1996 PROXY STATEMENT
PETER KIEWIT SONS', INC.
1000 KIEWIT PLAZA
OMAHA, NEBRASKA 68131
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Peter Kiewit
Sons', Inc. (the "Company") for use at the annual meeting of
stockholders to be held on June 8, 1996. Class C and Class D
common stock are the only classes of the Company's securities
entitled to be voted at the meeting. There were 9,954,006 shares
of Class C stock and 23,219,744 shares of Class D stock outstanding
on March 31, 1996. Stockholders of record at the close of business
on April 26, 1996 will be entitled to notice of, and to vote at,
the annual meeting. This Proxy Statement and proxy forms were
first mailed or delivered to stockholders on or about May 3, 1996.
Voting Procedures
The approval of a plurality of the Class D shares present in
person or by proxy at the annual meeting is required to elect the
nominees as the Class D Directors. The approval of a plurality of
the Class C shares present in person or by proxy at the annual
meeting is required to elect the nominees as the Class C Directors,
unless cumulative voting is required. The approval of a majority
of the combined Class C and Class D shares present in person or by
proxy at the annual meeting is required for the approval of the
Company's 1996 Bonus Plan and 1995 Class D Stock Plan.
Stockholders may vote in person at the annual meeting or by proxy.
Separate proxy forms are enclosed for voting Class C and Class
D shares. There are three matters upon which proxies are being
solicited. With respect to the election of directors, by marking
the enclosed proxy form, the stockholder may indicate voting
preferences by: (i) voting the full number of the stockholder's
shares for each of the Board's nominees; (ii) voting the full
number of shares for some, but not all, of the Board's nominees; or
(iii) voting for none of the nominees. With respect to each of the
proposals to approve the Company's 1996 Bonus Plan and 1995 Class
D Stock Plan, the enclosed proxy form may be marked to indicate (i)
a vote for approval of the proposal, (ii) a vote against approval
of the proposal, or (iii) abstention from voting on the proposal.
If no instructions are provided in a proxy with respect to a
proposal, it will be voted FOR the Board's nominees for directors,
FOR approval of the Company's 1996 Bonus Plan, and FOR approval of
the Company's 1995 Class D Stock Plan.
Proxy forms which are properly signed, dated, and returned
will be voted at the meeting. A person returning the enclosed
proxy may revoke it any time before it is voted at the meeting by:
(i) giving written notice of revocation to the Assistant Secretary;
(ii) sending a later-dated proxy; or (iii) revoking the proxy in
person at the meeting. Abstentions and broker non-votes will not
be counted as shares present on matters on which they are not
voted.
Under the Company's Restated Certificate of Incorporation, any
Class C stockholder is entitled to cumulative voting in any
election of the Class C Directors. Under the cumulative voting
method, the number of the stockholder's shares is first multiplied
by the number of Class C directors to be elected. The resulting
number of votes may then be voted for a single nominee or
distributed unequally among some or all of the nominees. After the
voting is closed, the nominees are ranked in order by the number of
votes received. The highest ranking nominees are then elected
until the number of open directorships is filled. The enclosed
proxy form for Class C shares does not utilize the cumulative
voting method. A separate proxy form which provides for cumulative
voting of Class C shares will be provided promptly to any
stockholder upon request, by writing to Robert L. Giles, Jr., Stock
Registrar and Assistant Secretary, at 1000 Kiewit Plaza, Omaha,
Nebraska 68131, or by telephoning him at 402-342-2052.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominations of Directors
The Board of Directors has determined that 15 directors are to
be elected and has nominated the following persons for election as
the Class C Directors and Class D Directors:
Class C Directors Class D Directors
Richard W. Colf James Q. Crowe
Richard Geary Robert B. Daugherty
Bruce E. Grewcock Charles M. Harper
William L. Grewcock Richard R. Jaros
Tait P. Johnson Robert E. Julian
Leonard W. Kearney
Peter Kiewit, Jr.
Walter Scott, Jr.
Kenneth E. Stinson
George B. Toll, Jr.
All the nominees are current directors of the Company. Each
nominee has agreed to serve as a director, if elected. Directors
shall be elected to serve until the next annual election and until
their successors are duly elected and qualified.
Identification of Directors and Executive Officers
The table below shows information as of March 31, 1996 about
each director and executive officer, including his business
experience during the past five years (1991-1996) and current
directorships in other public reporting companies. The public
companies include CalEnergy Company, Inc. ("CalEnergy"), C-TEC
Corporation ("C-TEC"), and MFS Communications Company, Inc.
("MFS"). Officers of the Company are elected annually by the
directors. The next election of officers will be at the first
board meeting following the election of directors on June 8, 1996.
Name Business Experience Age Since
Walter Scott, Jr.* Chairman of Board and President; 64 1964
also a director of Berkshire
Hathaway Inc., Burlington
Resources Inc., CalEnergy, ConAgra,
Inc., C-TEC, First Bank System,
Inc., MFS, and Valmont Industries, Inc.
Peter Kiewit, Jr. Attorney. Of counsel to the law 69 1966
firm of Gallagher & Kennedy of
Phoenix, Arizona.
William L. Grewcock*Vice Chairman; also a director of 70 1968
MFS.
Robert B. Daugherty Chairman of Board of Valmont 74 1986
Industries, Inc.; also a director
of KN Energy, Inc.
Charles M. Harper Chairman of RJR Nabisco Holdings 68 1986
Corp.; also a director of ConAgra,
Inc., E.I. DuPont de Nemours and
Company, Norwest Corporation,
and Valmont Industries, Inc.
Robert E. Julian* Executive Vice President; Chief 56 1987
Financial Officer (1991-1995);
Treasurer (1991-1993); also a
director of MFS and C-TEC.
Kenneth E. Stinson* Executive Vice President; 53 1987
Chairman and CEO, Kiewit Construction
Group Inc. ("KCG"); also a director
of MFS.
Richard Geary* Executive Vice President, KCG; 61 1988
President of Kiewit Pacific Co.
Leonard W. Kearney* Vice President, KCG; President, 55 1989
Kiewit Construction Company and
Kiewit Western Co.
George B. Toll, Jr.*Executive Vice President, KCG 60 1993
(since 1994); Vice President,
Kiewit Pacific Co. (1991-1994)
James Q. Crowe Chairman of the Board and CEO 46 1993
of MFS; also a director of CalEnergy
and C-TEC.
Richard R. Jaros* Executive Vice President (since 44 1993
1993); Chief Financial Officer (since
1995); Vice President (1990-1992);
President and COO (1992-1993) of
CalEnergy; also a director of
CalEnergy, C-TEC, and MFS.
Richard W. Colf* Vice President, Kiewit Pacific Co. 52 1994
Bruce E. Grewcock* President (since 1992), Sr. Vice 42 1994
President (1991-1992), Vice
President (1991) of Kiewit Mining
Group Inc.; also a director of Kinross
Gold Corporation.
Tait P. Johnson* President, Gilbert Southern Corp. 46 1995
and Gilbert Texas Construction Corp.
Identified by asterisks are the 11 current executive officers
of the Company. The Company considers its executive officers to be
its directors who are employed by the Company or its subsidiaries.
Bruce E. Grewcock is the son of William L. Grewcock.
The Board unanimously recommends a vote FOR the nominees named
above.
Information About the Board of Directors
The Board of Directors has an Audit Committee, an Executive
Compensation Committee, and an Executive Committee.
The current Audit Committee members are Messrs. Kearney
(Chairman) and Kiewit. The functions of the audit committee are to
recommend the selection of the independent auditors; review the
results of the annual audit; inquire into important internal
control, accounting and financial matters; and report and make
recommendations to the full Board of Directors. The Committee had
four meetings in 1995.
The current Executive Compensation Committee members are
Messrs. Daugherty, Harper, and Kiewit, none of whom are employees
of the Company. This committee reviews the compensation of the
Company's executive officers. This committee has also assumed the
functions of the former Management Compensation Committee, the
purpose of which was to review the compensation, securities
ownership, and benefits of the Company's employees other than its
executive officers. The committee had two formal meetings in 1995.
The current Executive Committee members are Messrs. Scott
(Chairman), William Grewcock, Julian, Stinson, and Jaros. The
committee exercises the powers of the Board between Board meetings,
except powers assigned to other committees. During 1995, the
committee had no formal meetings, acted by written consent action
in lieu of a meeting on four occasions, and had several informal
meetings.
The Company does not have a nominating committee. The
Company's Restated Certificate of Incorporation provides that the
incumbent Class C Directors may nominate a slate of Class C
Directors and the incumbent Class D Directors may nominate a slate
of Class D Directors, for election at the annual meeting of
stockholders. On April 26, 1996, the incumbent Class C and Class
D Directors nominated the respective slates listed on the second
page of this Proxy Statement.
The Board of Directors of the Company had five formal meetings
in 1995 and acted by written consent action on four occasions. In
1995, no director attended less than 75% of the meetings of the
Board of Directors and the committees of which he was a member.
Directors who are employees of the Company or its subsidiaries
do not receive directors' fees. Non-employee directors are paid
annual directors' fees of $30,000, plus $1,200 for attending each
meeting of the Board of Directors, and $1,200 for attending each
meeting of a committee of the Board.
Compensation Committee Interlocks and Insider Participation
Mr. Julian is a member of the Compensation Committee of C-TEC.
Mr. Jaros is a member of the Compensation Committees of CalEnergy
and MFS.
PROPOSAL 2
APPROVAL OF THE 1996 BONUS PLAN
The Company has adopted, subject to stockholder approval, the
Peter Kiewit Sons', Inc. 1996 Bonus Plan (the "Bonus Plan"). The
Bonus Plan will be administered by the Executive Compensation
Committee (the "Committee") and is intended to serve as a qualified
performance-based compensation program under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Section
162(m) denies a deduction by an employer for certain compensation
in excess of $1 million per year paid by a publicly held
corporation to the chief executive officer and the next four most
highly compensated executive officers (the "Covered Employees").
Certain compensation, including compensation based on performance
goals, is excluded from this deduction limit. Among the
requirements for compensation to qualify for this exception is that
the material terms under which the compensation is to be paid must
be disclosed to and approved by the stockholders in a separate vote
prior to the payment. Accordingly, the Bonus Plan is being
submitted to the stockholders for approval at the 1996 Annual
Meeting.
The following description of the Bonus Plan is qualified in
its entirety by the terms of the Bonus Plan, a copy of which is
attached as Exhibit A to this Proxy Statement.
The eligible participants of the Bonus Plan are the executive
officers of the Company identified in the Company's annual proxy
statement, i.e. those directors who are employed by the Company or
its subsidiaries. There are currently 11 eligible participants.
The Bonus Plan provides for the payment of annual incentive bonus
awards to participants if, and only to the extent that, performance
goals established by the Committee are met. Although the Bonus
Plan is designed to mitigate the negative impact of Section 162(m)
on stockholders, the Company may pay discretionary bonuses based on
nonquantifiable performance goals which are also in the best
interest of stockholders. Such bonuses will not be made pursuant
to this Bonus Plan and accordingly will not be eligible for the
performance based exception to the $1 million limitation of Section
162(m).
The goals established by the Committee can be expressed in
terms of one or more pre-set financial or other objective goals as
they relate to an individual, the Company as a whole, or to the
business unit for which a particular executive officer is
responsible. Financial goals may be expressed, for example, in
terms of stock price, revenues, earnings per share, or return on
equity. The goals can include standards for minimum attainment,
target attainment, and maximum attainment. The goals established
by the Committee can be (but need not be) different each year and
different goals may be applicable to different participants. The
goals with respect to a particular plan year will be established
not later than the latest date permissible under Section 162(m).
Any such goals shall (i) be determined in accordance with the
Company's audited financial statements and generally accepted
accounting principals and reported upon by the Company's
independent accountants, or (ii) be based upon a standard under
which a third party with knowledge of the relevant facts could
determine whether the goal is met.
Subject to the approval of this Bonus Plan by the
stockholders, for the 1996 plan year, the Committee has established
performance goals measured in terms of net earnings, specifically,
Net Earnings Attributable to Class B&C Stock and Net Earnings
Attributable to Class D Stock, as those amounts are reported in the
Company's audited financial statements. The maximum bonus that
could be paid for 1996 to the Chairman is $2 million and the
maximum bonus payable to any other executive officer is $1.5
million. The Committee may, in its discretion, reduce or eliminate
the amount payable to any participant in each case based upon such
factors as the Committee may deem relevant, but shall not increase
the amount payable to any participant. Before any awards are paid
to a Covered Employee, the Committee must certify that the
performance goals and other material terms have been satisfied.
If approved by stockholders, the Bonus Plan shall first be
effective with respect to the 1996 plan year. The Bonus Plan has
a five year term, ending with fiscal year 2000.
The Board can from time to time amend, suspend, or discontinue
the Bonus Plan (including amendments which could increase the
Company's cost); provided, however, that no amendment which
requires stockholder approval in order for the Bonus Plan to
continue to comply with Section 162(m) will be effective unless it
receives the requisite stockholder approval. In addition, the
Committee can make such amendments as it deems necessary to comply
with other applicable laws, rules, and regulations.
Because performance goal criteria may vary from year to year
and from participant to participant, benefits under the Bonus Plan
are not presently determinable.
The Board unanimously recommends a vote FOR approval of the
1996 Bonus Plan.
PROPOSAL 3
APPROVAL OF 1995 CLASS D STOCK PLAN
Effective September 25, 1995, the Board of Directors adopted
the Peter Kiewit Sons', Inc. 1995 Class D Stock Plan (the "Plan"),
under which 1,000,000 shares of Class D common stock ("Shares")
were reserved for issuance upon the exercise of awards. The
Company is seeking stockholder approval of the Plan in order to
comply with the requirements of Rule 16b-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (the
"Exchange Act"), and the requirements of Sections 162(m) and 422 of
the Code. The following summary of the 1995 Stock Plan is
qualified in its entirety by express reference to the text of the
Plan which is included as Exhibit B to this Proxy Statement. The
Plan permits the issuance of stock options (including incentive
stock options), restricted stock, convertible debentures, and other
stock-related awards (other than stock appreciation rights).
Purpose and Eligibility. The primary purpose of the Plan is
to increase the value of Class D Shares and the profitability of
the Company and the Diversified Group (i) by enabling the Company
and the Diversified Group to attract, retain, motivate, and reward
employees, and (ii) by aligning the interests of those employees
with the interests of the Company, the Diversified Group, and the
holders of Class D Shares. All employees of Kiewit Diversified
Group Inc. ("KDG") or its subsidiaries and full-time employees of
Peter Kiewit Sons', Inc. who perform substantial services to the
Diversified Group are eligible participants. The approximate
number of persons eligible to participate is 50.
Administration. The Plan is administered by the Company's
Executive Compensation Committee (the "Committee"). The Committee,
in its sole discretion, has the authority to determine the terms of
all stock options, the employees to whom options are granted, the
number of options granted, and the timing of grants, vesting,
exercise, and forfeiture.
Limits. The Plan has a ten year term, ending September 25,
2005. The Committee may not grant benefits with respect to more
than 1,000,000 Shares during the term of the Plan. The Committee
may not grant benefits with respect to more than 500,000 Shares in
any two year period and may not grant benefits to any one
participant with respect to more than 200,000 Shares.
Terms and Conditions of Options. The Committee may from time
to time grant stock options (including incentive options under
Section 422 of the Code) to a participant. The terms of options
granted under the Plan will be set out in option agreements between
the Company and participants which will contain such provisions as
the Committee from time to time deems appropriate, including the
exercise price and expiration date of such options. The options
must have an exercise price that is not less than the fair market
value of the Shares on the date of the grant. On the date of this
proxy statement, the formula price under the Company's charter is
$49.50 per Share. Unless otherwise provided by the Committee,
options granted under the Plan will become exercisable at a rate of
20% per year over a five-year period.
Other Awards. The Committee may grant any other stock or
stock-related awards (other than stock appreciation rights) to a
participant that the Committee deems appropriate, including but not
limited to restricted Shares, convertible debentures, and stock
bonuses.
Payment upon Exercise. Payment in full for the number of
Shares purchased under any award, including an option, must be made
to the Company at the time of such exercise. Payment for such
Shares must be made in cash, or with the consent of the Committee,
in Shares, or any combination thereof. No fees or commissions are
applicable to purchases of Shares under the Plan.
Withholding. With respect to any payments made to
participants under the Plan, the Company will have the right to
withhold any taxes required by law to be withheld because of such
payments. The Committee, in its sole discretion, may permit a
participant to satisfy tax withholding obligations, in whole or in
part, either (i) by having the Company withhold from the Shares to
be issued upon the exercise of an option or upon the receipt of
another award, Shares having a fair market value equal to the
withholding amount due, or (ii) by delivering to the Company
already-owned Shares to satisfy the withholding amount.
Adjustments. If any change is made to the Shares by reason of
any merger, consolidation, reorganization, recapitalization, stock
dividend, split-up, exchange of shares, change in corporate
structure, or otherwise, appropriate adjustments will be made by
the Committee to the kind and number of Shares and price per Share
subject to each outstanding award.
Non-transferability. No grant of options, or any right or
interest therein, is assignable or transferable except by will or
the laws of descent and distribution. During the lifetime of an
optionee, options are exercisable only by the optionee or his or
her legal representative. Similarly, restricted stock granted to
participants may not be sold, transferred, pledged or otherwise
encumbered during the restricted period.
Termination or Amendment. The Board of Directors may
terminate the Plan at any time, provided that no such action shall
deprive participants of their rights under outstanding awards. The
Committee may also amend the Plan from time to time as it deems
appropriate, if after amendment, the Plan continues to be in
compliance with Rule 16b-3 under the Exchange Act and Sections
162(m) and 422 of the Code.
Federal Income Tax Consequences. The following is a brief
discussion of the federal income tax consequences of transactions
under the Plan. The 1995 Class D Stock Plan is not qualified under
Section 401(a) of the Code. This discussion is limited to stock
options, other than Code Section 422 incentive stock options, since
the Company presently intends to issue only "non-statutory"
options. With respect to such non-statutory options, (1) no income
is realized by the optionee at the time the option is granted; (2)
generally, at exercise, ordinary income is realized by the optionee
in an amount equal to the difference between the option price paid
for the shares and the fair market value of the shares on the date
of exercise, and the optionee's employer is generally entitled to
a tax deduction in the same amount subject to applicable tax
withholding requirements; and (3) at sale, appreciation (or
depreciation) after the date of exercise is treated as either
short-term or long-term capital gain (or loss) depending on how
long the shares have been held.
The Board of Directors unanimously recommends a vote FOR
approval of the 1995 Class D Stock Plan.
Security Ownership of Certain Beneficial Owners and Management
The table below shows information about the ownership of the
Company's common stock as of March 31, 1996 by the Company's
directors and executive officers (individually and as a group), and
each person who beneficially owns more than 5 percent of a class of
the Company's voting securities.
Management Table.
Number of Percent of Number of Percent of
Class C Class C Class D Class D
Name Shares Shares Shares Shares
Walter Scott, Jr. 1,140,313 11.5%(1) 2,720,152(2) 11.7%
Kenneth E. Stinson 626,416 6.3 33,416 0.1
Richard Geary 528,768 5.3 57,252(3) 0.2
George B. Toll, Jr. 371,883 3.7 87,711 0.4
Richard W. Colf 363,217 3.6 72,282 0.3
Leonard W. Kearney 264,009 2.7 172,282(4) 0.7
Tait P. Johnson 173,434 1.7 43,434 0.2
Bruce E. Grewcock 157,775 1.6 52,777(5) 0.2
Richard R. Jaros 51,544 0.5 103,641 0.4
William L. Grewcock 22,048 0.2 1,119,257(6) 4.8
Robert E. Julian - - 403,908(7) 1.7
James Q. Crowe - - 134,369 0.6
Robert B. Daugherty - - 9,000 <.1
Charles M. Harper - - 9,000 <.1
Peter Kiewit, Jr. - - 2,000 <.1
Directors and Executive
Officers as 3,699,407 37.2% 5,020,481 21.6%
a Group
Beneficial Owner Table.
Donald L. Sturm(8) - - 1,822,375 7.8%
(1) The Certificate of Incorporation limits each employee's
ownership to 10% of the Class C shares (outstanding shares plus
shares reserved for conversion of debentures), measured each
January 1. Prior to the end of 1995, Mr. Scott reduced his Class C
ownership to the required 10%. Although he acquired no new Class
C shares, the number of shares owned by all Class C stockholders
declined, so that on January 1, 1996, Mr. Scott's holdings stood at
11%. He has one year to reduce his holdings to 10%.
(2) Table does not include 1,840,932 Class D shares held in
irrevocable trusts under which the trustee is required to vote with
the management of the Company. Does not include 26,245 Class D
shares owned by the Suzanne and Walter Scott Foundation.
(3) Does not include 40,000 Class D shares owned by Mrs. Geary.
(4) Does not include 25,231 Class D shares owned by Mrs. Kearney.
(5) Does not include 24,589 Class D shares held in irrevocable
trusts for which Mr. Grewcock is a trustee.
(6) Does not include 20,000 Class D shares held by the Bill and
Berniece Grewcock Foundation, nor 529
Class D shares owned by Mrs. Grewcock.
(7) Does not include 82,198 Class D shares held in irrevocable
trusts under which the trustee is required to vote with the
management of the Company.
(8) Mr. Sturm's business address is 3033 East First Ave., Denver,
Colorado 80206.
Report of Executive Compensation Committee
The Executive Compensation Committee of the Board of Directors
has furnished the following report on executive compensation:
The Executive Compensation Committee of the Board of Directors
is composed entirely of non-employee directors. This Committee is
responsible for reviewing and approving on an annual basis the
compensation of the Company's chief executive officer and the other
executive officers of the Company. The objectives of the Company's
executive compensation program are to (a) support the achievement
of desired Company performance, (b) provide compensation that will
attract and retain superior talent, (c) reward performance, (d) and
align the executive officers' interests with the success of the
Company by placing a portion of total compensation at risk. The
executive compensation program has two elements: salaries and
bonuses. The program provides base salaries which are intended to
be competitive with salaries provided by other comparable
companies. Bonuses are the vehicle by which executive officers can
earn additional compensation depending on individual, business
unit, and Company performance. The Compensation Committee uses its
discretion to set executive compensation at levels warranted in its
judgment by external, internal, or individual's circumstances.
The Committee determines the salary and bonus of the chief
executive officer. in 1995, the Committee approved an annual
salary (for the 1995-1996 pay cycle) of $630,000 for Mr. Scott. In
1996, the Committee separately looked at Mr. Scott's
responsibilities, contributions and performance as to the
Construction business and the Diversified business. The Committee
approved an annual salary (for the 1996-1997 pay cycle) of $250,000
as to Construction, and $500,000 as to Diversified. In recognition
of Mr. Scott's contributions to the Company's performance in 1995,
the Committee has approved a bonus of $250,000 as to Construction,
and $1,000,000 as to Diversified, each payable in 2000. A number
of factors were considered in setting Mr. Scott's bonus. These
factors included the Company's overall performance, the increase in
the combined stock formula prices, as well as Mr. Scott's personal
effort and accomplishments in managing the Company. The Committee
reviewed each factor as to both Construction and Diversified. In
addition, the Committee considered the Company's 1995 MFS Spin-off,
and the resultant increases in shareholder value. After
considering all of the factors, the Committee felt the approved
bonus was well within a reasonable range.
The foregoing report dated March 21, 1996 was presented by the
Executive Compensation Committee, Messrs. Daugherty, Harper and
Kiewit.
Stock Performance Graph
The graphs below compare the cumulative total return (stock
appreciation plus reinvested dividends) of the Company's common
stock with four indexes of publicly traded stocks. Unlike publicly
traded stocks, the Company's stock is valued by a formula contained
in the Company's certificate of incorporation. Company stock is
valued at the end of the Company's fiscal year and the formula
value is reduced as dividends are declared during the year. For
purposes of the graphs, it is assumed that dividends are
immediately reinvested in additional shares of the Company's common
stock, although such reinvestment is not permitted in actual
practice. Although the Company's fiscal year ends on the last
Saturday in December, its stock is compared against indexes which
assume a fiscal year ending December 31.
Because of two corporate restructuring events during the last
five years, further assumptions about total return are required.
The Company's stock was reclassified on January 8, 1992. Each old
Class B&C share was exchanged for one new Class B&C share and one
Class D share. The actual total return of the old Class B&C shares
for 1991 was 43 percent. A hypothetical total return of 43 percent
for 1991 has been assigned to each of the new Class B&C and Class
D shares.
On September 30, 1995, the Company spun-off its stock in MFS
Communications Company, Inc. to its Class D shareholders. For each
Class D share, 1.741 shares of MFS common stock and .651 share of
MFS preferred stock were distributed. On the distribution date,
1.741 shares of MFS common stock had a public market value of
$76.17 and .651 share of MFS preferred stock had a value of $.65
(together, a "distribution unit" of $76.82). For purposes of the
graph below, it is assumed that each distribution unit was
immediately sold for $76.82 and the proceeds reinvested in
additional Class D shares, which then had the reduced formula price
of $40.40 per share.
The formula value of the new Class B&C shares is linked to the
performance of the Company's Construction & Mining Group; that
Group's revenues come primarily from construction operations. The
formula value of the Class D shares is linked to the performance of
the Company's Diversified Group, which is primarily engaged in coal
mining and telecommunications businesses.
The first graph compares the cumulative total return of the
Company's Class B&C shares for the five year period 1991-1995 with
the Standard and Poors Composite 500 Index and the Dow Jones Heavy
Construction Index. The graph assumes that the value of the
investment was $100 on December 31, 1990 and that all dividends and
other distributions were reinvested.
[INSERT GRAPH]
1990 1991 1992 1993 1994 1995
Class B & C Stock 100 143 191 236 280 368
S&P 500 Index 100 130 140 155 157 215
Dow Jones Heavy Construction Index100 119 115 121 116 162
The second graph compares the cumulative total return of the
Company's Class D shares for the five year period 1991-1995 with
the Dow Jones Coal Index and the NASDAQ Telecommunications Index.
The graph assumes that the value of the investment was $100 on
December 31, 1990 and that all dividends and other distributions
were reinvested.
[INSERT GRAPH]
1990 1991 1992 1993 1994 1995
Class D Stock 100 143 157 187 189 451
Dow Jones Coal Index 100 100 90 132 130 137
NASDAQ Telecommunications Index 100 138 169 261 216 260
Summary Compensation Table
The table below shows the annual compensation of the Company's
chief executive officer and the next four most highly compensated
executive officers (the "Named Executive Officers"). Peter Kiewit
Sons', Inc. does not currently have plans under which options,
stock appreciation rights, restricted stock awards, long-term
incentive compensation, or pension benefits are held by the Named
Executive Officers.
Annual Compensation
Name and Other Annual
Principal Position Year Salary($) Bonus($) Compensation($)
Walter Scott, Jr. 1995 630,000 1,250,000 157,800(1)
Chief Executive 1994 630,000 500,000 126,900
Officer 1993 630,000 750,000 131,500
Kenneth E. Stinson 1995 351,300 600,000
Executive Vice 1994 310,800 475,000
President 1993 253,500 500,000
Richard Geary 1995 252,800 525,000
Executive Vice 1994 234,800 450,000
President of KCG 1993 215,700 500,000
Robert E. Julian 1995 272,500 500,000
Executive Vice 1994 260,500 200,000
President 1993 248,500 200,000
Richard R. Jaros
Executive Vice 1995 304,100 400,000
President 1994 276,000 300,000
1993 293,700 250,000
(1) Other Annual Compensation means perquisites and other personal
benefits received by Mr. Scott, including the non-business use of
Company aircraft. The amounts listed are taxable income to Mr.
Scott. The aircraft usage values are calculated pursuant to
federal income tax regulations. The other Named Executive Officers
received Other Annual Compensation of less than $50,000, the
required reporting threshold.
Certain Relationships and Related Transactions
The Executive Compensation Committee approved a bonus pool to
be distributed among the senior management team of MFS and KDG in
recognition of their extraordinary achievements in creating value
for the Kiewit shareholders over a significant period ending with
the distribution of MFS stock to the Class D shareholders in 1995.
Mr. Crowe was paid $12 million from the bonus pool in recognition
of his service as the senior executive officer of MFS and as a
senior executive officer of KDG throughout that period, as well as
for his efforts in the recruitment and development of other MFS and
Kiewit senior managers.
The Company loaned Mr. Toll $800,000 during 1994 in connection
with the purchase of a residence and relocation expenses. The full
principal amount of his non-interest bearing demand note payable to
the Company is currently outstanding.
Options/SARs
The Company has no outstanding options and has not granted any
new stock appreciation rights ("SARs") since 1990. No SARs are
held by or were exercised by the Named Executive Officers during
1995, except by Messrs. Julian and Jaros. Messrs. Scott and Jaros
hold certain options on CalEnergy common stock. The following
required table provides information on the value of the unexercised
options/SARs of the Named Executive Officers as of the end of the
1995 fiscal year.
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End
Option/SAR Values Table
Number of Securities Value of Un-
Shares Underlying Un- exercised In-
Acquired exercised Options/ the-Money
on Value SARS at Fiscal Year Options/SARs
Exercise Realized End (#) at Fiscal
(#) ($) Exercisable Un- Year End ($)
Name Exercisable Exercisable
Un-Exercisable
Walter Scott, Jr.
CalEnergy(1) - - 10,100 - 46,503 -
Kenneth E. Stinson
- - - - - -
Richard Geary
- - - - - -
Robert E. Julian(2)
- 1,022,000 - - - -
Richard R. Jaros(2)
- 204,400 - - - -
CalEnergy(1) - - 375,725 34,375 1,786,128 122,375
(1) Values of the CalEnergy options are the difference between the
exercise price of the options and the closing price of the CECI
common stock on the New York Stock Exchange of $19.50 per share on
December 31, 1995.
(2) Messrs. Julian and Jaros were granted 20,000 and 4,000 SARs,
respectively, in 1990 under the Kiewit Long-Term Incentive Plan
established in 1986 to provide compensation based on increase in
the value of the Company's common stock. The SARs granted in 1990
matured on January 1, 1995. Price appreciation and dividends over
the five year period resulted in a final payment in 1995 of $51.10
per 1990 SAR.
Mr. Crowe, who was not an executive officer of the Company at
the end of 1995, holds various options to purchase shares of MFS
and CalEnergy common stock.
Other Matters
Management knows of no other matters to be voted upon at the
annual meeting. The discretion of the proxyholders is limited to
casting votes as directed by stockholder proxies and voting on
procedural matters incidental to fulfilling those directions.
Accountants
Coopers & Lybrand, certified public accountants, have been
selected by the Board of Directors as the independent public
accountants for the Company. Representatives of Coopers & Lybrand
are expected to be present at the stockholders' meeting and will
have the opportunity to make a statement and to respond to
appropriate questions.
Solicitation Expenses
The Company will bear the cost of the solicitation of proxies.
In addition to the use of mail, proxies may be solicited in person
or by telephone by management or other employees of the Company,
for which they will receive no additional compensation.
1997 Stockholder Proposals
Any proposals from stockholders intended to be presented at
the 1997 annual meeting of stockholders must be received by the
Company by January 1, 1997, in order to be included in the proxy
materials for that meeting. Any such proposals should be sent to
the Secretary, Peter Kiewit Sons', Inc., 1000 Kiewit Plaza, Omaha,
Nebraska 68131.
Annual Report
The Company is mailing to each stockholder, along with this
Proxy Statement, a copy of its annual report. The Company's annual
report is its Form 10-K for the fiscal year ending December 30,
1995, as filed with the U.S. Securities and Exchange Commission.
THE COMPANY WILL FURNISH WITHOUT CHARGE UPON THE WRITTEN
REQUEST OF A STOCKHOLDER A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES, AND
EXHIBITS, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
WRITTEN REQUESTS SHOULD BE ADDRESSED TO STOCK REGISTRAR, PETER
KIEWIT SONS', INC., 1000 KIEWIT PLAZA, OMAHA, NEBRASKA 68131.
PETER KIEWIT SONS', INC.
May 3, 1996
EXHIBIT A
PETER KIEWIT SONS', INC.
1996 BONUS PLAN
1. Purposes.
The purposes of the Peter Kiewit Sons', Inc. 1996 Bonus Plan
(the "Plan") are to attract and retain highly-qualified executives
by providing appropriate performance-based short-term incentive
awards and to serve as a qualified performance-based compensation
program under Section 162(m) of the Code, in order to preserve the
Company's tax deduction for compensation paid under the Plan to
Covered Employees.
2. Definitions.
The following terms, as used herein, shall have the following
meanings:
(a) "Board shall mean the Board of Directors of the Company.
(b) "Bonus" shall mean any annual incentive bonus award granted
pursuant to the Plan, the payment of which shall be contingent upon
the attainment of Performance Goals with respect to a Plan Year.
(c) "Code" shall mean the Internal Revenue code of 1986, as
amended from time to time.
(d) "Committee" shall mean the Executive Compensation Committee of
the Board.
(e) "Company" shall mean Peter Kiewit Sons', Inc., a corporation
organized under the laws of the State of Delaware, or any successor
corporation.
(f) "Covered Employee" shall have the meaning set forth in Section
162(m)(3) of the Code (or any successor provision).
(g) "Executive Officers" shall mean an officer of the Company who,
as of the beginning of a Plan Year, is an "executive officer"
within the meaning of Rule 3b-7 promulgated under the Securities
Exchange Act of 1934, as amended.
(h) "Participant" shall mean the chief executive officer, chief
operating officer and chief financial officer of the Company, the
chief executive officer of each Subsidiary and any other Executive
Officer selected by the Committee to participate in the Plan.
(i) "Performance Goals" shall mean the criteria and objectives
which must be met during the Plan Year as a condition of the
Participant's receipt of payment with respect to a Bonus, as
described in Section 3 hereof.
(j) "Plan" shall mean the Peter Kiewit Sons', Inc. 1996 Bonus
Plan, as amended from time to time.
(k) "Plan Year" shall mean the Company's fiscal year.
(l) "Subsidiary" shall mean any subsidiary of the Company which is
designated by the Board or the Committee to have an Executive
Officer participant in the Plan.
3. Performance Goals.
Performance goals for each Plan Year shall be established by
the Committee not later than the latest date permissible under Code
Section 162(m). Such Performance Goals may be expressed in terms
of one or more financial or other objective goals. Financial goals
may be expressed, for example, in terms of stock price, revenues,
earnings per share, or return on equity. To the extent applicable,
any such Performance Goal shall be determined (i) in accordance
with the Company's audited financial statements and generally
accepted accounting principles and reported upon by the Company's
independent accountants or (ii) so that a third party having
knowledge of the relevant facts could determine whether such
Performance Goal is met. Performance Goals shall include a
threshold level of performance below which no Bonus payment shall
be made, levels of performance at which specified percentages of
the target Bonus shall be paid, and a maximum level of performance
above which no additional Bonus shall be paid. The Performance
Goals established by the Committee may be (but need not be)
different for each Plan Year and different Performance goals may be
applicable to different Participants.
4. Bonuses.
(a) In General. For each Plan Year commencing with the Plan Year
ending December 1996, the Committee shall, no later than the time
specified in paragraph 3 hereof, specify the Performance Goals
applicable to such Plan Year. The Committee may, in its
discretion, reduce or eliminate the amount payable to any
Participant (including a Covered Employee), in each case based upon
such factors as the Committee may deem relevant, but shall not
increase the amount payable to any Covered Employee. Unless
otherwise provided by the Committee in its discretion in connection
with terminations of employment, payment of a Bonus for a
particular Plan Year shall be made only if and to the extent the
Performance Goals with respect to such Plan Year are attained and
only if the Participant is employed by the Company or one of its
Subsidiaries on the last day of such Plan Year.
(b) Time of Payment. Unless otherwise determined by the
Committee, or except as provided in Section 6(e) hereof, all
payments in respect of Bonuses granted under this Section 4 shall
be made no later than a reasonable period after the end of the Plan
Year. In the case of Participants who are Covered Employees,
unless otherwise determined by the Committee in connection with
terminations of employment and except as provided in Section 6(e)
hereof, such payments shall be made only after achievement of the
Performance Goals has been certified by the Committee.
(c) Form of Payment. Payment of such Participant's Bonus for any
Plan Year shall be made in cash.
(d) Deferral Elections. The Company may give each Participant the
right, in accordance with rules and regulations to be established
by the Committee, to elect to defer the receipt of any or all of
such Participant's Bonus under the Plan in respect of any Plan
Year.
5. Administration.
The Plan shall be administered by the Committee. The
Committee shall have the authority in its sole discretion, subject
to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers either
specifically granted to it under the Plan or necessary or advisable
in the administration of the Plan, including, without limitation,
the power to grant Bonuses; to determine the persons to whom and
the time or times at which Bonuses shall be granted; to determine
the terms, conditions, restrictions and performance criteria
relating to any Bonus; to make adjustments in the Performance Goals
in response to changes in applicable laws, regulations, or
accounting principles to the extent not inconsistent with Section
162(m) of the Code and the regulations thereunder; except as
otherwise provided in Section 4(a) hereof, to adjust compensation
payable upon attainment of Performance Goals; to construe and
interpret the Plan and any Bonus; to prescribe, amend and rescind
rules and regulations relating to the Plan, including but not
limited to rules and regulations referred to in Sections 4(c) and
4(d) hereof; and to make all other determinations deemed necessary
or advisable for the administration of the Plan.
The Committee shall consist of two or more persons each of
whom is an "outside director" within the meaning of Section 162(m)
of the Code. The Committee may appoint a chairperson and a
secretary and may make such rules and regulations for the conduct
of its business as it shall deem advisable, and shall keep minutes
of its meetings. All determinations of the Committee shall be made
by a majority of its members either present in person or
participating by conference telephone at a meeting or by unanimous
written consent. The Committee may delegate to one or more of its
members or to one or more agents such administrative duties as it
may deem advisable, and the Committee or any person to whom it has
delegated duties as aforesaid may employ one or more persons to
render advice with respect to any responsibility the Committee, or
such person may have under the Plan. All decisions, determinations
and interpretations of the Committee shall be final and binding on
all persons, including the Company, the Participant (or any person
claiming any rights under the Plan from or through any Participant)
and any shareholder.
No member of the Board or the Committee shall be liable for
any action taken or determination made in good faith with respect
to the Plan or any Bonus granted hereunder.
6. General Provisions.
(a) Compliance With Legal Requirements. The Plan and the granting
of Bonuses, and the other obligations of the Company under the Plan
shall be subject to all applicable federal and state laws, rules
and regulations, and to such approvals by any regulatory or
governmental agency as may be required.
(b) No Right To Continued Employment. Nothing in the Plan or in
any Bonus granted shall confer upon any Participant the right to
continue in the employ of the Company or any of its Subsidiaries or
to be entitled to any remuneration or benefits not set forth in the
Plan or to interfere with or limit in any way the right of the
Company to terminate such Participant's employment.
(c) Withholding Taxes. The Company or Subsidiary employing any
Participant shall deduct from all payments and distributions under
the Plan any taxes required to be withheld by federal, state or
local governments.
(d) Amendment and Termination of the Plan. The Board may at any
time and from time to time alter, amend, suspend, or terminate the
Plan in whole or in part; provided, however that no amendment which
requires stockholder approval in order for the Plan to continue to
comply with Code Section 162(m) shall be effective unless the same
shall be approved by the requisite vote of the shareholders of the
Company. Additionally, the Committee may make such amendments as
it deems necessary to comply with other applicable laws, rules and
regulations. Notwithstanding the foregoing, no amendment shall
affect adversely any of the rights of any Participant, without such
Participant's consent, under any Bonus theretofore granted under
the Plan.
(e) Participant Rights. No Participant shall have any claim to be
granted any Bonus under the Plan, and there is no obligation for
uniformity of treatment among Participants.
(f) Unfunded Status of Bonuses. The Plan is intended to
constitute an "unfunded" plan for incentive compensation. With
respect to any payments which at any time are not yet made to a
Participant pursuant to a Bonus, nothing contained in the Plan or
any Bonus shall give any such Participant any rights that are
greater than those of a general creditor of the Company.
(g) Governing Law. The Plan and the rights of all persons
claiming hereunder shall be construed and determined in accordance
with the laws of the State of Delaware without giving effect to the
choice of law principles thereof.
(h) Effective Date. The Plan shall first be effective with
respect to the 1996 Plan Year, but only if the Plan shall have been
approved at the 1996 annual meeting by the requisite vote approval
of the shareholders of the Company.
(i) Interpretation. The Plan is designed and intended to comply
with Section 162(m) of the Code, to the extent applicable, and all
provisions hereof shall be construed in a manner to so comply.
(j) Term. No Bonus may be granted under the Plan with respect to
any Plan Year after Plan Year 2000. Bonuses made with respect to
Plan Year 2000 or prior years, however, may extend beyond Plan Year
2000 and the provisions of the Plan shall continue to apply
thereto.
EXHIBIT B
PETER KIEWIT SONS', INC.
1995 CLASS D STOCK PLAN
ARTICLE I
NAME AND PURPOSE
1.1 Name. The name of the Plan is the Peter Kiewit Sons', Inc.,
1995 Class D Stock Plan.
1.2 Purpose. The purpose of the Plan is to increase the value of
Class D Stock and the profitability of the Company and the
Diversified Group (i) by enabling the Company and the Diversified
Group to attract, retain, motivate and reward employees, and (ii)
by aligning the interests of those employees with the interests of
the Company, the Diversified Group and the holders of Class D
Stock.
ARTICLE II
DEFINITIONS
2.1 "Agreement" means any written agreement, document or
instrument that evidences a grant of a Benefit to a Participant and
the terms, conditions and provisions of, and restrictions upon, the
Benefit.
2.2 "Benefit" means any benefit granted to a Participant under
this Plan.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Certificate" means the certificate of incorporation of the
Company, as amended from time to time.
2.5 "Class D Conversion Price" has the meaning ascribed to it in
the Certificate.
2.6 "Class D Per Share Price" has the meaning ascribed to it in
the Certificate.
2.7 "Class D Stock" means the Class D Diversified Group
Convertible Exchangeable Common Stock, par value $0.0625, issued
by the Company.
2.8 "Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated under the Code.
2.9 "Committee" means the Board or a committee or committees of
the Board appointed by the Board to administer this Plan.
2.10 "Company" means Peter Kiewit Sons', Inc., a Delaware
corporation.
2.11 "Convertible Debenture" means any debenture issued by the
Company pursuant to Section 8.1 that is convertible into Class D
Stock.
2.12 "Diversified Group" means KDG and all other corporations,
partnerships, or other entities with respect to which KDG owns,
directly or indirectly, fifty percent or more of the issued and
outstanding capital stock or other equity interests (measured in
terms of total dollar value if the corporation, partnership or
other entity has outstanding more than one class of capital stock
or other equity interests).
2.13 "Effective Date" means September 25, 1995.
2.14 "Employee" means any person (a) who is employed on a full-time
basis by the Company and provides substantial services to the
Diversified Group or, (b) who is employed by any member of the
Diversified Group, in each case at the time of the grant of the
related Benefit.
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.15 "Fair Market Value" means, with respect to Class D Stock, (a)
the Class D Per Share Price, if the Class D Stock is not Publicly
Traded, and (b) if the Class D Stock is publicly traded, the Class
D Conversion Price or the fair market value of Class D Stock
determined by such other reasonable method of valuation adopted by
the Committee.
2.16 "Fiscal Year" means the taxable year of the Company for
federal income tax purposes, including the taxable year in which
the Plan is adopted.
2.17 "Incentive Stock Option" means any Option that is intended, at
the time it is granted, to be an incentive stock option within the
meaning of Section 422 of the Code.
2.18 "KDG" means Kiewit Diversified Group, Inc., a Delaware
corporation.
2.19 "Nonqualified Stock Option" means any Option that is not an
Incentive Stock Option.
2.20 "Option" means any option to purchase Shares that is granted
pursuant to Section 6.1.
2.21 "Participant" means any Employee who is granted a Benefit
pursuant to this Plan.
2.22 "Plan" means the Peter Kiewit Sons', Inc. 1995 Class D Stock
Plan, as it may be amended from time to time.
2.23 "Publicly Traded" has the meaning ascribed to it in the
Certificate.
2.24 "Representative" means a member of the Committee acting on
behalf of the Committee, or an Employee appointed by the Committee
to exercise some or all of the authority of the Committee.
2.25 "Restricted Shares" means any Shares that are granted pursuant
to Section 7.1 subject to restrictions on transfer, to forfeiture
under certain circumstances and to such other restrictions as the
Committee deems appropriate (including restrictions on the exercise
of voting rights or the right to receive dividends, or a
requirement to reinvest dividends).
2.26 "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as it may be amended from time to time, or any successor rule
in effect from time to time.
2.27 "Share" means a share of Class D Stock.
2.28 "Term" means the term of this Plan, as set forth in Section
11.2.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1. Eligibility. Every Employee is eligible to become a
Participant. A person who is not an Employee is not eligible to
become a Participant.
3.2. Participation. The Committee will select Employees to
participate in the Plan from time to time, in its sole discretion.
An Employee cannot become a Participant unless the Employee is
selected by the Committee to participate in the Plan. In selecting
Employees to participate in the Plan, the Committee may consider
the past, present and expected future performance of the Employee,
the effort of the Employee, the length of service of the Employee,
the level of responsibility of the Employee and such other factors
as the Committee deems appropriate.
ARTICLE IV
BENEFITS
4.1 Types of Benefits. The Committee will determine the Benefits
to be granted to each Participant. The Committee may grant
Benefits in any one or any combination of (a) Incentive Stock
Options; (b) Nonqualified Stock Options; (c) Restricted Shares; (d)
Convertible Debentures; (e) bargain purchases of Shares; (f)
bonuses of Class D Stock; (g) the grant of Shares based on
performance or the satisfaction of other conditions; or (h) any
other form of stock benefit or stock-related benefit other than
stock appreciation rights.
4.2 Terms and Conditions of Benefits. The Committee will
determine all terms, conditions and provisions of, and restrictions
upon, any grant of Benefits. Without limiting the Committee's
authority, the Committee may: (a) make the grant of Benefits
conditional upon an election by a Participant to defer payment of
a portion of his salary; (b) give a Participant a combination of
Benefits or a choice between two Benefits; (c) award Benefits in
the alternative so that acceptance of or exercise of one Benefit
cancels the right of a Participant to another; (d) award Benefits
subject to any condition that the Committee deems appropriate; (e)
provide that grants of Benefits in Shares or Share equivalents will
include dividend or dividend equivalent payments or dividend credit
rights; and (f) provide any vesting schedule for Benefits as the
Committee deems appropriate. The Committee may waive any term,
condition, provision or restriction, in its sole discretion.
4.3 Agreements. Each grant of a Benefit to a Participant will be
evidenced by an Agreement executed by the Participant and a
Representative (on behalf of the Company and the Committee).
Subject to the terms and conditions of this Plan, the Committee, in
its sole and absolute discretion, will determine the form and
content of all Agreements. Agreements with respect to a specific
type of Benefit need not be identical.
4.4 Modification or Termination of Benefits. The Committee, in
its sole discretion, may modify, cancel or terminate any Benefit at
any time if a Participant is not in compliance with this Plan, the
related Agreement or any rules adopted by the Committee.
4.5 Optional Deferral. The Committee may defer the right to
receive any Benefit under the Plan, at the request of the
Participant, for such period and upon such terms as the Committee
determines. Any such deferral may involve crediting of interest on
deferrals of cash and crediting of dividends on deferrals
denominated in Shares.
4.6 Code Section 162(m). The Committee, in its sole discretion,
may require that one or more Agreements provide that, in the event
that Section 162(m) of the Code or any similar provision would
operate to disallow a deduction by the Company for all or part of
any Benefit under the Plan, a Participant's receipt of the portion
of such Benefit that would not be deductible by the Company will be
deferred until the next succeeding year or years in which the
Participant's remuneration does not exceed the limit set forth in
Section 162(m) of the Code.
ARTICLE V
SHARES SUBJECT TO PLAN
5.1 Aggregate Limitation. The Committee may not grant Benefits
under this Plan with respect to more than 1,000,000 Shares during
the Term.
5.2 Annual Limitation. The Committee may not grant Benefits under
this Plan with respect to more than 500,000 Shares during any two-
Fiscal Year period.
5.3 Individual Limitations. The Committee may not grant Benefits
under this Plan to any Participant with respect to more than
200,000 Shares during the Term.
5.4 Unused Shares. If any Benefit expires or terminates, or if any
Benefit is surrendered, cancelled or forfeited without having been
fully exercised, the Committee may again grant Benefits with
respect to the unused Shares allocable to the expired, terminated,
surrendered, cancelled or forfeited Benefit.
5.5 Adjustments. The Committee will adjust the Share limitations
set forth in Section 5.1, 5.2 and 5.3 to reflect any and all
adjustments in numbers of Shares pursuant to Article IX.
ARTICLE VI
OPTIONS
6.1 Grant. The Committee may grant Options to any Participant.
The Committee will determine the terms, conditions and provisions
of, and the restrictions on, any Options, including the number of
shares subject to such Options, the date or dates on which the
Options become exercisable, either wholly or in part, and the
expiration date of the Options. A Participant to whom an Option is
granted will not be deemed the holder of any Shares subject to the
Option until the Shares are fully paid, and issued and delivered to
him following exercise of the Option.
6.2 Incentive Stock Options. Incentive Stock Options must include
such terms and conditions as determined by the Committee to be
reasonably necessary to cause the options to qualify as incentive
stock options under Section 422 of the Code.
6.3 Exchange. The Committee may grant Options to a Participant
holding unexercised outstanding Options, or unexercised outstanding
Options granted under another stock plan of the Company, on the
condition that the Participant surrenders for cancellation some or
all of those unexercised outstanding options.
6.4 Substitution. The Committee may grant Options from time to
time in substitution for similar rights held by employees of other
entities who become Employees as a result of a merger or
consolidation of the other corporation with a member of the
Diversified Group, the acquisition by a member of the Diversified
Group of the assets of the other corporation, or the acquisition by
a member of the Diversified Group of an equity interest in another
entity.
6.5 Fair Market Value. The Committee may not grant Options
pursuant to this Plan with an exercise price that is less than the
Fair Market Value, as of the date of the grant, of the Class D
Stock subject to the Option.
6.6. Vesting. Options granted pursuant to this Plan will become
exercisable at a rate of 20% per year over a five-year period
unless the Committee determines that a different vesting schedule
is appropriate with respect to the grant of any particular Option.
ARTICLE VII
RESTRICTED SHARES
7.1 Grant. The Committee may grant Restricted Shares to any
Participant. The Committee may make grants of Restricted Shares at
such cost, or at no cost, as determined by the Committee in its
sole discretion.
7.2 Beneficial Ownership. Except as set forth in an Agreement
relating to Restricted Shares, each Participant who is awarded
Restricted Shares will have the entire beneficial ownership of, and
all rights and privileges of a stockholder with respect to, the
Restricted Shares awarded to him.
ARTICLE VIII
OTHER AWARDS
8.1 Grants. The Committee may grant any other stock or stock-
related awards to a Participant under this Plan that the Committee
deems appropriate (other than stock appreciation rights),
including, but not limited to, Convertible Debentures, bargain
purchases of Class D Stock, bonuses of Class D Stock and the grant
of Shares based on performance or upon the satisfaction of other
conditions.
ARTICLE IX
ADJUSTMENTS
9.1 Increase or Decrease. If the outstanding shares of Class D
Stock are increased or decreased, or are changed into or exchanged
for a different number or kind of shares or securities or other
forms of property or rights, as a result of one or more
reorganizations, recapitalizations, stock splits, reverse stock
splits, stock dividends or the like, the Committee will make
appropriate adjustments in the price, number and/or kind of Shares,
of securities other forms of property or rights for which Benefits
may be granted under this Plan and for which outstanding Benefits
may be exercised.
9.2 Other Property. In connection with any reorganization,
recapitalization, spin-off or other transaction in which the
outstanding shares of Class D Stock are changed into or exchanged
for property, rights or securities other than, or in addition to,
Class D Stock, the Committee will adjust outstanding Benefits so
that the Benefits will become exercisable for either one or a
combination of (a) the property, rights and/or securities
receivable in that transaction, or (b) stock of the Company or of
a successor employer corporation, or a parent or subsidiary
thereof, so that such adjustment may preserve, in the judgment of
the Committee, the value of the Benefits to the Participants.
9.3 Merger. If the Company shall become a party to any corporate
merger, liquidation or agreement for the sale of substantially all
of its assets and property, the Committee will make appropriate
arrangements, which will be binding upon the holders of unexpired
Benefits, for the substitution of new Benefits for any unexpired
Benefits then outstanding under this Plan, or for the assumption of
any such unexpired Benefits, to the end that the Participant's
proportionate interest shall be maintained as before the occurrence
of such event.
9.4 Other Adjustments. The Committee may, but will have no
obligation to, provide for or make other adjustments to the price,
number and/or kind of shares subject to any Benefit upon the
occurrence of other extraordinary events or transactions affecting
the Company or the Class D Stock to the extent deemed appropriate
by the Committee, in its sole discretion, so that such adjustment
may preserve, in the judgment of the Committee, the value of the
Benefits to the Participants.
ARTICLE X
ADMINISTRATION
10.1 Administration. The Committee will administer this Plan. The
Board may appoint a separate committee or committees to administer
portions of the Plan applicable to persons subject to Rule 16b-3,
Section 162(m) of the Code or other similar provisions of law. The
Committee may act either through majority vote of the Committee at
a meeting for which a quorum is present, or through the written
consent of a majority of the members of the Committee in lieu of a
meeting. The Committee will maintain such books, accounts and
records relating to the Plan and to Committee proceedings as it
considers appropriate. The Committee may designate Employees to
assist the Committee in the administration of the Plan and to act
as Representatives of the Committee, and in that capacity to
exercise any or all of the authority of the Committee under this
Plan, and may grant authority to those Employees to execute any and
all agreements contemplated by this Plan and any other documents
reasonably required to implement this Plan. The Committee may
employ agents, attorneys, accountants or other third parties for
such purposes as the Committee considers appropriate.
10.2 Discretion and Authority. Subject to the express limitations
set forth in this Plan, the Committee, in its sole and absolute
discretion, may take any and all actions necessary, advisable or
appropriate to implement the Plan and may make any and all
determinations deemed appropriate for the administration of the
Plan, including actions and determinations with respect to (a) the
Participants in the Plan, (b) adequacy of consideration received by
the Company in exchange for Benefits granted under the Plan, (c)
the types and amounts of Benefits to be granted to Participants or
to any particular Participant, (d) the terms, conditions and
provisions of, and restrictions on, all Benefits, (e) amounts
payable, if any, by a Participant in connection with the grant,
award or receipt of any Benefit, (f) restrictions on transfer of
any Benefit by a Participant, and (g) the circumstances under which
any Benefit may expire, terminate or be surrendered, cancelled or
forfeited.
10.3 Payment. Upon the exercise of an Option or in the case of any
other Benefit that requires a payment by a Participant to the
Company, the amount due the Company may be paid (a) in cash; (b)
by the surrender of all or part of a Benefit (including the Benefit
being exercised); (c) by the tender to the Company of Shares owned
by the Participant and registered in his or her name having a Fair
Market Value equal to the amount due to the Company; (d) in other
property, rights and credits deemed acceptable by the Committee,
including the Participant's promissory note; or (e) by any
combination of the payment methods specified in (a) through (d).
Notwithstanding the foregoing, any method of payment other than in
cash may be used only with the consent of the Committee or if and
to the extent so provided in the related Agreement. The proceeds
of the sales of Shares purchased pursuant to an Option and any
payment to the Company for other Benefits will be added to the
general funds of the Company or to the reacquired Shares held by
the Company, as the case may be, and used for the corporate
purposes of the Company as the Board determines.
10.4 Rules. The Committee may make, amend and rescind such rules
and regulations and establish, modify or repeal such procedures as
it deems appropriate for the administration of the Plan. The
Committee may make special rules or regulations that apply only to
persons covered by Rule 16b-3, Section 162(m) of the Code or other
provisions of law.
10.5 Interpretation. In the event of a disagreement as to the
interpretation of the Plan, any rule, regulation or procedure under
the Plan, or as to any right or obligation arising from or related
to the Plan, the interpretation of the Committee will be final and
binding.
10.6 Legal Requirements. The Committee will cause the Plan, and
any grants or awards of Benefits, to comply with all applicable
laws.
ARTICLE XI
AMENDMENT AND TERMINATION
11.1 Amendment. The Committee may amend the Plan from time to time
as it deems appropriate. The Committee, however, may not amend any
provision of Article V, Section 6.2 or this Article XI without the
approval of the Board. No amendment to this Plan may deprive a
Participant of any Benefit or rights with respect to a Benefit
without the Participant's consent.
11.2 Term. The Plan will terminate on the tenth anniversary of the
Effective Date. The Board, however, may terminate the Plan at any
time. Neither amendment nor termination of the Plan will deprive
Participants of their rights with respect to outstanding Benefits.
ARTICLE XII
MISCELLANEOUS
12.1 Continuation of Employment. Neither this Plan nor any Benefit
granted under this Plan confers upon any Employee any right to
continue in the employment of the Company or any member of the
Diversified Group or limits the right of the Company to terminate
an Employee's employment at will at any time.
12.2 Termination of Employee. If the employment of a Participant
by the Employer terminates for any reason, all unexercised,
deferred, and unpaid Benefits may be exercisable or paid only in
accordance with rules established by the Committee. These rules
may provide, as the Committee in its sole discretion may deem
appropriate, for the expiration, forfeiture or continuation of, or
the acceleration of vesting of, all or part of the Benefits.
12.3 Unfunded Plan. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With
respect to any payments or deliveries of Shares not yet made to a
Participant by the Company, nothing contained in this Plan will
give any Participant rights that are greater than those of a
general creditor of the Company. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations to
deliver Shares or payments under the Plan.
12.4 Designation of Beneficiary. A Participant may file with the
Committee a written designation of a beneficiary or beneficiaries
(subject to such limitations as to the classes and numbers of
beneficiaries and contingent beneficiaries as the Committee may
from time to time prescribe) to exercise, in the event of the death
of the Participant, an Option, or to receive, in such event, any
Benefits. The Committee reserves the right to review and approve
beneficiary designations. A Participant may from time to time
revoke or change any such designation of beneficiary and any
designation of beneficiary under the Plan will be controlling over
any other disposition, testimony or otherwise; provided, however,
that if the Committee will be in doubt as to the right of any such
beneficiary to exercise any Option or to receive any Benefit, the
Committee may determine to recognize only an exercise by the legal
representative of the recipient.
12.5 Nontransferability. Unless otherwise determined by the
Committee or specified in an Agreement, (a) no Benefit granted
under this Plan may be transferred or assigned by the Participant
to whom it is granted other than by beneficiary designation, will,
pursuant to the laws of descent and distribution, or pursuant to a
qualified domestic relations order, and (b) a Benefit granted under
this Plan may be exercised, during the Participant's lifetime, only
by the Participant or by the Participant's guardian or legal
representative.
12.6 Rule 16b-3. With respect to Participants subject to Section
16 of the Exchange Act, transactions under this Plan are intended
to comply with all applicable provisions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee or a Representative fails to so
comply, it will be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee.
12.7 No Effect on Other Benefits. The receipt of Benefits under
the Plan shall have no effect on any benefits to which a
Participant may be entitled from the Employer, under another plan
or otherwise, or preclude a Participant from receiving any such
benefits.
12.8 Withholding. If the Company is required to withhold any taxes
in connection with a Benefit, and a Participant is obligated to pay
to the Company any or all of the amount required to be withheld,
the Committee may permit the Participant to satisfy the withholding
obligation, in whole or in part, either (a) by having the Company
withhold from any Class D Stock to be issued upon the receipt of a
Benefit Class D Stock with a Fair Market Value sufficient to
satisfy the withholding amount due, or (b) by delivering to the
Company sufficient Class D Stock to satisfy the withholding amount
due.
12.9 Effective Date. This Plan is adopted by the Board and is
effective as of September 25, 1995.
12.10 Liability. No member of the Board or the Committee, or any
officer or employee of the Company or its Subsidiaries, will be
personally liable for any action, omission or determination made in
good faith or upon the advice of counsel in connection with the
Plan or any Benefit granted or awarded under the Plan.
12.11 Governing Law. The law of the state of Delaware will govern
issues related to the validity and insurance of Shares. All other
terms, conditions and provisions of, and restrictions upon, this
Plan will be construed and administered in accordance with the law
of the state of Nebraska.
12.12 Conflict. If a term, condition or provision of, or
restriction upon, the Plan conflicts with the term, condition or
provision of, or restriction upon, any Agreement, the term of the
Plan will control.
