Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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[ ] Preliminary Proxy Statement
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Valmont Industries, Inc.
........................................................................
(Name of Registrant as Specified In Its Charter)
Terry J. McClain
........................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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PROXY STATEMENT
FOR THE
APRIL 27, 1998
ANNUAL SHAREHOLDERS' MEETING
Dear Shareholder:
You are cordially invited to attend Valmont's Annual Meeting of
Shareholders on April 27, 1998 at 2:00 P.M. The meeting will be held in
the Lecture Hall of the Joslyn Art Museum at 2200 Dodge Street in Omaha.
You may enter the building through its main entrance on the east side.
The formal meeting of Shareholders will be followed by a review of
operations for 1997 and the first quarter of 1998, as well as our
outlook for the future. Following the meeting, you are invited to an
informal reception where you can visit with the Directors and Officers
about the activities of the Company.
If you cannot attend the meeting in person, please vote your shares
by proxy. Mark, sign and date the enclosed proxy card and return it in
the postage paid envelope. Your prompt return of the card will help
your Company avoid additional solicitation costs. In person or by
proxy, your vote is important.
I look forward to seeing you at our Annual Meeting.
Sincerely,
/S/ Mogens C. Bay
Mogens C. Bay
Chairman and Chief Executive Officer
VALMONT INDUSTRIES, INC.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
Notice is hereby given that the Annual Meeting of Shareholders of
Valmont Industries, Inc., a Delaware corporation, will be held at the
Joslyn Art Museum, 2200 Dodge St., Omaha, Nebraska 68102, on Monday,
April 27, 1998, at 2:00 p.m. local time for the purpose of:
(1) Electing three directors of the Company to three year terms.
(2) Approving an amendment to the Company's Certificate of
Incorporation increasing the authorized number of common
shares.
(3) Ratifying the appointment of Deloitte & Touche LLP as
independent accountants for fiscal 1998.
(4) Transacting such other business as may properly come before
the meeting.
Shareholders of record at the close of business on March 6, 1998
are entitled to vote at this meeting. If you do not expect to be
present at the Annual Meeting and wish your shares to be voted, please
sign, date and mail the enclosed proxy form.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Thomas P. Egan, Jr.
Thomas P. Egan, Jr.
Secretary
Valley, Nebraska 68064
March 26, 1998
PROXY STATEMENT
To Our Shareholders:
The Board of Directors of Valmont Industries, Inc. solicits your
proxy in the form enclosed for use at the Annual Meeting of Shareholders
to be held on Monday, April 27, 1998,or at any adjournments thereof.
At the close of business on March 6, 1998, the record date for
shareholders entitled to notice of and to vote at the meeting, there
were outstanding 27,640,969 shares of the Company's common stock. There
were no preferred shares outstanding. All holders of common stock are
entitled to one vote for each share of stock held by them.
Shares of common stock represented by a properly signed and
returned proxy, including shares represented by broker non-votes or
abstaining from voting, will be treated as present at the meeting for
the purpose of determining a quorum. Directors are elected by a
favorable vote of a plurality of the shares of voting stock present and
entitled to vote, in person or by proxy, at the Annual Meeting.
Accordingly, abstentions or broker non-votes as to the election of
directors will not affect the election of the candidates receiving the
plurality of votes.
The proposal to amend the Company's Certificate of Incorporation to
increase the number of authorized common shares requires the affirmative
vote of a majority of shares entitled to vote. Abstentions and broker
non-votes will have the same effect as a vote against the proposal.
The proposal to ratify the accountants requires the affirmative
vote of a majority of shares present in person or represented by proxy.
Abstentions will have the same effect as a vote against this proposal.
Broker non-votes on this proposal are treated as shares for which voting
power has been withheld by the beneficial holders of those shares and
therefore will not be counted as votes for or against such proposal.
Any shareholder giving a proxy may revoke it before the meeting by
mailing a signed instrument revoking the proxy to: Corporate Secretary,
Valmont Industries, Inc., P.O. Box 358, Valley, Nebraska 68064. To be
effective, the revocation must be received by the Secretary before the
date of the meeting. A shareholder may attend the meeting in person and
at that time withdraw the proxy and vote in person.
The cost of solicitation of proxies, including the cost of
reimbursing banks and brokers for forwarding proxies and proxy
statements to their principals, shall be borne by the Company. This
proxy statement and proxy card are being mailed to shareholders on or
about March 26, 1998.
CERTAIN SHAREHOLDERS
The following table sets forth, as of March 6, 1998, the number of
shares beneficially owned by (i) persons known to the Company to be
beneficial owners of more than 5% of the Company's outstanding common
stock, (ii) directors, nominees and named executive officers and (iii)
all directors and executive officers as a group.
Amount and Nature
Name and Address of of Beneficial Ownership Percent
Beneficial Owner March 6, 1998 (1) of Class (2)
- --------------------------------------------------------------------------
Robert B. Daugherty 7,107,568 25.7%
8805 Indian Hills Drive
Suite 225
Omaha, NE. 68114
Mogens C. Bay 541,604 2.0%
Charles M. Harper 92,000 --
Allen F. Jacobson 48,000 --
Lloyd P. Johnson 28,000 --
John E. Jones 26,000 --
Thomas F. Madison 41,230 --
Walter Scott, Jr. 68,000 --
Kenneth E. Stinson 13,000 --
Robert G. Wallace 32,000 --
Joseph M. Goecke 227,772 --
Vincent T. Corso 42,146 --
Terry J. McClain 134,766 --
Gary L. Cavey 115,251 --
All Executive Officers and Directors
As Group (18 persons) 8,945,425 32.3%
<FN>
(1) Includes shares which the directors and executive officers have, or
within 60 days of March 6, 1998 will have, the right to acquire through
the exercise of stock options, as follows: 4,000 shares each for
Messrs. Daugherty and Stinson; 12,000 shares each for Messrs. Harper,
Jacobson, Johnson, Jones, Madison, Scott and Wallace, and 252,667,
36,333, 17,904, 39,820, and 79,667 shares for Messrs. Bay, Goecke,
Corso, McClain, and Cavey respectively; and 626,949 shares for all
executive officers and directors as a group.
(2) Unless otherwise indicated, beneficial ownership of any named
individual does not exceed 1% of the outstanding shares of the class.
ELECTION OF DIRECTORS
The Company's Board of Directors is composed of ten members,
divided into three classes. Each class serves for three years on a
staggered term basis. Of the ten current Directors of the Company, only
Mr. Bay is an employee of the Company.
Three Directors have terms of office that expire at the 1998 Annual
Meeting. They have been nominated by the Board of Directors for re-
election to three-year terms. These nominees are:
Charles M. Harper
Lloyd P. Johnson
Thomas F. Madison
Unless authority to vote for directors is withheld, the shares
represented by the enclosed proxy will be voted for the election of the
nominees named above. In the event any of such nominees becomes
unavailable for election, the proxy holders will have discretionary
authority to vote the proxies for a substitute. The Board of Directors
has no reason to believe that any such nominee will be unavailable to
serve.
NOMINEES FOR ELECTION - TERMS EXPIRE 2001:
CHARLES M. HARPER, Age 70, Former Chairman of the Board and Chief
Executive Officer of RJR Nabisco Holdings Corp. Director and former
Chairman and Chief Executive Officer of ConAgra, Inc. Director,
Norwest Corporation, Peter Kiewit Sons', Inc. and E.I. DuPont
deNemours and Company.
Served as Director of Company continuously since April 1979.
Valmont Stock: 92,000 shares
LLOYD P. JOHNSON, Age 67, Retired Chairman of Norwest Corporation since
May 1995. Chairman of Norwest Corporation from January 1989 to May
1995. Director, Norwest Corporation.
Served as Director of Company continuously since June 1991.
Valmont Stock: 28,000 shares
THOMAS F. MADISON, Age 62, President of MLM Partners since January 1993;
Chairman and Director of Communications Holdings, Inc. since September
1996; Vice Chairman and Office of CEO of Minnesota Mutual Life Insurance
Company from February 1994 to August 1994; Previously, President of
Markets of U S WEST Communications. Director, ACI Telecentrics, Aon
Insurance Advisory Board, Eltrax Systems, Inc., LHS Health Systems,
Minnegasco Advisory Board, Span Link and Delaware Group of Mutual Funds.
Served as Director of Company continuously since June 1987.
Valmont Stock: 41,230 shares
CONTINUING DIRECTORS - TERMS EXPIRE 2000:
ROBERT B. DAUGHERTY, Age 76, Chairman Emeritus of the Company since
December 1996; Chairman of the Board of the Company from March 1947 to
December 1996. Director, Peter Kiewit Sons', Inc.
Served as Director of Company continuously since March 1947.
Valmont Stock: 7,107,568 shares
ALLEN F. JACOBSON, Age 71, Retired Chairman and Chief Executive Officer
of 3M Company. Director, Deluxe Corporation, Mobil Corporation, Potlatch
Corporation, Sara Lee Corporation, Silicon Graphics, Inc. and U S WEST
Inc.
Served as Director of Company continuously since July 1976.
Valmont Stock: 48,000 shares
KENNETH E. STINSON, Age 55 , Chairman and Chief Executive Officer of
Kiewit Construction Group Inc. since August 1994 and Executive Vice
President and Director of Peter Kiewit Sons', Inc. since April 1994;
President of Kiewit Construction Group Inc. January 1992 to August 1994.
Director, ConAgra, Inc.
Served as Director of Company continuously since December 1996.
Valmont Stock: 13,000 shares
ROBERT G. WALLACE, Age 71, Retired Executive Vice President of Phillips
Petroleum Co. Director, A. Schulman, Inc.
Served as Director of Company continuously since April 1984.
Valmont Stock: 32,000 shares
CONTINUING DIRECTORS - TERMS EXPIRE 1999:
MOGENS C. BAY, Age 49, Chairman and Chief Executive Officer of the
Company since January 1997. President and Chief Executive Officer of
the Company from August 1993 to December 1996. Director, ConAgra, Inc.
and Inacom Corporation.
Served as Director of Company continuously since October 1993.
Valmont Stock: 541,604 shares
JOHN E. JONES, Age 63, Retired Chairman, President and Chief Executive
Officer of CBI Industries, Inc. since January 1996. Chairman, President
and Chief Executive Officer of CBI Industries, Inc. from June 1989 to
January 1996. Director, Allied Products Corporation, Amsted Industries
Incorporated, Interlake Corporation, NICOR Inc. and BWAY Corp.
Served as Director of Company continuously since April 1993.
Valmont Stock: 26,000 shares
WALTER SCOTT, JR., Age 66, Chairman of the Board, President and Director
of Peter Kiewit Sons', Inc. Director, Berkshire Hathaway, Inc.,
Burlington Resources, Inc., CalEnergy Company, ConAgra, Inc.,
Commonwealth Telephone Enterprises, Inc., RCN Corporation and U.S.
Bancorp.
Served as Director of Company continuously since April 1981.
Valmont Stock: 68,000 shares
(1) Messrs. Jacobson (Chairman), Harper, Johnson and Madison are members
of the Compensation Committee, which met two times during 1997. The
Compensation Committee, composed of directors who are not employees of
the Company, directs the administration of various management incentive
plans; takes action upon or makes recommendations to the Board of
Directors on salary changes for certain key management personnel; and
takes action upon or makes recommendations to the Board of Directors
concerning certain employee benefit plan matters.
Messrs. Scott (Chairman), Jones and Wallace are members of the Audit
Committee, which met three times during the last fiscal year. The Audit
Committee, composed of directors who are not employees of the Company,
recommends selection of the independent public accountants; reviews
matters pertaining to the audit, systems of internal control and
accounting policies and procedures; has approval authority with respect
to services provided by the independent public accountants; and directs
and supervises investigations into matters within the scope of its
duties.
The Company does not have a standing Nominating Committee.
(2) The Board of Directors held five meetings during the last fiscal
year. During 1997, non-employee directors were paid an annual fee of
$25,000 plus $2,000 for each board meeting and $1,000 for each committee
meeting attended. Committee chairmen receive an additional $6,000 per
year. Messrs. Harper, Jacobson, Johnson, Jones, Scott and Wallace have
elected to receive their fees in the form of deferred compensation.
Payments are to be made in fifteen annual installments commencing one
year after the earliest of termination of service as a director of the
company, attainment of age 72, or death. The deferred fees accrue
interest indexed to U.S. Government bonds, compounded monthly. Employee
directors do not receive director or meeting fees.
(3) Mr. Daugherty, who was an employee of the Company through fiscal
1996, received an award of $391,248 under the 1995-1997 Long-Term
Performance Share Program and $30,172 in benefits from the Company.
(4) Pursuant to the stockholder approved 1996 Stock Plan, each non-
employee director receives (i) an annual award of 2,000 shares of common
stock of the company and (ii) an annual award of a nonqualified stock
option for 4,000 shares of common stock exercisable at the fair market
value of the Company's common stock on the date of grant. These awards
are made annually on the date of and following completion of Valmont's
Annual Shareholders' Meeting. The common stock award will be forfeited
if the director's services terminate for any reason other than death,
retirement from the board at mandatory retirement age, or resignation or
failure to stand for re-election, in any such case without the prior
approval of the board.
(5) The Company has a service agreement with PKS Information Services,
Inc. ("PKS"), a subsidiary of Peter Kiewit Sons', Inc. The agreement
extends through the year 2001 and covers the use of time on PKS
mainframe computer equipment. In 1997 lease payments totaled
approximately $1,600,000. Additionally, in 1997 the Company paid Kiewit
Construction Group Inc., another subsidiary of Peter Kiewit Sons', Inc.,
approximately $500,000 for construction services to improve the
Company's facilities. Walter Scott, Jr., a Director of the Company, is
Chairman, President and Director of Peter Kiewit Sons', Inc. Kenneth E.
Stinson, a Director of the Company, is Chairman and Chief Executive
Officer of Kiewit Construction Group, Inc. and Executive Vice President
and Director of Peter Kiewit Sons', Inc. The Company believes such
payments were comparable to amounts that would have been paid to
unaffiliated entities.
(6) See "Certain Shareholders" for additional information on stock
ownership.
EXECUTIVE COMPENSATION
The following Summary Compensation Table provides information on
the annual and long-term compensation for services paid by the Company
to the Chief Executive Officer and the four highest paid executive
officers for the three fiscal years ended December 27, 1997.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts All
Name and Number of LTIP Other
Principal Position Year Salary($) Bonus($) Options(#) Payouts($) Comp($)(1)
Mogens C. Bay(2) 1997 551,923 368,086 100,000 755,630 114,238
Chairman and Chief 1996 501,923 721,201 100,000 749,512 114,504
Executive Officer 1995 438,211 518,812 100,000 458,311 77,645
Joseph M. Goecke(2) 1997 203,000 113,477 0 233,966 40,598
President and Chief 1996 203,000 389,301 10,000 232,072 44,826
Operating Officer: 1995 203,000 99,313 0 141,907 27,044
Valmont Irrigation
Vincent T. Corso 1997 205,769 150,622 30,000 168,758 33,287
Group President 1996 185,769 129,704 25,000 167,392 28,688
and Chief Operating 1995 175,192 111,811 14,000 102,357 20,359
Officer - Irrigation
and Coatings
Terry J. McClain(2) 1997 200,769 131,238 30,000 191,777 36,083
Sr. Vice President 1996 185,577 260,704 25,000 190,224 36,884
And Chief Financial 1995 165,385 171,777 14,000 116,318 25,304
Officer
Gary L. Cavey 1997 222,342 0 30,000 191,777 28,187
Group President and 1996 210,462 84,906 25,000 190,224 30,788
Chief Operating 1995 178,846 186,835 30,000 116,318 28,170
Officer:
Industrial Products
<FN>
(1) Amounts represent the Company's contribution under the Valmont Employee
Retirement Savings Plan and related Restoration Plan.
(2) Messrs. Bay, Goecke and McClain hold 6,000, 4,000 and 4,000 restricted
shares of the Company's common stock, respectively, which on December 27, 1997
were valued at $118,500, $79,000 and $79,000 respectively. The restrictions
lapse in February 1999. Each executive receives dividends paid on the
restricted stock.
STOCK OPTION GRANTS IN FISCAL YEAR 1997
The table that follows provides information on 1997 stock
option grants to executive officers named in the Summary Compensation
Table. No stock appreciation rights were granted during fiscal 1997.
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term (3)
- ------------------------------------------------------------------------------------
% of Total
Options
Options Granted to Exercise Expir-
Granted Employees In Price ($) ation
Name (1) Fiscal Year Per Share Date 5%($) 10%($)
Mogens C. Bay (1)100,000 24.5% 21.78 Dec. 8, 2007 1,364,372 3,461,917
Joseph M. Goecke (1) -- -- -- -- -- --
Vincent T. Corso (1) 30,000 7.4% 21.78 Dec. 8, 2007 409,312 1,038,575
Terry J. McClain (1) 30,000 7.4% 21.78 Dec. 8, 2007 409,312 1,038,575
Terry J. McClain (2) 6,980 1.7% 20.38 Dec. 7, 2002 44,086 103,099
Terry J. McClain (2) 12,118 3.0% 20.38 Dec. 12, 2004 109,977 269,236
Terry J. McClain (2) 3,390 0.8% 20.38 Dec. 19, 2005 35,842 90,006
Gary L. Cavey (1) 30,000 7.4% 21.78 Dec. 8, 2007 409,312 1,038,575
- ------------------------------------------------------------------------------------
All Shares Outstanding (4) 343,319,323 870,038,572
<FN>
(1) Options were granted on December 8, 1997, and become exercisable in
three equal annual installments commencing on the first anniversary of the
grant.
(2) Options were granted on January 7, 1997 and become exercisable six
months following the grant date.
(3) Potential realizable value is based on the assumption that the common
stock price appreciates at the annual rate shown (compounded annually) from
the date of grant until the end of the option term. The numbers are
calculated based on the requirements promulgated by the Securities and
Exchange Commission. The actual value, if any, an executive may realize will
depend on the excess of the stock price over the exercise price on the date
the option is exercised (if the executive were to sell the shares on the date
of exercise) so there is no assurance that the value realized will be at or
near the potential realizable value as calculated in this table.
(4) All shares outstanding represents the increase in total Company
shareholder value if the stock price and assumed rates used in the stock
option assumptions are achieved over a ten year option period multiplied by
the number of shares outstanding at the end of fiscal 1997 (27,640,969).
OPTIONS EXERCISED IN FISCAL YEAR 1997 AND FISCAL YEAR END VALUES
The following table provides information on the exercise of stock
options during fiscal 1997 and the status of unexercised stock options at the
end of the year for the executive officers named in the Summary Compensation
Table.
Value of Unexercised
Number of In-The-Money
Shares Unexercised Options at
Acquired Value Options FY-End ($)(2)
On Exercise Realized at FY-End (#)
(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
Mogens C. Bay 29,330 478,575 252,667 246,667 2,668,341 479,168
Joseph M. Goecke 7,168 101,142 36,333 12,667 415,413 35,837
Vincent T. Corso -- -- 17,904 71,096 179,563 196,936
Terry J. McClain 35,334 404,671 39,820 62,334 181,324 83,839
Gary L. Cavey 10,333 147,536 79,667 69,000 855,005 140,000
<FN>
(1) Value realized is the difference between the closing price of the
Company's Common Stock on the day of exercise and the option exercise
price multiplied by the number of shares.
(2) Value is the difference between the closing price of the Company's
Common Stock on the last trading day of fiscal 1997 and the option
exercise price of the in-the-money options multiplied by the number of
in-the-money options.
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors to file reports of changes in ownership
of Valmont's common stock with the Securities and Exchange Commission.
Executive officers and directors are required by SEC regulations to
furnish Valmont with copies of all Section 16(a) forms so filed. Based
solely on review of the copies of such forms furnished to Valmont and
written representations from Valmont's executive officers and directors,
Valmont believes that all persons subject to these reporting
requirements filed the required reports on a timely basis during fiscal
1997, except Vince T. Corso, an executive officer, and Kenneth E.
Stinson, a director, each filed late one report with respect to one
purchase transaction, and Joseph M. Goecke, an executive officer, filed
late one report with respect to two stock option exercise transactions.
LONG-TERM INCENTIVE PLANS - AWARDS IN FISCAL YEAR 1997
The following table provides information on the long-term incentive
program awards granted to the executive officers named in the Summary
Compensation Table during fiscal year 1997.
Performance
Number Of or Other Estimated Future Payouts under
Shares, Units Period Until Non-Stock Price-Based Plans
or Other Maturation or Threshold Target Maximum
Rights (#) Payout ($) ($) ($)
Mogens C. Bay 1 Unit (1) 136,125 247,500 495,000
Joseph M. Goecke 1 Unit (1) 27,912 50,750 101,500
Vincent T. Corso 1 Unit (1) 33,825 61,500 123,000
Terry J. McClain 1 Unit (1) 33,000 60,000 120,000
Gary L. Cavey 1 Unit (1) 36,630 66,600 133,200
<FN>
(1) Awards are for the three-year award cycle ending in 1999. See
"Compensation Committee Report on Executive Compensation - Long-Term
Performance Incentives" for a description of the award program.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
Valmont's executive compensation policies and practices are
approved by the Compensation Committee of the Board of Directors (the
"Committee"). The Committee consists of four Directors who are not
employees of the Company. The Committee's determinations on
compensation of the Chief Executive Officer and other executive officers
are reviewed with all the non-employee Directors who constitute a
majority of the Board.
The Committee has implemented compensation policies, plans and
programs which seek to enhance shareholder value by aligning the
financial interests of the executive officers with those of its
shareholders. Annual base salaries are generally set at competitive
median levels. The Company relies on annual and long-term incentive
compensation and stock options to attract, retain, motivate and reward
executive officers and other key employees. Incentive compensation is
variable and tied to corporate, business unit and individual
performance. The plans are designed to provide an incentive to
management to grow earnings, provide quality returns on investment,
enhance shareholder value and contribute to the long-term growth of the
Company. All incentive compensation plans are reviewed at least
annually to assure their linkage to the current strategies and needs of
the business. The Company's programs have been designed so that
compensation paid to named executive officers in 1997 will be deductible
under the Internal Revenue Code's $1 million compensation limits for
deductibility.
Valmont's executive compensation is based on four components, each
of which is intended to support the overall compensation philosophy.
BASE SALARY. Base salary is targeted at the median level for
industrial manufacturing companies of similar characteristics such as
sales volume, capitalization and financial performance. Salaries for
executive officers are reviewed by the Committee on an annual basis and
may be changed based on the individual's performance or a change in
competitive pay levels in the marketplace.
The Committee reviews with the Chief Executive Officer an annual
salary plan for the Company's executive officers (other than the Chief
Executive Officer). The salary plan is modified as deemed appropriate
and approved by the Committee. The annual salary plan is developed by
the Company's human resources staff under the ultimate direction of the
Chief Executive Officer based on peer group and national surveys of
industrial manufacturing organizations with similar characteristics and
on performance judgments as to the past and expected future
contributions of the individual executive. In addition, the Committee
periodically is advised by independent compensation consultants
concerning salary competitiveness. The Committee reviews and
establishes the base salary of the Chief Executive Officer based on
similar competitive compensation data and the Committee's assessment of
his past performance, his leadership in establishing performance
standards in the conduct of the Company's business, and its expectation
as to his future contributions in directing the long-term success of the
Company and its businesses.
The Committee increased the Chief Executive Officer's salary in
December 1997 to the current level of $600,000 per year. The salary
increase reflected the Committee's desire to reward Mr. Bay for his
superior performance in increasing the Company's net earnings by 20% in
1997.
ANNUAL INCENTIVES. The Company's short-term incentives are paid
pursuant to the Total Value Impact (TVI) Program, established under the
stockholder approved Executive Incentive Plan. The Committee believes
that the annual bonus of key employees, including executive officers,
should be based on optimizing operating profits and prudent management
of the capital employed in the business. Accordingly, the TVI plan
provides for target performance levels based upon the Company's or
business units' net operating income after tax, less the cost of
capital. A minimum threshold level must be met before any awards are
earned. Individual award targets are based on a pre-determined
percentage of beginning of year base salary considering the individual's
position and the Committee's assessment of the individual's expected
contribution in such position. Participants, thresholds and specific
performance levels are established by the Committee at the beginning of
each fiscal year.
The Committee approved the participation of 48 key management
employees, including 9 executive officers, in the TVI Program for 1997.
Based on performance levels achieved during 1997, the Committee approved
aggregate bonus payments of $4,324,061. The TVI bonus of $368,086
paid to the Chief Executive Officer for 1997 was based on the pre-
established performance goals under the Program.
LONG-TERM PERFORMANCE INCENTIVES. Long-term performance
incentives for senior management employees are provided through the
Long-Term Performance Share Program ("Program") established under the
stockholder approved Executive Incentive Plan and 1988 and 1996 Stock
Plans. The Program operates on three-year award cycles. The Committee
selects participants, establishes target awards, and determines a
performance matrix (based on return on equity, net earnings and other
selected factors) at the beginning of each award cycle. The performance
matrix provides for the performance shares to be increased or decreased
in number based on greater or lesser levels of performance. Earned
performance shares are then valued at the company's stock price at the
end of the performance period. The Committee approves the number of
performance shares to be paid following a review of results at the end
of each performance cycle. Awards may be paid in cash or in shares of
common stock or any combination of cash and stock.
The Committee previously selected the nine executive officers who
participated in the award cycle ending in 1997. Based on performance
goals previously established by the Committee, the Committee approved
payments aggregating $2,078,766 for 1997 to the nine executive
officers. The award of $755,630 to the Chief Executive Officer
for 1997 was based on the Company's increase in net earnings and
improved return on equity during the award cycle. During 1997, the
Committee selected the participants and established the performance
goals for the 1997-1999 award cycle.
STOCK INCENTIVES. Long-term stock incentives are provided through
grants of stock options and restricted stock to executive officers and
other key employees pursuant to the stockholder approved 1988 Stock Plan
and 1996 Stock Plan (both referenced hereafter as the "Plan"). The
stock component of compensation is intended to retain and motivate
employees to improve long-term shareholder value. Stock options are
granted at the prevailing market value and have value only if the
Company's stock price increases. Stock options vest beginning on the
first anniversary of the grant in equal amounts over three to six years
or on the fifth anniversary of the grant. Employees must be employed by
the Company at the time of vesting in order to exercise the options.
The Committee believes this element of the total compensation program
directly links the participant's interests with those of the
shareholders and the long-term performance of the Company.
The Committee establishes the number and terms of options granted
under the Plan. The Committee encourages executives to build a
substantial ownership investment in the Company's common stock. The
Options Exercised table on page 11 reflects the shares acquired by
certain executive officers during 1997. The table on page four reflects
the ownership position of the directors and executive officers at March
6, 1998. Outstanding performance by an individual executive officer is
recognized through larger option grants. The Committee, in determining
grants of stock options under the Plan, also reviews and considers the
executive's history of retaining shares previously obtained through the
exercise of prior options.
The Committee granted options for an aggregate of 367,000 shares
to 72 employees during 1997, including options for an aggregate of
213,000 shares to the executive officers. The Chief Executive Officer
was granted a non-qualified option in December 1997 to acquire 100,000
shares. The number of shares awarded in the 1997 grant recognizes the
improved performance of the business over the last four years under Mr.
Bay's leadership and the Committee's determination that the 1997 grant
should be no less than the 1996 grant.
Restricted stock grants are also a part of the Company's long-term
stock incentives. Restricted stock awards will be issued when
performance results and the strategic needs of the business so warrant.
There were no restricted stock awards in 1995, 1996, or 1997 to
executive officers.
The Committee believes that the programs described above provide
compensation that is competitive with comparable manufacturing
companies, links executive and shareholder interests and provides the
basis for the Company to attract and retain qualified executives. The
Committee will continue to monitor the relationship among executive
compensation, the Company's performance and shareholder value.
COMPENSATION COMMITTEE
----------------------
Allen F. Jacobson, Chairman
Charles M. Harper
Lloyd P. Johnson
Thomas F. Madison
SHAREHOLDER RETURN PERFORMANCE GRAPHS
Historically, the Company has used as its comparative
industry index a combination of the S&P Electrical Equipment and
Machinery (Diversified) indexes. During 1997, the Company sold its
subsidiary, Valmont Electric, Inc., a manufacturer of lighting ballasts
for the electrical industry. Therefore, effective this year the Company
is changing its comparative industry index to a combination of the S&P
Manufacturing (Diversified) and Machinery (Diversified) indexes to
reflect a better comparison with its current business activities.
The following graphs compare the yearly change in the
cumulative total shareholder return on the Company's common stock with
the cumulative total returns of the S&P Small Cap 600 Index, an index
consisting of a combination of the S&P Electrical Equipment and
Machinery (Diversified) indexes and an index consisting of a combination
of the S&P Manufacturing (Diversified) and Machinery (Diversified)
indexes for the five and ten year periods ended December 31, 1997. The
graphs assume that the value of the investment in Valmont Common Stock
and each index was $100 on December 31, 1992 and December 31, 1987,
respectively, and that all dividends were reinvested.
Base
Period
Index 12/92 12/93 12/94 12/95 12/96 12/97
Valmont Industries 100 111.40 96.52 142.39 239.89 229.32
S&P Small Cap 600 Index 100 118.79 113.12 147.01 178.35 223.98
S&P Electrical Equipment
& Machinery Index 100 124.11 124.66 170.79 230.21 320.94
S&P Manufacturing &
Machinery Index 100 135.46 135.32 178.75 235.71 289.38
Base
Period
Index 12/87 12/88 12/89 12/90 12/91 12/92
Valmont Industries 100 229.01 386.95 244.02 235.51 397.81
S&P Small Cap 600 Index 100 119.49 136.08 103.85 154.20 186.65
S&P Electrical Equipment
& Machinery Index 100 102.78 140.30 127.54 165.93 179.68
S&P Manufacturing &
Machinery Index 100 108.04 125.26 115.04 138.67 145.54
Index 12/93 12/94 12/95 12/96 12/97
Valmont Industries 443.15 383.95 566.44 954.29 912.24
S&P Small Cap 600 Index 221.71 211.13 274.39 332.89 418.05
S&P Electrical Equipment
& Machinery Index 223.00 223.98 306.88 413.65 576.68
S&P Manufacturing &
Machinery Index 197.15 196.95 260.14 343.04 421.15
PROPOSAL TO AMEND THE COMPANY'S
CERTIFICATE OF INCORPORATION INCREASING
THE AUTHORIZED NUMBER OF COMMON SHARES
The Certificate of Incorporation of the Company currently
authorizes the issuance of 36,000,000 shares of common stock of a par
value of $1.00 per share, and 500,000 shares of series preferred stock
of a par value of $1.00 per share. Following a two-for-one stock split
during 1997, the Company had approximately 27.6 million shares
outstanding at the end of fiscal 1997.
On February 25, 1998, the Board of Directors adopted a resolution
approving and recommending that the first sentence of Article IV to the
Certificate of Incorporation be amended to increase the total authorized
shares of common stock of the Company. This would be done by increasing
the authorized common shares of the Company from 36,000,000 to
75,000,000 shares, all of which would continue to have a $1.00 par value
per share. There would be no change in the authorized series preferred
stock.
If the amendment is approved by the shareholders, the authorized
common shares of the Company will be increased from 36,000,000 to
75,000,000. All such shares not heretofore issued and outstanding would
be issuable at any time or from time to time by action of the Board of
Directors without further authorization from the shareholders unless
such authorization is required pursuant to applicable law. Each holder
of each share of common stock would continue to be entitled to one vote
in respect of such shares. As in the past, no holder of common stock
would have any pre-emptive rights.
The Board of Directors believes that it is desirable to increase
the number of authorized shares of common shares. This action will
provide the Company with sufficient shares to provide flexibility of
action in the future by assuring that there will be sufficient
authorized but unissued shares of common stock available for possible
acquisitions, financing requirements, stock splits and other corporate
purposes without the necessity of further shareholder action at any
special or annual meeting.
The Company has no present plans, proposals, agreements or
understandings to issue any of the newly authorized common stock. The
Board of Directors does not presently intend to secure any further
approval from shareholders prior to authorizing or issuing such common
stock, except where such approval is required by law.
Although the Company has no such intentions, the additional
authorized but unissued shares of common stock could also be issued to
make more difficult a change in control of the Company. Under certain
circumstances, such shares could be used to create voting impediments,
or to discourage third parties seeking to effect a takeover or otherwise
gain control of the Company. Such shares could also be placed with
purchasers who might support the Board of Directors in opposing a
hostile takeover bid.
Adoption of the proposed amendment requires the affirmative vote
of the holders of a majority of the outstanding shares of the Company's
common stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
AMENDMENT TO ARTICLE IV OF THE CERTIFICATE OF INCORPORATION.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP ("Deloitte") has been appointed
by the Board of Directors to conduct the 1998 audit of the Company's
financial statements. The same firm conducted the 1996 and 1997 audit.
The Board of Directors requests that shareholders ratify this
appointment. A representative from Deloitte will be present at the
Shareholders' Meeting and will have the opportunity to make a statement
and to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the next annual
meeting of shareholders must be received by the Company no later than
November 26, 1998 in order to be considered for inclusion in the proxy
statement for such meeting.
The Company's bylaws set forth certain procedures which
shareholders must follow in order to nominate a director or present any
other business at an annual shareholders' meeting. Generally, a
shareholder must give timely notice to the Secretary of the Company. To
be timely, such notice must be received by the Company at its principal
executive offices not less than sixty nor more than ninety days prior to
the meeting. The bylaws specify the information which must accompany
such shareholder notice. Details of the provision of the bylaws may be
obtained by any shareholder from the Secretary of the Company.
OTHER MATTERS
The Board of Directors does not know of any matter, other than
those described above, that may be presented for action at the Annual
Meeting of Shareholders. If any other matter or proposal should be
presented and should properly come before the meeting for action, the
persons named in the accompanying proxy will vote upon such matter and
upon such proposal in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Thomas P. Egan, Jr.
Thomas P. Egan, Jr.
Secretary
Valmont Industries, Inc.
PROXY
VALMONT INDUSTRIES, INC.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 27, 1998
The undersigned hereby constitutes and appoints Mogens C. Bay and Robert
B. Daugherty, or any substitute appointed by them, the undersigned's
agents, attorneys and proxies to vote, as designated below, the number
of shares the undersigned would be entitled to vote if personally
present at the Annual Meeting of the Shareholders of Valmont Industries,
Inc., to be held at the Joslyn Art Museum, 2200 Dodge Street, Omaha,
Nebraska 68102, on April 27, 1998, at 2:00 p.m., local time or at any
adjournments thereof.
1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as designated to
the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below
Charles M. Harper
Lloyd P. Johnson
Thomas F. Madison
(Instruction: To withhold authority to vote for any individual nominee,
write the nominee's name on the space provided below.)
- ------------------------------------------------------------------------
2) PROPOSAL to approve an amendment to the Company's
Certificate of Incorporation increasing the authorized
number of common shares from 36,000,000 to 75,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3) PROPOSAL to ratify the appointment of Deloitte & Touche LLP
as independent accountants for fiscal 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4) IN THEIR DISCRETION, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF PROPERLY EXECUTED AND NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS.
Dated this day of , 1998.
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Signature
---------------------------------------
Signature
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(When signing as attorney, executor,
administrator, trustee, guardian or conservator, designate full title.
All joint tenants must sign.)