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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
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
BERKSHIRE HATHAWAY INC.
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(Name of Registrant as Specified In Its Charter)
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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)(4) 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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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.
[ ] 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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BERKSHIRE HATHAWAY INC.
1440 KIEWIT PLAZA
OMAHA, NEBRASKA 68131
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 2001
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of the Shareholders of
Berkshire Hathaway Inc. will be held at the Omaha Civic Auditorium, 1804 Capitol
Avenue, Omaha, Nebraska, on April 28, 2001 at 9:30 a.m. for the following
purposes:
1. To elect directors.
2. To act on a shareholder proposal, if properly presented at the
meeting.
3. To consider and act upon any other matters that may properly come
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 2, 2001
as the record date for determining the shareholders having the right to vote at
the meeting or any adjournment thereof. A list of such shareholders will be
available for examination by a shareholder for any purpose germane to the
meeting during ordinary business hours at the offices of the Corporation at 1440
Kiewit Plaza, Omaha, Nebraska during the ten days prior to the meeting.
You are requested to date, sign and return the enclosed proxy which is
solicited by the Board of Directors of the Corporation and will be voted as
indicated in the accompanying proxy statement and proxy. A return envelope is
provided which requires no postage if mailed in the United States. If mailed
elsewhere, foreign postage must be affixed.
By order of the Board of Directors
FORREST N. KRUTTER, Secretary
Omaha, Nebraska
March 19, 2001
A SHAREHOLDER MAY REQUEST MEETING CREDENTIALS FOR ADMISSION TO THE
MEETING FOR HIMSELF OR HERSELF AND FAMILY MEMBERS BY COMPLETING AND PROMPTLY
RETURNING TO THE COMPANY THE MEETING CREDENTIAL ORDER FORM ACCOMPANYING THIS
NOTICE. OTHERWISE, MEETING CREDENTIALS MAY BE OBTAINED AT THE MEETING BY PERSONS
IDENTIFYING THEMSELVES AS SHAREHOLDERS AS OF THE RECORD DATE. FOR A RECORD
OWNER, POSSESSION OF A PROXY CARD WILL BE ADEQUATE IDENTIFICATION. FOR A
BENEFICIAL-BUT-NOT-OF-RECORD OWNER, A COPY OF A BROKER'S STATEMENT SHOWING
SHARES HELD FOR HIS OR HER BENEFIT ON MARCH 2, 2001 WILL BE ADEQUATE
IDENTIFICATION.
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BERKSHIRE HATHAWAY INC.
1440 KIEWIT PLAZA
OMAHA, NEBRASKA 68131
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 28, 2001
This statement is furnished in connection with the solicitation by the
Board of Directors of Berkshire Hathaway Inc. (hereinafter "Berkshire" or the
"Corporation") of proxies in the accompanying form for the Annual Meeting of the
Shareholders to be held on Saturday, April 28, 2001 at 9:30 a.m. and at any
adjournment thereof.
This proxy statement and the enclosed form of proxy were first sent to
shareholders on or about March 19, 2001.
If the form of proxy enclosed herewith is executed and returned as
requested, it may nevertheless be revoked at any time prior to exercise by
filing an instrument revoking it or a duly executed proxy bearing a later date.
Solicitation of proxies will be made solely by mail at the Corporation's
expense. The Corporation will reimburse brokerage firms, banks, trustees and
others for their actual out-of-pocket expenses in forwarding proxy material to
the beneficial owners of its common stock.
As of the close of business on March 2, 2001, the record date for the
Annual Meeting, the Corporation had outstanding and entitled to vote 1,343,041
shares of Class A Common Stock (hereinafter called "Class A Stock") and
5,505,791 shares (including 4,415 shares held by Fleet National Bank as Agent
for holders of unexchanged shares of FlightSafety International, Inc.,
International Dairy Queen, Inc. and General Re Corporation) of Class B Common
Stock (hereinafter called "Class B Stock"). Each share of Class A Stock is
entitled to one vote per share and each share of Class B Stock is entitled to
one-two-hundredth (1/200) of one vote per share on all matters submitted to a
vote of shareholders of the Corporation. The Class A Stock and Class B Stock
vote together as a single class. Only shareholders of record at the close of
business on March 2, 2001 are entitled to vote at the Annual Meeting or at any
adjournment thereof.
The presence at the meeting, in person or by proxy, of the holders of
Class A Stock and Class B Stock holding in the aggregate a majority of the
voting power of the Corporation's stock entitled to vote shall constitute a
quorum for the transaction of business. A plurality of the votes properly cast
for the election of directors by the shareholders attending the meeting, in
person or by proxy, will elect directors to office. A majority of votes properly
cast upon any question other than election of directors shall decide the
question. Abstentions and broker non-votes will count for purposes of
establishing a quorum, but will not count as votes cast for the election of
directors or any other question and accordingly will have no effect.
Shareholders who send in proxies but attend the meeting in person may vote
directly if they prefer and withdraw their proxies or may allow their proxies to
be voted with the similar proxies sent in by other shareholders.
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1. ELECTION OF DIRECTORS
At the 2001 Annual Meeting of Shareholders, a Board of Directors
consisting of seven members will be elected, each director to hold office until
a successor is elected and qualified, or until the director resigns, is removed
or becomes disqualified.
Each of the current directors of the Corporation is a nominee for
reelection. Certain information with respect to nominees for election as
directors is contained in the following table:
WARREN E. BUFFETT, age 70, has been a director of the Corporation since 1965 and
has been its Chairman and Chief Executive Officer since 1970. Mr. Buffett
is a controlling person of the Corporation. He is also a director of The
Coca-Cola Company, The Gillette Company and The Washington Post Company.
HOWARD G. BUFFETT, age 46, has been a director of the Corporation since 1993.
For more than the past five years, Mr. Buffett has been the Chairman of
the Board of Directors of The GSI Group, a company primarily engaged in
the manufacture of agricultural equipment. He is also a director of
Coca-Cola Enterprises Inc. and Lindsay Manufacturing Co.
SUSAN T. BUFFETT, age 68, has been a director of the Corporation since 1991.
Mrs. Buffett has not been employed in the past five years.
MALCOLM G. CHACE, age 66, has been a director of the Corporation since 1992. In
1996 Mr. Chace was named Chairman of the Board of Directors of BankRI, a
community bank located in the State of Rhode Island. Prior to 1996 Mr.
Chace had been a private investor.
CHARLES T. MUNGER, age 77, has been a director and Vice Chairman of the
Corporation's Board of Directors since 1978. He is Chairman of the Board
of Directors and Chief Executive Officer of Wesco Financial Corporation,
approximately 80%-owned by the Corporation. Mr. Munger is also Chairman of
the Board of Directors of Daily Journal Corporation and a director of
Costco Wholesale Corporation.
RONALD L. OLSON, age 59, was elected a director in 1997. For more than the past
five years, he has been a partner in the law firm of Munger, Tolles &
Olson LLP. He is also a director of Edison International, Western Asset
Trust, Inc. and Pacific American Income Shares Inc.
WALTER SCOTT, JR., age 69, has been a director of the Corporation since 1988.
For more than the past five years, he has been Chairman of the Board of
Directors of Level 3 Communications, Inc., a successor to certain
businesses of Peter Kiewit Sons' Inc. which is engaged in
telecommunications and computer outsourcing. He is also a director of
Burlington Resources Inc., Commonwealth Telephone Enterprises, Inc.,
ConAgra, Inc., Peter Kiewit Sons' Inc., RCN Corporation and Valmont
Industries Inc.
Warren E. Buffett and Susan T. Buffett are husband and wife. Howard G.
Buffett is the son of Warren and Susan Buffett. Ronald L. Olson is a partner of
the law firm of Munger, Tolles & Olson LLP. Munger, Tolles & Olson LLP rendered
legal services to the Corporation and its subsidiaries in 2000 and is expected
to render services in 2001.
On March 14, 2000, Berkshire, David L. Sokol and Walter Scott, Jr., who is
a current director and a nominee for director, acquired MidAmerican Energy
Holdings Company. Berkshire invested approximately $1.24 billion and acquired
about a 9.7% voting interest and a 76% economic interest in MidAmerican on a
fully-diluted basis. Mr. Scott, who invested approximately $280 million in cash
and shares of MidAmerican common stock in the transaction, controls
approximately 86% of the voting interest in MidAmerican and serves as a member
of its board of directors.
When the accompanying proxy is properly executed and returned, the shares
it represents will be voted in accordance with the directions indicated thereon
or, if no direction is indicated, the shares will be voted in favor of the
election of the seven nominees identified above. The Corporation expects each
nominee to be able to serve if elected, but if any nominee notifies the
Corporation before this meeting that he or she is unable to do so, then the
proxies will be voted for the remainder of those nominated and, as designated by
the Directors, may be voted (i) for a substitute nominee or nominees, or (ii) to
elect such lesser number to constitute the whole Board as equals the number of
nominees who are able to serve.
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BOARD OF DIRECTORS MEETINGS, COMMITTEES AND DIRECTORS COMPENSATION
Board of Directors' actions were taken in 2000 at the Annual Meeting of
Directors that followed the 2000 Annual Meeting of Shareholders, at two special
meetings and upon four occasions by Directors' unanimous written consent. Except
for Mr. Olson not attending the special meetings of directors, each director
attended all meetings of the Board and of the Committees of the Board on which
they served.
Prior to April 29, 2000, the Audit Committee consisted of Mr. Scott. On
April 29, 2000, Messrs. Chace and Olson were appointed to the Audit Committee
with Mr. Scott continuing as a member and being named the Chairman of the Audit
Committee. All members of the Audit Committee meet the independence standards of
the rules promulgated by the Securities and Exchange Commission and New York
Stock Exchange. The Audit Committee meets periodically with the Corporation's
independent public accountants, Director of Internal Audit and members of
management and reviews the Corporation's accounting policies and internal
controls. It also reviews the scope and adequacy of the independent accountants'
examination of the Corporation's annual financial statements. In addition, the
Audit Committee recommends the firm of independent public accountants to be
retained by the Corporation. The Audit Committee held two formal meetings during
2000. The Board of Directors adopted an Audit Committee Charter on April 29,
2000, a copy of which is attached to this Proxy Statement as Exhibit A. The
Corporation does not have standing nominating or compensation committees of the
Board of Directors.
Directors who are employees of the Corporation or its subsidiaries do not
receive fees for attendance at directors' meetings. Directors who are not
employees receive a fee of $900 for each meeting attended in person and $300 for
participating in any meeting conducted by telephone. A director who serves as a
member of the Audit Committee receives additional fees of $1,000 quarterly.
Directors are reimbursed for their out-of-pocket expenses incurred in attending
meetings of directors or shareholders.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Corporation has
reviewed and discussed the consolidated financial statements of the Corporation
and its subsidiaries to be set forth in the Corporation's 2000 Annual Report to
Shareholders and at Item 8 of the Corporation's Annual Report on Form 10-K for
the year ended December 31, 2000, with management of the Corporation and
Deloitte & Touche LLP, independent public accountants for the Corporation.
The Audit Committee has discussed with Deloitte & Touche LLP the matters
required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees," as amended, which includes, among other
items, matters relating to the conduct of an audit of the Corporation's
financial statements.
The Audit Committee has received the written disclosures and the letter
from Deloitte & Touche LLP required by Independence Standards Board Standard No.
1, "Independence Discussions with Audit Committees" and has discussed with
Deloitte & Touche LLP their independence from the Corporation.
Based on the review and discussions with management of the Corporation and
Deloitte & Touche LLP referred to above, the Audit Committee has recommended to
the Board of Directors that the Corporation publish the consolidated financial
statements of the Corporation and subsidiaries for the year ended December 31,
2000 in the Corporation's Annual Report on Form 10-K for the year ended December
31, 2000 and in the Corporation's 2000 Annual Report to Shareholders.
It is not the duty of the Audit Committee to plan or conduct audits or to
determine that the Corporation's financial statements are complete and accurate
and in accordance with generally accepted accounting principles; that is the
responsibility of management and the Corporation's independent public
accountants. In giving its recommendation to the Board of Directors, the Audit
Committee has relied on (i) management's representation that such financial
statements have been prepared with integrity and objectivity and in conformity
with generally accepted accounting principles and (ii) the report of the
Corporation's independent auditors with respect to such financial statements.
Submitted by the members of the Audit Committee of the Board of Directors.
Walter Scott, Jr., Chairman
Malcolm G. Chace
Ronald L. Olson
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INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP served as the Corporation's principal independent
public accountants for 2000. Representatives from that firm will be present at
the meeting of shareholders, will be given the opportunity to make a statement
if they so desire, and will be available to respond to any appropriate
questions. The Corporation has not selected auditors for the current year, since
its normal practice is for the Audit Committee of the Board of Directors to make
such selection later in the year.
Aggregate fees billed to the Corporation for the year-ending December 31,
2000 by Deloitte & Touche LLP were as follows:
Audit Fees $2,770,000(a)
Financial Information Systems
Design and Implementation Fees --
All Other Fees $1,119,000(b)(c)
(a) Includes fees for the audit of the Corporation's consolidated financial
statements, interim reviews of the Corporation's consolidated quarterly
financial statements, statutory audit fees related to many of the
Corporation's insurance subsidiaries as well as certain of its foreign
subsidiaries and fees for stand alone audits of certain U.S. subsidiaries
required for regulatory purposes.
(b) Includes fees for tax consulting, audit related services and non-audit
services.
(c) The Audit Committee has considered whether the provision of these services
is compatible with maintaining the independence of Deloitte & Touche LLP.
EXECUTIVE COMPENSATION
The following table discloses the compensation received for the three
years ended December 31, 2000 by the Corporation's Chief Executive Officer and
its other executive officers.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION ALL
NAME AND ------------------------ OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
------------------ ---- ------ ----- ------------
Warren E. Buffett 2000 $100,000 -- $255,600(2)
Chief Executive Officer/ 1999 100,000 -- 237,750(2)
Chairman of the Board 1998 100,000 -- 176,600(2)
Marc D. Hamburg 2000 362,500 -- 30,500(3)
Vice President/Chief 1999 331,250 -- 10,000(3)
Financial Officer 1998 306,250 -- 10,000(3)
Charles T. Munger(1) 2000 100,000 -- --
Vice Chairman of the Board 1999 100,000 -- --
1998 100,000 -- --
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(1) Mr. Munger is compensated by a Berkshire subsidiary.
(2) Represents the value of directors' fees received by Mr. Buffett in cash or
deferred phantom equity interests from certain non-subsidiary companies in
which Berkshire has significant investments.
(3) Represents contribution to a subsidiary's defined contribution plan in
which Mr. Hamburg participates and, in 2000, directors' fees received by
Mr. Hamburg from a Berkshire subsidiary.
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BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
Berkshire's program regarding compensation of its executive officers is
different from most public corporations' programs. Mr. Warren E. Buffett
recommends to the Board of Directors the amount of his proposed remuneration and
he sets the remuneration of Berkshire's other executive officers (including both
salary and bonus). Mr. Buffett has been paid an annual salary of $100,000 for
each of the last 20 years. Factors considered by the Board of Directors and Mr.
Buffett are typically subjective, such as their perception of the individual's
performance and any planned change in functional responsibility. Neither the
profitability of the Corporation nor the market value of its stock are
considered in setting executive officer remuneration (including both salary and
bonus). Further, it is the Corporation's policy that all compensation paid to
its executive officers be deductible under Internal Revenue Code Section 162(m).
Submitted by the Berkshire Hathaway Inc. Board of Directors
Warren E. Buffett, Chairman Charles T. Munger
Susan T. Buffett Ronald L. Olson
Howard G. Buffett Walter Scott, Jr.
Malcolm G. Chace
STOCK PERFORMANCE GRAPH
The following chart compares the subsequent value of $100 invested in
Berkshire Hathaway Inc. common stock on December 31, 1995 with a similar
investment in the Standard and Poor's 500 Stock Index and in the Standard and
Poor's Property - Casualty Insurance Index.
COMPARISON OF FIVE YEAR CUMULATIVE RETURN*
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
Berkshire Hathaway Inc. $100 $105 $142 $216 $173 $219
S&P 500 Property-Casualty Insurance Index ** 100 122 177 164 123 191
S&P 500 Index 100 123 164 211 255 232
* Cumulative return for the Standard and Poor's indices based on
reinvestment of dividends.
** It would be difficult to develop a peer group of companies similar to
Berkshire. The Corporation owns subsidiaries engaged in a number of
diverse business activities of which the most important is the property
and casualty insurance business and, accordingly, management has used the
Standard and Poor's Property - Casualty Insurance Index for comparative
purposes.
BOARD OF DIRECTORS
INTERLOCKS AND INSIDER PARTICIPATION
Warren E. Buffett, Chairman of Berkshire's Board of Directors, is an
employee of the Corporation. Charles T. Munger, Vice Chairman of Berkshire's
Board of Directors, is employed by a Berkshire subsidiary.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Warren E. Buffett, whose address is 1440 Kiewit Plaza, Omaha, NE 68131, a
nominee for director, is the only person known to the Corporation to be the
beneficial owner of more than 5% of the Corporation's Class A or Class B Stock.
Beneficial ownership of the Corporation's Class A and Class B Stock on February
28, 2001 by Mr. Buffett and by any other executive officers and directors of the
Corporation who own shares is shown in the following table:
Percentage Percentage
Percentage of Aggregate of Aggregate
of Outstanding Voting Power Economic
Shares Stock of of Class A Interest
Title of Class Beneficially Respective and of Class A
Name of Stock Owned(1) Class(1) Class B(1) and Class B(1)
---- -------- --------- --------- ----------- --------------
Warren E. Buffett Class A 477,166(2) 35.5
Class B -- * 34.8(3) 31.2
Susan T. Buffett Class A 34,477(2) 2.6
Class B 17(2) * 2.5(3) 2.3
Howard G. Buffett Class A 14 *
Class B 37 * * *
Malcolm G. Chace Class A 1,285(4) 0.1
Class B 83(4) * 0.1 0.1
Charles T. Munger Class A 17,611 1.3
Class B -- * 1.3 1.2
Ronald L. Olson Class A 90 *
Class B 300 * * *
Walter Scott, Jr. Class A 100(5) *
Class B -- * * *
Directors and executive officers as a group Class A 530,743 39.5
Class B 437 * 38.7 34.8
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* less than 0.1%.
(1) Beneficial owners exercise both sole voting and sole investment power
unless otherwise stated. Each share of Class A Stock is convertible into
thirty shares of Class B Stock at the option of the shareholder. As a
result, pursuant to Rule 13d-3(d)(1) of the Securities Exchange Act of
1934, a shareholder is deemed to have beneficial ownership of the shares
of Class B Stock which such shareholder may acquire upon conversion of the
Class A Stock. In order to avoid overstatement, the amount of Class B
Stock beneficially owned does not take into account such shares of Class B
Stock which may be acquired upon conversion (an amount which is equal to
30 times the number of shares of Class A Stock held by a shareholder). The
percentage of outstanding Class B Stock is based on the total number of
shares of Class B Stock outstanding as of March 2, 2001 (5,505,791 shares)
and does not take into account shares of Class B Stock which may be issued
upon conversion of Class A Stock.
(2) Includes 474,998 shares owned directly and beneficially by Warren E.
Buffett, and 2,168 shares owned by three trusts of which Mr. Buffett is
sole trustee but with respect to which Mr. Buffett disclaims any
beneficial economic interest. Mr. Buffett shares investment and voting
power with respect to 34,477 Class A shares and 17 Class B shares owned by
Susan T. Buffett.
(3) Mr. and Mrs. Buffett have entered into a voting agreement with Berkshire
providing that, should the combined voting power of shares held by Mr. and
Mrs. Buffett and the trusts exceed 49.9% of Berkshire's total voting
power, they will vote those shares in excess of that percentage
proportionately with votes of the other Berkshire shareholders.
(4) Includes 246 Class A shares and 55 Class B shares for which Mr. Chace has
sole investment and voting power. Also includes 1,039 Class A shares and
28 Class B shares held by various trusts and partnerships of which Mr.
Chace is a trustee or a limited partner. Excluded are 757 Class A shares
in which Mr. Chace has a pecuniary interest but with respect to which he
possesses neither investment power nor voting power, and also does not
include 54 Class A shares owned by Elizabeth Z. Chace, wife of Mr. Chace.
(5) Does not include 10 Class A shares owned by Suzanne M. Scott, wife of
Walter Scott, Jr.
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SECTION 16(a) BENEFICIAL OWNER REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than ten percent
of a registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, directors and greater than
ten-percent shareholders are required by SEC regulation to furnish the
Corporation with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Corporation believes that during 2000 all filing
requirements applicable to its officers, directors, and greater than ten-percent
shareholders were complied with.
2. SHAREHOLDER PROPOSAL
Bartlett Naylor, who resides at 1255 N. Buchanan, Arlington, VA 22205 and
owns 100 shares of Class B Common Stock, has given notice that he intends to
present for action at the annual meeting the following proposal.
Resolved: The shareholders urge our board of directors to take the
necessary steps to nominate at least two candidates for each open board
position, and that the names, biographical sketches, SEC-required declarations
and photographs of such candidates shall appear in the Corporation's proxy
materials (or other required disclosures) to the same extent that such
information is required by law and is our Corporation's current practice with
the single candidates it now proposes for each position.
Supporting statement: Although our Corporation's board appreciates the
importance of qualified people overseeing management, we believe that the
process for electing directors can be improved.
Our Corporation currently nominates for election only one candidate for
each board seat, thus leaving shareholders no practical choice in most director
elections. Shareholders who oppose a candidate have no easy way to do so unless
they are willing to undertake the considerable expense of running an independent
candidate for the board. The only other way to register dissent about a given
candidate is to withhold support for that nominee, but that process rarely
affects the outcome of director elections. The current system thus provides no
readily effective way for shareholders to oppose a candidate that has failed to
attend board meetings; or serves on so many boards as to be unable to supervise
our Corporation management diligently; or who serves as a consultant to the
Corporation that could compromise independence; or poses other problems. As a
result, while directors legally serve as the shareholder agent in overseeing
management, the election of directors at the annual meeting is largely
perfunctory. Even directors of near bankrupt companies enjoy re-election with
90%+ pluralities. The "real" selection comes through the nominating committee, a
process too often influenced, if not controlled, by the very management the
board is expected to scrutinize critically.
Our Corporation should offer a rational choice when shareholders elect
directors. Such a process could abate the problem of a chair "choosing" his own
board, that is, selecting those directors he expects will reflexively support
his initiatives, and shedding those who may sometimes dissent. Such a process
could create healthy and more rigorous shareholder evaluation about which
specific nominees are best qualified.
Would such a process lead to board discontinuity? Perhaps, but only with
shareholder approval. Presumably an incumbent would be defeated only because
shareholders considered the alternative a superior choice. Would such a
procedure discourage some candidates? Surely our board should not be made of
those intolerant of competition. Would such a procedure be "awkward" for
management when it recruits candidates? Hopefully so. (Management could print a
nominee's name advanced by an independent shareholder to limit such
embarrassment.) The point is to remove the "final" decision on who serves as a
board director from the hands of management, and place it firmly in those of
shareholders.
"We urge you to vote FOR this proposal."
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THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THIS PROPOSAL FOR THE FOLLOWING
REASON:
Berkshire's corporate governance policies were set forth on pages 17 -- 18
of the Chairman's Letter to Shareholders from our 1993 annual report, which can
be viewed at our website (berkshirehathaway.com). Mr. Naylor's statements appear
to be directed toward the first category of companies we discussed, whereas
Berkshire's ownership situation puts us in the second category.
Because of the high level of stock ownership by management, an alternative
slate of directors would have no chance of election. It would waste time and
money to go through the procedure Mr. Naylor proposes. At Berkshire the rational
way for shareholders to express their disapproval of directors is simply to vote
against them. We encourage those who are dissatisfied to take this action and we
will regularly report -- as we have in the past -- the negative votes for each
director. We suggest you vote AGAINST this proposal.
3. OTHER MATTERS
As of the date of this statement your management knows of no business to
be presented to the meeting that is not referred to in the accompanying notice,
other than the approval of the minutes of the last shareholders' meeting, which
action will not be construed as approval or disapproval of any of the matters
referred to in such minutes. As to other business that may properly come before
the meeting, it is intended that proxies properly executed and returned will be
voted in respect thereof at the discretion of the person voting the proxies in
accordance with their best judgment, including upon any shareholder proposal
about which the Corporation did not receive timely notice.
ANNUAL REPORT
The Annual Report to the Shareholders for 2000 accompanies this proxy
statement, but is not deemed a part of the proxy soliciting material.
A COPY OF THE 2000 FORM 10-K REPORT AS REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, EXCLUDING EXHIBITS, WILL BE MAILED TO
SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO: FORREST N. KRUTTER,
SECRETARY, BERKSHIRE HATHAWAY INC., 1440 KIEWIT PLAZA, OMAHA, NEBRASKA 68131.
SUCH REQUEST MUST SET FORTH A GOOD-FAITH REPRESENTATION THAT THE REQUESTING
PARTY WAS EITHER A HOLDER OF RECORD OR A BENEFICIAL OWNER OF CLASS A OR CLASS B
STOCK OF THE CORPORATION ON MARCH 2, 2001. EXHIBITS TO THE FORM 10-K WILL BE
MAILED UPON SIMILAR REQUEST AND PAYMENT OF SPECIFIED FEES. THE 2000 FORM 10-K IS
ALSO AVAILABLE THROUGH THE SECURITIES AND EXCHANGE COMMISSION'S WORLD WIDE WEB
SITE (SEC.GOV).
PROPOSALS OF SHAREHOLDERS
Any shareholder proposal intended to be considered for inclusion in the
proxy statement for presentation at the 2002 Annual Meeting must be received by
the Corporation by November 19, 2001. The proposal must be in accordance with
the provisions of Rule 14a-8 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934. It is suggested the
proposal be submitted by certified mail -- return receipt requested.
Shareholders who intend to present a proposal at the 2002 Annual Meeting without
including such proposal in the Corporation's proxy statement must provide the
Corporation notice of such proposal no later than February 2, 2002. The
Corporation reserves the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not comply with these
and other applicable requirements.
By order of the Board of Directors
Omaha, Nebraska FORREST N. KRUTTER, Secretary
March 19, 2001
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EXHIBIT A
AUDIT COMMITTEE CHARTER
PURPOSE
The Audit Committee ("Committee") is appointed by the Board of Directors
("Board") to assist the Board in fulfilling its oversight responsibilities by
performing the following:
- Monitor the integrity of the financial reporting process and systems
of internal controls.
- Monitor the independence and performance of the internal and
external auditors.
- Provide an avenue of communication between the Board, management,
internal auditors and external auditors.
- Monitor compliance with legal and regulatory requirements.
The Committee has the power to conduct or authorize investigations deemed
necessary to fulfill its responsibilities. The Committee shall have unrestricted
access to members of management and the independent auditors and shall be
empowered to retain independent counsel, accountants, or others to assist it in
the conduct of any investigation, at the Company's expense.
ORGANIZATION AND MEETINGS
The Board shall appoint the members of the Committee. The Committee shall
consist of at least three members. Each member of the Committee will meet the
independence requirements of the New York Stock Exchange. All members will be
financially literate, and at least one member will have accounting or related
financial management expertise.
The Board shall appoint one of the members of the Committee as Chairperson of
the Committee. It is the responsibility of the Chairperson to schedule all
meetings of the Committee and provide the Committee with a written agenda for
all meetings. The Committee shall meet at least two times per year, or more
frequently as circumstances require.
RESPONSIBILITIES AND DUTIES
The Committee shall:
- Annually, review and assess the adequacy of the Committee's written
charter.
- Review the Company's annual audited financial statements with
management and independent auditors prior to filing or distribution.
- Discuss any significant issues that may be required in accordance
with Statement on Auditing Standards No. 61 ("SAS 61") relating to
the conduct of the audit.
- Review the Company's quarterly financial statements prior to the
release of quarterly earnings and/or the filing and distribution of
the quarterly financial statements.
- Have a clear understanding with management and the independent
auditors that the independent auditors are ultimately accountable to
the Board and the Committee.
- Approve the appointment of the independent auditors or approve any
discharge of auditors.
- Review periodic reports from the independent auditors regarding
relationships and services which may affect objectivity and
independence.
- Review fees and other significant compensation to be paid to the
independent auditors.
- Review the scope and approach of the annual audit plan with
independent auditors.
- Prior to management's release of year-end earnings, review with
management and the independent auditors the results of the annual
audit.
- Review the internal audit process for establishing the annual
internal audit plan and the focus on risk.
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EXHIBIT A
AUDIT COMMITTEE CHARTER
- Approve the appointment and replacement of the senior internal audit
executive.
- Review significant reports prepared by the internal audit department
together with management's response.
- Prepare a report as required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
statement stating that the Committee has:
- Reviewed and discussed the audited financial statements with
management.
- Discussed with the independent auditors any matters required
by SAS 61.
- Received disclosures from the auditors regarding their
independence.
- Recommended to the Board that the audited financial statements
be included in the Company's Annual Report on Form 10-K.
- Perform any other duties consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or Board deems
necessary.
- Maintain minutes of meetings and periodically report to the Board on
significant results of activities.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and accurate and
are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditors. Nor is it the duty of
the Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure compliance with laws
and regulations.
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BERKSHIRE HATHAWAY INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 28, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P The undersigned hereby appoints Marc D. Hamburg and Walter Scott,
R Jr., or either of them, as proxies, with power of substitution to each
O proxy and substitute, to vote the Class A Common Stock (CLA) and Class B
X Common Stock (CLB) of the undersigned at the 2001 Annual Meeting of
Y Shareholders of Berkshire Hathaway Inc. and at any adjournment thereof, as
indicated on the reverse hereof on the proposal for Election of Directors,
the Shareholder Proposal and as said proxies may determine in the exercise
of their best judgment on any other matters which may properly come before
the meeting.
IF PROPERLY EXECUTED AND RETURNED, THIS PROXY WILL BE VOTED AS SPECIFIED
OR, IF NOT SPECIFIED, WILL BE VOTED FOR ELECTING ALL NOMINEES AND AGAINST THE
SHAREHOLDER PROPOSAL.
PLEASE SIGN ON REVERSE SIDE AND MAIL PROMPTLY
IN THE ENCLOSED ENVELOPE
SEE REVERSE SEE REVERSE
SIDE SIDE
THE BOARD RECOMMENDS A VOTE FOR ITEM 1 AND AGAINST ITEM 2.
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. Election of Directors
NOMINEES: Warren E. Buffett, Charles T. MARK HERE
Munger, Susan T. Buffett, Howard G. Buffett, FOR ADDRESS [ ]
Malcolm G. Chace, Ronald L. Olson CHANGE AND
and Walter Scott, Jr. NOTE AT LEFT
[ ] FOR [ ] WITHHELD PLEASE SIGN EXACTLY AS YOUR
ALL FROM ALL NAME APPEARS. IF ACTING AS
NOMINEES NOMINEES ATTORNEY, EXECUTOR, TRUSTEE
OR IN REPRESENTATIVE
CAPACITY, SIGN NAME AND
TITLE.
[ ] SIGNATURE: DATE
------------------------ -----
---------------------------------- SIGNATURE: DATE
FOR, EXCEPT VOTE WITHHELD FROM THE ------------------------ -----
ABOVE NOMINEE(S).
2. Shareholder Proposal:
To approve the stockholder
proposal with respect to election
of directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN