UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 18, 2005
Date of report (Date of earliest event reported)
Valmont Industries, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-31429 47-0351813
(Commission File Number) (IRS Employer Identification No.)
One Valmont Plaza
Omaha, NE 68154
(Address of Principal Executive Offices) (Zip Code)
(402) 963-1000
(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
The Valmont board of directors, upon recommendation of the Compensation
Committee, on December 19, 2005 established fiscal 2006 base salaries for the
five executive officers named in the 2005 proxy statement (the "Executives"):
Mogens Bay, $795,000; Terry McClain, $360,400; Robert Meaney, $303,496; Mark
Jaksich, $206,377; and Mark Treinen, $206,377. The Compensation Committee on
December 18, 2005 established the performance measures for the fiscal 2006
annual incentives for the Executives. Such incentives were established under the
stockholder-approved Valmont Executive Incentive Plan. A target incentive was
established for each executive ranging from 35% to 100% of base salary, and
performance goals were set based on earnings per share performance. A minimum
threshold level of earnings per share must be attained before any incentive is
earned and incentives are earned based on specific performance levels of
earnings per share. Payout under the plan to any Executive is capped at three
times the target incentive.
The Compensation Committee on December 18, 2005 also established the
performance measures for executives for the long-term incentive program with
respect to the three-year cycle of fiscal 2006 - fiscal 2008. Such incentives
were established under the stockholder-approved Valmont Executive Incentive
Plan. Targets were established for each Executive ranging from 25% to 60% of
base salary, which amount is converted to performance shares. The Committee
established performance goals based on return on invested capital for the
Company over the three-year term, with a performance matrix pursuant to which
the performance shares may be increased or decreased based on greater or lesser
levels of performance. Results for each year are weighted 20%, 30% and 50% over
the three-year cycle. Earned performance shares are valued at the Company's
stock price at the end of the performance period and awards may be paid in cash
or in shares of common stock, or any combination of cash and stock as determined
by the Committee. Payout under the plan to any Executive is capped at two times
the target incentive.
The Compensation Committee on December 18, 2005 also granted restricted
shares and stock options to the Executives as follows: Mr. Bay, 37,000
restricted shares; Mr. McClain, 10,000 restricted shares; Mr. Meaney, 5,000
restricted shares; Mr. Jaksich, 10,000 stock options; and Mr. Treinen, 7,500
stock options. The restricted shares vest if the Executive's employment
terminates upon death, disability or normal retirement on or after age 62, upon
involuntary termination prior to age 62 without cause, or upon a change of
control of the company. Dividends are paid on restricted shares. The stock
options are exercisable at market price on the grant date, have a term of seven
years, and vest beginning on the first anniversary of the grant in equal amounts
over three years. The restricted share and stock option grants were made
pursuant to the stockholder-approved Valmont 2002 Stock Plan.
The Valmont board of directors on December 19, 2005 confirmed director
compensation for fiscal 2006. Director compensation for 2006 is unchanged from
director compensation for 2005 other than the lead director retainer.
Non-employee directors will receive (1) an annual retainer of $55,000, (2)
$2,500 for each board meeting attended ($1,000 if the participation was via
teleconference), and (3) $2,000 for each committee meeting attended. The lead
director receives an additional $35,000 per year and each committee chairman
receives an additional $10,000 per year. Directors have the ability to receive
cash fees in the form of deferred compensation which accrues interest indexed to
U.S. Government Bonds compounded monthly.
Non-employee directors also receive equity compensation as provided in the
stockholder-approved 2002 Stock Plan. The equity compensation consists of (1) an
annual grant of 2,000 shares of common stock and (2) an annual grant of a
nonqualified stock option for 4,000 shares of common stock exercisable at the
fair market value of the Company's common stock on the date of grant. The equity
grants are made annually on the date of and following completion of Valmont's
annual stockholders' meeting. The common stock grant is forfeited if a
director's services terminate for any reason other than death, retirement from
the board at mandatory retirement age, or resignation or failure to stand for
re-election, in any case without the prior approval of the board.
Valmont does not have a defined benefit pension plan. Valmont maintains the
Valmont Employee Retirement Savings Plan (a 401(k) Plan) and the related Valmont
restoration plan (a non-qualified plan designed to restore 401(k) benefits
limited by IRS regulations). The amounts contributed by Valmont to such plans
for executive officers are generally 4.5% of the executive officer's salary and
bonus (15% for Messrs. Bay, McClain and Meaney). The Compensation Committee
determined to end the Valmont perquisites program effective for fiscal 2006. The
Chief Executive Officer is directed by company security policy to use company
aircraft for both business and personal travel.
Item 5.02. Departure of Directors of Principal Officers; Election of Directors;
Appointment of Principal Officers.
(d) On December 19, 2005, at a regularly scheduled meeting of the Valmont
board of directors, the board elected Mr. Daniel P. Neary to the board for a
term expiring in 2006. Mr. Neary was also appointed to serve on the Audit
Committee.
Mr. Neary, age 53, has held a number of key management positions at Mutual
of Omaha and was named Chairman and Chief Executive Officer of Mutual of Omaha
in December 2004. Mutual of Omaha is a full service, multi-line organization
providing insurance and financial services products for individuals, businesses
and groups throughout the United States. Mr. Neary joined Mutual of Omaha
Insurance Company in 1975.
Item 8.01 Other Events
Valmont adopted a Stockholder Rights Plan in 1995 under which each share of
Valmont common stock carried with it certain preferred stock purchase rights.
The rights were subject to the terms and conditions of the Rights Agreement
dated December 19, 1995, as amended. The Valmont board of directors determined
to allow the preferred stock purchase rights to expire December 19, 2005
pursuant to the Rights Agreement, effectively terminating the Stockholder Rights
Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Valmont Industries, Inc.
Date: December 22, 2005
By: /s/ Terry J. McClain
______________________________________
Name: Terry J. McClain
Title: Senior Vice President and
Chief Financial Officer