SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
BUTLER MANUFACTURING COMPANY
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(Name of Registrant as Specified in Its Charter)
BUTLER MANUFACTURING COMPANY
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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BUTLER MANUFACTURING COMPANY
1540 Genessee
(P.O. Box 419917)
Kansas City, Missouri 64102
March 14, 2002
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND PROXY STATEMENT
To the Stockholders:
The Annual Meeting of Stockholders of Butler Manufacturing Company will be
held at the City Stage Theater, Union Station Kansas City, 30 West Pershing
Road, Kansas City, Missouri,* on Tuesday, April 16, 2002, beginning at 9:30
a.m., local time for the following purposes:
l. To elect three directors, each for a three year term expiring in
2005; and
2. To consider and act upon the proposed Stock Incentive Plan of 2002;
and
3. To consider and act upon the proposed 2002 Stock Option Plan for
Outside Directors; and
4. To transact such other business as may properly come before the
meeting.
Holders of common stock of record on the books of the Company at the close
of business on February 20, 2002, will be entitled to vote at the meeting or any
adjournment thereof. A list of stockholders of the Company as of the close of
business on February 20, 2002, will be available for inspection during business
hours from April 4, 2002, through the close of business on April 15, 2002, at
the Company's offices at 1540 Genessee, Kansas City, Missouri and will also be
available at the meeting.
STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN, DATE AND MAIL PROMPTLY IN THE
ENCLOSED ENVELOPE THE ACCOMPANYING PROXY SO THAT, IF YOU ARE UNABLE TO ATTEND
THE MEETING, YOUR SHARES MAY NEVERTHELESS BE VOTED.
By Order of the Board of Directors,
John J. Holland
Chairman of the Board
John W. Huey
Vice President, General Counsel and Secretary
NOTE
A reception will precede the
Stockholder's meeting commencing at
8:45 a.m. in the Lobby of the City Stage Theater,
Union Station, Kansas City.
*Three hours free parking is available in "The Yards" parking lot at the
west end, lower level of Union Station.
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the solicitation
of proxies for use at the Company's Annual Meeting of Stockholders on April 16,
2002, as set forth in the preceding Notice. It is expected that this Proxy
Statement and enclosed form of Proxy will be mailed to stockholders commencing
March 14, 2002. A returned Proxy will not be exercised if you attend the meeting
and choose to cast a ballot, or if you should otherwise give written notice of
revocation at any time before it is exercised.
Holders of common stock of record at the close of business on February 20,
2002, are entitled to vote at the meeting. As of February 20, 2002, there were
6,296,228 shares of common stock outstanding, each share being entitled to one
vote. As of February 20, 2002, no shares of Class A or Class 1 Preferred Stock
were issued.
Stockholders representing a majority of the common stock outstanding and
entitled to vote must be present or represented by proxy in order to constitute
a quorum to conduct business at the meeting. The matters to be submitted to the
Stockholders at the meeting include the election of three directors,
consideration of the Stock Incentive Plan of 2002 and consideration of the 2002
Stock Option Plan for Outside Directors. If any other matters are properly
brought before the meeting, the enclosed proxy grants discretionary authority to
the persons named in the proxy to vote the shares in their best judgment.
YOU ARE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS TO SIGN, DATE AND
RETURN THE PROXY CARD IN THE ACCOMPANYING ENVELOPE, which is postage-paid if
mailed in the United States.
Abstentions and broker non-votes will be counted as present for purposes of
determining the existence of a quorum at the Annual Meeting. Abstentions will be
treated as shares present and entitled to vote for purposes of any matter
requiring the affirmative vote of a majority or other proportion of the shares
present and entitled to vote. With respect to any matter brought before the
Annual Meeting requiring the affirmative vote of a majority or other proportion
of the outstanding shares, an abstention or non-vote will have the same effect
as a vote against the matter being voted upon.
You may revoke your proxy at any time before it is actually voted at the
Annual Meeting by (i) delivering written notice of revocation to the Secretary
of the Company, (ii) submitting a subsequently dated proxy, or (iii) attending
the meeting and withdrawing the proxy. Each unrevoked proxy card properly
executed and received prior to the close of the voting will be voted as
indicated. Where specific instructions are not indicated, the proxy will be
voted FOR all proposals as submitted.
PROPOSAL NO. 1
ELECTION OF CLASS A DIRECTORS
NOMINEES.
The Company's Board of Directors currently consist of members serving
staggered three-year terms. Three Class A Directors are to be elected at this
year's Annual Meeting, each for terms of three years expiring at the Annual
Meeting of Stockholders for 2005. The terms of the other two classes of
directors do not expire until 2003 (Class B) and 2004 (Class C). Persons elected
as directors continue to hold office until their terms expire or until their
successors are elected and are qualified.
Each nominee has consented to be named and to serve if elected. All
nominees are current directors. If for any reason any should not be available or
able to serve, the proxies will exercise discretionary authority to vote for
substitutes proposed by the Board of Directors of the Company.
VOTING.
By checking the appropriate box on your proxy card you may (i) vote for all
of the director nominees as a group; (ii) withhold authority to vote for all
director nominees as a group; or (iii) vote for all director nominees as a group
except those nominees you identify in the line provided for that choice. The
three nominees for director who receive the highest number of votes cast will be
elected as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES.
CLASS A NOMINEES
(TERMS WILL EXPIRE 2005)
GARY M. CHRISTENSEN
President and Chief Executive Officer, Pella Corporation; Member of the Board
Governance and Compensation and Benefits Committees.
Christensen, age 58, has been a Director since 1999. He has been President
and Chief Executive Officer of Pella Corporation since 1996. Pella Corporation
manufactures premium windows and doors. He joined Pella in 1990 as Senior Vice
President, Sales and Marketing and was named President and Chief Operating
Officer in 1994. From 1980 to 1990 he was a marketing executive for General
Electric and from 1971 to 1980 was with Trane Corporation. He is a director of
Pella Corporation, a director of Hon Corporation and is a member of the Policy
Advisory Board, Harvard Joint Center for Housing Studies, and of the Iowa
Business Council.
C. L. WILLIAM HAW
President and Chief Executive Officer of National Farms, Inc.; Chairman of the
Board Governance Committee and a member of the Audit and Executive Committees.
Haw, age 63, has been a Director since 1983. He has served as the President
and Chief Executive Officer of National Farms, Inc., a diversified agricultural
production company, since 1974. He is also an advisory director of Commerce Bank
of Kansas City, N.A.
JOHN J. HOLLAND
Chairman and Chief Executive Officer; Chairman of the Executive Committee.
Holland, age 51, has been a Director since 1999. He joined Butler in 1980,
became Vice President-Controller in 1986, Vice President-Finance in 1990,
Executive Vice President in 1998, President and Chief Executive Officer in 1999
and was elected Chairman and Chief Executive Officer in November 2001. Mr.
Holland is a director of Commerce Fund, a mutual fund, a Trustee of William
Jewell College, and a director of Saint Luke's Hospital, the National
Association of Manufacturers, the Greater Kansas City Chamber of Commerce, the
Civic Council of Greater Kansas City, and The Midwest Research Institute.
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CLASS B DIRECTORS
(TERMS EXPIRE 2003)
ROBERT J. REINTJES, SR.
President and Chief Executive Officer, Geo. P. Reintjes Co., Inc.; Chairman of
the Audit Committee and Member of the Compensation and Benefits and Executive
Committees.
Reintjes, age 70, has been a Director since 1994. He has been President and
Chief Executive Officer of Geo. P. Reintjes Co., Inc. of Kansas City, Missouri
for over 20 years. Geo. P. Reintjes Co., Inc. is a specialty contracting firm
which installs refractories in basic industries. He is also a director of
Midwest Grain Products, Inc., an advisory director of Commerce Bank of Kansas
City, N.A. and a trustee of the Francis Families Foundation, Midwest Research
Institute and Benedictine College. He is a member of the Kansas City Crime
Commission.
GARY L. TAPELLA
President and Chief Executive Officer, Rheem Manufacturing Company; Member of
the Audit and Board Governance Committees.
Tapella, age 58, has been a Director since 1998. He has been President and
Chief Executive Officer of Rheem Manufacturing Company since 1991. He has been
with Rheem since 1968 serving in various domestic and international operations.
Rheem is a manufacturer of residential and commercial central air conditioners,
gas and electric furnaces and water heaters. He is a director and past Chairman
of the Gas Appliance Manufacturers Association (GAMA), a director and immediate
past Chairman of the Air Conditioning and Refrigeration Institute (ARI) and past
Chairman of ARI's International Committee.
WILLIAM D. ZOLLARS
Chairman, President and Chief Executive Officer, Yellow Corporation; Member of
the Audit and Board Governance Committees.
Zollars, age 54, has been a Director since 2000. He has been President of
Yellow Freight Systems, Inc. since 1996 and Chairman, President and Chief
Executive Officer of Yellow Corporation since 1999. Yellow Corporation is a
global transportation services company. From 1994 to 1996, he was Senior Vice
President of Ryder Integrated Logistics, a division of Ryder Systems, Inc., and
from 1969 to 1993 was with Eastman Kodak. He is also a director of Rogers Group,
Inc., ProLogis Trust, The Midwest Research Institute, National Association of
Manufacturers, Heart of America United Way and the Civic Council of Greater
Kansas City.
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CLASS C DIRECTORS
(TERMS EXPIRE 2004)
K. DANE BROOKSHER
Chairman and Chief Executive Officer, ProLogis Trust; Chairman of the
Compensation and Benefits Committee and Member of the Audit Committee.
Brooksher, age 63, has been a Director since 1999. He has been Chairman,
Trustee and Chief Executive Officer of ProLogis Trust since 1999. He joined
ProLogis in 1993 as Co-Chairman, Trustee and Chief Operating Officer. ProLogis
is a U.S. based real estate investment trust specializing in the acquisition,
development, marketing, operation and ownership of distribution facilities and
services worldwide. From 1961 to 1993, he was with KPMG Peat Marwick, last
serving, prior to retirement, as the Area Managing Partner and Chicago Office
Managing Partner. He also served on the KPMG Peat Marwick Board of Directors and
Management Committee. Mr. Brooksher also serves on the Board of Advisors of the
J. L. Kellogg Graduate School of Management at Northwestern University.
SUSAN F. DAVIS
Corporate Vice President, Human Resources, Johnson Controls, Inc.; Member of the
Audit and Compensation and Benefits Committees.
Davis, age 48, has been a Director since 2000. She has been Corporate Vice
President, Human Resources of Johnson Controls, Inc. since 1994. Johnson
Controls manufactures automobile batteries, interior trim, seating products and
automotive interior systems, and designs, manufactures, installs and services
automated control systems for nonresidential buildings. She has been with
Johnson Controls since 1983. Ms. Davis is also a director of Quanex Corporation.
RONALD E. RUTLEDGE
President; Member of the Executive Committee
Rutledge, age 60, became a Director in November 2001. He joined Butler in
1984 as President of the Vistawall Architectural Products Group, was elected
Executive Vice President in April 2001, and President in November 2001. He is a
past director of the Terrell, Texas, Chamber of Commerce and the Terrell State
Bank and is currently a director of the Kansas City Council for the Boy Scouts
of America.
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors has four standing committees: (1) the Audit
Committee, (2) the Executive Committee, (3) the Board Governance Committee,
formerly known as the Board Organization Committee, and (4) the Compensation and
Benefits Committee. All committees consist of non-employee directors except the
Executive Committee. The primary functions of the committees are described
below.
During 2001, the Board of Directors met five times and the various
committees met as follows: Compensation and Benefits - four times; Audit - three
times; Board Governance - one time. The Executive Committee did not meet. All
current directors attended 96% of such meetings.
Non-employee directors are paid a retainer of $20,000 per annum (all in
Butler common stock) and $1,500 for attendance at each board and committee
meeting and for attendance in connection with special assignments. Attendance by
means of conference telephone is compensated at the rate of $1,000 per meeting.
Each non-employee director serving as a Committee Chair receives an additional
chair fee of $2,000 per year. Under the Director Deferred Fee Plan, non-employee
directors may defer all or a portion of fees earned, which deferrals are
converted into units equivalent to the value of Company common stock. Such units
are adjusted to reflect dividends and, upon the director's termination, death or
disability, accumulated deferrals are distributed in the form of Company common
stock. Travel allowances are provided where appropriate. The Company provides
$50,000 of accidental death and term life insurance for each non-employee
director while the director serves as such and thereafter for those who have
served more than ten years. Directors who are employees of the Company receive
no director compensation.
The Executive Committee acts for the Board of Directors upon matters
requiring action before the next Board meeting.
The Board Governance Committee, formerly the Board Organization Committee,
recommends to the Board of Directors qualifications for new director nominees,
candidates for nomination, the structure of Board committees, the review of
director performance and policies concerning compensation and length of service.
The Committee considers written recommendations from stockholders concerning
these subjects and suggests that they be addressed to the Secretary of the
Company. Recommendations for director nominees should provide pertinent
information concerning the candidate's background and experience.
A description of the Compensation and Benefits Committee's responsibilities
is set out under "COMPENSATION AND BENEFITS COMMITTEE", and a description of the
Audit Committee's responsibilities is set out under "AUDIT COMMITTEE".
NOMINATING PROCEDURES
The Company's Bylaws establish a procedure for the nomination of candidates
for election to the Board of Directors. Nominations may be made at an annual
meeting of stockholders pursuant to the Corporation's notice of meeting, by or
at the direction of the Board of Directors, or by any stockholder of the
Corporation who was a stockholder of record at the time of giving of notice, who
is entitled to vote at the meeting and who complied with the notice procedures
set forth in the Bylaws. Notice of proposed stockholder nominations for election
of directors must be given to the Secretary not later than 90 days nor more than
120 days before the anniversary date of the last annual meeting in the case of
annual meetings and, in the case of a special meeting for the election of
directors, not later than the later of the 70th day prior to such special
meeting or the 10th day following the day on which public announcement of the
date of such meeting and of the nominees proposed by the Board of Directors is
first made. The notice must contain certain information about each proposed
nominee, including his/her age, business and residence addresses and principal
occupation, the number of shares of capital stock of the Company beneficially
owned by the nominee and such other information as would be required to be
included in a proxy statement. Provision is also made for substitution of
nominees should a designated nominee be unable or unwilling to stand for
election at the meeting. If the Chairman of the meeting of stockholders
determines that a nomination was not made in accordance with these procedures,
the nomination shall be void. The advance notice requirement permits the Board
to inform stockholders in a timely manner about the qualifications of the
proposed nominees.
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PROPOSAL NO. 2
PROPOSED STOCK INCENTIVE PLAN OF 2002
The Board of Directors submits to the stockholders for approval the
Butler Manufacturing Company Stock Incentive Plan of 2002 (the "Plan"). The Plan
was adopted by the Board of Directors on January 15, 2002, but will not become
effective until approved by the stockholders. If approved by the stockholders,
the Plan will provide for the granting of stock options and other stock awards
to members of senior management and other key employees of the Company and any
subsidiary.
The purposes of the Plan are to allow a committee of the Board of
Directors to provide stock incentives that will encourage close identity of
interests between stockholders and members of senior management and other key
employees and that will assist the Company in continuing to attract and retain
highly qualified personnel.
The following brief description of the material features of the Plan is
qualified in its entirety by reference to the full text of the copy of the Plan
attached as Exhibit A to this Proxy Statement. Capitalized terms not defined
herein have the same meaning as set forth in the Plan.
SHARES RESERVED UNDER THE PLAN
The number of shares of common stock that may be issued under the Plan
for stock incentives granted during the term of the Plan is two hundred
seventy-nine thousand (279,000). Shares subject to a stock incentive under the
Plan that are not issued or transferred, or if, after issuance or transfer, are
reacquired by the Company because the terms and conditions of the stock
incentive are not fulfilled, are available for future awards. Stock Awards
settled by a cash payment instead of common stock will reduce the number of
shares that may be issued under the Plan; however, shares of common stock
withheld by the Company pursuant to a withholding tax election, as described
below under "Withholding Taxes," and shares used by Plan participants to pay the
exercise price of stock incentives shall not be deemed issued under the Plan.
Shares issued under stock incentives granted by the Company to employees of
other corporations who become employees of the Company due to a merger or
acquisition will not reduce the number of shares that may be issued under the
Plan. The shares available for issuance, shares subject to outstanding stock
incentives, exercise prices and other limitations in the Plan are subject to
adjustment in the event of a reorganization, reclassification, split-up,
consolidation, merger, or certain distributions or similar transactions related
to the Company's capital stock.
If a stock incentive is granted to induce the purchase by a Plan
participant of other shares of the Company's common stock for cash at fair
market value on the date of purchase, then these other shares will not be
counted against the shares otherwise available for grant under the Plan. Shares
issued pursuant to the applicable stock incentive, however, will reduce the
number of shares available for issuance under the Plan.
The shares issuable under the Plan may be drawn from either authorized
but previously unissued shares of common stock or from reacquired shares of
common stock, including shares purchased by the Company on the open market and
held as treasury shares.
As of February 20, 2002, a total of 476,500 shares of common stock were
subject to outstanding stock options granted under the Company's 1987 and 1996
Stock Incentive Plans and 118,987 shares remained available for incentive awards
under the Company's 1996 Stock Incentive Plan.
PLAN ADMINISTRATION
The Plan will be administered by a committee of the Board of Directors
(the "Committee") consisting of not less than three directors designated by the
Board. Unless otherwise specified by the Board, the Compensation and Benefits
Committee of the Board of Directors will serve as the Committee. The Committee
will have, among other powers, the power to interpret the Plan and to establish,
waive, amend, or suspend rules and regulations under the Plan. Subject to the
terms of the Plan, the Committee may also authorize the amendment of outstanding
award agreements so long as any such amendment is consistent with the Plan and
would not adversely affect the rights of the Plan participant. The Committee may
not reprice or replace through cancellation any Stock Option which has been
awarded to a participant. Any member of the Committee will automatically cease
to be a member if he or she fails to qualify as a "non-employee director" within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(or any successor rule or statute at the time in effect) (the "Exchange Act"),
or as
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an "outside director" for purposes of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code").
TYPES OF AWARDS UNDER THE PLAN
The plan permits four basics types of stock incentives: (i) stock
options, which are either incentive stock options ("ISOs"), as defined by
Section 422 of the Code, or nonqualified stock options ("NQSOs"), (ii) stock
appreciation rights ("Stock Appreciation Rights") granted in connection with
stock options, (iii) stock awards ("Stock Awards"), and (iv) performance awards
("Performance Awards"), or a combination of any of these incentives.
The Committee will have the sole discretion to determine the number or
amount of shares, units, or other rights to be awarded to any Plan participant;
provided, subject to adjustment, no executive officer of the Company may receive
stock incentives under the Plan in any calendar year that relate to more than
one hundred thousand (100,000) shares of common stock. Each stock incentive
under the Plan will be evidenced by a written award agreement that will specify
the terms and conditions of the stock incentive and any rules applicable
thereto.
STOCK OPTIONS. A stock option, which can be either an ISO or an NQSO,
is the right to purchase shares of the Company's common stock at a set price for
a period of time in the future. Under the Plan, the purchase price for shares
must be at least 100% of their fair market value on the date of grant. "Fair
Market Value" is defined in the Plan generally as the closing sale price of the
Company's common stock on the date the option is granted.
Unless otherwise determined by the Committee or permitted by the Plan,
no stock option may be exercised until the expiration of six months following
the date of its grant. The maximum period for exercise of a stock option is ten
years from the date of the grant. The Committee can fix a shorter time for a
stock option and can impose such other terms and conditions on the grant of
stock options as it chooses, consistent with the Plan and with applicable laws
and regulations which, with respect to ISOs, limit the size of individual
grants.
Pursuant to federal tax law and regulations, the aggregate fair market
value of the stock for which an employee's ISOs granted after 1986 becomes
exercisable for the first time during any calendar year is limited to $100,000.
Options or portions of options that exceed this limit are treated as NQSOs.
STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is a right
granted in connection with a stock option that entitles the holder to settle all
or part of the exercise price of the stock option by requesting a payment from
the Company in an amount equal to the amount by which the fair market value of
one share exceeds the option exercise price. Payments for Stock Appreciation
Rights may be made by the Company in cash, shares of common stock having a fair
market value equal to the amount of appreciation or a combination of cash and
shares.
STOCK AWARDS. A Stock Award is the grant of a right to receive shares
of the Company's common stock at a future date without the payment of cash. A
Stock Award need not be conditioned upon the satisfaction of specified
performance objectives established prior to the grant and may be subject to such
other terms and conditions, including restrictions on transfer, that the
Committee may determine. Shares subject to Stock Awards must provide for
restrictions on transfer and/or ownership that continue for a period of at least
one year from the date of grant in the case of Stock Awards that are performance
based and that continue for a period of three years from the date of grant in
the case of Stock Awards that are not performance based.
PERFORMANCE AWARDS. Performance Awards generally provide for the grant
of restricted stock conditioned upon the Company or any subsidiary, division or
business unit of the Company meeting certain performance goals established by
the Committee during a specified period of at least one year. The criteria upon
which performance goals may be based are limited to pre-tax earnings per share,
divisional pre-tax income, net income, net operating profit after taxes, cash
flow, free cash flow or any combination of the foregoing and may be before the
effect of acquisitions, divestitures, accounting changes and restructuring and
special charges (determined according to criteria established by the Committee).
Performance Awards shall be denominated at the time of grant in shares of common
stock. Payment under a Performance Award may be made, at the discretion of the
Committee, in shares of common stock, in cash or in any combination thereof. No
participant may receive payments in any calendar year under Performance Awards
that exceed 100,000 shares of common stock (or cash in lieu thereof).
Shares subject to Performance Awards must provide for restrictions on
transfer and/or ownership that continue for a period of at least one year from
the date of grant. Unless the Committee determines otherwise, a
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Plan participant must remain employed by the Company at the end of the
applicable award period in order to be eligible to receive payment for a
Performance Award.
CHANGE IN CONTROL
A change in control is deemed to occur in the event of certain
acquisitions of 15% or more of the Company's outstanding common stock, certain
changes of more than a majority of the membership of the Board of Directors or
certain mergers which result in the Company's stockholders owning less than 50%
of the surviving corporation. Upon a change in control and unless the Committee
provides otherwise in the applicable award agreement, vesting requirements for
stock options and Stock Appreciation Rights, provisions for forfeiture and
restrictions on transfer of shares underlying Stock Awards expire, and provision
is made for partial maximum payments under Performance Awards for the period of
time up to the time of the change in control event.
WITHHOLDING TAXES
In lieu of requiring a Plan participant to pay amounts sufficient to
satisfy the Company's withholding obligation attributable to a stock incentive,
the Committee may permit Plan participants to satisfy this obligation by having
shares otherwise issuable under a stock incentive withheld, by delivering shares
of common stock obtained pursuant to a stock incentive under the Plan or any
other plan of the Company that have been held continuously by the participant
for six months or more or by delivering other shares obtained by the Plan
participant on the open market. The amount of tax which may be paid by a Plan
participant through share withholding or delivery of shares may not exceed the
Company's minimum federal and state withholding amounts.
ELIGIBLE PARTICIPANTS
Under the Plan, the Committee may only grant stock incentives to the
Company's Chairman, Chief Executive Officer, President, Executive Vice
Presidents, Division Presidents, other corporate officers and other managers,
and any other individuals who are or will be salaried employees of the Company
or any subsidiary who are deemed by the Committee as persons that will
contribute significantly to the growth and successful operations of the Company
or any subsidiary. Stock incentives may also be granted in substitution for
stock incentives held by employees of other corporations who are about to become
employees of the Company or any subsidiary due to a merger or acquisition. As of
January 1, 2002, there were approximately sixty (60) officers, managers and
other persons who might be eligible to participate in the Plan.
DURATION OF AND AMENDMENTS TO THE PLAN
The Plan will become effective upon approval by the Company's
stockholders and will remain in effect until all stock incentives have been
exercised or satisfied in accordance with their terms. However, no stock
incentives may be granted under the Plan after April 16, 2009. The Board may
amend or terminate the Plan at any time; provided that it may not amend the Plan
without an affirmative vote of the stockholders with respect to any amendment
that would (i) increase the aggregate number of shares of common stock that may
be issued or transferred pursuant to stock incentives under the Plan, (ii) amend
the provisions of the Plan with respect to eligibility of members of the
Committee, (iii) permit any person who does not meet the eligibility
requirements of the Plan to be granted a stock incentive under the Plan, (iv)
permit shares to be valued or to be optioned at less than 100% of fair market
value, (v) change the business criteria upon which Performance Awards are based,
or (vi) extend the term of the Plan.
NEW PLAN BENEFITS AND PARTICIPATION
No benefits or amounts have been allocated under the Plan, nor are any
such benefits or amounts now determinable and it is not possible to predict the
number or identity of future key employees of the Company that may participate
in the Plan, or, except as set forth in the Plan, to describe the terms and
restrictions that may be included in specific award agreements.
DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a brief description of certain significant United
States federal income tax consequences of the Plan, under existing law.
References to the "Company" shall mean the Company or any subsidiary of the
Company that employs the participating employee, as the case may be. In
addition, the discussion applies primarily to participating employees that are
citizens or resident aliens of the United States whose tax home or abode is in
the United States.
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The discussion is based on the Code and applicable regulations
thereunder in effect on the date hereof. Any subsequent changes in the Code or
such regulations may affect the accuracy of this discussion. In addition, this
discussion does not consider any state, local or foreign tax consequences or any
circumstances that are unique to a particular participant that may affect the
accuracy or applicability of this discussion.
INCENTIVE STOCK OPTIONS
No taxable income is recognized by the optionee upon the grant or
exercise of an ISO that meets the requirements of Section 422 of the Code.
However, the exercise of an ISO may result in alternative minimum tax liability
for the optionee. If no disposition of shares issued to an optionee pursuant to
the exercise of an ISO is made by the optionee within two years from the date of
grant or within one year after the date of exercise, then, upon sale of the
shares, any amount realized in excess of the exercise price (the amount paid for
the shares) will be taxed to the optionee as a long-term capital gain and any
loss sustained will be a long-term capital loss, and no deduction will be
allowed to the Company for federal income tax purposes.
If shares of common stock acquired upon the exercise of an ISO are
disposed of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition"), generally the optionee will
recognize ordinary income in the year of disposition in an amount equal to the
excess (if any) of the fair market value of the shares on the date of exercise
over the exercise price of the underlying options, and the Company will be
entitled to deduct such amount. Any gain realized from the shares in excess of
the amount taxed as ordinary income will be taxed as capital gain and will not
be deductible by the Company.
An ISO will not be eligible for the tax treatment described above if it
is exercised more than three months following termination of employment, except
in certain cases where the ISO is exercised after the death or permanent and
total disability of the optionee. If an ISO is exercised at a time when it no
longer qualifies for the tax treatment described above, the option is treated as
an NQSO.
NONQUALIFIED STOCK OPTIONS
No taxable income is recognized by the optionee at the time an NQSO is
granted under the Plan. Generally, on the date of exercise of an NQSO, ordinary
income is recognized by the optionee in the amount of the excess (if any) of the
fair market value of the shares on the date of exercise over the exercise price
of the underlying options and the Company receives a tax deduction for the same
amount. Upon disposition of the shares acquired, an optionee generally
recognizes the appreciation or depreciation on the shares after the date of
exercise as either short-term or long-term capital gain or loss depending on how
long the shares have been held.
If the stock received upon exercise of a NQSO or Stock Appreciation
Right is subject to a substantial risk of forfeiture, the income and deduction,
if any, associated with such award may be deferred in accordance with the rules
described below for restricted stock.
STOCK APPRECIATION RIGHTS
No income will be recognized by an optionee in connection with the
grant of a Stock Appreciation Right. When the Stock Appreciation Right is
exercised, the optionee will generally be required to include as taxable
ordinary income in the year of such exercise an amount equal to the amount of
cash received and the fair market value of any stock received. The Company will
generally be entitled to a deduction equal to the amount includable as ordinary
income by the optionee.
RESTRICTED STOCK
A recipient of restricted stock under a Stock Award or Performance
Award generally will be subject to tax at ordinary income rates on the excess of
the fair market value of the stock (measured at the time the stock is either
transferable or is no longer subject to forfeiture) over the amount, if any,
paid for such stock. However, a recipient who elects under Section 83(b) of the
Code within 30 days of the date of issuance of the restricted stock to be taxed
at the time of issuance of the restricted stock will recognize ordinary income
on the date of issuance equal to the fair market value of the shares of
restricted stock at that time (measured as if the shares were unrestricted and
could be sold immediately), minus any amount paid for the stock. If the shares
subject to the election are forfeited, the recipient will be entitled to a
capital loss for tax purposes only for the amount paid for the forfeited shares,
not the amount recognized as ordinary income as a result of the Section 83(b)
election. The holding period to determine whether the recipient has long-term or
short-term capital gain or loss upon sale of shares begins when the forfeiture
9
period expires (or upon issuance of the shares, if the recipient elected
immediate recognition of income under Section 83(b) of the Code).
LIMITATION ON COMPANY DEDUCTIONS FOR CERTAIN COMPENSATION
Under Section 162(m) of the Code, certain compensation payments in
excess of $1 million are subject to a limitation on deductibility for the
Company. This limitation on deductibility applies with respect to that portion
of a compensation payment for a taxable year in excess of $1 million to either
the chief executive officer of the Company or any one of the other four highest
paid executive officers who are employed by the Company on the last day of the
taxable year. However, certain "performance-based compensation," the material
terms of which are disclosed to and approved by stockholders, is not subject to
this limitation on deductibility. The Company has structured the Stock Option,
Stock Appreciation Rights and Performance Award portions of the Plan with the
intention that compensation resulting therefrom would be qualified
performance-based compensation that would be deductible. To qualify, the Company
is seeking stockholder approval of the Plan. However, incentives that may be
issued under the Stock Awards feature of the Plan may not necessarily satisfy
the definition of performance based compensation as defined by the Code unless
the granting or vesting of incentives are based upon performance goals that have
been approved by a further stockholder vote.
CHANGE IN CONTROL
Under certain circumstances, accelerated vesting or exercise of Stock
Options or Stock Appreciation Rights, or the accelerated lapse of restrictions
on restricted stock, in connection with a "change in control" of the Company
might be deemed an "excess parachute payment" for purposes of the golden
parachute tax provisions of Section 280G of the Code. To the extent it is so
considered, the optionee or grantee may be subject to a 20% excise tax and the
Company may be denied a corresponding tax deduction.
APPROVAL
Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares of common stock represented at the meeting. Abstentions
will be treated as shares present and will have the same effect as a vote
against the proposal. Broker non-votes will not be treated as shares present or
represented and entitled to vote at the Annual Meeting. The Board of Directors
believes that the approval of this Plan is in the best interests of the Company
since it will facilitate the Company's attraction, motivation and retention of
key employees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN.
PROPOSAL NO. 3
PROPOSED 2002 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS
GENERAL
The Board of Directors submits to the stockholders for approval the
Butler Manufacturing Company 2002 Stock Option Plan for Outside Directors (the
"Plan"). The Plan was adopted by the Board of Directors on January 15, 2002, but
will not become effective until approved by the stockholders.
The Plan is intended to promote the long-term success of the Company by
enhancing the long-term mutuality of interests between the non-employee
directors of the Company ("Outside Directors") and the stockholders of the
Company and to enhance the Company's ability to attract highly qualified persons
to serve as directors of the Company.
All of the current members of the Board of Directors are Outside
Directors except for Messrs. Holland and Rutledge.
The following brief description of the material features of the Plan is
qualified in its entirety by reference to the full text of the copy of the Plan
attached as Exhibit B to this Proxy Statement.
GRANTS OF STOCK OPTIONS
10
The Plan provides that upon the earlier of the first business day
following the annual meeting of stockholders to be held on April 16, 2002 or the
first business day following initial election or appointment to the Board, each
Outside Director shall be granted a non-qualified stock option ("NQSO") to
purchase 4,000 shares of the Company's common stock at an exercise price per
share equal to the fair market value of one share on that date. Each Outside
Director shall be entitled to receive only one option grant under the Plan.
Options granted under the Plan become exercisable on the 184th day following
the date of grant and expire on the sooner of (a) ten years from the date of
grant, (b) three years following termination of the Outside Director's office
due to retirement following age 70, (c) one year following termination of the
Outside Director's office due to death or (d) 90 days following the date of the
termination of the Outside Director's term of office for any other reason. Each
Outside Director shall enter into a stock option agreement with the Company that
will specify the exercise price of the stock option, the term of the stock
option and the provisions regarding exercise of the stock option.
SHARES RESERVED UNDER THE PLAN
Subject to adjustments in the case of a merger, reorganization or
certain similar kinds of transactions specified in the Plan, the aggregate
number of shares of common stock that may be purchased pursuant to options
granted under the Plan may not exceed 4,000 shares as to any individual Outside
Director, nor 40,000 shares in the aggregate. In addition, if any shares are not
issued or cease to be issuable or transferable under an option, the shares will
no longer be charged against the 40,000 share limitation and may again be made
subject to stock options; and only the net additional shares issued upon the
exercise of a stock option through the delivery of shares of common stock in
payment of the exercise price will be counted against the number of shares which
are authorized for issuance under the 40,000 share limitation. The shares
issuable under the Plan may be drawn from either authorized but previously
unissued shares of common stock or treasury shares held by the Company.
ADMINISTRATION
The Plan will be administered by a committee of the Board of Directors
(the "Committee") consisting of not less than two directors designated by the
Board. Until otherwise specified by the Board, the Compensation and Benefits
Committee of the Board of Directors will serve as the Committee. The Committee
will have full power and authority to construe and administer the Plan, provided
that the Committee shall have no discretion as to the directors to whom stock
options are granted, the timing of these grants, the number of shares subject to
any stock option, the exercise price of any stock option, the periods during
which any stock option may be exercised or the term of any stock option, which
matters shall be governed by the Plan.
NEW PLAN BENEFITS AND PARTICIPATION
Although the Plan provides for the allocation to each Outside Director
of options to purchase 4,000 shares of the Company's common stock, no such
benefits or amounts have been allocated and will not be allocated unless the
Plan is approved by the stockholders. Since the value of options under the Plan
is dependent upon the future market price of the Company's common stock at the
time of grant, the amount of benefits to be derived by Outside Directors under
the Plan is not now determinable.
DURATION OF AND AMENDMENTS TO THE PLAN
The Plan will become effective upon approval by the Company's
stockholders and will remain in effect until all stock options have been
exercised in accordance with their terms. However, no stock options may be
granted under the Plan on or after the tenth anniversary of the effective date.
The Board may amend, alter, modify or discontinue the Plan at any time, provided
that the Board may not amend or alter the provisions of the Plan without the
approval of the stockholders if the amendment would materially increase the
number of shares that may be issued under the Plan.
11
CHANGE IN CONTROL
A change in control is deemed to occur in the event of certain
acquisitions of 15% or more of the Company's outstanding common stock, certain
changes of more than a majority of the membership of the Board of Directors or
certain mergers which result in the Company's stockholders owning less than 50%
of the surviving corporation. Immediately upon a change in control, vesting
requirements for stock options expire and any director who is removed or not
re-elected within two years following a change in control is entitled to
exercise all unexercised stock options for a period of three months following
the date of removal or non-election.
DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a brief description of certain significant United
Stated federal income tax consequences of the Plan, under existing law. The
discussion is based on the Code and applicable regulations thereunder in effect
on the date hereof. Any subsequent changes in the Code or such regulations may
affect the accuracy of this discussion. In addition, this discussion does not
consider any state, local or foreign tax consequences or any circumstances that
are unique to a particular participant that may affect the accuracy or
applicability of this discussion.
The Plan provides only for the grant of NQSOs. Accordingly, no taxable
income will be recognized by an Outside Director at the time of grants of NQSOs
under the Plan. Generally, on the date of exercise of a NQSO, ordinary income
will be recognized by the Outside Director in the amount of any appreciation on
the option and the Company will receive a tax deduction for the same amount.
Upon disposition of the shares acquired upon exercise of a NQSO, the Outside
Director will recognize the appreciation or depreciation on the shares after the
date of exercise as either short-term or long-term capital gain or loss
depending on how long the shares have been held.
APPROVAL
Approval of the Plan requires the affirmative vote of the holders of a
majority of the shares of common stock represented at the meeting. Abstentions
will be treated as shares present and will have the same effect as a vote
against the proposal. Broker non-votes will not be treated as shares present or
represented and entitled to vote at the annual meeting. The Board of Directors
believes that the approval of this Plan is in the best interests of the Company
since it will encourage close identity of interests between stockholders and
Outside Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN.
12
BENEFICIAL OWNERSHIP TABLE
The following table sets forth information regarding beneficial ownership
of Butler common stock by all present directors and the executive officers who
are listed in the Summary Compensation Table, and by all directors and executive
officers as a group as of February 20, 2002. Except as indicated, no director or
executive officer beneficially owns as much as one percent of all outstanding
Butler common stock. The table also sets forth the number of shares beneficially
owned and the percentage ownership of Butler common stock by each other person
believed by the Company to own beneficially as much as five percent of the total
outstanding shares of Butler common stock, based on shares outstanding as of
February 20, 2002.
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL COMMON STOCK
STOCKHOLDER OWNERSHIP OWNED
----------- --------- -----
K. Dane Brooksher (a)................................................................ 1,934
Gary M. Christensen (a).............................................................. 1,255
Susan F. Davis....................................................................... 1,574
C. L. William Haw.................................................................... 21,473
John J. Holland (b).................................................................. 101,570 1.59%
John W. Huey (c)..................................................................... 23,593
Larry C. Miller (d).................................................................. 38,826
Robert J. Reintjes, Sr. (a).......................................................... 5,443
Ronald E. Rutledge (e)............................................................... 33,990
Gary L. Tapella (a).................................................................. 2,030
Clyde E. Wills, Jr. (f).............................................................. 51,464
William D. Zollars (a)............................................................... 205
All Directors and Executive Officers as a Group of 22 (g)........................... 445,440 6.61%
Trustee of Butler Manufacturing Company
Individual Retirement Asset Account (IRAA) (h)...................................... 727,101 11.6%
Dimensional Fund Advisors, Inc. (i).................................................. 459,100 7.3%
For purposes of the table, except as otherwise indicated in the footnotes
below, a person is deemed to be a beneficial owner of shares if the person has
or shares the power to vote or dispose of them, or if the person has the right
to acquire such power within sixty days through the exercise of a stock option
or otherwise ("stock acquisition rights").
Unless otherwise indicated in the footnotes below, each person had sole
voting and investment power over the shares listed under "Amount and Nature of
Beneficial Ownership" above. Percentage of ownership is calculated on the basis
of 6,296,228 shares outstanding at February 20, 2002, plus the number of shares
subject to stock acquisition rights for those persons and groups holding such
rights. The stockholders disclaim beneficial ownership in the shares described
in the footnotes as being "held by" or "held for the benefit of" other persons.
(a) Does not include phantom stock units allocated to the Directors Deferred
Benefit Account under the Director Deferred Fee Plan. At December 31, 2001,
2,362 units were allocated to Mr. Brooksher's account, and 1,381 units were
allocated to each of the accounts of Mr. Christensen, Mr. Reintjes, Mr.
Tapella and Mr. Zollars.
(b) Includes 84,000 shares subject to exercisable outstanding stock options,
3,471 shares in Mr. Holland's IRAA account and 4,515 shares in his BEST
401(k) account.
(c) Includes 18,000 shares subject to exercisable outstanding stock options,
2,878 shares in Mr. Huey's IRAA account and 58 shares in his BEST 401(k)
account.
(d) Includes 21,000 shares subject to exercisable outstanding stock options,
1,625 shares in Mr. Miller's IRAA account and 130 shares in his BEST 401(k)
account.
13
(e) Includes 14,000 shares subject to exercisable outstanding stock options,
2,182 shares in Mr. Rutledge's IRAA account and 135 shares in his BEST
401(k) account.
(f) Includes 45,000 shares subject to exercisable outstanding stock options, 72
shares in Mr. Wills' IRAA account and 128 shares in his BEST 401(k)
account.
(g) Includes 264,500 shares subject to exercisable outstanding stock options,
24,869 shares in officers' IRAA accounts and 7,705 shares in officers' BEST
401(k) accounts.
(h) The shares are held for the benefit of Plan participants. Under the Plan,
UMB Bank, N.A., as trustee passes on to participants voting and permitted
reinvestment decisions as to allocated shares. The Plan's address is 1540
Genessee (P. O. Box 419917), Kansas City, Missouri, 64102.
(i) Dimensional Fund Advisors ("DMA") is an investment advisor to four
investment companies and investment manager to certain other commingled
group trusts and separate accounts, all of which it refers to as "Funds."
DMA reports that it possesses sole voting and/or investment power with
respect to 459,100 shares, all of which it reports are owned by the Funds.
DMA disclaims beneficial ownership of all of such shares. All information
relating to DMA is as of December 31, 2001 based on its report on Schedule
13G filed on January 30, 2002. DMA's address is 1299 Ocean Avenue, 11th
floor, Santa Monica, CA 90401.
AUDIT COMMITTEE
The Audit Committee is composed of six outside directors, named below under
"Audit Committee Report". The Board of Directors of the Company has adopted a
written Audit Committee Charter, which the Audit Committee reviews annually.
Generally, it is the Audit Committee's responsibility to assist the Board of
Directors in monitoring (1) the integrity of the financial statements of the
Company, (2) the compliance by the Company with legal and regulatory
requirements and (3) the independence and performance of the Company's internal
and external auditors. During 2001 the Audit Committee met three times. The
Board of Directors has determined that each Audit Committee member is
"independent" as that term is defined in Section 303.01(B)(2)(a) and (3) of the
New York Stock Exchange's Listing Standards.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed with management the audited
financial statements for the year ended December 31, 2001; has discussed with
the independent auditors the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU ss. 380), as modified or
supplemented; has received the written disclosures and letter from the
independent auditors required by Independence Standards Board Standard No. 1, as
may be modified or supplemented; and has discussed with the independent auditors
the auditors' independence. Based on such review and discussions, the Audit
Committee has recommended to the Board of Directors that the audited financial
statements for the year ended December 31, 2001 be included in the Company's
Annual Report on Form 10-K for filing with the Securities and Exchange
Commission.
This report is made over the name of each member of the Audit Committee,
namely Robert J. Reintjes, Sr. (Chairman), K. Dane Brooksher, Susan F. Davis, C.
L. William Haw, Gary L. Tapella and William D. Zollars.
AUDIT AND CERTAIN OTHER FEES PAID TO ACCOUNTANTS
The aggregate fees billed the Company by Arthur Andersen LLP for the year
ended December 31, 2001 for (i) professional services rendered for the audit of
the Company's annual financial statements and the reviews of the financial
statements included in the Company's reports on Form 10-Q, (ii) for financial
information systems design and implementation as described in paragraph
(c)(4)(ii)of Rule 2-01 of Regulation S-X, and (iii) for all other services, were
as set forth in the following table. The Audit Committee has considered whether
the provision of such services is compatible with maintaining the independence
of Arthur Andersen LLP.
14
TYPE OF FEE AMOUNT
----------- ------
Audit Fees $235,000
Financial Information Systems Design
And Implementation Fees 0
All Other Fees 277,000
-------
Total $512,000
========
COMPENSATION AND BENEFITS COMMITTEE
The Compensation and Benefits Committee ("Committee") is composed of four
non-employee directors. It is the Committee's responsibility to assure that the
Company's policies regarding executive compensation are followed, to recommend
changes to the policies, to recommend to the Board of Directors the compensation
of the Chairman of the Board and Chief Executive Officer, President and of any
other officers who are directors, to review compensation plans for other
executive officers and management personnel as recommended by the Chief
Executive Officer and to administer the Company's stock incentive plans. The
Committee also reviews proposals concerning the adoption of or material changes
to Company pension plans, the financial condition of each plan and the
investment performance of each investment advisor. It recommends to the Board
the amount of the Company's annual contribution to the Individual Retirement
Asset Account plan and to the Company's 401(k) Plan. The Committee also
recommends to the Board the appointment of plan trustees and approves the
appointment of investment advisors and actuaries.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
K. Dane Brooksher, Gary M. Christensen, Susan F. Davis and Robert J.
Reintjes, Sr. serve as members of the Committee. No Committee member is an
officer or former officer of the Company. No Committee or board member has been
or is an executive of another company on whose board a Butler executive sits.
REPORT OF THE COMPENSATION AND BENEFITS COMMITTEE
ON EXECUTIVE COMPENSATION
Following is the Compensation and Benefits Committee's Report on the
Company's compensation policies and practices with respect to compensation for
executive officers.
COMPENSATION POLICIES APPLICABLE TO BUTLER'S EXECUTIVE OFFICERS. It is the
Company's policy that executive officers receive total compensation that is
appropriate in light of business unit and corporate performance, the executive's
performance in achieving both annual and strategic goals, and that is
competitive with compensation levels of companies in a relevant peer group
described below. Each factor is considered in arriving at total compensation,
with business unit performance given greater weight for business unit executives
and corporate performance for corporate executives.
Because of the cyclical nature of the Company's business, the Committee's
policy is to conservatively manage fixed compensation and emphasize variable,
results-oriented compensation to achieve a competitive total compensation
package for executives. The Committee considers total remuneration data on an
annual basis to ensure that the Company is appropriately aligned with the market
for executive talent. Peer companies with whom the Committee compares
compensation are companies in the same or related industry as the Company and
durable goods manufacturing companies of comparable size as surveyed and
reported by independent consulting organizations. The Committee seeks to set
executive compensation to approximate the median level of compensation paid
executives by companies in the peer group, based on survey data, with
consideration of each executive's position, experience and performance.
The key elements of executive compensation are base salary, annual bonus,
stock options, and long-term performance incentives. The Company also makes
selected awards of restricted stock.
Base salaries for executives are set within salary ranges which are
established for each position based on the independent surveys mentioned above.
Factors typically considered by the Committee in setting base salaries are
15
the CEO's recommendation, individual performance, leadership, tenure and length
of time since the last salary adjustment.
The Company's executive officers are eligible for an annual incentive cash
bonus. Bonus amounts are discretionary and are based on achievement of pretax
operating earnings objectives for business unit executives and net operating
earnings objectives for corporate executives. At the beginning of each year,
threshold and target earnings levels are established for the Company and each
business unit. Normally, no bonus is awarded unless the threshold level of
earnings is met. Once the threshold level is met, the Committee considers
bonuses within a range based upon actual operating earnings. The Committee may
also consider individual non-financial performance in determining final amounts
of any discretionary bonus awards.
Historically, long-term incentives were provided exclusively through the
grant of stock options and restricted stock bonus awards. Throughout its one
hundred year history, the Company has continued a strong tradition of employee
stock ownership at all organizational levels. The belief has been that employee
stock ownership encourages close identity of interests among shareholders,
executives and operating personnel. Stock options and restricted stock bonus
awards are granted at current market price so that executive rewards accrue only
as shareholder value increases.
During 2001, the Committee submitted and received Board approval to revise
the long-term incentives for the Company's executive officers with the addition
of a value based Long Term Incentive Plan (LTIP), which is designed to reward
the Company's executive officers by means of cash performance awards and stock
options as shareholder value increases. At targeted performance levels, it is
anticipated that over a period of time the LTIP will provide total compensation
for senior management members more closely approximating market median.
The cash performance portion of the LTIP measures and rewards value-added
performance over a three-year period. The performance measure is based on total
business return, a measure of the creation of economic value in the Company's
business. Cash awards will be paid based upon actual results compared to
threshold and target levels of total business return established based upon
market expectations, and performance of companies in the same or related
industries as the Company and durable goods manufacturing companies of
comparable size, as surveyed and reported by independent consulting
organizations. No cash award will be granted unless the threshold level of
performance is met. At target levels, cash awards are anticipated to equal 40%
of average salary of the named executive officers over the first three year
performance cycle and 80% of the average salary of the CEO over that cycle.
Actual awards may range from 0% to 200% of target, depending on the Company's
performance. The LTIP contemplates that a portion of the cash award will be used
by participants to purchase shares of Company stock on the open market.
The stock option component of the LTIP requires stockholder approval of a
new option plan providing for options with terms of up to 10 years. Stock
options will normally be granted once a year to a group of senior executives
whose positions of responsibility afford them the opportunity to significantly
affect the future growth and profitability of the Company. Grants will be made
at the discretion of the Committee. Factors that will be considered are the
executive's job responsibilities, the Company's strategic priorities, the number
of shares currently owned by the executive and the number of options previously
granted to the executive.
COMMITTEE'S BASES FOR THE CEO'S COMPENSATION FOR 2001, INCLUDING THE FACTORS AND
CRITERIA UPON WHICH THE CEO'S COMPENSATION WAS BASED. With respect to the salary
paid to Mr. Holland for 2001, the Committee took into consideration, in addition
to the factors mentioned above, the following: Mr. Holland's individual
performance, as well as the vision and focus he has provided in setting and
effecting the long-term strategic growth of the Company; the annual salaries of
chief executive officers of the peer companies described above; and the
Company's level of profitability in 2000.
In 2001, the recession that enveloped the U.S. and the global economy
significantly reduced the Company's operating earnings compared with those
generated in 2000. As a result, net operating earnings achieved in 2001 were
below the established threshold and, as a consequence, no bonus was awarded to
Mr. Holland.
This report is made over the name of each member of the Committee, namely
K. Dane Brooksher (Chairman), Gary M. Christensen, Susan F. Davis and Robert J.
Reintjes, Sr.
16
SUMMARY COMPENSATION TABLE
The table below shows all plan and non-plan compensation awarded to, earned
by, or paid to the Company's Chief Executive Officer and its four most highly
compensated executive officers other than the CEO, including the Buildings
Division President, for services rendered to the Company and its subsidiaries
during the periods indicated.
---------------------------------------------------------------------------------------
LONG -TERM ALL-OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
------------------- ------------ ------------
AWARDS
-------------------------------------------------------------------------------------------------------------------
RESTRICTED STOCK
NAME AND STOCK (2) OPTIONS
PRINCIPAL POSITION YEAR SALARY BONUS OTHER ($) (#SHARES) ($) (3)
---------------------------------------------------------------------------------------
John J. Holland* 2001 $402,769 0 $ 1,972 $ 0 0 $166,993
Chairman & Chief 2000 $349,334 $250,000 $ 2,531 $30,005 0 $330,676
Executive Officer 1999 $314,171 $115,500 $ 569 $10,010 80,000 $ 47,825
Ronald E. Rutledge* 2001 $267,615 $ 20,000 $90,396(1) $ 4,988 0 $ 32,979
President 2000 $189,466 $ 75,000 $ 206 $10,002 0 $125,687
1999 $173,917 $120,000 $ 462 $11,989 10,000 $ 15,959
Larry C. Miller 2001 $214,081 $ 9,000 $ 1,362 $ 2,255 0 $ 42,455
Vice President- 2000 $181,740 $ 59,000 $ 1,807 $14,763 0 $ 66,335
Finance 1999 $161,500 $ 53,300 $ 945 $12,990 15,000 $ 3,954
John W. Huey 2001 $183,654 $ 7,400 $ 522 $ 0 0 $ 3,849
Vice President 2000 $174,167 $ 56,600 $ 491 $ 0 0 $ 3,668
General Counsel 1999 $163,167 $ 53,900 $ 0 $ 0 15,000 $ 2,197
And Secretary
Clyde E. Wills 2001 $244,231 $ 15,000 $ 4,516 $ 2,494 0 $ 84,854
President, 2000 $214,833 $150,000 $ 0 $ 0 0 $231,313
Buildings Div. 1999 $189,334 $ 50,000 $ 19 $ 0 30,000 $ 4,185
-------------------------------------------------------------------------------------------------------------------
*Mr. Holland was elected to the additional position of Chairman and Mr. Rutledge
was elected President, each effective November 27, 2001.
(1) Includes $87,706 reimbursement of Mr. Rutledge's relocation expenses
incurred in moving from Texas to Kansas City.
(2) For 2001, 2000, and 1999, restricted stock of the value indicated was
awarded to Messrs. Holland, Rutledge, Miller, and Wills, respectively,
based upon the election of each to receive a portion of his annual
bonus in Butler common stock as described under the "Restricted Stock
Bonus Program." The restricted stock vests on the third anniversary of
the date of the award. Dividends are payable on the restricted stock.
At December 31, 2001, Mr. Holland held 1,568 shares of restricted stock
with a value of $43,434, Mr. Rutledge held 1,091 shares of restricted
stock with a value of $30,221, Mr. Miller held 1,574 shares of
restricted stock with a value of $43,600, and Mr. Wills held 94 shares
of restricted stock with a value of $2,604.
(3) To offset its obligations under the Company's Supplemental Retirement
Benefit Plan for executives whose retirement benefit cannot be fully
funded through the Company's Base Retirement Plan for Salaried
Employees, the Company has entered into split dollar life insurance
agreements with each of Messrs. Holland, Miller, Rutledge and Wills,
and has agreed to pay the premiums for policies of split dollar life
insurance on the lives of such executives. During 2001, the Company
paid insurance premiums for policies on the lives of the above named
executive officers as follows: Mr. Holland - $327,168, Mr. Rutledge -
$130,520, Mr. Miller - $62,189, and Mr. Wills - $227,097. Under the
applicable agreements, upon an individual's retirement the Company may
recover its premium payments if the remaining cash surrender value of
the policy provides specified coverage for the individual's
Supplemental Benefit Plan benefit. In years prior to 2001, the Company
reported the premiums paid for such policies but believes the economic
cost to the Company may be of more interest to stockholders.
Accordingly, amounts included in all other compensation in the above
table for 2001 represent the economic cost to the Company of the
premiums paid, assuming full recovery of the premium at retirement.
This column also:
- Includes $850 for the Company's 2001 contribution to the Individual
Retirement Asset Account (IRAA) and forfeitures allocated for each
named executive officer's account.
17
- Includes insurance premiums paid by the Company in 2001 with respect to
term life insurance for Mr. Holland of $977, Mr. Huey of $370, Mr.
Rutledge of $1,283, Mr. Miller of $8, and Mr. Wills of $64.
- Includes the Company's 30% matching contribution for 2001 to the named
executive officer's account in the Butler Employees' Savings Trust (a
401(k) plan), in the amount of $2,629 each for Messrs. Holland, Huey,
Miller, Rutledge and Wills.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table sets out the number of exercised and unexercised
options and the value of all such in-the-money options held by the named
executive officers at December 31, 2001. The Company has no Stock Appreciation
Rights (SARs) outstanding.
-------------------------------------------------------------------------------------------------------------
SHARES 2001 STOCK NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTION EXERCISES OPTIONS IN-THE-MONEY OPTIONS
----------------
ON EXERCISE VALUE AT DECEMBER 31, 2001 AT DECEMBER 31, 2001 (1)
----------- ----- -------------------- ------------------------
NAME (#) REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------
J. J. Holland 0 0 88,000 0 $136,000 0
-------------------------------------------------------------------------------------------------------------
R .E. Rutledge 0 0 20,000 0 $ 17,000 0
-------------------------------------------------------------------------------------------------------------
J. W. Huey 0 0 22,000 0 $ 25,500 0
-------------------------------------------------------------------------------------------------------------
L. C. Miller 0 0 21,000 0 $ 25,500 0
-------------------------------------------------------------------------------------------------------------
C. E. Wills 10,000 164,500 45,000 0 $ 7,000 0
-------------------------------------------------------------------------------------------------------------
(1) Reflects the amount by which the fair market value of Butler
stock exceeded (in the case of exercised options) or exceeds
(in the case of unexercised options) the option price. At
December 31, 2001, the Company's stock price was $27.70.
PENSION PLAN TABLE
The following table shows estimated annual benefits payable upon retirement
at age 65 to salaried employees in the specified compensation and years of
service classifications under the Company's Base Retirement Plan and
Supplemental Benefit Plan. Average compensation generally means income reported
on Federal Income Tax withholding statements each year, including salary, bonus,
and other annual compensation but excluding relocation expenses and
contributions the Company makes to provide benefits under other employee benefit
plans.
The average compensation is the employee's average compensation for the
five consecutive calendar years in which compensation is the highest during the
participant's entire completed calendar years of continuous employment. Benefits
are calculated on the assumption that the benefits will be payable over the
participant's lifetime and that no survivor benefits (which would reduce the
benefit shown) are to be paid. The benefits shown in the table are subject to a
deduction for the monthly income value of IRAA benefits and of the cash value or
death benefits of split dollar life insurance, if any. Average compensation and
years of credited service for the individuals named in the compensation table at
December 31, 2001 were: Mr. Holland, $411,754 and 22 years; Mr. Huey, $209,369
and 24 years; Mr. Rutledge, $268,052 and 18 years; Mr. Miller, $219,796 and 22
years; Mr. Wills, $263,913 and 26 years.
18
ESTIMATED ANNUAL PENSION FOR YEARS OF CREDITED SERVICE
------------------------------------------------------
AVERAGE COMPENSATION 10 20 30 40
-------------------- -- -- -- --
$150,000 $22,700 $45,400 $68,100 $ 91,800
200,000 31,000 61,900 92,900 124,800
250,000 39,200 78,400 117,600 157,800
300,000 47,500 94,900 142,400 190,800
350,000 55,700 111,400 167,100 223,800
400,000 64,000 127,900 191,900 256,800
450,000 72,200 144,400 216,600 289,800
500,000 80,500 160,900 241,400 322,800
550,000 88,700 177,400 266,100 355,800
600,000 97,000 193,900 290,900 388,800
DEFERRED COMPENSATION PLAN
The Company has an executive deferred compensation plan that allows
approximately 65 executives to defer up to 25% of their annual salary and up to
100% of any incentive pay. At the participant's election, amounts deferred are
credited with earnings tied to a Bond Yield Index or Stock Composite Index.
Participants must defer their compensation until a specified date, their
retirement, termination of employment, death or disability or a change in
control of the Company (as defined) and may elect to take the balance of their
deferred cash account at the end of the deferral period in a lump sum or in
monthly payments. Messrs. Huey, Miller, Rutledge and Wills participated in this
Plan in 2001.
CHANGE OF CONTROL EMPLOYMENT AGREEMENTS
The Company has Change of Control Employment Agreements with five executive
officers, including Messrs. Holland, Huey, Miller, and Rutledge. The Agreements
provide that upon a change of control (as defined in the Agreements), the
executive shall be entitled to receive until the third anniversary of the change
in control a base salary, annual cash bonuses and other fringe benefits at the
highest levels provided to the executive during certain periods immediately
preceding the change in control. Upon a termination of the executive other than
for cause, or upon the executive's resignation for good reason (as defined) or
resignation during a thirty (30) day period following the first anniversary of
the change of control, the executive is entitled to receive a lump sum cash
payment consisting of (a) the executive's base salary through the date of
termination, (b) a proportionate bonus based upon the executive's annual bonus
for the last three fiscal years, (c) three times the sum of the base salary plus
bonus the executive is entitled to under the Agreement, (d) other accrued
obligations, and (e) the difference between the actuarial equivalent of the
retirement benefit the executive would receive if he remained employed for the
employment period and the actuarial equivalent of the executive's actual
retirement benefit. In addition, for the remainder of the employment period, the
executive is entitled to continued employee welfare benefits, including life and
family health insurance. If any payment to the executive, whether pursuant to
the Agreement or otherwise, would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code, then the executive shall be entitled
to receive an additional payment equal to the excise tax and other taxes with
respect thereto. The Agreements continue for a three year term with provision
for automatic renewal. Benefits are provided subsequent to the expiration of the
Agreement if a change of control occurs during the initial or any renewal term.
RESTRICTED STOCK BONUS PROGRAM
The Company has a Restricted Stock Bonus Program that allows approximately
12 senior executives, including Messrs. Holland, Rutledge, Huey, Miller and
Wills, to elect to receive up to 50% of their annual bonus in the Company's
common stock ("Bonus Stock"). If the eligible executive makes such an election,
the Company will match the Bonus Stock at a 50% rate ("Match Stock"). The Match
Stock is restricted and not transferable for 3 years. If the Executive's
employment is terminated prior to the end of 3 years (other than due to
retirement, disability, or a change of control of the Company), or if the
Executive transfers his or her Bonus Stock during the 3-year period, the Match
Stock will be forfeited. The principal purpose of the Program is to increase
share ownership among senior executives and encourage close identity of
interests among them and shareholders.
19
PERFORMANCE GRAPH
The following line graph compares, for five years, beginning December 31,
1996, the yearly percentage change in the Company's cumulative total shareholder
return with the Russell 2000 stock market index and the Media General "General
Building Materials Group" index. The graph assumes $100 invested at December 31,
1996 and reinvestment of dividends.
The Russell 2000 index is made up of equities with market capitalizations
more comparable to the Company's than those included in other general market
indices. The Media General "General Building Materials Group" index is an
industry index published by Media General Financial Services which includes the
Company. This index is only generally related to the Company's markets. Two of
the Company's direct competitors, NCI Building Systems, Inc. and International
Aluminum Corporation, are included. Conversely, the Media General index includes
firms such as American Standard Companies, Inc., Vulcan Materials Company, USG
Corporation, and The Sherwin-Williams Company, whose products do not compete
with the Company's.
[GRAPH]
-------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
-------------------------------------------------------------------------------------------------
Butler Manufacturing 100.00 80.88 57.32 58.56 68.41 77.00
-------------------------------------------------------------------------------------------------
Media General 100.00 109.76 125.32 107.22 109.45 119.67
-------------------------------------------------------------------------------------------------
Russell 2000 100.00 122.34 118.91 142.21 136.07 137.46
-------------------------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 2001, the Company closed on the purchase of real estate in Kansas
City, Missouri upon which the Company constructed its new Corporate and certain
Division Headquarters Building. The Company purchased the site, constituting
approximately 7.8 acres, from N. F. Bldg. Corp., a unit of National Farms, Inc.
for a price of $2,730,000. The purchase price was determined by independent
appraisals of the site. C. L. William Haw, a director of the Company, is
President and Chief Executive Officer of National Farms, Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of beneficial ownership reports furnished to the
Company, the Company believes that during 2001 all of its executive officers,
directors and greater-than-10% beneficial owners complied with Section 16(a) of
the Securities Exchange Act of 1934 except that, due to an administrative
oversight, the allocation of phantom stock units in 2000 to the accounts of
Messrs. Brooksher, Christensen, Reintjes, Tapella and Zollars under the Director
Deferred Fee Plan (referred to in note (a) of the Beneficial Ownership Table)
were not reported in Form 5 reports due February 14, 2001, but were reported in
Form 5 reports filed prior to February 14, 2002.
20
INDEPENDENT PUBLIC ACCOUNTANTS
Representatives of Arthur Andersen LLP, independent certified public
accountants, which audited the books, records and accounts of the Company for
2001, will be present at the stockholders meeting and will be available to
respond to appropriate questions.
The selection of the independent certified public accountants to audit the
books, records and accounts of the Company for 2002 will be made by the
Directors at its April, 2002 meeting based upon the recommendation of the Audit
Committee.
PROXY SOLICITATIONS
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokers, banks or other persons for reasonable expenses in
sending proxy material to beneficial owners. Proxies may be solicited through
the mail and through telephonic or telegraphic communications to, or by meetings
with, stockholders or their representatives by present and former directors,
officers and other employees of the Company who will receive no additional
compensation therefor.
HOUSEHOLDING
Only one copy of the Company's Annual Report and Proxy Statement has been
sent to multiple stockholders of the Company who share the same address and last
name, unless the Company has received contrary instructions from one or more of
those stockholders. This procedure is referred to as "householding." In addition
the Company has been notified that certain intermediaries, i.e., brokers or
banks, will household proxy materials. The Company will deliver promptly, upon
oral or written request, a separate copy of the Annual Report and Proxy
Statement to any stockholder at the same address. If you wish to receive a
separate copy of the Annual Report and Proxy Statement, you may write to
Shareholder Relations, Butler Manufacturing Company, 1540 Genessee Street, P. O.
Box 419917, Kansas City, MO 64102 or call (816) 968-3000. You can contact your
broker or bank to make a similar request. Stockholders sharing an address who
now receive multiple copies of the Company's Annual Report and Proxy Statement
may request delivery of a single copy by writing or calling the Company at the
above address or by contacting their broker or bank, provided they have
determined to household proxy materials.
DATES FOR THE SUBMISSION OF CERTAIN MATTERS
Stockholders who intend to present proposals for inclusion in the Company's
proxy statement for the next annual meeting of stockholders on April 15, 2003,
must forward them to the Company at 1540 Genessee (P. O. Box 419917), Kansas
City, Missouri 64102, Attention: Secretary, so that they are received no later
than November 8, 2002. In addition, proxies solicited by management may confer
discretionary authority to vote on matters which are not included in the proxy
statement but which are raised at the annual meeting by stockholders, unless the
Company receives written notice of the matter by January 16, 2003, at the above
address.
By Order of the Board of Directors
John W. Huey, Secretary
March 14, 2002
21
EXHIBIT A
STOCK INCENTIVE PLAN OF 2002
BUTLER MANUFACTURING COMPANY
STOCK INCENTIVE PLAN OF 2002
TABLE OF CONTENTS
Section Page
------- ----
1. Purposes..................................................................................................... 1
2. Definitions.................................................................................................. 1
3. Grants of Stock Incentives................................................................................... 3
4. Stock Subject to the Plan.................................................................................... 4
5. Stock Awards................................................................................................. 4
6. Stock Options................................................................................................ 5
7. Stock Appreciation Rights.................................................................................... 6
8. Performance Awards........................................................................................... 7
9. Termination or Suspension of Employment...................................................................... 8
10. Adjustment Provisions........................................................................................ 9
11. Change in Control............................................................................................ 10
12. Term......................................................................................................... 10
13. Administration............................................................................................... 11
14. General Provisions........................................................................................... 11
15. Amendment or Discontinuance of Plan.......................................................................... 13
Adopted by the Board of Directors on January 15, 2002.
i
BUTLER MANUFACTURING COMPANY
STOCK INCENTIVE PLAN OF 2002
1. PURPOSES.
The purposes of the Plan are (a) to provide additional incentive for
members of senior management and other Key Employees of the Company and its
Affiliates by authorizing a Committee of the Board of Directors to grant Stock
Incentives to such Key Employees, thereby furthering their identity of interest
with the interests of the Company's stockholders, and increasing their interest
in and commitment to the future growth and prosperity of the Company; and (b) to
enable the Company to induce the employment and continued employment of Key
Employees and to compete with other organizations in attracting and retaining
the services of highly-qualified personnel.
2. DEFINITIONS.
Unless otherwise required by the context, the following terms, when
used in the Plan, shall have the meanings set forth in this Section 2:
AFFILIATE: Any entity that, directly or indirectly, is controlled by
the Company and any entity in which the Company has a significant equity
interest, in either case as determined by the Committee.
AWARD AGREEMENT: Any written agreement, contract, or other instrument
or document evidencing any Stock Incentive, which may, but need not, be executed
or acknowledged by a Participant.
BOARD OF DIRECTORS OR BOARD: The Board of Directors of the Company.
CHANGE IN CONTROL: A Change in Control shall mean:
(i) The acquisition (other than from the Company) by any person,
entity or "group," within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, (excluding, for this purpose,
the Company or its subsidiaries, or any employee benefit plan
of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company) of beneficial
ownership, (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 15% or more of either the then
outstanding shares of common stock or the combined voting
power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors; or
(ii) Individuals who, as of the date hereof, constitute the Board
(as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the
date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual
or threatened election contest relating to the election of the
Directors of the Company) shall be, for purposes of this
Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) Approval by the stockholders of the Company of a
reorganization, merger, consolidation, in each case, with
respect to which persons who were the stockholders of the
Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own collectively
as a group more than 50% of the combined voting power entitled
to vote generally in the election of directors of the
reorganized, merged or consolidated company's then outstanding
voting securities, or a liquidation or dissolution of the
Company or of the sale of all or substantially all of the
assets of the Company.
If any of the events enumerated in clauses (i) through (iii)
occur, the Board shall determine the effective date of the
Change in Control resulting therefrom, for purposes of the
Plan.
CODE: The Internal Revenue Code of 1986 as now or hereafter amended.
COMMITTEE: The Compensation and Benefits Committee of the Board of
Directors of the Company or any other committee the Board may subsequently
appoint to administer the Plan pursuant to Section 13 hereof, each member of
which shall be a "Non-Employee Director" as provided in Section 13 of the Plan.
COMMON STOCK: The Common Stock of the Company, no par value, or such
other class of shares or other securities as may be subject to the Plan as the
result of an adjustment made pursuant to the provisions of Section 10.
COMPANY: Butler Manufacturing Company, a Delaware corporation.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXECUTIVE OFFICER: At any time, an individual who is an executive
officer of the Company within the meaning of Exchange Act Rule 3b-7 as
promulgated and interpreted by the SEC under the Exchange Act, or any successor
rule or regulation thereto as in effect from time to time, or who is an officer
of the Company within the meaning of Exchange Act rule 16a-1(f) as promulgated
and interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.
FAIR MARKET VALUE: The fair market value of a share of Common Stock on
the date as of which fair market value is to be determined shall be: (a) if the
Common Stock is reported on the NASDAQ National Market System of the National
Association of Securities Dealers, Inc., the last reported sales price of a
share of Common Stock as reported by NASDAQ; or (b) if the Common Stock is
listed on an established securities exchange or exchanges, the highest reported
closing price of a share of Common Stock on such exchange or exchanges. The fair
market value of the Common Stock if not so reported or listed and the fair
market value of any other property on the date as of which fair market value is
to be determined shall mean the fair market value as determined by the Committee
in its sole discretion.
INCENTIVE COMPENSATION: Bonuses, extra and other compensation payable
in addition to a salary or other base amount, whether contingent or not, whether
discretionary or required to be paid pursuant to an agreement, resolution,
arrangement, plan or practice, and whether payable currently or on a deferred
basis, in cash, Common Stock or other property.
INCENTIVE STOCK OPTION: A stock option granted hereunder which
satisfies the requirements of Section 422 of the Code.
KEY EMPLOYEES: The Company's Chairman, Chief Executive Officer,
President, Executive Vice Presidents, Division Presidents, other corporate
officers and other managers, and any other salaried employee of the Company or
of an Affiliate, including an officer or director who is an employee, who in the
opinion of the Committee can contribute significantly to the growth and
successful operations of the Company or an Affiliate. The determination by the
Committee that a Stock Incentive be granted to an employee shall be deemed a
determination by the Committee that such employee is a Key Employee. Awards may
be made to eligible employees whether or not they have received prior awards
under the Plan or under any previously adopted plan, and whether or not they are
participants in other benefit plans of the Company or any other Subsidiary.
MATURE STOCK: Shares of Common Stock which have been obtained through
the exercise of an Option or pursuant to another Stock Incentive under this Plan
or any other plan of the Company and which have been held continuously by a
Participant for six months or more without being subject to any forfeiture
restriction.
NON QUALIFIED STOCK OPTION: A right to purchase Common Stock from the
Company that is granted under Section 6 of the Plan and that is not intended to
be an Incentive Stock Option.
PARTICIPANT: Any Key Employee selected by the Committee to receive a
Stock Incentive under the Plan.
PERFORMANCE AWARD: Stock Incentives which shall consist of Performance
Awards under Section 8.
PRIOR PLANS: The Butler Manufacturing Company Stock Incentive Plan of
1979, as amended (the "1979 Plan"), the Butler Manufacturing Company Stock
Incentive Plan of 1987, as amended (the "1987 Plan"), and the Butler
Manufacturing Stock Incentive Plan of 1996, as amended (the "1996 Plan").
OPTION: An option to purchase shares of Common Stock or, where the
context so requires, the instrument
2
which evidences such an option.
PLAN: The Stock Incentive Plan herein set forth as the same may from
time to time be amended.
RESTRICTED SHARES: Shares of Common Stock issued or transferred subject
to terms and conditions with respect to payment, transfer or forfeiture as
authorized by paragraph (d) of Section 5.
STOCK APPRECIATION RIGHT: A right to receive a number of shares of
Common Stock, cash, or a combination of the two based on the increase in the
Fair Market Value of shares of Common Stock subject to an Option, as set forth
in Section 7 of the Plan.
STOCK AWARD: An issuance or transfer of shares of Common Stock at the
time a Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future, including, without
limitation, such an issuance, transfer or undertaking with respect to a Stock
Incentive that is contingent, in whole or in part, upon the attainment of a
specified objective or objectives.
STOCK INCENTIVE: A stock incentive granted under the Plan in one of the
forms authorized in Section 3.
STOCK PURCHASE RIGHT: A right granted as a part of a Stock Award or
Performance Award to purchase for cash shares of the Company's Common Stock at
their fair market value on the date of purchase through a cash payment or the
cancellation of all or a portion of an earned cash bonus.
SUBSIDIARY: A corporation or other form of business association of
which shares (or other ownership interests) having 50% or more of the voting
power are owned or controlled, directly or indirectly, by the Company.
SUBSTITUTE STOCK INCENTIVES: Stock Incentives granted pursuant to
Section 14.
3. GRANTS OF STOCK INCENTIVES.
(a) Persons Eligible to Participate. Subject to the provisions of the
Plan, the Committee may at any time grant Stock Incentives under the Plan to,
and only to, Key Employees.
(b) Forms of Stock Incentives. Stock Incentives may be granted in the
following forms:
(i) a Stock Award, in accordance with Section 5, or
(ii) a Stock Option, in accordance with Section 6, or
(iii) a Stock Appreciation Right, in accordance with
Section 7, or
(iv) a Performance Award in accordance with Section 8, or
(v) a combination of any of the foregoing.
(c) Award Agreements. Each Stock Incentive shall be evidenced by a
written Award Agreement in a form prescribed by the Committee that is consistent
with this Plan, that shall be delivered to the Participant and that shall
specify the terms and conditions of the Stock Incentive and any rules applicable
thereto. Award Agreements may be executed on behalf of the Company and the Plan
by any Executive Officer of the Company or such other officer of the Company as
the Committee shall designate.
(d) Amendments of Award Agreements. Subject to the terms of the Plan,
the Committee may from time to time authorize the amendment of outstanding Award
Agreements so long as such amendments are consistent with the Plan; provided,
that any such amendment that would adversely affect the rights of any
Participant or any holder or beneficiary of any Stock Incentive theretofore
granted shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary. The Committee may not reprice or
replace through cancellation any Stock Option which has been awarded to a
Participant.
3
4. STOCK SUBJECT TO THE PLAN.
(a) Number of Shares Available.
Subject to the provisions of this clause (a) and Section 10, the number
of shares of Common Stock that may be issued under the Plan for Awards granted
wholly or partly in stock during the term of the Plan is two hundred
seventy-nine thousand (279,000). If any shares of Common Stock subject to a
Stock Incentive shall not be issued or transferred or shall cease to be issuable
or transferable under such Stock Incentive, or if, after issuance or transfer,
any such shares shall be reacquired by the Company or Subsidiary because of an
employee's failure to comply with or meet the terms and conditions of a Stock
Incentive, such shares shall no longer be charged against the limitation
provided for above and may again be made subject to Stock Incentives; and only
the net additional shares issued upon the exercise of a Stock Incentive through
the delivery or withholding of shares of Common Stock in payment of the exercise
price or withholding taxes shall be counted against the number of shares which
are authorized for issuance under this paragraph. The limitation provided for in
this paragraph shall also be increased by the number of shares subject to any
substitute Stock Options granted under Section 14(j). Notwithstanding the
foregoing, shares shall be deemed to have been issued pursuant to a Stock Option
or Stock Award and shall be charged against the limitation provided for in this
paragraph, whether actually delivered, to the extent of the number of shares
covered by that portion of the related Stock Option or Stock Award granted under
the Plan which is settled by the exercise of a Stock Appreciation Right or by a
cash payment under a Stock Award.
If a Stock Award or Stock Performance Award is granted on the condition
that the Participant purchase other shares of the Company's Common Stock for
cash at fair market value on the date of purchase under a Stock Purchase Right,
then only the shares issued under the Stock Purchase Award or Stock Award shall
be counted against the number of shares available for awards and not the shares
purchased for cash at fair market value under the Stock Purchase Right.
(b) Use of Treasury and Other Shares. Authorized but unissued shares of
Common Stock and shares of Common Stock held in the treasury, whether acquired
by the Company specifically for use under the Plan or otherwise, may be used, as
the Board of Directors may from time to time determine, for purposes of the
Plan; provided, however, that any shares acquired or held by the Company for the
purposes of the Plan shall, unless and until transferred to a Participant in
accordance with the terms and conditions of a Stock Incentive, be and at all
times remain treasury shares of the Company, available for any corporate
purpose, irrespective of whether such shares are entered in a special account
for purposes of the Plan.
(c) Certain Limitations on Grants. Notwithstanding any provision herein
to the contrary, and subject to adjustment as provided in Section 10, no
Executive Officer of the Company may receive Stock Incentives under the Plan in
any calendar year that relate to more than one hundred thousand (100,000) shares
of Common Stock. In addition, and subject to other provisions of the plan
permitting the expiration of restrictions under certain circumstances, no Stock
Award or Stock Performance Award shall be granted under Section 5 or 8 unless
the shares subject to the Award (other than shares purchased for cash at fair
market value on date of purchase under a related Stock Purchase Right) are
subject to restrictions on transfer and/or ownership specified by the Committee
and the restrictions continue for a period of one year from the date of grant in
the case of Awards that are performance based and continue for a period of three
years from the date of grant in the case of Awards under Section 5 that are not
performance based.
5. STOCK AWARDS.
Stock Incentives in the form of Stock Awards shall be subject to the
following provisions:
(a) General. A Stock Award shall be granted only (i) in payment of
Incentive Compensation that has been earned, (ii) as Incentive Compensation to
be earned or (iii) a combination of (i) and (ii).
(b) Valuation. For the purposes of the Plan, in determining the value
of a Stock Award, all shares of Common Stock subject to such Stock Award shall
be valued at not less than 100% of the Fair Market Value of such shares on the
date such Stock Award is granted, regardless of whether or when such shares are
issued or transferred to the Participant and whether or not such shares are
subject to restrictions which affect their value.
(c) Grant. Shares of Common Stock subject to a Stock Award may be
issued or transferred to a Key Employee at the time the Stock Award is granted,
or at any time subsequent thereto, or in installments from time to
4
time, as the Committee shall determine. With respect to a Stock Award providing
for issuance or transfer of shares subsequent to the time it is granted, the
Committee may provide for payment to the grantee of amounts not exceeding the
cash dividends which would have been payable in respect of such shares (as
adjusted under Section 10 of the Plan) if they had been issued or transferred at
the time the Stock Award was granted. Such payments may be made in cash, shares
of Common Stock or a combination of cash and shares. Such payments may be made
at the time the shares are issued or transferred, or at the time or times the
cash dividends would have been payable if the shares had been issued or
transferred at the time the Stock Award was granted. Any amount payable in
shares of Common Stock under the terms of the Stock Award may be paid in cash on
each date on which delivery of shares would otherwise have been made, in an
amount equal to the Fair Market Value on such date of the shares which would
otherwise have been delivered.
(d) Terms Relating to Transfer, Payment or Forfeiture. A Stock Award
may contain such other terms and conditions as the Committee may determine with
respect to transfer, payment or forfeiture of all or any part of the Stock
Award.
(e) Other Terms. A Stock Award may be subject to such other terms and
conditions, including, without limitation, restrictions on sale or other
disposition of the shares issued or transferred pursuant to the Stock Award, as
the Committee may determine; provided, however, that upon the issuance or
transfer of shares pursuant to a Stock Award, the recipient shall, with respect
to such shares, be and become a stockholder of the Company fully entitled to
receive dividends, to vote and to exercise all other rights of a stockholder
except to the extent otherwise provided in the Stock Award. A Stock Award may
also include and be made contingent upon the exercise of a Stock Purchase Right.
6. STOCK OPTIONS.
Stock Incentives granted under the Plan in the form of Stock Options
shall be subject to the following provisions:
(a) Grant. Subject to the provisions of the Plan, including those
contained in this Section 6, the Committee shall have the sole and complete
authority to determine the Key Employees to whom Options shall be granted, the
number of shares of Common Stock to be covered by each Option, the option price
therefor and the conditions and limitations applicable to the exercise of the
Option. The Committee shall have authority to grant Incentive Stock Options or
to grant Non Qualified Stock Options, or to grant both types of Options. In the
case of Incentive Stock Options, the amounts, terms and conditions of such
grants shall be subject to and comply with the requirements for Incentive Stock
Options as set forth in Section 422 of the Code, as from time to time amended,
and any regulations implementing such statute.
(b) Date of Grant. The "Date of Grant" of an Option shall be the date
the action of the Committee providing for the grant of the Option is taken, or
such later date as the Committee may provide. An amendment to the terms of an
existing Option shall not constitute the grant of a new Option except to the
extent that the amendment increases the number of shares subject to the Option
other than as the result of an amendment effected pursuant to the adjustment
provisions of the Plan.
(c) Price. The price at which shares of Common Stock may be purchased
under an Option (the "Option Price") shall be specified in the Option and shall
be not less than 100% of the Fair Market Value of such stock on the Date of
Grant of the Option.
(d) Term. An Option shall be exercisable only during a term (the "Term
of the Option" or "Term") commencing not sooner than six months and one day
after the Date of Grant of the Option and ending (unless the Option shall have
terminated earlier under other provisions of the Plan) on a date fixed by the
Committee and stated in the Option, which date shall not be later than the tenth
anniversary of the Date of Grant. If an Option is granted for an original Term
of less than ten years, the Committee may, at any time prior to the expiration
of the Option, extend its Term for a period ending not later than the tenth
anniversary of the Date of Grant of the Option.
(e) Installments. An Option may provide that it shall be exercisable in
full or in part at any time during the Term of the Option, or that it shall be
exercisable in a specified series of installments. Unless otherwise provided in
the Option, installments or portions thereof not exercised in earlier periods
shall be cumulative and shall be available for exercise in later periods. The
Committee may, by so providing in an Option, require any
5
partial exercise thereof to be with respect to a specified minimum number of
shares.
(f) Exercise. To the extent that the right to purchase shares has
accrued under an Option, the Option may be exercised from time to time by the
optionee or by a person or persons entitled to exercise the Option, by delivery
to the Company of a written notice, in the manner and in such form as may be
prescribed by the Committee, stating the number of shares with respect to which
the Option is being exercised, and by making provision satisfactory to the
Company for the payment in full of the Option price of the shares prior to or in
connection with the delivery of certificates evidencing the shares. The
Committee may, in its discretion and upon request of the Participant, issue
shares of Common Stock upon the exercise of an Option directly to a brokerage
firm or firms to be approved by the Company, without payment of the purchase
price by the optionee but upon delivery of an irrevocable guarantee by such
brokerage firm or firms of the payment of such purchase price or upon the
participant's issuance to the brokerage firm of irrevocable instructions to sell
or margin a sufficient portion of the shares and deliver the sale or margin loan
proceeds directly to the Company to pay the exercise price and any withholding
taxes. Upon receipt of such notice and payment arrangement in form satisfactory
to the Company, the Company shall deliver to or upon the order of the optionee,
or such other person entitled to exercise the Option, at the corporate
headquarters of the Company, or at such place as shall be mutually acceptable, a
certificate or certificates evidencing such shares. An Option may not be
exercised for fractional shares of Common Stock.
(g) Payment in Common Stock. Payment in form satisfactory to the
Company may, at the option of the Company, include payment by transfer to the
Company of other shares of Mature Stock or other Common Stock which was obtained
by the Participant on the open market. Common Stock transferred to the Company
or withheld from shares to be distributed in payment of the option price or
withholding taxes shall be valued at the Fair Market Value of the Common Stock
on the date of the exercise.
(h) No Stockholder Rights Prior to Exercise. No person shall have any
rights of a stockholder by virtue of an Option except with respect to shares
actually issued to him, and issuance of shares shall not confer retroactive
rights to dividends.
(i) Certain Limits on Incentive Stock Options. The aggregate fair
market value (determined as of the time the option is granted) of the stock for
which any employee may be granted Incentive Stock Options in any calendar year
under this Plan and all such other incentive stock option plans of the Company
and its subsidiaries shall not exceed limits specified from time to time in the
Code for Incentive Stock Options.
7. STOCK APPRECIATION RIGHTS.
(a) Grant. Stock Appreciation Rights may be granted in connection with
any Option granted under the Plan or Prior Plans, either at the time of the
grant of such Option or at any time thereafter during the term of the Option. A
grant of Stock Appreciation Rights shall either be included in the instrument
evidencing the Option to which they relate or evidenced by a separate instrument
meeting the requirements of Section 3 of the Plan.
(b) Settlement. A person entitled to exercise an Option in connection
with which Stock Appreciation Rights shall have been granted shall be entitled,
at such time or times and subject to such terms and conditions as may be stated
in the granting instrument, to settle all or part of the Option by requesting
the Company to pay, in cancellation of the part of the Option to be settled,
consideration in an amount equal to the number of shares of Common Stock subject
to the canceled part of the Option times the amount by which the fair market
value of one share on the exercise date exceeds the Option Price (the
"Appreciation"). The election shall be made in a written instrument, in form
satisfactory to the Committee, delivered in the manner prescribed in Section 6
for the exercise of options.
(c) Form of Consideration. The form of the consideration to be paid for
the Appreciation shall either be cash, shares of Common Stock having an
aggregate market value on the exercise date equal to the Appreciation, or a
combination of cash and shares. Such form of consideration shall be specified
either by the Committee or, subject to the approval of the Committee, by the
person exercising the Stock Appreciation Right, provided that such form of
consideration shall in no event include fractional shares of Common Stock.
(d) Other Terms. An Option in connection with which Stock Appreciation
Rights are granted may prescribe or limit the period or periods of time during
which the Stock Appreciation Rights may be exercised as
6
provided in paragraph (b) of this Section 7, and may prescribe such additional
terms and conditions applicable to the exercise of the Stock Appreciation Rights
as may be determined by the Committee and as are consistent with the Plan. In no
event may Stock Appreciation Rights be exercised at a time when the Option in
connection with which they were granted is not exercisable. If Stock
Appreciation Rights and Incentive Stock Options are granted in tandem such that
the exercise of one affects the right to exercise of the other, the Stock
Appreciation Rights shall meet the requirements of Section 422 of the Code, as
from time to time amended, and the regulations promulgated thereunder.
8. PERFORMANCE AWARDS.
The Committee may grant Performance Awards denominated at the time of grant in
shares of Common Stock. Payment under a Performance Award shall be made, at the
discretion of the Committee, in shares of Common Stock ("Performance Shares"),
or in cash or in any combination thereof, if the financial performance of the
Company or any subsidiary, division, or other unit of the Company ("Business
Unit") selected by the Company meets certain financial goals established by the
Committee for the Award Period. The following provisions are applicable to
Performance Awards:
(a) Award Period. The Committee shall determine and include in the
Award Agreement for the Performance Award the period of time (which shall be
four or more consecutive fiscal quarters) for which a Performance Award is made
("Award Period"). Grants of Performance Awards need not be uniform with respect
to the length of the Award Period. Award Periods for different Grants may
overlap. A Performance Award may not be granted for a given Award Period after
90 days or more of such period has elapsed.
(b) Performance Goals and Payment. Before a Performance Award is made,
the Committee shall establish objectives ("Performance Goals") that must be set
out in an Award Agreement and must be met by the Business Unit during the Award
Period as a condition to payment being made under the Performance Award. The
criteria upon which Performance Goals may be based are limited to pre-tax
earnings per share, divisional pre-tax income, net income, net operating profit
after taxes, cash flow, free cash flow or any combination, of the foregoing and
may be before the effect of acquisitions, divestitures, accounting changes, and
restructuring and special changes (determined according to criteria established
by the Committee). The Committee shall also set forth in the Award Agreement the
number of Performance Shares or the amount of payment to be made under a
Performance Award if the Performance Goals are met or exceeded, including the
fixing of a maximum payment, subject to Section 8(f). A Performance Award may
also include and be made contingent upon the exercise of a Stock Purchase Right.
(c) Computation of Payment. After an Award Period, the financial
performance of the Business Unit during the Award Period shall be measured
against the Performance Goals. Before payment of any remuneration under an
Award, the Committee shall certify in writing that the performance goals and any
other material terms of the Award were in fact satisfied. The Committee, in its
sole discretion, may elect to pay part or all of the Performance Award in cash
in lieu of issuing or transferring Performance Shares. The cash payment shall be
based on the fair market value of Common Stock on the date of payment. The
Company shall promptly notify each Participant of the number of Performance
Shares and the amount of cash, if any, he or she is to receive.
(d) Revisions for Significant Events. At any time before payment is
made, the Committee may revise the Performance Goals and the computation of
payment if unforeseen events occur during an Award Period which have a
substantial effect on the Performance Goals and which in the judgment of the
Committee make the application of the Performance Goals unfair unless a revision
is made; provided, however, that no such revision shall be made with respect to
a Performance Award to the extent that the Committee determines the revision
would cause payment under the Award to fail to be fully deductible by the
Company under Section 162(m) of the Code.
(e) Requirement of Employment. To be entitled to receive payment under
a Performance Award, a Participant must remain in the employment of the Company
to the end of the Award Period, except that the Committee may provide for
partial or complete exceptions to this requirement as it deems equitable in its
sole discretion.
(f) Maximum Payment. No Participant may receive Performance Award
payments in respect of Stock Performance Awards in excess of 100,000 shares of
Common Stock in any calendar year.
9. TERMINATION OR SUSPENSION OF EMPLOYMENT.
7
The following provisions shall apply in the event of the Participant's
termination of employment unless the Committee shall have provided otherwise,
either at the time of the grant of the Stock Incentive or thereafter:
(a) Non Qualified Stock Options and Stock Appreciation Rights.
(1) Termination of Employment Other than Due to Death,
Disability, Cause or Retirement. If the Participant's
employment with the Company or its Affiliates is
terminated for any reason other than death, permanent
and total disability, cause or retirement, the
Participant's right to exercise any Non Qualified
Stock Option or Stock Appreciation Right shall
terminate ninety (90) days after the cessation of
employment, unless it terminates earlier by its terms
or under other provisions of the Plan. Until the
Option or Right terminates, it may be exercised by
the optionee, his estate or legal representatives for
all or a portion of the shares as to which the right
of purchase had accrued under the Plan at the time of
cessation of employment, subject to all applicable
conditions and restrictions provided in the Plan and
the Option. In no event shall an Option or Right be
exercisable later than the date of expiration of the
Term of the Option or Right, and in no event shall an
Option or Right be exercisable for any shares as to
which the right of purchase had not accrued at the
time of cessation of employment. Employment for the
purposes of this paragraph shall mean continuous
full-time salaried employment. Vacations, sick leaves
and any approved absence on leave shall not
constitute a termination of employment or an
interruption of continuous full-time salaried
employment.
(2) Disability or Retirement. If the Participant's
employment with the Company or its Affiliates is
terminated by permanent and total disability or
retirement, any Non Qualified Stock Option or Stock
Appreciation Right held by such Participant shall
terminate on the earlier of (i) the third anniversary
of such termination of employment or (ii) the date
the Option or Right would have otherwise expired by
its terms had it not been for such termination of
employment. Until the Option terminates it may be
exercised by the optionee, his estate or legal
representatives for all or a portion of the shares as
to which the right of purchase had accrued as of the
date of such exercise, subject to all applicable
conditions and restrictions provided in the Plan and
the Option or Right. In no event shall such Option or
Right be exercisable later than the date of
expiration of the term of the Option or Right, and in
no event shall such Option or Right be exercisable
for any shares as to which the right of purchase had
not accrued at the time of exercise. "Retirement" and
"permanent and total disability" shall be defined by
the Committee.
(3) Death. If the Participant's employment with the
Company or its Affiliates is terminated by death, and
if any Non Qualified Stock Option or Stock
Appreciation Right was in effect at the time of his
death (whether or not its terms had then commenced),
the Option or Right may, until the expiration of one
year from the date of death of the Participant or
until the earlier expiration of the Term of the
Option or Right, be exercised as and to the extent it
could have been exercised by the Participant had he
been living at the time of exercise, by the legal
representatives of the Participant or by any person,
persons or entity to whom his rights under the Option
or Right shall have been transferred pursuant to the
provisions of paragraph (g) of Section 14 of the
Plan. Such exercise shall not be limited to the
shares as to which the right of purchase had accrued
at the date of death of the Participant, but shall be
subject to all applicable conditions and restrictions
prescribed in the Plan and the Option or Right,
including any installment provision.
(4) Acceleration and Extension of Exercisablility.
Notwithstanding the foregoing, the Committee may, in
its discretion, provide (A) that a Non Qualified
Stock Option or Stock Appreciation Right granted to a
Participant may terminate at a date earlier than that
set forth above, (B) that a Non Qualified Stock
Option or Stock Appreciation Right granted to a
participant not subject to Section 16 of the Exchange
Act may terminate at a date later than that set forth
above, provided such date shall not be beyond the
date the option or right would have expired had it
not been for the termination of the Participant's
employment, and (C) that a Non Qualified Stock Option
or Stock Appreciation Right may
8
become immediately exercisable when it finds that
such acceleration would be in the best interests of
the Company.
(b) Incentive Stock Options. Except as otherwise determined by the
Committee at the time of grant, if the Participant's employment with the Company
is terminated for any reason, the Participant shall have the right to exercise
any Incentive Stock Option and any related Stock Appreciation Right during the
three months after such termination of employment to the extent it was
exercisable at the date of such termination, but in no event later than the date
the option would have expired had it not been for the termination of such
employment. If the Participant does not exercise such Option or related Stock
Appreciation Right to the full extent permitted by the preceding sentence, the
remaining exercisable portion of such Option automatically will be deemed a Non
Qualified Stock Option, and such Option and any related Stock Appreciation Right
will be exercisable during the period set forth in Section 9(a) of the Plan,
provided that in the event that employment is terminated because of death or the
Participant dies in such three month period, the option will continue to be an
Incentive Stock Option to the extent provided by Section 422 of the Code, or any
successor provision, and any regulations promulgated thereunder.
(c) Stock Awards and Performance Awards. Except as otherwise determined
by the Committee at the time of grant, upon termination of employment for any
reason during the restriction period, all shares of Restricted Stock and
Performance Awards still subject to restriction shall be forfeited by the
Participant and reacquired by the Company at the price (if any) paid by the
Participant for such Restricted Stock and Performance Awards, provided that in
the event of a Participant's retirement, permanent and total disability, or
death, or in cases of special circumstances, the Committee may, in its sole
discretion, when it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining restrictions with
respect to such participant's shares of Restricted Stock.
(d) Termination for Cause. Notwithstanding the other provisions hereof,
a Stock Incentive granted to a Participant shall expire and the Participant
shall thereupon forfeit all rights thereunder if the Participant is terminated
for cause due to the misconduct of the Participant. The Committee shall, in its
sole discretion, determine whether a termination was for cause due to
misconduct.
10. ADJUSTMENT PROVISIONS
In the event of a reorganization of the Company, equitable adjustments
shall be made by the Committee in the Plan and in outstanding Stock Incentives.
Without limiting the foregoing, the Committee may authorize payments of cash or
other consideration with respect to outstanding Stock Incentives or it may
otherwise adjust the terms of the Stock Incentive with respect to: (a)
performance goals, (b) the number and class of shares or other securities that
may be issued or transferred pursuant to Stock Incentives in the aggregate or to
any individual, (c) the number and class of shares or other securities which
have not been issued or transferred under outstanding Stock Incentives, (d) the
purchase price to be paid per share under outstanding Options, and (e) the price
to be paid per share by the Company or a subsidiary for shares or other
securities issued or transferred pursuant to Stock Incentives which are subject
to a right of the Company or an Affiliate to reacquire such shares or other
securities. For this purpose, a "reorganization" shall be deemed to have
occurred in the event:
(i) any recapitalization, reclassification, split-up or
consolidation of shares of Common Stock shall be
effected;
(ii) the outstanding shares of Common Stock are, in
connection with a merger or consolidation of the
Company or the acquisition by another corporation of
Common Stock or of all or part of the assets of the
Company, exchanged for a different number or class of
shares of stock or other securities of the Company or
for shares of the stock or other securities of
another corporation;
(iii) new, different or additional shares or other
securities of the Company or of another corporation
are received by the holders of Common Stock; or
(iv) any distribution other than an ordinary cash dividend
is made to the holders of Common Stock.
In the event of any other change in the capital structure or in the
capital stock of the Company, the
9
Committee shall be authorized to make such appropriate adjustments in the
maximum number of shares of Common Stock available for issuance under the Plan
in the aggregate or to any individual and any adjustments and/or modifications
to outstanding Stock Incentives as it deems appropriate.
The Committee may also unilaterally amend outstanding Stock Incentives
to remove restrictions or otherwise change the terms of outstanding Stock
Incentives to permit such incentives to be substituted for comparable incentives
to be provided by any entity which assumes the obligations with respect to such
outstanding Stock Incentives upon terms and conditions approved by the Board of
Directors or Stockholders.
The action of the Committee in approving any adjustment or change
contemplated by this Section 10 shall be conclusively deemed to be equitable,
appropriate, fair and/or comparable and shall be binding on all persons holding
rights under the Plan.
11. CHANGE IN CONTROL.
Unless the Committee shall otherwise provide in the Award Agreement relating to
a Stock Incentive granted under the Plan, upon the occurrence of a Change in
Control:
(a) In the case of Stock Options and Stock Appreciation Rights granted
under the Plan (i) each outstanding option or right that is not then fully
Exercisable shall automatically become fully exercisable until the termination
of the option exercise period of the option or right, as modified by subsection
(ii) that follows, and (ii) in the event the Participant's employment is
terminated within two years after a Change in Control, his or her outstanding
options or rights at that date of termination shall be immediately exercisable
for a period of three months following such termination, provided, however,
that, to the extent the option or right by its terms otherwise permits a longer
option exercise period after such termination, such longer period shall govern,
and provided further that in no event shall such option or right be exercisable
more than ten years after the date of grant.
(b) Any restrictions and provisions for forfeiture on all outstanding
Stock Awards shall automatically expire and immediately lapse and all such
awards shall be immediately and fully vested;
(c) Each Grantee of a Performance Award for an Award Period that has
not been completed at the time of the Change in Control shall be deemed to have
earned a minimum Performance Award equal to the product of (i) such
Participant's maximum award opportunity for such Performance Award, and (ii) a
fraction, the numerator of which is the number of full and partial months that
have elapsed since the beginning of such Award Period to the date on which the
Change in Control occurs, and the denominator of which is the total number of
months in such Award Period.
12. TERM.
(a) Effective Date. The Plan shall become effective upon its approval
by the affirmative vote of the holders of a majority of the shares of the
Company's Common Stock present or represented, and entitled to vote at a meeting
duly held in accordance with applicable law.
(b) Expiration Date. No Stock Incentives shall be granted under the
Plan after April 16, 2009. Unless otherwise expressly provided in the Plan or in
an applicable Award Agreement, any Stock Incentive granted hereunder may, and
the authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Stock Incentive shall, continue after the authority for grant of
new Stock Incentives hereunder has been exhausted.
10
13. ADMINISTRATION.
(a) Committee. The Plan shall be administered by the Committee which
shall consist of not less than three directors of the Company designated by the
Board of Directors; provided, however, that no director shall be designated as
or continue to be a member of the Committee unless he shall at the time of
designation and throughout his service be a "non-employee director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (or any
successor rule or statute at the time in effect) and be an "outside director"
for purposes of Section 162(m) of the Code. Any member of the Committee shall
automatically cease to be a member of the Committee at such time as such person
ceases to qualify as a "non-employee" or "outside" director as so defined and
any vote cast by such person while so disqualified to act shall be deemed a
nullity and shall not adversely affect any vote cast or action taken pursuant to
the affirmative votes of a majority of the remaining members of the Committee
who at such time were not so disqualified.
(b) Delegation by the Board. The Board of Directors by adoption of the
Plan delegates to the Committee all of its authority under the Plan, including
the authority to award Stock Incentives, but excluding the authority to amend or
discontinue the Plan.
(c) Authority of the Committee. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Stock Incentives to be granted to an eligible employee; (iii) determine the
number of shares of Common Stock to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with,
Stock Incentives; (iv) determine the terms and conditions of any Stock
Incentive; (v) determine whether, to what extent, and under what circumstances
Stock Incentives may be settled or exercised in cash, shares of Common Stock,
other securities, other Stock Incentives or other property, or canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, shares of Common Stock, other securities, other Stock
Incentives, other property, and other amount payable with respect to a Stock
Incentive shall be deferred either automatically or at the election of the
holder thereof or of the Committee; (vii) interpret and administer the Plan and
any instrument or agreement relating to, or Stock Incentive made under, the
Plan; (viii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (ix) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan.
(d) Committee Discretion Binding. Unless otherwise expressly provided
in the Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Stock Incentive shall be
within the sole discretion of the Committee, may be made at any time and shall
be final, conclusive, and binding upon all persons, including the Company, any
Affiliate, any Participant, any holder or beneficiary of any Stock Incentive,
any stockholder and any employee.
(e) Liability of Committee Members. Members of the Board of Directors
and members of the Committee acting under the Plan shall be fully protected in
relying in good faith upon the advice of counsel and shall incur no liability
except for willful misconduct in the performance of their duties.
(f) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company or
any Affiliate, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Stock Incentives to, or to cancel, modify or waive rights with respect to, or to
alter discontinue, suspend, or terminate Stock Incentives held by, Participants
who are not officers or directors of the Company for purposes of Section 16 of
the Exchange Act, or any successor section thereto, or who are otherwise not
subject to such Section.
14. GENERAL PROVISIONS.
(a) No Rights to Employment. Nothing in the Plan nor in any instrument
executed pursuant thereto shall confer upon any Participant any right to
continue in the employ of the Company or an Affiliate or shall affect the right
of the Company or of an Affiliate to terminate the employment of any Participant
with or without cause.
(b) Share Issuance Subject to Compliance with Applicable Law. No shares
of Common Stock shall be issued or transferred pursuant to a Stock Incentive
unless the Company is satisfied that there has been compliance with all legal
requirements applicable to the issuance or transfer of such shares. In
connection with any such
11
issuance or transfer, the person acquiring the shares shall, if requested by the
Company, give assurances satisfactory to the Company that the shares are being
acquired for investment and not with a view to resale or distribution thereof
and assurances in respect of such other matters as the Company may deem
desirable to assure compliance with all applicable legal requirements.
(c) No Rights as Stockholder. Subject to the provisions of the
applicable Stock Incentive, no Participant (individually or as a member of a
group), and no beneficiary or other person claiming under or through him, shall
have any right, title or interest in or to any shares of Common Stock allocated
or reserved for the purposes of the Plan or subject to any Stock Incentive,
except as to such shares of Common Stock, if any, as shall have been issued or
transferred to him.
(d) Grants of Stock Incentives to Future Employees. The Company or
Affiliate may, with the approval of the Committee, enter into an agreement or
other commitment to grant a Stock Incentive in the future to a person who is or
will be at the time of grant a Key Employee, and, notwithstanding any other
provision of the Plan, any such agreement or commitment shall not be deemed the
grant of a Stock Incentive until the date on which the Committee takes action to
implement such agreement or commitment, which date shall for the purpose of the
Plan be the date of grant.
(e) Implementation of Stock Incentives by Affiliates. In the case of a
grant of a Stock Incentive to any employee of an Affiliate, such grant may, if
the Committee so directs, be implemented by the Company issuing or transferring
the shares, if any, covered by the Stock Incentive to the Affiliate, for such
lawful consideration as the Committee may specify, upon the condition or
understanding that the Affiliate will transfer the shares to the employee in
accordance with the terms of the Stock Incentive. Notwithstanding any other
provision hereof, such Stock Incentive may be issued by and in the name of the
Affiliate and shall be deemed granted on the date it is approved by the
Committee or on such later date as the Committee shall specify.
(f) Withholding and Payment of Taxes. The Company or an Affiliate may
make such provisions as it may deem appropriate for the withholding of any taxes
which the Company or Affiliate determines it is permitted or required to
withhold in connection with any Stock Incentive. Such provisions may include a
requirement that all or part of the amount of such taxes be paid to the Company
or Affiliate, in cash, at the time of settlement. Such provisions may also
permit the payment of such taxes through the withholding of shares of Common
Stock to be issued under a Stock Incentive or the delivery of shares of Mature
Stock owned by the Participant or other Common Stock which was obtained by the
Participant on the open market. The amount of tax which may be paid by a
Participant through share withholding or the delivery of shares will not exceed
the Company's minimum statutory withholding amount, based on the Company's
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the taxable income resulting
from the Stock Incentive.
(g) Non-transferability. Except with the Committee's prior approval,
(i) no Stock Incentive and no rights under a Stock Incentive or under the Plan,
contingent or otherwise, shall, by operation of law or otherwise, be
transferable or assignable or subject to any encumbrance, pledge, hypothecation
or charge of any nature, or to execution, attachment or other legal process,
except that, in the event of the death of the holder of a Stock Incentive, the
holder's rights under the Stock Incentive may pass, as provided by law, to the
legal representatives of the holder, and such legal representatives may transfer
any rights in respect of such Stock Incentive to the person or persons or entity
(including a trust) entitled thereto under the will of the holder of such Stock
Incentive, or in the case of intestacy, under the applicable laws relating to
intestacy, and (ii) during the life of a holder of a Stock Incentive, the Stock
Incentive shall be exercisable only by such holder.
(h) Other Compensation. Nothing in the Plan is intended to be a
substitute for, or shall preclude or limit the establishment or continuation of,
any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Affiliate now has or may hereafter lawfully put into
effect, including, without limitation, any retirement, pension, profit-sharing,
insurance, stock purchase, incentive compensation or bonus plan.
(i) Place of Administration. The place of administration of the Plan
shall conclusively be deemed to be within the State of Missouri and the
validity, construction, interpretation and administration of the Plan and of any
rules and regulations or determinations or decisions made thereunder, and the
rights of any and all persons having or claiming to have any interest therein or
thereunder, shall be governed by and be determined exclusively and solely in
accordance with, the laws of the State of Missouri. Without limiting the
generality of the foregoing, the period within which any action arising under or
in connection with the Plan, or any payment or award made or purportedly made
under or in connection therewith, must be commenced, shall be governed by the
laws of the
12
State of Missouri, irrespective of the place where the act or omission
complained of took place and of the residence of any party to such action and
irrespective of the place where the action may be brought.
(j) Substitute Options. Stock Incentives may be granted under the Plan
from time to time in substitution for stock incentives held by employees of
other corporations who are about to become employees of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or an Affiliate, or the acquisition by the Company
or an Affiliate of the assets of the employing corporation, or the acquisition
by the Company or an Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate. The terms and conditions of the
substitute options so granted may vary from the terms and conditions set forth
in this Plan to such extent as the Committee at the time of grant may deem
appropriate to conform, in whole or in part, to the provisions of the stock
incentives in substitution for which they are granted.
15. AMENDMENT OR DISCONTINUANCE OF PLAN.
(a) Amendment. The Plan may be amended by the Board of Directors at any
time, provided that without the affirmative vote of the holders of a majority of
the shares of the Company's Common Stock present or represented, and entitled to
vote at a meeting duly held in accordance with applicable law, no amendment
shall be made which (i) increases the aggregate number of shares of Common Stock
that may be issued or transferred pursuant to Stock Incentives as provided in
Section 4, (ii) amends the provisions of paragraph (a) of Section 13 with
respect to eligibility and disinterest of members of the Committee, (iii)
permits any person who does not meet the eligibility requirements of the Plan to
be granted a Stock Incentive, (iv) amends the provisions of Sections 5, 6, 7 or
8 to permit shares to be valued or to be optioned at less than 100% of Fair
Market Value or to change the business criteria in Section 8 upon which
Performance Awards are based, (v) amends Section 12 to extend the term of the
Plan, or (vi) amends this Section 15.
(b) Discontinuance. The Board of Directors may by resolution adopted by
a majority of the entire Board of Directors discontinue the Plan.
(c) Consents. No amendment or discontinuance of the Plan by the Board
of Directors or the stockholders of the Company shall adversely affect, without
the consent of the holder thereof, any Stock Incentive theretofore granted.
13
EXHIBIT B
2002 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
BUTLER MANUFACTURING COMPANY
2002 STOCK OPTION PLAN
FOR OUTSIDE DIRECTORS
1. Name; Purposes; Definitions.
The name of this plan is the Butler Manufacturing Company 2002 Stock
Option Plan for Outside Directors (the "Plan").
The purposes of the Plan are to promote the long-term success of the
Company by providing incentives that will enhance the Company's ability to
attract highly qualified persons to serve as directors of the Company and by
enhancing the long-term mutuality of interests between the Outside Directors of
the Company and the stockholders of the Company.
For purposes of this Plan, the following terms shall be defined as set
forth below:
(a) "Board" means the Company's Board of Directors.
(b) "Change in Control" means:
(1) The acquisition (other than from the Company) by any
person, entity or "group," within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act,
(excluding, for this purpose, the Company or its
subsidiaries, or any employee benefit plan of the
Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company) of
beneficial ownership, (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 15% or
more of either the then outstanding shares of common
stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote
generally in the election of directors; or
(2) Individuals who, as of the date hereof, constitute
the Board (as of the date hereof the "Incumbent
Board") cease for any reason to constitute at least a
majority of the Board, provided that any person
becoming a director subsequent to the date hereof
whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office
is in connection with an actual or threatened
election contest relating to the election of the
Directors of the Company) shall be, for purposes of
this Agreement, considered as though such person were
a member of the Incumbent Board; or
(3) Approval by the stockholders of the Company of a
reorganization, merger, consolidation, in each case,
with respect to which persons who were the
stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not,
immediately thereafter, own collectively as a group
more than 50% of the combined voting power entitled
to vote generally in the election of directors of the
reorganized, merged or consolidated company's then
outstanding voting securities, or a liquidation or
dissolution of the Company or of the sale of all or
substantially all of the assets of the Company.
The effective date of a Change in Control for purposes of the
Plan shall be the date any of the events enumerated in clauses
(1) through (3) above actually occur.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
(d) "Committee" means the Compensation and Benefits Committee of
the Board, or any other committee the Board may subsequently
appoint to administer the Plan pursuant to Section 2.
(e) "Company" shall mean Butler Manufacturing Company, a
corporation organized under the laws of the State of Delaware
(or any successor corporation).
(f) "Effective Date" shall mean the date the plan is approved by
the stockholders of the Company.
(g) "Fair Market Value" of a share of Common Stock on the date as
of which fair market value is to be determined shall be: (a)
if the Common Stock is reported on the NASDAQ National Market
System of the National Association of Securities Dealers,
Inc., the last reported sales price of a share of Common Stock
as reported by NASDAQ; or (b) if the Common Stock is listed on
an established securities exchange or exchanges, the highest
reported closing price of a share of Common Stock on such
exchange or exchanges.
(h) "Mature Stock" shall mean Stock which was obtained through the
exercise of an option under this Plan or any other plan of the
Company and which has been held continuously by an Optionee
for six months or more.
(i) "Nonqualified Stock Option" means any Stock Option that by its
terms is designated as not being an "incentive stock option"
within the meaning Section 422 of the Code.
(j) "Optionee" means the recipient of a Stock Option.
(k) "Outside Director" means a director of the Company who is not
an employee of the Company or any of its subsidiaries.
(l) "Stock" means the Company's presently authorized Common Stock,
no par value, except as this definition may be modified
pursuant to Section 3 hereunder.
(m) "Stock Option" means any nonqualified option to purchase
shares of Stock granted pursuant to Section 5.
2. Administration.
The Plan shall be administered by a Committee of not less than two
Directors, who shall be appointed by the Board and who shall serve at the
pleasure of the Board. Until otherwise specified by the Board, the Plan shall be
administered by the Compensation and Benefits Committee of the Board. If at any
time no Committee shall be in office, then the functions of the Committee shall
be exercised by the Board.
The Committee shall have no discretion as to the Directors to whom
stock options are granted, the timing of such grants, the number of shares
subject to any Stock Option, the exercise price of any Stock Option, the periods
during which any Stock Option may be exercised or the term of any Stock Option,
which matters shall be determined as herein provided.
3. Stock Subject to Plan.
(a) The total number of shares of Stock reserved and available for
issuance under the Plan is 40,000. Such shares may consist, in whole or in part,
of authorized and unissued shares or treasury shares.
(b) In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in (i) the
aggregate number of shares reserved for issuance under the Plan, (ii) the number
of options to be granted automatically to Outside Directors of the Company,
(iii) the limits on the number of options that may be granted to each Outside
Director under the plan and (iv) the number and option price of shares subject
to outstanding Stock Options granted under the Plan as may be determined by the
Board, provided that the number of shares subject to any award shall always be a
whole number.
(c) If any shares of Common Stock subject to a Stock Option shall not
be issued or transferred or shall cease to be issuable or transferable under
such Stock Option, such shares shall no longer be charged against the
2
limitation provided for in paragraph (a) of this Section 3 and may again be made
subject to Stock Options; and, only the net additional shares issued upon the
exercise of a stock option through the delivery of shares of Common Stock in
payment of the exercise price shall be counted against the number of shares
which are to be authorized for issuance under Section 3(a).
4. Eligibility.
Each member of the Board who is an Outside Director shall receive
Nonqualified Stock Options in accordance with the provisions of Section 5.
5. Stock Options.
(a) On the first business day after the Annual Meeting of Stockholders
of the Company to be held on April 16, 2002, each non-employee member of the
Board then in office shall be granted a Nonqualified Stock Option to purchase
4,000 shares of Stock.
(b) On the first business day after initial election or appointment to
the Board after April 16, 2002, each new non-employee member of the Board shall
be granted a Nonqualified Stock Option to purchase 4,000 shares of Stock.
(c) Stock Options granted under the Plan shall be subject to the
following terms and conditions:
(1) The exercise price per share of Stock purchasable under
such Stock Options shall be 100% of the Fair Market Value of the Stock on the
date of grant.
(2) Each Stock Option shall be exercisable on the 184th day
following the date of grant by written notice to the Company of the election to
exercise and of the number of shares elected to be purchased in such form as the
Committee has prescribed or approved, together with payment in full of the
purchase price in cash, personal check, wire transfer, certified or cashier's
check, or delivery of Stock certificates for Mature Stock or other Stock which
was obtained on the open market, endorsed in blank or accompanied by executed
stock powers with signatures guaranteed by a national bank or trust company or a
member of a national securities exchange.
(3) Except as otherwise provided in this Agreement, if an
Optionee resigns or does not stand for election (prior to retirement from the
Board of Directors upon reaching age 70) or is removed from his or her position
as a Director or is not re-elected to his or her position as a Director, any
unexercised portion of the Stock Option granted to him or her under the terms of
the Plan shall terminate ninety (90) days following the date of such
resignation, removal or end of the term of such position. If an Optionee dies
while a Director, any unexercised portion of any Stock Option granted to him or
her under the terms of the Plan shall terminate one year from the date of death.
If an Optionee retires or does not stand for re-election due to retirement from
the Board of Directors upon reaching age 70, any unexercised portion of any
Stock Option granted to him or her under the terms of the Plan shall terminate
three years from the date of the end of his or her term. It is understood,
however, that such right to exercise any outstanding Options during any period
following a terminating event shall only exist to the extent such Options were
exercisable immediately preceding the terminating event.
(4) Each Stock Option shall cease to be exercisable on the
date that is ten years following the date of grant.
(5) The Plan provides for only a single grant to each
non-employee member of the Board eligible to participate. Accordingly, the
aggregate number of shares of Stock that may be granted to any non-employee
member of the Board pursuant to the Plan may not exceed 4,000 shares.
(6) Except as otherwise provided in the option agreement,
Options shall not be transferable by the Optionee otherwise than by will or by
the laws of descent and distribution.
(7) Any withholding taxes required to be paid to the Company
in connection with the exercise of any portion shall be paid in cash.
(d) Each Optionee shall enter into a stock option agreement (each, a
"Stock Option Agreement") with the Company, which agreement shall set forth,
among other things, the exercise price of the option, the term of the
3
option and provisions regarding exercisability of the option granted thereunder,
which provisions shall not be inconsistent with the terms set forth herein.
6. Change in Control.
Immediately upon the occurrence of a Change in Control (a) each
outstanding Stock Option that is not then fully exercisable shall automatically
become exercisable until the termination of the exercise period of the Stock
Option, and (b) in the event an Optionee is removed from his or her position as
a member of the Board or is not re-elected to his or her position as a member of
the Board within two years after a Change in Control, any unexercised portion of
the Stock Option granted to him or her under the Plan shall automatically become
exercisable for a period of ninety (90) days following such removal or
non-election, provided, however, that to the extent the Stock Option by its
terms permits a longer exercise period after such removal or non-election, such
longer period shall govern, and provided further that in no event shall such
Stock Option be exercisable more than ten years after the date of grant.
7. Amendment and Termination.
The Board may amend, alter, modify or discontinue the Plan at any
time, provided that the Board may not amend or alter the provisions of the Plan
without the approval of the stockholders if the amendment would materially
increase the number of securities that may be issued under the Plan.
8. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a recipient by the
Company, nothing contained herein shall give any such recipient any rights that
are greater than those of a general creditor of the Company.
9. General Provisions.
(a) If necessary to effect compliance with applicable securities laws,
each person purchasing shares pursuant to a Stock Option must represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to the distribution thereof.
(b) All certificates for shares of Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Stock is then listed, and any applicable
federal or state securities law, and a legend or legends may be put on any such
certificates to make appropriate reference to any required restriction on
transfer.
(c) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any member of the Board any right to continued membership on
such Board.
(d) No member of the Board or the Committee, nor any officer or
employee of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan, and all members of the Board and the
Committee and any officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the
Company in respect to any such action, determination or interpretation.
10. Term of Plan.
No stock Option shall be granted pursuant to the Plan on or after the
tenth anniversary of the Effective Date, but awards theretofore granted may
extend beyond that date.
4
[BUTLER LOGO]
INSTRUCTION CARD
INSTRUCTIONS TO: UMB Bank, N.A., Trustee of the Butler Manufacturing Company
Individual Retirement Asset Account (IRAA) and Fidelity
Management Trust Company, Trustee of the Butler Employee
Savings Trust (BEST), Galesburg Hourly Employee Savings
Trust (GHEST), Birmingham Hourly Employee Savings Trust
(BHEST), and Warwick Hourly Employees Savings Trust (WHEST)
for voting at the Annual Meeting of Stockholders of Butler
Manufacturing Company on April 16, 2002.
Please vote the shares held by you for my IRAA stock account and/or Butler
Common Stock Fund as specified below.
1. Election of three Class A Directors - Nominees: GARY M. CHRISTENSEN;
C. L. WILLIAM HAW;
JOHN J. HOLLAND
[ ] FOR all Nominees. [ ] AUTHORITY WITHHELD from all Nominees.
[ ] FOR all Nominees, except vote withheld for the
following Nominee(s):
----------------------------------------------
2. Proposal No. 2 - Stock Incentive Plan of 2002
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal No. 3 - 2002 Stock Option Plan for Outside Directors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In your discretion, you are authorized to vote upon such other business
as may properly come before the meeting.
The Board of Directors recommends a vote FOR the Director Nominees and FOR
Proposals 2 and 3.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD
(See reverse side for matters to be voted on)
The undersigned has received the Company's Annual Report for 2001 and its Proxy
Statement. IF THE INSTRUCTION CARD IS NOT RETURNED OR IF NO DIRECTION IS GIVEN
WHEN THE DULY EXECUTED INSTRUCTION CARD IS RETURNED, THE SHARES CREDITED IN THE
IRAA STOCK ACCOUNT AND/OR THE BEST, GHEST, BHEST, OR WHEST BUTLER COMMON STOCK
FUND WILL BE VOTED ON EACH BALLOT ITEM IN THE SAME PROPORTION AS THE TRUSTEE HAS
BEEN INSTRUCTED TO VOTE BY PARTICIPANTS GIVING VALID INSTRUCTIONS.
-----------------------------------
Participant's Signature
-----------------------------------
Date
(Please complete, date and sign
exactly as your name appears.
RETURN CARD PROMPTLY IN
ACCOMPANYING ENVELOPE.)
[BUTLER LOGO]
BUTLER MANUFACTURING COMPANY PROXY
P.O. BOX 419917, KANSAS CITY, MISSOURI 64141-6917
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints C. L. William Haw, John J. Holland and Ronald E.
Rutledge, or any of them, each with full power to appoint his substitute,
proxies to vote, in the manner specified below, all of the shares of common
stock of Butler Manufacturing Company, held by the undersigned at the Annual
Meeting of Stockholders to be held on April 16, 2002 or at any adjournment
thereof.
1. Election of three Class A Directors - Nominees: GARY M. CHRISTENSEN;
C. L. WILLIAM HAW;
JOHN J. HOLLAND
[ ] FOR all Nominees. [ ] AUTHORITY WITHHELD from all Nominees.
[ ] FOR all Nominees, except vote withheld for the
following Nominee(s):
----------------------------------------------
2. Proposal No. 2 - Stock Incentive Plan of 2002
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal No. 3 - 2002 Stock Option Plan for Outside Directors
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In your discretion, you are authorized to vote upon such other business
as may properly come before the meeting.
The Board of Directors recommends a vote FOR the Director Nominees and FOR
Proposals 2 and 3.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD
(See reverse side for matters to be voted on)
The undersigned has received the Company's Annual Report for 2001 and its Proxy
Statement. This Proxy is revocable and it shall not be voted if the undersigned
is present and voting in person. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED
PROXY IS RETURNED, THE SHARES WILL BE VOTED "FOR" ALL NOMINEES AND ALL
PROPOSALS.
-----------------------------------
Stockholder's Signature
-----------------------------------
Stockholder's Signature
Dated
------------------------------
(Please sign exactly as your
name(s) appear. All joint owners
must sign; executors, trustees,
custodians, etc. should indicate
the capacity in which they are
signing.) PLEASE RETURN THE PROXY
PROMPTLY IN THE ACCOMPANYING
ENVELOPE.