Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
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[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a12
VALMONT INDUSTRIES, INC.
...........................................................................
. (Name of Registrant as Specified In Its Charter)
TERRY 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.
1) Title of each class of securities to which transaction applies:
.......................................................................
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
.......................................................................
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(1)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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4) Date Filed:
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1
Proxy Statement
For The
April 28, 1997
Annual Shareholders' Meeting
Dear Shareholder:
You are cordially invited to attend Valmont's Annual
Meeting of Shareholders on April 28, 1997 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 1996 and the first quarter of 1997,
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, Officers and Business Unit
Managers 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
2
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 28, 1997,
at 2:00 p.m. local time for the purpose of:
(1) Electing four directors of the Company to
three year terms.
(2) Ratifying the appointment of Deloitte & Touche
LLP as independent accountants for fiscal 1997.
(3) Transacting such other business as may properly
come before the meeting.
Shareholders of record at the close of business on March
7, 1997 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 27, 1997
3
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
28, 1997, or at any adjournments thereof.
At the close of business on March 7, 1997, the
record date for shareholders entitled to notice of and to
vote at the meeting, there were outstanding 13,697,814 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 nonvotes 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 nonvotes as to the
election of directors will not affect the election of the
candidates receiving the plurality of votes.
The proposal to ratify 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 these proposals. 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 27, 1997.
4
Certain Shareholders
The following table sets forth, as of March 7,
1997, 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 7, 1997 (1) of Class (2)
_________________________________________________________________
Robert B. Daugherty 3,550,784 25.9%
c/o Valmont Industries, Inc.
Valley, Nebraska 68064
Charles M. Harper 43,000 ---
Allen F. Jacobson 21,000 ---
Lloyd P. Johnson 11,000 ---
John E. Jones 10,000 ---
Thomas F. Madison 17,615 ---
Walter Scott, Jr. 31,000 ---
Kenneth E. Stinson 0 ---
Robert G. Wallace 13,000 ---
Mogens C. Bay 236,088 1.7%
Joseph M. Goecke 111,296 --
Terry J. McClain 58,717 --
Gary L. Cavey 49,063 --
All Executive Officers and Directors
As Group (21 persons) 4,498,128 32.8%
(1) Includes shares which the directors and executive
officers have, or within 60 days of March 7, 1997 will
have, the right to acquire through the exercise of stock
options, as follows: 4,000 shares each for Messrs. Harper,
Jacobson, Johnson, Jones, Madison, Scott and Wallace, and
101,000, 17,084, 11,244 and 33,000 shares for Messrs. Bay,
Goecke, McClain and Cavey respectively; and 297,581 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.
5
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,
nine are not employees of the Company. Mr. Bay is currently employed by
the Company and Mr. Daugherty was an employee of the Company until his
retirement on December 31, 1996, such employment constituting their principal
occupations for at least the last five years.
Four Directors have terms of office that expire at the 1997 Annual
Meeting. They have been nominated by the Board of Directors for re-election
to three-year terms. These nominees are:
Robert B. Daugherty
Allen F. Jacobson
Kenneth E. Stinson
Robert G. Wallace
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 2000:
Robert B. Daugherty, Age 75, Chairman Emeritus of the Company since
January 1997; 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: 3,550,784 shares
Allen F. Jacobson, Age 70, Retired Chairman and Chief Executive
Officer of 3M Company. Director, 3M Company, Abbott Laboratories,
Deluxe Corporation, Mobil Corporation, Northern States Power
Company, Potlatch Corporation, Prudential Insurance Company of
America,
Sara Lee Corporation, Silicon Graphics, Inc. and U S WEST Inc.
Served as Director of Company continuously since July 1976. Valmont
Stock: 21,000 shares
Kenneth E. Stinson, Age 54 , 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: 0 shares
Robert G. Wallace, Age 70, Retired Executive Vice President of
Phillips Petroleum Co. Director, A. Schulman, Inc.
Served as Director of Company continuously since April 1984.
Valmont Stock: 13,000 shares
6
Continuing Directors - Terms Expire 1999:
Mogens C. Bay, Age 48, 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. From November 1990
to August 1993 served as President and Chief Operating Officer of
the Irrigation Division of the Company. Director, ConAgra, Inc. and
Inacom Corporation.
Served as Director of Company continuously since October 1993.
Valmont Stock: 236,088 shares
John E. Jones, Age 62, 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: 10,000 shares
Walter Scott, Jr., Age 65, Chairman of the Board, President and
Director of Peter Kiewit Sons', Inc. Director, Berkshire Hathaway, Inc.,
Burlington Resources, Inc., CalEnergy Company, ConAgra, Inc., C-TEC
Corporation, First Bank System, Inc. and WorldCom, Inc.
Served as Director of Company continuously since April 1981.
Valmont Stock: 31,000 shares
Continuing Directors - Terms Expire 1998:
Charles M. Harper, Age 69, Former Chairman of the Board of RJR Nabisco
Holdings Corp. since May 1996. Chairman of the Board of RJR Nabisco
Holdings Corp. from May 1993 to May 1996. Chief Executive Officer of
RJR Nabisco Holdings Corp. from May 1993 to December 1995. Chairman of
the Board of ConAgra, Inc. from 1981 to May 1993, and Chief Executive
Officer of ConAgra from 1976 to September 1992. Director, ConAgra,
Inc., E.I. DuPont de Nemours & Co., Inc., Norwest Corporation and
Peter Kiewit Sons', Inc.
Served as Director of Company continuously since April 1979. Valmont
Stock: 43,000 shares
Lloyd P. Johnson, Age 66, Retired Chairman of Norwest Corporation since
May 1995. Chairman of Norwest Corporation from January 1989 to May 1995
and Chief Executive Officer of Norwest Corporation from January 1985 to
January 1993. Director, Norwest Corporation, Cargill, Incorporated,
Musicland Stores Corporation; Trustee, Minnesota Mutual Life Insurance
Company; Member, Advisory Board of Directors, Minnegasco.
Served as Director of Company continuously since June 1991.
Valmont Stock: 11,000 shares
Thomas F. Madison, Age 61, President, 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; President-Markets, U S WEST
Communications from June 1987 to December 1992. Director, ACI
Telecentrics, Alexander & Alexander Insurance Advisory Board, Eltrax
Systems, Inc., LHS Health Systems, Minnegasco Advisory Board and Span Link.
Served as Director of Company continuously since June 1987.
Valmont Stock: 17,615 shares
7
(1) Messrs. Jacobson (Chairman), Harper, Johnson and Madison are
members of the Compensation Committee, which met two times during
1996. 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 1996, 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 70, 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) Each non-employee director receives (i) an annual award of 1,000
shares of common stock of the company and (ii) an annual award of a
non-qualified stock option for 2,000 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.
(4) 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 1996 lease payments
totaled approximately $1,500,000. Additionally, in 1996 the
Company paid Kiewit Construction Group Inc., another subsidiary of
Peter Kiewit Sons', Inc., approximately $600,000 for construction
services to improve the Company's facilities. Walter Scott, Jr., a
Director of the Company, is Chairman, President and Director of
Peter Kiewit Sons', Inc. Kenneth E. Stinson, a Director of the
Company, is Chairman and Chief Executive Officer of Kiewit
Construction Group, Inc. and Executive Vice President and Director
of Peter Kiewit Sons', Inc. The Company believes such payments
were comparable to amounts that would have been paid to
unaffiliated entities.
(5) See "Certain Shareholders" for additional information on stock
ownership.
8
Executive Compensation
The following Summary Compensation Table provides
information on the annual and long-term compensation for
services paid by the Company to the Chief Executive Officer
and the four highest paid executive officers (with principal
positions as of December 28, 1996) for the three fiscal years
ended December 28, 1996.
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payouts All Other
Number of LTIP Comp
Principal Position Year Salary($) Bonus($) Options(#) Payouts($) ($)(1)
Mogens C. Bay (2) 1996 501,923 721,201 50,000 749,512 114,504
President and Chief 1995 438,211 518,812 50,000 458,311 77,645
Executive Officer 1994 396,366 403,605 50,000 19,585 36,880
Robert B. Daugherty 1996 340,000 554,417 0 582,120 33,845
Chairman of the Board 1995 340,000 369,849 0 355,955 59,683
of Directors 1994 346,538 365,154 0 18,935 32,854
Joseph M. Goecke (2) 1996 203,000 389,301 5,000 232,072 30,788
President and Chief 1995 203,000 99,313 0 141,907 27,044
Operating Officer 1994 199,212 221,913 10,000 10,550 19,425
Valmont Irrigation
Terry J. McClain(2)(3)1996 185,577 260,704 12,500 190,224 36,884
Sr. Vice President 1995 165,385 171,777 7,000 116,318 25,304
and Chief Financial 1994 142,173 119,245 15,000 17,683 12,560
Officer
Gary L. Cavey (3) 1996 210,462 84,906 12,500 190,224 44,826
President and Chief 1995 178,846 186,835 15,000 116,318 28,170
Operating Officer 1994 133,819 221,154 15,000 0 15,973
Industrial Products Group
(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 3,000, 2,000 and
2,000 restricted shares of the Company's common stock,
respectively, which on December 28, 1996 were valued at
$117,000, $78,000 and $78,000 respectively. The
restrictions lapse in February 1999. Each executive
receives dividends paid on the restricted stock.
(3) Messrs. McClain and Cavey became executive officers in
January 1994 and July 1994, respectively.
9
Stock Option Grants In Fiscal Year 1996
The table that follows provides information on 1996 stock
option grants to executive officers named in the Summary
Compensation Table. No stock appreciation rights were
granted during fiscal 1996.
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term (2)
______________________________________________________ ___________________
% of Total
Options
Granted to
Employees Exercise
Options in Fiscal Price Expiration
Name Granted(1) Year ($)Share Date 5%($) 10%($)
Mogens C. Bay 50,000 24.6% 38.00 Dec. 9, 2006 1,194,900 3,028,111
Mogens C. Bay 4,739 2.5% 32.50 Dec. 18, 1996 4,747 9,494
Robert B. Daugherty -- -- -- -- -- --
Joseph M. Goecke 5,000 2.5% 38.00 Dec. 9, 2006 119,490 302,811
Terry J. McClain 12,500 6.1% 38.00 Dec. 9, 2006 298,725 757,028
Gary L. Cavey 12,500 6.1% 38.00 Dec. 9, 2006 298,725 757,028
______________________________________________________________________________
All Shares Outstanding (3) 335,169,572 849,385,503
(1) All options (except the option of 4,739 shares to Mr. Bay), were
granted on December 9, 1996, and become exercisable on the fifth
anniversary of the grant. The option of 4,739 shares to Mr. Bay
was granted on May 17, 1996 and became exercisable six months
following the grant date.
(2) 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.
(3) 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 1996 (13,665,392).
10
Options Exercised in Fiscal Year 1996 and Fiscal Year End Values
The following table provides information on the exercise of
stock options during fiscal 1996 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 Un- In-The-Money
exercised Options Options at
FY-End (#) FY-End ($)(2)
Shares Value
Acquired On Realized Exer- Unexer- Exer- Unexer-
Exercise (#) ($)(1) cisable cisable cisable cisable
Mogens C. Bay 14,163 403,002 101,000 116,332 2,262,617 1,291,202
Robert B. Daugherty 0 0 0 0 0 0
Joseph M. Goecke 1,359 77,379 17,084 14, 000 386,056 213,228
Terry J. McClain 10,700 212,785 17,667 26,833 373,753 304,122
Gary L. Cavey 2,250 116,800 33,000 31,500 731,750 361,750
(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 1996 and the option exercise price of the in-the-
money options multiplied by the number of in-the-money
options.
Long-Term Incentive Plans - Awards in Fiscal Year 1996
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
1996.
# of Performance
Shares, or Other Estimated Future Payouts under
Units Period Until Non-Stock Price-Based Plans
or Other Maturation or Threshold Target Maximum
Rights(#) Payout $ $ $
Mogens C. Bay 1 Unit (1) 112,500 225,000 450,000
Robert B. Daugherty 1 Unit (1) 76,500 153,000 306,000
Joseph M. Goecke 1 Unit (1) 30,500 61,000 122,000
Terry J. McClain 1 Unit (1) 27,750 55,500 111,000
Gary L. Cavey 1 Unit (1) 31,000 63,000 126,000
(1) Awards are for the three-year award cycle ending in 1998.
See "Compensation Committee Report on Executive
Compensation - Long-Term Performance Incentives" for a
description of the award program.
11
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 nonemployee 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 longterm 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 1996 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 and the human
resources executive 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.
12
The Committee increased the Chief Executive Officer's salary in December
1996 to the current level of $550,000 per year, which is within the mid-range
of salaries of chief executive officers of industrial manufacturing companies
comparable in sales, capitalization and financial performance. The salary
increase also reflected the Committee's desire to reward Mr. Bay for his
superior performance in increasing the Company's net earnings (pre-charge)
by 26.6% in 1996.
Annual Incentives. The Company's short-term incentives are established
under the Total Value Impact (TVI) 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 52 key management employees,
including 13 executive officers, in the TVI Plan for 1996. Based on
performance levels achieved during 1996, the Committee approved aggregate
bonus payments of $4,927,445. The TVI bonus of $721,201 paid to the Chief
Executive Officer for 1996 was based on the pre-established performance goals
under the Plan.
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 Company's 1988 and 1996 Stock
Plans. The Program operates on three-year award cycles (or in certain
shorter periods from the commencement of the Program). 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 determines 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 13 executive officers who participated
in the award cycle ending in 1996. Based on performance goals previously
established by the Committee, the Committee approved payments aggregating
$3,138,663 for 1996 to the 13 executive officers. The award of $749,512 to
the Chief Executive Officer for 1996 was based on the Company's increase in
net earnings and improved return on equity during the award cycle. During
1996, the Committee selected the participants and established the performance
goals for the 1996-1998 award cycle.
13
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 Company's 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.
Generally, stock options vest beginning on the first anniversary of the
grant in equal amounts over three to six years. For certain executives the
options become vested 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 10 reflects the shares acquired by certain executive officers
during 1996. The table on page four reflects the ownership position of the
directors and executive officers at March 7, 1997. 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 184,500 shares to 62
employees during 1996, including options for an aggregate of 114,500 shares
to the executive officers. The Chief Executive Officer was granted a
non-qualified option in December 1996 to acquire 50,000 shares. The number
of shares awarded in the 1996 grant recognizes the improved performance of
the business in 1994, 1995 and 1996 under Mr. Bay's leadership and the
Committee's determination that the 1996 grant should be no less than the
1995 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 1994, 1995, or 1996 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 Company's stock
price increased 67% in calendar year 1996 and the Company's market
capitalization increased $228 million. 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
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Shareholder Return Performance Graphs
The following graphs compare the yearly change in cumulative total
shareholder return on the Company's Common Stock with the cumulative total
returns of the S&P SmallCap 600 Index and an index consisting of a
combination of the S&P's Electrical Equipment and Machinery Diversified
indexes for the five and ten-year periods ended December 31, 1996. The
graphs assume that the value of the investment in Valmont Common Stock and
each Index was $100 on December 31, 1991 and December 31, 1986, respectively,
and that all dividends were reinvested.
Index 12/91 12/92 12/93 12/94 12/95 12/96
Valmont Industries 100 168.92 188.17 163.03 240.52 405.21
S&P Electrical Equipment
& Machinery Index 100 108.29 134.40 134.99 184.95 249.30
S&P SmallCap 600 Index 100 121.04 143.78 136.92 177.94 215.88
Base
Period
Index 12/86 12/87 12/88 12/89 12/90 12/91 12/92
Valmont Industries 100 137.27 314.35 531.16 335.00 323.37 546.06
S&P Electrical
Equipment &
Machinery Index 100 125.12 128.60 175.55 159.57 207.61 224.82
S&P SmallCap Index 100 86.50 103.36 117.71 89.82 133.38 161.45
12/93 12/94 12/95 12/96
Valmont Industries 608.31 527.05 777.54 1309.94
S&P Electrical
Equipment & Machinery
Index 279.02 280.25 383.97 517.56
15
Independent Public Accountants
The firm of Deloitte & Touche LLP ("Deloitte") has been appointed by
the Board of Directors to conduct the 1997 audit of the Company's financial
statements. The same firm conducted the 1996 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.
The Company changed its independent accountants from KPMG Peat Marwick
LLP ("Peat Marwick") to Deloitte & Touche LLP ("Deloitte") effective for
fiscal year 1996. The reports of Peat Marwick on the financial statements
of the Company for the fiscal years 1994 and 1995 contain no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
any uncertainty, audit scope or accounting principle. In connection with
the audits for those years, there were no disagreements with Peat Marwick
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of Peat Marwick would have caused the firm to
make reference thereto in its report on the financial statements for such
years. During fiscal years 1994 and 1995, Peat Marwick did not advise the
Company of any reportable events (as defined in Item 304(a) (1) (v) or
Regulation S-K issued by the Securities and Exchange Commission). Peat
Marwick furnished the Company with a letter addressed to the Securities
and Exchange Commission in which it stated that it agreed with the foregoing
statements in this paragraph.
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 27, 1997 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 an 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.
16
PROXY
Valmont Industries, Inc.
Proxy for the Annual Meeting of Shareholders on April 28, 1997
The undersigned hereby constitutes and appoints Mogens C. Bay, or any
substitute appointed by him, 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 28, 1997, 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
Robert B. Daugherty
Allen F. Jacobson
Kenneth E. Stinson
Robert G. Wallace
(Instruction: To withhold authority to vote for any individual nominee,
write the nominee's name on the space provided below.)
____________________________________________________________________________
2) PROPOSAL to ratify the appointment of Deloitte & Touche LLP as
independent accountants for fiscal 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3) 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 _____________, 1997.
Signature_______________________________________
Signature_______________________________________
(When signing as attorney, executor, administrator, trustee,
guardian or conservator, designate full title. All joint tenants
must sign.)
17