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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 Section 240.14a-11(c) or Section 240.14a-12
Johns Manville Corporation
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
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[LOGO OF JOHNS MANVILLE CORPORATION]
JOHNS MANVILLE CORPORATION
P. O. Box 5108
Denver, CO 80217-5108
(303) 978-2000
March 16, 1998
DEAR STOCKHOLDERS:
The 1998 Annual Meeting of Stockholders of Johns Manville Corporation (the
"Company") will be held on Friday, April 24, 1998 at 8:00 a.m., at 717 17th
Street, Denver, Colorado.
The business scheduled for the Annual Meeting is the election of Directors
and the ratification of the appointment of Coopers & Lybrand L.L.P. as
independent accountants of the Company. The Board of Directors recommends a
vote FOR the election of the Board's nominees for Directors and FOR
ratification of the appointment of Coopers & Lybrand L.L.P.
No business presentations will be made at the Annual Meeting.
WE URGE YOU TO FILL IN, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY
RETURN IT IN THE ENCLOSED ENVELOPE SO THAT AS MANY SHARES AS POSSIBLE MAY
BE REPRESENTED AT THE MEETING. NO POSTAGE IS NEEDED IF THE PROXY CARD IS
MAILED IN THE UNITED STATES.
If you plan to attend the meeting in person, please check the appropriate
box on your proxy card.
Sincerely,
[SIGNATURE OF CHARLES L. HENRY]
Charles L. Henry
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Holders of Johns Manville Corporation Common Stock:
The Annual Meeting of Stockholders of Johns Manville Corporation (the
"Company") will be held on Friday, April 24, 1998 at 8:00 a.m., at 717 17th
Street, Denver, Colorado, to:
(i) elect Directors of the Company to hold office until the next Annual
Meeting of Stockholders and until their respective successors are
elected and qualified;
(ii) ratify the appointment of the firm of Coopers & Lybrand L.L.P. as
independent accountants of the Company for the year 1998; and
(iii) transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only holders of record of the Common Stock at the close of business on
February 23, 1998, the record date, will be entitled to vote at the Annual
Meeting.
This Notice, Proxy Statement and the enclosed proxy card are sent to you by
order of the Board of Directors.
March 16, 1998
[SIGNATURE OF RICHARD B. VON WALD]
Richard B. Von Wald
Executive Vice President,
General Counsel and Secretary
Johns Manville Corporation
P. O. Box 5108
Denver, CO 80217-5108
IT IS IMPORTANT THAT STOCKHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND
THE ANNUAL MEETING IN PERSON, FILL IN, DATE AND SIGN THE ENCLOSED PROXY
CARD AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NEEDED
IF THE PROXY CARD IS MAILED IN THE UNITED STATES.
<PAGE>
JOHNS MANVILLE CORPORATION
P. O. BOX 5108
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Introduction.............................................................. 1
Election of Directors (Proxy Item No. 1).................................. 2
Board Attendance........................................................ 4
Committees of the Board of Directors.................................... 4
Certain Relationships and Related Transactions.......................... 5
Compensation of Directors............................................... 5
Executive Compensation.................................................... 7
Report of the Compensation Committee.................................... 7
Compensation Summary.................................................... 10
Option/SAR Grants in Last Fiscal Year................................... 11
Aggregated Option/SAR Exercises in Last Fiscal Year and Year-End
Option/SAR Values...................................................... 12
Pension Plan............................................................ 12
Employment Agreements and Other Arrangements............................ 13
Compensation Committee Interlocks and Insider Participation............. 14
Performance Graph....................................................... 15
Security Ownership of Certain Beneficial Owners and Management............ 15
Security Ownership of Certain Beneficial Owners......................... 15
Security Ownership of Management........................................ 16
Ratification of Appointment of Independent Accountants (Proxy Item No.
2)....................................................................... 17
Other Business............................................................ 17
Voting Procedures......................................................... 18
Stockholder Proposals for 1999 Annual Meeting............................. 18
</TABLE>
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JOHNS MANVILLE CORPORATION
P. O. BOX 5108
717 17TH STREET (80202)
DENVER, CO 80217-5108
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PROXY STATEMENT
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INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of Johns Manville
Corporation (the "Company") for use at the Company's Annual Meeting of
Stockholders, and is revocable at any time by the person giving it prior to
its use at the Annual Meeting. If signed and returned, it will authorize the
persons named as proxy to vote on the matters referred to therein. The
authority conferred by all properly executed proxies will be exercised by such
persons as specified therein.
Only holders of the Company's common stock, $.01 par value ("Common Stock"),
of record at the close of business on February 23, 1998, the record date for
the Annual Meeting, are entitled to notice of, and to vote at, the Annual
Meeting. At the close of business on that date, 161,591,402 shares of Common
Stock were outstanding, which constituted the only outstanding class of voting
securities of the Company. Each share of Common Stock is entitled to one vote.
Shares may not be voted on a cumulative basis.
Any stockholder giving a proxy in the form accompanying this Proxy Statement
has the power to revoke the proxy prior to its use at the Annual Meeting. A
stockholder may revoke a proxy by (i) delivering an instrument of revocation
before the Annual Meeting to the Secretary of the Company at the Company's
principal offices; (ii) duly executing a proxy bearing a later date or time
than the date or time of the proxy being revoked; or (iii) voting in person at
the Annual Meeting. A stockholder's attendance at the Annual Meeting will not
by itself revoke a proxy given by such stockholder.
The costs of soliciting proxies will be borne by the Company. In addition to
solicitation of proxies by mail, proxies may be solicited by the Company's
Directors, officers and other employees by personal interview, telephone and
telegram. Such persons will receive no additional compensation for such
services. The Company requests that brokerage houses and other custodians,
nominees and fiduciaries forward solicitation materials to the beneficial
owners of shares of Common Stock held of record by such persons and will
reimburse such brokers and other fiduciaries for their reasonable out-of-
pocket expenses incurred when the solicitation materials are forwarded.
This Proxy Statement and the enclosed proxy card are first being sent to
holders of Common Stock on or about March 16, 1998.
1
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ELECTION OF DIRECTORS
(PROXY ITEM NO. 1)
Unless marked specifically to the contrary, proxies will be voted FOR the
election as Directors of the persons named below. Directors shall be elected
by a plurality of the votes cast at the Annual Meeting by the holders of
shares entitled to vote in the election. Each Director of the Company shall
hold office until the next Annual Meeting and until his or her successor is
elected and duly qualified. If any nominee should be unable to serve as
Director, an event not now anticipated, proxies may be voted in favor of
substitute nominees designated by the Board of Directors. All nominees have
indicated their willingness to serve as a Director.
Effective November 28, 1988, the Company consummated its Second Amended and
Restated Plan of Reorganization (the "Plan") under Chapter 11 of the United
States Bankruptcy Code. A copy of such Plan is available upon request from the
Company. In connection with the Plan, the Manville Personal Injury Settlement
Trust (the "Trust"), formed to implement certain portions of the Plan, in
particular, those relating to the settlement of asbestos health claims against
the Company and certain of its affiliates, is entitled to approve two of the
Company's nominees for Director. Robert A. Falise, Chairman and Managing
Trustee of the Trust, and Louis Klein, Jr., Christian E. Markey, Jr. and Frank
J. Macchiarola, Trustees of the Trust, who are presently members of the
Company's Board, are all nominees for election to the Board at the Annual
Meeting.
Your Board of Directors has approved the following nominees for Director and
recommends a vote FOR such nominees.
Leo Benatar In June 1996, Mr. Benatar became an Associated
Associated Consultant Consultant at A. T. Kearney, Inc., a management
A. T. Kearney, Inc. consulting firm. Prior to that, Mr. Benatar was a
Director since 1996 Director of Sonoco Products Company and the
Age: 68 Chairman of Engraph, Inc., a wholly owned
subsidiary of Sonoco Products Company, from
October 1993 to June 1996. He was a Senior Vice
President of Sonoco Products Company between 1993
and 1996. Mr. Benatar also serves on the Boards
of Directors of Aaron Rents, Inc., Interstate
Bakeries Corporation, Mohawk Industries, Inc. and
Paxar Corporation. Mr. Benatar is Chairman of the
Health, Safety and Environment Committee and is a
member of the Audit and Compensation Committees.
Ernest H. Drew From July 1997 to December 1997, Dr. Drew was
Former Chief Executive Chief Executive Officer of the Industries and
Officer, Technology Group of Westinghouse Electric
Industries and Corporation. Prior to joining Westinghouse, from
Technology Group, January 1995 to June 1997, Dr. Drew served as a
Westinghouse Electric member of the Board of Management of Hoechst AG,
Corporation a chemical and pharmaceutical company. From 1988
Director Nominee to December 1994, Dr. Drew was President and
Age: 60 Chief Executive Officer of Hoechst Celanese
Corporation. Dr. Drew is a director of Public
Service Enterprise Group and Thomas & Betts
Corporation.
Robert A. Falise Mr. Falise was elected a Trustee of Manville
Chairman and Managing Personal Injury Settlement Trust in December
Trustee, 1991, and became its Chairman and Managing
Manville Personal Injury Trustee in January 1992. Mr. Falise served as
Settlement Trust Chairman of the Board of the Company from June to
Director since 1992 September of 1996. Mr. Falise is Chairman of the
Age: 65 Executive Committee and is a member of the Audit,
Committee on Board Organization and Operation,
Compensation and Finance Committees.
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Todd Goodwin Mr. Goodwin has been a General Partner of the New
General Partner, York investment banking firm Gibbons, Goodwin,
Gibbons, Goodwin, van Amerongen since 1984. Mr. Goodwin is also a
van Amerongen Director of Rival Company, Schult Homes, U.S.
Director since 1991 Energy Systems and Wells Aluminum. Mr. Goodwin is
Age: 66 Chairman of the Compensation Committee and is a
member of the Committee on Board Organization and
Operation, Executive and Finance Committees.
Michael N. Hammes From October 1993 to February 1997, Mr. Hammes
Former Chairman and was Chairman of the Board and Chief Executive
Chief Executive Officer, Officer of The Coleman Company, Inc., a global
The Coleman Company, Inc. marketer and manufacturer of products used in the
Director since 1993 outdoor recreation and hardware industries. Mr.
Age: 56 Hammes was previously Vice Chairman of The Black
& Decker Corporation. Mr. Hammes is also a
Director of NAVISTAR. Mr. Hammes is a member of
the Audit, Compensation, Executive and Finance
Committees.
Kathryn Rudie Harrigan Ms. Harrigan is the Henry R. Kravis Professor of
Henry R. Kravis Professor of Business Leadership at the Columbia University
Business Leadership, Graduate School of Business, where she has been a
Columbia University Graduate professor in the Management and Organizations
School of Business Division since 1981. Ms. Harrigan is also a
Director since 1995 Director of Cambrex Corporation and Technical
Age: 47 Chemicals and Products, Inc. Ms. Harrigan is a
member of the Finance and Health, Safety and
Environment Committees.
Charles L. Henry Mr. Henry was named Chairman of the Board,
Chairman of the Board, President and Chief Executive Officer of the
President and Company in September 1996. Mr. Henry was
Chief Executive Officer, previously Chief Financial Officer and Executive
Johns Manville Corporation Vice President at E.I. du Pont de Nemours and
Director since 1996 Company ("DuPont"). He joined DuPont in 1963 and
Age: 56 held a number of positions beginning with Process
Engineer. Mr. Henry is a member of the Committee
on Board Organization and Operation, Executive,
Finance and Health, Safety and Environment
Committees.
Louis Klein, Jr. Mr. Klein was elected a Trustee of Manville
Manville Personal Injury Personal Injury Settlement Trust in December
Settlement Trust 1991. Mr. Klein also serves on the Board of
Director since 1992 Trustees of The CRM Funds. Mr. Klein is Chairman
Age: 62 of the Audit Committee and is a member of the
Compensation and Finance Committees.
Frank J. Macchiarola In July 1996, Mr. Macchiarola became President of
President, St. Francis St. Francis College in New York. Prior to that,
College, and Trustee, he was Dean and Professor of the Benjamin N.
Manville Personal Injury Cardozo School of Law, Yeshiva University
Settlement Trust beginning in 1991. He has also been a Trustee of
Director since 1996 Manville Personal Injury Settlement Trust since
Age: 56 1992. Mr. Macchiarola also serves as a Director
of Jefferies Group, Inc. Mr. Macchiarola is a
member of the Health, Safety and Environment
Committee.
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Christian E. Markey, Jr. Judge Markey has been a Trustee of Manville
Trustee, Personal Injury Settlement Trust since its
Manville Personal Injury inception in 1988 and is serving as a private
Settlement Trust judge specializing in dispute resolution,
Director since 1992 including trials, arbitrations and mediations.
Age: 68 Judge Markey is Chairman of the Committee on
Board Organization and Operation and is a member
of the Health, Safety and Environment Committee.
William E. Mayer In December 1996, Mr. Mayer formed Development
Founder, Capital L.L.C., a company which invests in
Development Capital L.L.C. private and public companies. From October 1992
Director since 1996 to December 1996, Mr. Mayer was Dean of the
Age: 57 College of Business and Management of the
University of Maryland at College Park. He also
serves as a Director on the Boards of American
Trading and Production Corporation, Chart House
Enterprises, Inc., Hambrecht & Quist, Inc. and
Premier, Inc., and as Trustee for the Colonial
Group of Mutual Funds. Mr. Mayer is Chairman of
the Finance Committee and is a member of the
Audit, Committee on Board Organization and
Operation and Executive Committees.
BOARD ATTENDANCE
During 1997, the Board of Directors of the Company had six regular meetings
and two special meetings. In 1997, each Director attended a minimum of 75
percent of the total number of meetings of the Board of Directors and of the
Committees of which the Director was a member.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has six standing Committees: Audit,
Board Organization and Operation, Compensation, Executive, Finance and Health,
Safety and Environment.
AUDIT COMMITTEE
The Audit Committee is comprised of Messrs. Benatar, Falise, Hammes, Klein
(Chairman) and Mayer. The Audit Committee met two times during 1997 and,
during such meetings, met with the Company's internal auditors, independent
public accountants and operating and financial management. The principal
functions of the Audit Committee are to review and report to the Board with
respect to: (i) the annual financial statements and filings with the
Securities and Exchange Commission; (ii) accounting issues significant to the
Company; (iii) internal auditing, accounting and financial controls; (iv) the
appointment of independent public accountants, the annual audit by the
independent public accountants, including the scope of the audit, and the
compensation of the independent public accountants for both audit and non-
audit services; (v) the Company's policies governing compliance with laws and
regulations, ethics and conflicts of interest and any significant instances of
employee misconduct; and (vi) travel and entertainment expenses of all
officers of the Company.
COMMITTEE ON BOARD ORGANIZATION AND OPERATION
The Committee on Board Organization and Operation is comprised of Messrs.
Falise, Goodwin, Henry, Markey (Chairman) and Mayer. The Committee on Board
Organization and Operation met five times during 1997. The Committee on Board
Organization and Operation considers and makes recommendations to the Board
with respect to the composition of the Board and matters relating to the
organization, operation, function, compensation and procedures of the Board
and its Committees.
Persons recommended by stockholders of the Company as suitable nominees for
the position of Director are referred to the Committee on Board Organization
and Operation for its consideration. Stockholders wishing to recommend to the
Board persons for nomination to the position of Director should send their
recommendations to the Secretary of the Company.
4
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COMPENSATION COMMITTEE
The Compensation Committee is comprised of Messrs. Benatar, Falise, Goodwin
(Chairman), Hammes and Klein. The Compensation Committee met six times during
1997. The principal functions of the Compensation Committee are to: (i)
approve and report to the Board with respect to executive compensation,
subject to the approval of the full Board in the case of compensation of the
Chief Executive Officer; (ii) review employee benefit programs and approve or
recommend changes therein to the Board; and (iii) review with the Chief
Executive Officer matters with respect to management development and
succession.
EXECUTIVE COMMITTEE
The Executive Committee is comprised of Messrs. Falise (Chairman), Goodwin,
Hammes, Henry and Mayer. The Executive Committee did not meet in 1997. The
Executive Committee is delegated the authority of the full Board during the
intervals between Board meetings insofar as may be lawful, except for actions
relating to the declaration or payment of dividends. The Executive Committee
has the responsibility to report actions taken by it to the full Board at the
next meeting of the Board.
FINANCE COMMITTEE
The Finance Committee is comprised of Messrs. Falise, Goodwin, Hammes,
Henry, Klein and Mayer (Chairman) and Ms. Harrigan. The Finance Committee met
two times during 1997. The principal functions of the Finance Committee are to
review and report to the Board with respect to: (1) significant tax issues and
treasury matters; (2) the Company's capital structure; (3) the composition and
actions of the Investment Committee; and (4) the Company's retirement, thrift,
health and welfare and other benefit plans.
HEALTH, SAFETY AND ENVIRONMENT COMMITTEE
The Health, Safety and Environment Committee is comprised of Messrs. Benatar
(Chairman), Henry, Macchiarola and Markey and Ms. Harrigan. The Health, Safety
and Environment Committee met one time during 1997. The principal functions of
the Health, Safety and Environment Committee are to provide oversight and to
report and make recommendations to the Board with respect to the Company's
activities relating to health, safety and environmental issues and product
safety.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Trust owns approximately 79.5 percent of the Common Stock and by virtue
of such stock ownership is able to nominate and elect Directors of the Company
as the Trust determines. Four of the Company's current Directors, Messrs.
Falise, Klein, Macchiarola and Markey, are Trustees of the Trust.
COMPENSATION OF DIRECTORS
Charles L. Henry is the only Director who is employed by the Company. He
receives no fees for serving as a Director in addition to his regular
compensation.
Except for Messrs. Falise, Klein, Macchiarola and Markey, all non-employee
Directors receive an annual retainer of $25,000, $1,000 for each Board meeting
attended, $1,000 for each Committee of the Board meeting attended, and
reimbursement for travel expenses related to attendance at Board and Committee
meetings. Each Director (other than Messrs. Falise, Henry, Klein and Markey)
who serves as a Committee Chairman is paid an additional $2,500 per year.
Director's fees earned by the Company's Directors who are Trustees of the
Trust are paid directly to the Trust pursuant to the Manville Personal Injury
Settlement Trust Agreement, as amended (the "Trust Agreement").
Mr. Falise received $16,211 in 1997 for services rendered in 1996 on a
special committee to effect a search for a new chief executive officer.
5
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In June 1996, the Company offered all retired Directors a lump-sum payment
of the present value of the retirement payments owed to such Directors under
the Company's retirement program for non-employee Directors which was adopted
in 1988. The retirement program provided for continued payment of the annual
retainer in effect at the time of a Director's retirement. Under the
retirement program, a Director who retired after attaining age 70 received
continued payment of the retainer for life, and a Director who retired before
attaining age 70 received continued payment of the retainer for a period of
years equal to the number of years of service or for life, whichever was less,
except that no retirement benefits were paid to any Director retiring with
less than five years of service. The Company paid an aggregate amount of
$2,213,192 for such lump-sum payments to retired Directors from amounts
contributed to the trust established in 1992 in connection with the retirement
program and from general corporate funds. In connection with such payments,
the Company satisfied its obligations under the retirement program to all
retired Directors except for one retired Director who did not elect to receive
the lump-sum payment.
Effective February 7, 1997, the Company terminated its retirement program
for non-employee Directors with respect to the current non-employee Directors
and adopted a new Non-Employee Directors' Deferred Compensation Plan (the
"Directors' Plan"). The retirement program is still in effect and has not been
terminated with respect to the one remaining retired Director who did not
elect to receive the June 1996 payout.
For purposes of terminating the retirement program, the Company vested all
accrued benefits and credited the present value of each current non-employee
Director's accrued benefit under the retirement program (the "Retirement
Program Payouts"), based on years of service through February 1997 (except as
noted), to deferred accounts under the Directors' Plan, as follows: Mr.
Benatar, $18,153; Mr. Falise, $90,252; Mr. Goodwin, $110,401; Mr. Hammes,
$83,018; Mr. Hanson, $83,018; Ms. Harrigan, $41,479; Mr. Klein, $91,253; Mr.
Macchiarola, $18,259; Mr. Markey, $121,331; and Mr. Mayer, $18,368. In
consideration of the fact that termination of the program would eliminate Mr.
Markey's otherwise likely lifetime benefit and due to Mr. Markey's time
remaining until retirement, the Company added to the amount of his Retirement
Program Payout a compensating adjustment of $32,371 (included in the amount
set forth in the previous sentence) based on years of service.
Under the Directors' Plan, an account was established for each Director for
a non-forfeitable deferral of the Retirement Program Payout until termination
of services as a Director or later, if so elected by such Director. For
Directors other than the Trustee Directors, the amounts deferred are deemed to
be invested in Common Stock. Because the Trust Agreement prohibits Trustee
Directors from direct ownership of Common Stock, each Trustee Director's
deferral account will be deemed to be invested in non-Common Stock investment
alternatives as provided under the Directors' Plan.
In connection with the termination of the retirement program, the Board also
modified its Directors' compensation policy so that under the Directors' Plan,
non-employee Directors (other than Trustee Directors) will be granted $12,500
annually in deferred shares of Common Stock. Trustee Directors will be granted
$12,500 annually to be deemed invested in non-Common Stock investment
alternatives under the Directors' Plan. The Plan provides that if Trustee
Directors become eligible to own Common Stock, the deferred amounts of the
Retirement Program Payout and annual grants will automatically be deemed to be
invested in Common Stock. The Directors' Plan also provides for elective
deferral of annual retainers, Board and Committee meeting fees and Committee
Chairman fees.
6
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EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of Directors who are not employees of the Company or any of
its subsidiaries. The Board of Directors has delegated to the Committee the
responsibility for establishing and administering the Company's executive
compensation plans subject to the Board's final approval of major new
compensation systems and the Chief Executive Officer's compensation. The
Committee consults with outside compensation consultants, attorneys and other
specialists.
A primary objective of the Committee is to work with management to design
and implement compensation systems that both attract and retain a top quality
management team and motivate that team to create long-term stockholder value.
The guiding principle of the Company's compensation system is "Pay for
Performance," with an emphasis on variable pay tied to the attainment of
performance goals. Under the Pay for Performance philosophy used throughout
the organization, the combination of annual incentive bonuses, which are
dependent on performance, equity-related long-term awards and base salary
offers the opportunity for executives' average total compensation from all
sources over a number of years to reach competitive levels of total
compensation. However, actual total compensation levels of executive officers
may range below or above competitive levels in any one year or period of years
based on performance. The design of the compensation system is intended to
align the interests of the executives with the interests of stockholders and
to encourage employees to anticipate and respond to business challenges and
opportunities while avoiding an entitlement attitude.
Together with its outside experts, the Committee reviews compensation
practices of other companies and the prevailing salary and total compensation
levels for various levels of performance. Comparisons are made with
compensation levels for a broad group of companies, including all of the
companies included in the Standard & Poor's Building Materials Index, which
reflects the Company's principal lines of business ("Comparable Companies").
Competitive levels are determined based upon the 50th to 75th percentile
levels of compensation among companies in the various surveys utilized. The
Company's mix of businesses, its unique stock ownership and its strategic and
tactical objectives are considered by the Committee when compensation policies
are established.
Section 162(m) of the Internal Revenue Code (the "Code") generally disallows
a tax deduction to public companies for compensation over $1 million paid to
the Chief Executive Officer and the other four most highly compensated
individuals who are executive officers as of the end of the year. Qualifying
performance-based compensation is not subject to the deduction limit if
certain requirements are met. While it is the Committee's policy to preserve
corporate tax deductions by qualifying compensation paid over $1 million to
named executive officers, it also maintains the flexibility to approve
compensation arrangements that it deems to be in the best interests of the
Company and its stockholders but which may not always qualify for full tax
deductibility.
COMPENSATION PHILOSOPHY
The discussion below outlines the Committee's philosophy for administering
the three major components of executive pay: base salary, annual incentive and
long-term incentive.
Base Salaries. The Committee determines base salaries of executives in
accordance with the following factors listed in order of importance: the
significance of the executive's position to the Company, the executive's
experience and expertise in his or her position, and competitive marketplace
salaries for similar positions. Individual salary increases are based on each
person's performance as evaluated and approved by the Committee. Base salaries
for current executive officers increased, on average, 2.5 percent in 1997. The
Committee's policy is to position base salaries at or below competitive levels
for similarly qualified executives in comparable positions.
Annual Incentive Bonus. Since 1987, the Company has utilized an annual
incentive pay plan that provides above average bonus opportunities when
Company performance merits such awards. Target bonuses for executive officers
in 1997 ranged from 65 percent to 100 percent of their respective base
salaries.
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For 1997, the maximum bonus potential, according to the formula in the plan,
would be triggered at achievement of 130 percent of earnings per share
targets, and the minimum bonus award required the achievement of 70 percent of
1997 earnings per share targets and 90 percent of actual 1996 earnings per
share amounts. Achievements in excess of 130 percent of earnings per share
targets or personal achievements of particular significance could result in
bonuses in excess of 200 percent of target bonuses. In some cases, after-tax
operating income targets are utilized in addition to earnings per share
targets. The annual performance targets, other performance objectives, and
maximum and minimum performance levels, are reviewed and approved by the
Committee at the beginning of each year.
In 1997, the Committee weighted 80 percent of the bonus on financial goals
and 20 percent of the bonus on the Committee's assessment of an individual
executive's performance. In approving individual awards, the Committee
considered the following factors: achievement of record levels of earnings per
share at the Company (13 percent higher than 1996); the dramatically improved
safety record of the Company; the reintroduction of the Johns Manville brand
name; and the completion of several acquisitions and strategic alliances
during 1997. For 1997, the Company's various business divisions achieved
between 74 percent and 110 percent of their respective after-tax operating
income targets while the Company, as a whole, achieved 83 percent of its
earnings per share target. The Committee also took into account the Chief
Executive Officer's appraisal of each senior officer. The Committee made its
decision regarding individual awards without expressly weighting any of the
foregoing criteria higher than any other of such criteria. Based on the
achievements described above, aggregate annual incentive compensation for
executive officers in 1997 was 99 percent of target bonuses. Executive
officers who elected to defer receipt of their annual incentive bonus and to
have such awards deemed to be invested in Common Stock for at least two years,
will receive a 15 percent premium grant of Common Stock at the end of the two-
year period.
Long-Term Incentive Plans. To attract and retain top quality management, the
Company has used several types of long-term, equity-related incentives for the
Company's executive officers: stock options, stock appreciation rights
("SARs"), restricted stock, and cash payments based on dividends and other
distributions on its Common Stock. In 1996, the Company adopted the Johns
Manville Corporation 1996 Executive Incentive Compensation Plan (the "Stock
Plan"), which was approved by stockholders at the 1996 Annual Meeting.
Effective January 1, 1996, the Committee granted ten-year stock options and
deferred stock awards to its executive officers in amounts representing a
five-year long-term incentive grant. These options and awards were granted
under the Stock Plan and are intended to recognize the joint commitment of the
Board of Directors and key management to a new five-year growth strategy and
the creation of stockholder value. The exercise price of 60 percent of the
options was established at $10.625 per share, the market price of the Common
Stock (the "Market Price") on June 7, 1996, the actual date of grant, and the
exercise price of the remaining 40 percent of the options was established at
$13.281 per share, which represents a twenty-five percent premium over the
Market Price. Fifty percent of the options vested at December 31, 1996 and 50
percent vested at December 31, 1997. The deferred stock awards represent the
right to receive Common Stock or the value thereof and current dividends
thereon. Sixty percent of the deferred stock will vest on December 31, 1998,
and the remainder will vest in equal amounts on December 31, 1999 and December
31, 2000. Executive officers joining the Company since January 1, 1996 have
also been awarded options and deferred stock under the Stock Plan in prorated
amounts based on their starting dates and the stock price at such times.
In 1997, the Company made payments to certain executive officers with
respect to awards previously made under the Johns Manville International
Group, Inc. 1994 Long Term Cash Incentive Compensation Plan (the "Cash Plan").
Awards under the Cash Plan are in the form of performance units. The value of
performance units paid in 1997 was determined based on Johns Manville
International Group, Inc.'s and the Company's performance over the 1995 to
1997 period against a financial goal of cumulative earnings before interest,
taxes, depreciation and amortization or "EBITDA." The Committee established
EBITDA performance minimums, targets and maximums corresponding with the 50th
percentile, 75th percentile and 90th percentile, respectively, of the
historical performance of Comparable Companies. Consistent with this range of
performance, awards for the 1995 to 1997 performance period were intended to
provide target long-term incentive opportunities at the
8
<PAGE>
75th percentile of the long-term compensation paid by Comparable Companies.
Executive officers who elected to defer receipt of their awards for the 1995
to 1997 performance period, and to have such awards deemed to be invested in
Common Stock for at least two years, will receive a 15% premium grant of
Common Stock at the end of the two-year period.
In 1997, the Company granted market-priced options to purchase 200 shares of
Common Stock to all of its full-time employees employed on July 1, 1997. This
broad-based stock option grant was part of a program to encourage stock
ownership by employees in order to align the interests of employees with those
of stockholders. Mr. Henry and the other executive officers each received a
grant of options to purchase 200 shares of Common Stock pursuant to this
program.
CEO Compensation. Mr. Henry's total compensation has been determined in
accordance with the principles described above which are applicable to all
executive officers of the Company. Mr. Henry's 1997 base salary of $650,000 is
in accordance with the average of annual salaries for chief executive officers
of Comparable Companies. Mr. Henry's employment agreement entered into in
connection with his hiring by the Company on September 9, 1996, obligated the
Company to pay Mr. Henry an annual incentive bonus for 1997 of at least
$650,000, which amount the Board of Directors determined to pay. As was the
case with Mr. Henry's 1996 incentive bonus, Mr. Henry elected to defer the
receipt of the 1997 incentive bonus and to have it invested in Common Stock.
The Committee believes the design of its total compensation system
accomplishes the Company's goals of attracting new management talent,
retaining the Company's high quality ongoing management team and aligning the
interests of these executives with those of stockholders.
1997 COMPENSATION COMMITTEE
Todd Goodwin, Chairman
Leo Benatar
Robert A. Falise
Michael N. Hammes
Louis Klein, Jr.
9
<PAGE>
COMPENSATION SUMMARY
The following Summary Compensation Table sets forth the compensation earned
from the Company during 1995 through 1997 by Charles L. Henry, the Company's
Chief Executive Officer, and by each of the other four most highly compensated
executive officers of the Company during 1997. Bonuses are shown for the year
earned, although these are generally paid at the beginning of the subsequent
year.
JOHNS MANVILLE CORPORATION
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------- -----------------------------
AWARDS PAYOUTS
--------------------- -------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTCIP ALL OTHER
NAME AND COMP. AWARD(S) OPTIONS/ PAYOUTS COMP.
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) ($)(2) SARS(#) ($)(3) ($)(4)
------------------ ---- --------- -------- ------ ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles L. Henry ....... 1997 650,000 650,000 26,390 -0- 200 -0- 8,181
Chairman of the Board, 1996 203,125 330,000 1,519 2,499,999 865,830 -0- 80,575
President & CEO 1995 -0- -0- -0- -0- -0- -0- -0-
Richard B. Von Wald .... 1997 300,000 196,000 6,011 -0- 200 -0- 141,181
Executive Vice 1996 275,000 250,000 5,232 1,244,049 295,660 70,560 9,000
President, General 1995 275,000 300,000 -0- -0- -0- -0- 9,000
Counsel and Secretary
Thomas L. Caltrider(5).. 1997 143,750 130,000 21,751 357,994 197,203 -0- 74,519
Senior Vice President, 1996 -0- -0- -0- -0- -0- -0- -0-
Insulation Group 1995 -0- -0- -0- -0- -0- -0- -0-
Harvey L. Perry, Jr .... 1997 210,000 121,000 15,038 -0- 200 338,842 8,181
Senior Vice President, 1996 210,000 200,000 1,379 412,463 208,620 273,381 9,000
Global Engineered 1995 168,750 175,000 226 -0- -0- -0- 9,000
Products Group
Kenneth L. Jensen ...... 1997 225,000 129,000 8,516 -0- 200 387,248 8,181
Senior Vice President, 1996 210,000 170,000 6,345 412,463 208,620 804,372 9,000
Corporate Development 1995 200,000 175,000 2,381 -0- -0- -0- 9,000
and Investor Relations
</TABLE>
- --------
(1) Other Annual Compensation represents amounts reimbursed by the Company to
the Named Executive Officers in respect of the taxable value of
perquisites provided to such officers.
(2) The number and value of aggregate restricted and deferred Common Stock
holdings for each of the Named Executive Officers at the end of 1997,
based on the net fair market value of the Common Stock on December 31,
1997, are as follows: Mr. Henry--235,294 shares with a value of
$2,367,646; Mr. Von Wald--83,661 shares with a value of $841,839; Mr.
Caltrider--35,577 shares with a value of $357,994; Mr. Perry--38,820
shares with a value of $390,626; and Mr. Jensen--38,820 shares with a
value of $390,626.
The following table shows the vesting schedule of all shares awarded which,
as of December 31, 1997, had not previously vested for the Named Executive
Officers:
<TABLE>
<CAPTION>
1998 1999 2000 TOTAL
------- ------ ------ -------
<S> <C> <C> <C> <C>
C. L. Henry.................................... 141,176 47,059 47,059 235,294
R. B. Von Wald................................. 47,332 25,327 11,002 83,661
T. L. Caltrider................................ 15,247 10,165 10,165 35,577
H. L. Perry, Jr. .............................. 23,292 7,764 7,764 38,820
K. L. Jensen................................... 23,292 7,764 7,764 38,820
</TABLE>
Each share of deferred stock is entitled to receive a payment equal to
dividends declared and paid on shares of the Common Stock. Upon the
occurrence of certain events which constitute a Change in Control (as
defined under "Employment Agreements and Other Arrangements") and upon the
occurrence of certain events described in the award agreements (including
certain terminations of employment) all outstanding shares of restricted
and deferred stock become immediately vested and, in the case of deferred
stock, their value may be paid in cash to the holders.
10
<PAGE>
(3) For Messrs. Jensen and Perry, amounts in 1996 and 1997 include payments
made under the Company's 1994 Long Term Cash Incentive Compensation Plan.
Amounts in 1996 also include payments made under the Company's 1991 Long-
Term Cash Incentive Plan, paid in consideration of the forfeiture by
participants of their rights to participate in dividend payments under
such plan.
(4) Amounts in this column represent $80,575 paid to Mr. Henry in 1996 for
relocation expenses; $133,000 paid to Mr. Von Wald in 1997 under his
supplemental retirement agreement; and $67,092 paid to Mr. Caltrider in
1997 for relocation expenses. All other amounts in this column of up to
$9,000 in 1995, $9,000 in 1996 and $8,181 in 1997 represent the Company's
contribution to each of the Named Executive Officers' accounts in the
Company's Thrift Plan.
(5) Mr. Caltrider joined the Company effective June 23, 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information concerning options granted to the
Named Executive Officers during 1997. The hypothetical present value on date
of grant shown in the last column below for stock options granted in 1997 are
presented pursuant to the rules of the Securities and Exchange Commission and
are calculated under the modified Black-Scholes model for pricing options. The
Company is not aware of any model or formula that will determine with
reasonable accuracy a present value for stock options. The actual before-tax
amount, if any, realized upon the exercise of stock options will depend upon
the excess, if any, of the market price of the Common Stock over the exercise
price of the stock option at the time the stock option is exercised. There is
no assurance that the hypothetical present values of the stock options
reflected in the following table will be realized.
In 1997, the Company granted market-priced options to purchase 200 shares of
Common Stock to all of its full-time employees employed on July 1, 1997. This
broad-based stock option grant was part of a program to encourage stock
ownership by employees in order to align the interests of employees with those
of stockholders. Mr. Henry and the other Named Executive Officers each
received a grant of options to purchase 200 shares of Common Stock pursuant to
this program.
JOHNS MANVILLE CORPORATION
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------
NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SARS EXERCISE OR GRANT DATE
OPTIONS/SARS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED(1) IN FISCAL YEAR PER SHARE DATE ($)(2)
---- -------------------- -------------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Charles L. Henry........ 200 .01% $12.1875 12/31/2002 894
Richard B. Von Wald..... 200 .01% $12.1875 12/31/2002 894
Thomas L. Caltrider..... 121,707 5.4% $ 11.50 12/31/2005 628,008
75,296 3.3% $ 14.375 12/31/2005 329,044
200 .01% $12.1875 12/31/2002 894
Kenneth L. Jensen....... 200 .01% $12.1875 12/31/2002 894
Harvey L. Perry, Jr..... 200 .01% $12.1875 12/31/2002 894
</TABLE>
- --------
(1) The options granted in 1997 to Mr. Caltrider vest 50% on each of the first
two anniversaries of his commencement of employment (other than the 1997
Options (as defined below)). The 200 options granted in 1997 to each of
the Named Executive Officers (the "1997 Options") vest and become
exercisable in two equal installments on each of July 1, 2000 and July 1,
2002. Upon the occurrence of certain events which constitute a Change in
Control (as defined under "Employment Agreements and Other Arrangements")
or upon certain market price tests being met, all 1997 Options immediately
vest and become exercisable.
11
<PAGE>
(2) The hypothetical present values on grant date are calculated under the
Black-Scholes Model, which is a mathematical formula used to value options
traded on stock exchanges. This formula considers a number of factors in
hypothesizing an option's present value. Factors used to value 1997
Options include the stock's exercise price at fair market value on the
date of grant, expected volatility rate (30.62%), risk free rate of return
(6.34%), expected dividend yield (0.98%) and the expected time of exercise
(5.5 years). Factors used to value the other options granted to Mr.
Caltrider include the stock's expected volatility rate (30.62%), risk free
rate of return (6.34%), expected dividend yield (1.04%) and the expected
time to exercise (8.5 years). Mr. Caltrider also received premium-priced
stock options with an exercise price that exceeded the fair market value
on the date of grant by 25%, which influenced the valuation of that grant.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
YEAR-END OPTION/SAR VALUES
The following table provides information concerning the exercise of stock
options and SARs by the Named Executive Officers during 1997 and the value of
unexercised options and SARs.
JOHNS MANVILLE CORPORATION
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION/SAR VALUES
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT FY-END(#) OPTIONS AT FY-END($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Charles L. Henry........ None None 865,830/200 0/0
Richard B. Von Wald..... None None 345,910/24,950 304,641/150,047
Thomas L. Caltrider..... None None 0/232,780 0/0
Kenneth L. Jensen....... None None 208,620/200 0/0
Harvey L. Perry, Jr..... None None 208,620/200 0/0
</TABLE>
PENSION PLAN
Salaried employees are participants in the Johns Manville Employees
Retirement Plan (the "Retirement Plan"). Pension benefits under the Retirement
Plan are limited to the amounts allowed by the provisions of the Code. The
Company has adopted a Supplemental Pension Plan ("Supplemental Plan") that
provides for payment of the difference between the benefits earned pursuant to
the Retirement Plan, without regard to Code limits, and the amounts actually
available from the Retirement Plan. Former and current executive officers
(other than Mr. Von Wald), and other employees, are eligible to participate in
the Supplemental Plan. In addition, Mr. Henry is entitled to an individual
retirement arrangement under the terms of his employment agreement and Mr. Von
Wald is a party to an individual supplemental retirement arrangement adopted
in 1994. See "Employment Agreements and Other Arrangements." The Supplemental
Plan may be funded by contributions to an irrevocable Supplemental Pension
Plan Trust ("Pension Trust") for the accounts of participants. Contributions,
if any, to the Pension Trust to fund the Supplemental Plan and earnings
thereon are fully taxable to the individual, deductible by the Company and are
reduced by applicable withholding taxes.
12
<PAGE>
The following Pension Plan Table sets forth the estimated annual benefits
payable upon retirement, including amounts attributable to the Supplemental
Plan, for specified remuneration levels and years of service.
<TABLE>
<CAPTION>
YEARS OF SERVICE
-----------------------------------------------------
REMUNERATION 10 15 20 25 30 35
- ------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 125,000................ $ 16,386 $ 24,579 $ 32,772 $ 40,965 $ 49,158 $ 57,351
150,000................ 19,886 29,830 39,773 49,716 59,659 69,602
175,000................ 23,386 35,078 46,771 58,464 70,157 81,850
200,000................ 26,886 40,329 53,772 67,215 80,658 94,101
250,000................ 33,886 50,828 67,771 84,714 101,657 118,600
300,000................ 40,886 61,330 81,773 102,216 122,659 143,102
400,000................ 54,886 82,328 109,771 137,214 164,657 192,100
500,000................ 68,886 103,329 137,772 172,215 206,658 241,101
600,000................ 82,886 124,330 165,773 207,216 248,659 290,102
700,000................ 96,886 145,328 193,771 242,214 290,657 339,100
800,000................ 110,886 166,329 221,772 277,215 332,658 388,101
900,000................ 124,886 187,330 249,773 312,216 374,659 437,102
1,000,000................ 138,886 208,328 277,771 347,214 416,657 486,100
</TABLE>
- --------
NOTES:
(1) Had the Named Executive Officers retired as of December 31, 1997, their
remuneration, for purposes of the table set forth above, would have been
as follows: Mr. Henry, $654,785; Mr. Von Wald, $489,167; Mr. Perry,
$296,500; and Mr. Jensen, 323,997. Mr. Caltrider is not eligible to
participate in the retirement plan until he has completed one full year of
service with the Company.
(2) On December 31, 1997, the Named Executive Officers had the following years
of credited service under the Retirement Plan: Mr. Henry, 1; Mr. Von Wald,
24; Mr. Caltrider, 0; Mr. Jensen, 14; and Mr. Perry, 19.
(3) The Retirement Plan provides for payment of a retirement allowance based
on 1.02 percent of the participant's five-year average final salary up to
Covered Compensation (as defined in the Retirement Plan) plus 1.4 percent
of the participant's average final salary greater than Covered
Compensation multiplied by the participant's years of benefit service up
to a maximum of 35 years plus 1.33 percent of the participant's average
final salary multiplied by the participant's years of service over 35 plus
2.5 percent of the value of the participant's refunded contributions and
interest compounded at 5.0 percent until normal retirement age. Covered
Compensation in 1997 was $27,576. Salary, as defined in the Retirement
Plan, includes payments under the Company's annual incentive pay plan, but
excludes payments under the Company's Stock Plan. The benefits are
determined by using straight-life annuity amounts and are not subject to
reduction for Social Security benefits.
EMPLOYMENT AGREEMENTS AND OTHER ARRANGEMENTS
Each of the Named Executive Officers and certain other salaried executives
of the Company have entered into three-year employment agreements that provide
for lump sum separation payments upon any termination of employment other than
termination for cause, voluntary resignation without "good reason" as defined
in the employment agreements, or termination as a result of death, disability
or retirement. For the Named Executive Officers, prior to a Change in Control,
as defined below, separation payments under such contracts generally equaled a
total of two times the annual salary, the full year bonus at target levels of
performance under the Company's annual incentive pay plan and certain other
benefits. Following a Change in Control, the definitions of "cause" and "good
reason" are liberalized and benefits payable are enhanced. Following a Change
in Control, upon a termination of employment other than (i) for cause, (ii) a
voluntary resignation without "good reason," or (iii) as a result of death,
disability or retirement, benefits include two years' annual salary, two
years' target annual bonus, two years' additional credit in certain cases
under the Supplemental Plan, a pro-rata portion of the target annual bonus for
the year of termination, 36 months of continued welfare benefits and 24 months
of
13
<PAGE>
continued perquisites. Change in Control is defined in the employment
agreements to include a variety of events, including significant changes in
the Company's stock ownership or board of directors and sales of significant
assets by the Company.
In order to provide Mr. Henry with retirement benefits comparable to the
retirement benefits he would have earned at DuPont, Mr. Henry's employment
agreement also provides for certain supplemental retirement benefits,
generally equal in value to a single life annuity of $932,740 per year less
the amount of all annual payments which Mr. Henry is entitled to receive under
all defined benefit plans maintained by the Company and by DuPont. The
retirement benefits are subject to reduction in the event Mr. Henry's
employment terminates prior to his attaining the age of 62.
The Company has agreed that its sale of Riverwood International Corporation
in 1996 constitutes both a Change in Control and an event of "good reason" for
purposes of Mr. Von Wald's compensation arrangements. The Company and Mr. Von
Wald also entered into an amendment to his employment agreement pursuant to
which the Company agreed that if Mr. Von Wald is determined to be subject to
any golden parachute excise tax as a result of any payments made to him
following termination of his employment by the Company other than for cause or
other than voluntary termination for "good reason" (other than relating to the
Company's sale of Riverwood International Corporation in 1996), or following a
Change in Control occurring after March 27, 1996, the Company shall pay Mr.
Von Wald an amount which, after taking into account any federal, state and
local income taxes and excise taxes upon such amount, is equal to the amount
of the golden parachute excise tax.
The Company has entered into a supplemental retirement agreement with Mr.
Von Wald in replacement of prior supplemental retirement arrangements. The
supplemental retirement agreement provides for the Company to pay him upon his
termination of employment a lump sum benefit equal to the present value of a
single life annuity commencing at the time of such termination of 60 percent
of his highest average base salary plus cash bonus for three consecutive years
during the preceding ten years, offset by amounts payable under the Retirement
Plan plus certain other amounts previously paid and to be paid under the
supplemental retirement agreement, including a cash payment made during 1997
of $133,000.
From time to time, the Company repurchases up to 45 percent of the Common
Stock that certain key executives receive from the Company upon the vesting of
such stock in order to provide such executives with funds for related income
tax obligations. Pursuant to a repurchase program approved by the Company's
Board of Directors in September 1995, in connection with the sale of a
subsidiary of the Company and related transactions, the Company repurchased
5,014 shares of Common Stock from Mr. Von Wald on May 1, 1997, at a price of
$9.75 per share. The closing sales price for the Common Stock on the New York
Stock Exchange, Inc. on May 1, 1997 was $9.75 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised of Messrs. Benatar,
Falise, Goodwin (Chairman), Hammes and Klein. No interlocks existed and no
insider participation occurred during 1997 between the Compensation Committee
and the officers or employees of the Company.
14
<PAGE>
PERFORMANCE GRAPH
Presented below is a graph comparing the total stockholder return on Common
Stock, assuming full dividend reinvestment, with the Standard & Poor's 500
Index (S&P 500) and the Standard & Poor's Building Materials Index (S&P
Building Materials). The graph compares the Company's performance to the other
indices for the five-year period ended December 31, 1997.
JOHNS MANVILLE CORPORATION
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG JOHNS MANVILLE, S&P 500 INDEX AND S&P BUILDING MATERIALS INDEX
<CAPTION>
S&P BUILDING
Measurement period JOHNS S&P 500 MATERIALS
(Fiscal Year Covered) MANVILLE INDEX INDEX
- --------------------- -------- -------- ------------
<S> <C> <C> <C>
Measurement PT -
12/31/92 $ 100.0 $ 100.0 $ 100.0
FYE 12/31/93 $ 112.45 $ 110.08 $ 123.91
FYE 12/31/94 $ 119.06 $ 111.53 $ 91.34
FYE 12/31/95 $ 171.98 $ 153.45 $ 123.72
FYE 12/31/96 $ 229.54 $ 188.68 $ 147.66
FYE 12/31/97 $ 220.14 $ 251.63 $ 179.71
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the identity of beneficial owners believed by
the Company to own more than five percent of the outstanding shares of Common
Stock as of March 1, 1998.
<TABLE>
<CAPTION>
AMOUNT OF
BENEFICIAL PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS
-------------- ------------------------------------ ------------------ ----------
<C> <S> <C> <C>
Common Stock Manville Personal Injury 128,527,110 shares 79.5%
Settlement Trust(1)
8260 Willow Oaks Corporate Drive
Sixth Floor
P. O. Box 10415
Fairfax, Virginia 22031
</TABLE>
- --------
(1) At March 1, 1998, the Trustees of the Trust were: Robert A. Falise,
Chairman and Managing Trustee, Louis Klein, Jr., Frank J. Macchiarola and
Christian E. Markey, Jr., each of whom serves on the Company's Board of
Directors.
15
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of Common Stock
beneficially owned by all Directors and Named Executive Officers and all
Directors and executive officers as a group as of March 1, 1998. As of March
1, 1998, the percentage of Common Stock beneficially owned by any Director,
Named Executive Officer or by all Directors, and executive officers as a
group, did not exceed 1.0 percent of the outstanding shares of the Common
Stock, excluding the 128,527,110 shares of Common Stock owned by the Trust
(constituting 79.5% of the outstanding shares of Common Stock) and attributed
to certain directors who disclaim beneficial ownership of such shares.
<TABLE>
<CAPTION>
COMMON STOCK
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED
- ------------------------ ------------------
<S> <C>
Leo Benatar................................................ 9,769(1)
Thomas L. Caltrider........................................ 8,783(2)
Robert A. Falise........................................... 128,527,110(3)
Todd Goodwin............................................... 33,881(4)
Michael N. Hammes.......................................... 8,508(5)
Kathryn R. Harrigan........................................ 6,809(6)
Charles L. Henry........................................... 947,514(7)
Kenneth L. Jensen.......................................... 251,736(8)
Louis Klein, Jr............................................ 128,527,110(3)
Frank J. Macchiarola....................................... 128,527,110(3)
Christian E. Markey, Jr.................................... 128,527,110(3)
William E. Mayer........................................... 26,930(9)
Harvey L. Perry, Jr........................................ 238,798(10)
Richard B. Von Wald........................................ 421,143(11)
All Directors and executive officers as a group (15
persons).................................................. 130,480,981(12)
</TABLE>
- --------
(1) Includes 5,269 deferred shares issuable under the Non-Employee Directors'
Deferred Compensation Plan.
(2) Includes 5,283 deferred shares issuable under the Company's Deferred
Compensation Plan.
(3) All of these 128,527,110 shares of Common Stock are owned by the Trust, of
which Mr. Falise is the Chairman and Managing Trustee, and Messrs. Klein,
Macchiarola and Markey are Trustees. Voting power with respect to such
shares is shared by all four Trustees of the Trust, and none of Messrs.
Falise, Klein, Macchiarola or Markey can vote the shares alone. Each of
Messrs. Falise, Klein, Macchiarola and Markey disclaims beneficial
ownership of any shares of Common Stock. Pursuant to the Trust Agreement,
no Trustee may individually own any securities of the Company or its
affiliates or have any other direct or indirect financial interest in the
Company or its affiliates.
(4) Includes 14,781 deferred shares issuable under the Non-Employee Directors'
Deferred Compensation Plan.
(5) Includes 8,508 deferred shares issuable under the Non-Employee Directors'
Deferred Compensation Plan.
(6) Includes 4,809 deferred shares issuable under the Non-Employee Directors'
Deferred Compensation Plan.
16
<PAGE>
(7) Includes options to purchase 865,830 shares and 81,684 deferred shares
issuable under the Company's Deferred Compensation Plan.
(8) Includes options to purchase 208,620 shares and 27,616 deferred shares
issuable under the Company's Deferred Compensation Plan.
(9) Includes 6,930 deferred shares issuable under the Non-Employee Directors'
Deferred Compensation Plan.
(10) Includes options to purchase 208,620 shares and 30,178 deferred shares
issuable under the Company's Deferred Compensation Plan.
(11) Includes options to purchase 370,660 shares.
(12) Includes 40,297 deferred shares issuable under the Non-Employee
Directors' Deferred Compensation Plan; 144,761 deferred shares issuable
under the Company's Deferred Compensation Plan, options to purchase
1,653,730 shares and 128,527,110 shares owned by the Trust. See note (3)
above.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(PROXY ITEM NO. 2)
The Board of Directors, acting upon the recommendation of the Audit
Committee, has appointed, subject to ratification by the stockholders at the
forthcoming Annual Meeting, the firm of Coopers & Lybrand L.L.P. as
independent accountants of the Company for the year 1998. Coopers & Lybrand
L.L.P. has acted as the independent accountants of the Company for more than
fifty years and, the Company is advised, has had no financial interest, direct
or indirect, in the Company or any affiliate thereof, nor, other than
providing certain non-audit services, any other connection with the Company
during the past three years.
For 1997, the Company paid Coopers & Lybrand L.L.P. approximately $1.6
million for audit services and approximately $1.2 million for non-audit
services. Audit services rendered in 1997 included services related to
recurring audit activities and non-recurring audit activities principally for
acquisition reviews. Non-audit services consisted primarily of tax
consultations.
Although the submission of this proposal to a vote of the stockholders is
not legally required, the Board of Directors believes that such action follows
sound corporate practice and is in the best interest of the stockholders, to
whom the independent accountants are ultimately responsible. In the event of a
negative vote on this proposal by a majority of the votes cast at the meeting
by the holders of shares entitled to vote thereon, or the termination of the
appointment of Coopers & Lybrand L.L.P. during the year by the Board of
Directors, management will recommend a different firm of independent
accountants for approval by the Board of Directors.
Your Board of Directors recommends a vote FOR ratification of the
appointment of Coopers & Lybrand L.L.P. as independent accountants of the
Company.
OTHER BUSINESS
Management knows of no business that will be presented for consideration
other than the matters described in the Notice of Annual Meeting. If other
matters are presented, it is the intention of the persons designated as
Proxies to vote in accordance with their judgment on such matters.
17
<PAGE>
VOTING PROCEDURES
The affirmative vote of the holders of a plurality of the shares of the
Common Stock present or represented by proxy at the Annual Meeting and
entitled to vote is required for the election of each Director nominee.
Approval of the proposal to ratify the appointment of Coopers & Lybrand L.L.P.
may be authorized by a majority of the votes cast in person or by proxy at the
Annual Meeting by holders of shares of Common Stock entitled to vote thereon.
On all matters presented to stockholders, votes may be cast in favor or
against such matter, or a stockholder may abstain from voting. Abstentions are
counted for the purpose of determining the presence of a quorum for the
transaction of business. Abstentions are also counted in the tabulation of the
total number of shares entitled to vote on matters presented to stockholders,
and thus have the effect of a vote against the proposal. Brokers who hold
shares in street name for beneficial owners have the authority to vote on
certain routine matters, including without limitation, the election of
Directors and ratification of the appointment of accountants, when brokers
have not received voting instructions from the beneficial owners. As to other
matters, brokers may not vote shares held for beneficial owners without
specific instructions from such beneficial owners ("broker non-votes"). Broker
non-votes are counted for determining the presence of a quorum. Broker non-
votes are not counted, however, in the tabulation of the total number of
shares entitled to vote on matters presented to stockholders. The inspectors
of election appointed by the Company will count all votes cast, in person or
by submission of a properly executed proxy, before the closing of the polls at
the Annual Meeting.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Proposals of stockholders intended to be presented at the Company's 1999
Annual Meeting must be received by the Secretary of the Company no later than
November 20, 1998. Proposals received after that date may be excluded from the
Company's proxy materials. No stockholder proposals have been received by the
Secretary of the Company for presentation at the Company's 1998 Annual
Meeting.
By Order of the Board of Directors
[SIGNATURE OF RICHARD B. VON WALD]
Richard B. Von Wald
Executive Vice President,
General Counsel and Secretary
March 16, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997, WITHOUT EXHIBITS, MAY BE OBTAINED BY A STOCKHOLDER OF THE COMPANY,
WITHOUT CHARGE, BY WRITING TO JOHNS MANVILLE CORPORATION, C/O INVESTOR
RELATIONS, P. O. BOX 5108, DENVER, COLORADO 80217-5108.
18
<PAGE>
P R O X Y
JOHNS MANVILLE CORPORATION
PROXY FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Charles L. Henry and Richard B. Von Wald or
either of them as Proxies, each with the power to appoint a substitute, and
hereby authorizes them to represent and to vote as designated hereon, all
the shares of common stock of Johns Manville Corporation held of record by
the undersigned on February 23, 1998, at the Annual Meeting of Stockholders
to be held on April 24, 1998 in Denver, Colorado or any adjournment thereof.
Change of Address
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
(If you have written in the above space, please mark
the corresponding box on the reverse side of this
card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR
CHOICES BY MARKING THE APPROPRIATE SEE REVERSE SIDE
BOXES. SEE REVERSE SIDE, BUT YOU
NEED NOT MARK ANY BOXES IF YOU WISH
TO VOTE IN ACCORDANCE WITH THE
BOARD OF DIRECTORS'
RECOMMENDATIONS. PLEASE SIGN THIS
CARD ON THE REVERSE. A RETURN
ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE IN RETURNING THIS CARD.
<PAGE>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BELOW. IF
NO DIRECTION GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. Election of Directors FOR WITHHELD
NOMINEES: [_] [_]
Leo Benatar, Ernest H. Drew, Robert A. Falise, Todd Goodwin, Michael N. Hammes,
Kathryn Rudie Harrigan, Charles L. Henry, Louis Klein, Jr., Frank J.
Macchiarola, Christian E. Markey, Jr., William E. Mayer.
For, except vote withheld from the following nominee(s):
_______________________________________________________
2. Approval of appointment of Coopers & Lybrand, L.L.P. as Independent
Accountants.
FOR AGAINST ABSTAIN
[_] [_] [_]
If you plan to attend the 1998 Annual Meeting please check this box. [_]
If you indicated a change of address on the reverse side, please check this box.
[_]
SIGNATURE(S) ________________________________________ DATE____________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
