<PAGE> 1
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
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule sec. 240.14a-11(c) or sec.
240.14a-12
CABOT CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CABOT CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and state
how it was determined.
/ / 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
December 21, 1994
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Cabot Corporation which will be held on Friday, February 10, 1995 at 10:00 a.m.
in the Enterprise Room on the fifth floor of the State Street Bank and Trust
Company, 225 Franklin Street, Boston, Massachusetts.
Receipt of the attached Notice of Annual Meeting of Stockholders, Proxy
Statement and proxy card indicates that you were the beneficial owner of shares
of Cabot Corporation common stock on December 16, 1994, the record date for
determining the persons eligible to vote at the Annual Meeting.
Whether or not you plan to attend the Annual Meeting, it is important that
your shares be represented. Please complete, sign, date and mail the enclosed
proxy card in the postage-paid envelope provided.
Sincerely,
/s/ Samuel W. Bodman
SAMUEL W. BODMAN
Chairman of the Board, President
and Chief Executive Officer
- --------------------------------------------------------------------------------
CABOT CORPORATION
- --------------------------------------------------------------------------------
75 State Street
- --------------------------------------------------------------------------------
Boston, Massachusetts 02109
- --------------------------------------------------------------------------------
(617) 345-0100
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<PAGE> 3
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 10, 1995
The Annual Meeting of Stockholders of Cabot Corporation (the "Company"), a
Delaware corporation, will be held in the Enterprise Room on the fifth floor of
the State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts, on Friday, February 10, 1995, at 10:00 a.m., Eastern Standard
Time, for the following purposes:
1. To elect six persons to the Board of Directors of the Company; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only stockholders of record at the close of business on December 16, 1994,
are entitled to receive notice of and to vote at the Annual Meeting. The
transfer books of the Company will not be closed.
Stockholders are urged to complete, sign, date and return the accompanying
proxy card in the enclosed, self-addressed envelope, whether or not they plan to
attend the Annual Meeting. The self-addressed envelope requires no postage if
mailed in the United States. You may still vote in person if you do attend the
Annual Meeting.
The Company's 1994 Annual Report to Stockholders is being mailed to
stockholders with this Notice of Annual Meeting and Proxy Statement.
It is important that your shares be represented and voted at the Annual
Meeting. Please exercise your right to vote and return a completed form of proxy
at your earliest convenient time.
By order of the Board of Directors,
Charles D. Gerlinger
Secretary
Boston, Massachusetts
December 21, 1994
<PAGE> 4
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
General Information................................................................. 1
Election of Directors............................................................... 1
Certain Information Regarding Directors............................................. 2
Information on the Board of Directors and its Committees............................ 6
Beneficial Stock Ownership of Directors, Executive Officers and Persons Owning More
than Five Percent of Common Stock................................................. 7
Executive Compensation.............................................................. 9
Summary Compensation Table..................................................... 9
Aggregated Fiscal Year-End Option Values....................................... 11
Pension Plan Table............................................................. 12
Employment Contracts and Change-in-Control Arrangements........................ 12
Compensation Committee Report on Executive Compensation........................ 13
Performance Graph................................................................... 15
Certain Securities Filings.......................................................... 15
Future Stockholder Proposals........................................................ 15
Solicitation of Proxies............................................................. 15
Miscellaneous....................................................................... 16
</TABLE>
i
<PAGE> 5
CABOT CORPORATION
75 STATE STREET
BOSTON, MASSACHUSETTS 02109
PROXY STATEMENT
MAILED DECEMBER 21, 1994, FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 10, 1995
GENERAL INFORMATION
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation by and on behalf of the Board of Directors of
Cabot Corporation, a Delaware corporation (the "Company"), for use at the 1995
Annual Meeting of Stockholders to be held at 10:00 a.m. Eastern Standard Time on
Friday, February 10, 1995, at the State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts, and at any adjournment or postponement
of the meeting (the "Annual Meeting"). This Proxy Statement and the accompanying
form of proxy were first mailed to stockholders on or about December 21, 1994.
Stockholders attending the Annual Meeting may vote their shares in person
even though they have already given a proxy. Properly executed proxies not
revoked will be voted in accordance with the specifications thereon at the
Annual Meeting and at any adjournment or postponement. You may revoke your proxy
at any time prior to its use by a written communication to Mr. Charles D.
Gerlinger, Secretary of the Company, by a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person. Proxies will also
be considered voting instructions by participants in employee benefit plans of
the Company and a former subsidiary of the Company with respect to shares of
Company stock held for such participants by the trustees of such plans.
Only stockholders of record as of the close of business on December 16,
1994, are entitled to vote at the Annual Meeting. As of that date, the Company
had outstanding and entitled to vote 38,108,506 shares of common stock, par
value $1.00 per share ("Common Stock"), and 70,654 shares of Series B ESOP
convertible preferred stock, par value $1.00 per share ("Convertible Preferred
Stock"). Each share of Common Stock is entitled to one vote and each share of
Convertible Preferred Stock is entitled to 43.735 votes. The State Street Bank
and Trust Company, the trustee of the Cabot Corporation Employee Stock Ownership
Plan ("Employee Stock Plan"), is the record owner of all of the shares of
Convertible Preferred Stock and is entitled to vote such shares in accordance
with instructions from participants in, and the terms of, the Employee Stock
Plan. There is no provision for cumulative voting. A quorum for the election of
directors and for the consideration of such other business as may properly be
presented to the Annual Meeting consists of a majority in interest of all
outstanding shares of Common Stock and Convertible Preferred Stock considered as
a single class and entitled to vote at the Annual Meeting. A plurality of the
votes properly cast is required for the election of a director. Votes withheld
for a nominee for election as a director or that reflect abstentions or broker
non-votes will be treated as present at the Annual Meeting for the purpose of
determining a quorum but will not be counted as votes cast.
The independent accountants for the Company are Coopers & Lybrand L.L.P.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
ELECTION OF DIRECTORS
At the Annual Meeting, Ms. Lydia W. Thomas will be nominated for election
to the class of directors whose terms expire in 1997, and Messrs. Kennett F.
Burnes, John G.L. Cabot, Robert P. Henderson, John F. O'Brien and Charles P.
Siess, Jr. will be nominated for election to the class of directors whose terms
expire in 1998. All of the nominees for election are currently directors of the
Company. Ms. Thomas was appointed a director by the Board during 1994. The
remaining nominees were elected by the stockholders at previous meetings. The
Board of Directors expects that all of the nominees will be available for
election but, if any of the nominees are not so available at the time of the
Annual Meeting, proxies received will be voted for substitute nominees to be
designated by the Board of Directors or, if no such designation is made by the
Board, proxies will be voted for a lesser number of nominees. In no event will
the proxies be voted for more than six nominees.
1
<PAGE> 6
CERTAIN INFORMATION REGARDING DIRECTORS
Set forth below, as of November 22, 1994, for each director of the Company
is information regarding his or her age, position(s) with the Company,
membership on committees of the Board of Directors of the Company, the period
during which he or she has served as a director and his or her term of office,
family relationship with any other director or executive officer of the Company,
his or her business experience during at least the past five years and other
directorships currently held by him or her.
- --------------------------------------------------------------------------------
[PHOTO] DAMARIS AMES
Age: 50
Committee Memberships: Audit and Safety, Health and
Environmental Affairs
Director since: 1990
Term of Office Expires: 1997
Business Experience:
Houghton Mifflin Company (publishing):
Director -- April 1989 to April 1993
Executive Vice President, Publisher -- October
1988 to April 1993
Senior Vice President, Publisher -- April 1987 to
September 1988
Vice President, Publisher -- May 1986 to April
1987
Simmons College Corporation:
Member
- --------------------------------------------------------------------------------
[PHOTO] SAMUEL W. BODMAN
Age: 55
Position: Chairman of the Board, President and Chief
Executive Officer
Committee Membership: Executive
Director since: 1987
Term of Office Expires: 1996
Business Experience:
Cabot Corporation:
Chairman of the Board -- October 1988 to present
President -- February 1991 to present, January
1987 to October 1988
Chief Executive Officer -- February 1988 to
present
FMR Corp. (investment advisor and mutual fund
manager):
President and Chief Operating Officer -- 1983 to
December 1986
Directorships:
Cabot Oil & Gas Corporation
John Hancock Mutual Life Insurance Company
Security Capital Group Incorporated
Westvaco Corporation
- -------------------------------------------------------------------------------
[PHOTO] JANE C. BRADLEY(1)
Age: 67
Committee Memberships: Compensation and Nominations
Director since: 1993
Term of Office Expires: 1996
Business Experience:
Boston Museum of Science:
Vice Chairman, Board of Trustees -- 1992 to present
Trustee -- 1989 to present
Overseer -- 1983 to 1989
Boston Symphony Orchestra:
Trustee Emerita -- 1988 to 1993
Vice Chairman, Board of Trustees -- 1985 to 1988
Harvard University:
Member, Board of Overseers -- 1983 to 1989
Directorships:
Fiduciary Trust Company
2
<PAGE> 7
- --------------------------------------------------------------------------------
[PHOTO] KENNETT F. BURNES
Age: 51
Position: Executive Vice President
Committee Membership: Executive
Director since: 1992
Term of Office Expires: 1995 (Nominee for Election)
Business Experience:
Cabot Corporation:
Executive Vice President -- October 1988 to
present
Vice President and General Counsel -- November
1987 to October 1988
Choate, Hall & Stewart (law firm):
Partner -- 1976 to November 1987
Directorships:
Neozyme Corporation II
- --------------------------------------------------------------------------------
[PHOTO] JOHN G.L. CABOT(1)
Age: 60
Position: Vice Chairman of the Board and Chief
Financial Officer
Committee Memberships: Executive and Safety, Health
and Environmental Affairs
Director since: 1963
Term of Office Expires: 1995 (Nominee for Election)
Business Experience:
Cabot Corporation:
Vice Chairman of the Board -- October 1988 to
present
Chief Financial Officer -- October 1992 to present
Executive Vice President -- January 1985 to
October 1988
Directorships:
Cabot Oil & Gas Corporation
Eaton Vance Corp.
K N Energy, Inc. (Advisory Director)
- --------------------------------------------------------------------------------
[PHOTO] ROBERT A. CHARPIE
Age: 69
Committee Memberships: Audit and Nominations
Director since: 1969
Term of Office Expires: 1997
Business Experience:
Ampersand Ventures (venture capital management):
Chairman -- March 1989 to present
Cabot Corporation:
Chairman of the Board -- September 1986 to
September 1988
Directorships:
Ashland Coal, Inc.
Ceramics Process Systems Corporation
Champion International Corporation
Federated Stores, Inc.
- --------------------------------------------------------------------------------
[PHOTO] JOHN D. CURTIN, JR.
Age: 61
Position: Executive Vice President
Committee Membership: Executive
Director since: 1992
Term of Office Expires: 1996
Business Experience:
Cabot Corporation:
Executive Vice President -- July 1989 to present
Chief Financial Officer -- July 1989 to October
1992
Curtin & Co., Incorporated (investment banking):
President, Chief Executive Officer and Director --
1974 to June 1989
Directorships:
Augat Inc.
Imperial Holly Corporation
3
<PAGE> 8
- --------------------------------------------------------------------------------
[PHOTO] ROBERT P. HENDERSON
Age: 63
Committee Membership: Compensation (Chairman)
Director since: 1990
Term of Office Expires: 1995 (Nominee for Election)
Business Experience:
Greylock Partnerships (private equity investments):
Greylock Investments Limited Partnership:
Managing Partner -- June 1985 to present
Greylock Limited Partnership:
Managing Partner -- February 1990 to present
Greylock Ventures Ltd.:
General Partner -- July 1984 to present
Greylock Capital Ltd.:
General Partner -- January 1987 to present
Directorships:
Eastern Enterprises Inc.
Filene's Basement, Inc.
Structural Dynamics Research Corp.
- --------------------------------------------------------------------------------
[PHOTO] ARNOLD S. HIATT
Age: 67
Committee Memberships: Compensation and Safety,
Health and Environmental Affairs
Director since: 1993
Term of Office Expires: 1997
Business Experience:
The Stride Rite Foundation:
Chairman -- 1982 to present
The Stride Rite Corporation (manufacturer and
retailer):
Chairman of the Board -- March 1982 to June 1992
Chief Executive Officer -- March 1982 to November
1989
President -- 1968 to January 1985; May 1985 to
July 1987
Directorships:
Director or trustee of various Dreyfus Corp. mutual
funds
- --------------------------------------------------------------------------------
[PHOTO] GERRIT JEELOF
Age: 67
Committee Memberships: Corporate Strategy and
Safety, Health and Environmental Affairs
(Chairman)
Director since: 1990
Term of Office Expires: 1996
Business Experience:
Philips Electronics N.V. (electronic equipment):
Member of Supervisory Board and Board of Governors
-- July 1990 to present
Vice Chairman of Board of Management and Executive
Vice President -- May 1986 to July 1990
North American Philips Corporation
(electronic equipment):
Chairman -- September 1988 to January 1991
European Community Chamber of Commerce (U.S.A.):
Chairman -- June 1989 to present
Directorships:
A.V.C.B. Reinsurance Co.
Centraal Beheer Insurance Co.
ROBECO Investment Funds
V.N.U. Publishing
4
<PAGE> 9
- --------------------------------------------------------------------------------
[PHOTO] JOHN H. MCARTHUR
Age: 60
Committee Memberships: Compensation and Nominations
(Chairman)
Director since: 1990
Term of Office Expires: 1996
Business Experience:
Harvard University:
Dean of Graduate School of Business Administration
-- 1980 to present
Directorships:
Chase Manhattan Corporation
Rohm and Haas Company
Springs Industries, Inc.
- --------------------------------------------------------------------------------
[PHOTO] JOHN F. O'BRIEN
Age: 51
Committee Memberships: Audit (Chairman) and
Nominations
Director since: 1990
Term of Office Expires: 1995 (Nominee for Election)
Business Experience:
State Mutual Life Assurance Company of America:
President and Chief Executive Officer -- August
1989 to present
Allmerica Funds (investment company):
Chairman of the Board -- April 1991 to present
Allmerica Investment Trust (investment company):
Chairman of the Board -- October 1989 to present
Allmerica Property & Casualty Companies, Inc.
(insurance company):
President and Chief Executive Officer -- August
1992 to present
Allmerica Securities Trust (investment company):
Chairman of the Board -- November 1989 to present
Citizens Corporation (insurance holding company):
Chairman of the Board and Chief Executive Officer
-- December 1992 to present
SMA Life Assurance Company (insurance company):
Chairman of the Board -- August 1989 to present
Directorships:
ABIOMED, Inc.
Allmerica Funds (Trustee)
Allmerica Investment Trust (Trustee)
Allmerica Property & Casualty Companies, Inc.
Allmerica Securities Trust (Trustee)
Citizens Corporation
SMA Life Assurance Company
State Mutual Life Assurance Company of America
- --------------------------------------------------------------------------------
[PHOTO] DAVID V. RAGONE
Age: 64
Committee Memberships: Corporate Strategy and
Safety, Health and Environmental Affairs
Director since: 1985
Term of Office Expires: 1997
Business Experience:
Massachusetts Institute of Technology:
Senior Lecturer -- July 1988 to present
Visiting Professor -- July 1987 to July 1988
ASMV Management Company Limited Partnership (venture
capital management):
Partner -- March 1992 to present
General Partner -- January 1989 to March 1992
Case Western Reserve University:
President -- 1980 to June 1987
Directorships:
Augat Inc.
SIFCO INC.
5
<PAGE> 10
- --------------------------------------------------------------------------------
[PHOTO] CHARLES P. SIESS, JR.
Age: 67
Committee Memberships: Audit and Safety, Health and
Environmental Affairs
Director since: 1988
Term of Office Expires: 1995 (Nominee for Election)
Business Experience:
Bridas S.A.P.I.C. (oil exploration):
Acting General Manager -- February 1993 to January
1994
Cabot Oil & Gas Corporation (energy exploration and
production):
Chairman and Chief Executive Officer -- December
1989 to December 1992
Directorships:
Cabot Oil & Gas Corporation
CAMCO, Inc.
Rowan Companies, Incorporated
- --------------------------------------------------------------------------------
[PHOTO] MORRIS TANENBAUM
Age: 66
Committee Memberships: Compensation and Corporate
Strategy (Chairman)
Director since: 1981
Term of Office Expires: 1997
Business Experience:
AT&T Corp.:
Vice Chairman -- September 1986 to July 1991
Directorships:
American Electric Power Company, Inc.
- --------------------------------------------------------------------------------
[PHOTO] LYDIA W. THOMAS
Age: 50
Committee Membership: Safety, Health and
Environmental Affairs
Director since: October 1994
Term of Office Expires: 1995 (Nominee for Election)
Business Experience:
The MITRE Corporation:
Center for Environment, Resources and Space:
Senior Vice President and General Manager --
February 1992 to Present
Vice President -- 1989 to February 1992
Technical Director -- 1982 to 1989
Charles Stark Draper Laboratory Inc.:
Member
- --------------------------------------------------------------------------------
(1) John G.L. Cabot is a first cousin of the spouse of Jane C. Bradley.
INFORMATION ON THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company held eight meetings during the 1994
fiscal year. The Board has six standing Committees: the Audit Committee,
Compensation Committee, Corporate Strategy Committee, Executive Committee,
Nominations Committee and Safety, Health and Environmental Affairs Committee
(the "SH&E Committee"). Membership on each Committee is listed above on pages 2
through 6. The Audit, Compensation, Corporate Strategy and Nominations
Committees are composed entirely of non-employee directors. The SH&E Committee
is composed of five non-employee directors and one employee director. The
Executive Committee is comprised of four employee directors.
The Audit Committee annually recommends the independent accountants to be
appointed by the Board as the auditors of the Company and its subsidiaries. It
reviews the arrangements for and the results of the auditors' examination of the
Company's books and records, auditors' compensation, internal accounting control
procedures and the activities and recommendations of the Company's internal
auditors. It also reviews the Company's accounting policies and control systems.
The Committee reports to the Board on Audit Committee activities and makes such
investigations as it deems appropriate. The Audit Committee met twice during
fiscal year 1994.
The Compensation Committee establishes policies applicable to executive
compensation and determines the salaries, bonuses and other remuneration of the
officers of the Company who are also directors (for a further description of
those policies and activities, see the Committee's Report on pages 13 and 14).
In addition, the Committee determines whether any extraordinary events have
occurred which should be taken
6
<PAGE> 11
into consideration for purposes of making Company contributions to the Profit
Sharing and Savings Plan (renamed the Cabot Retirement Incentive Savings Plan
("CRISP") as of October 1, 1994). It administers the Company's supplemental
employee benefit plans. It also administers the Equity Incentive Plan, including
the adoption of the rules and regulations therefor, the designation of
participants and the determination of the size of awards. The Committee reviews
the activities of the Company's Benefits and Investment Committees and reviews
the Company's Human Resources policies and compliance activities. It also makes
recommendations to the Board of Directors with respect to directors'
compensation. The Compensation Committee met three times during the 1994 fiscal
year.
The Corporate Strategy Committee reviews and advises on the long range
strategic plans and planning processes of the Company with regard to their
soundness and consistency with the overall corporate direction established by
the Board of Directors. It reviews and advises on the Company's development
plans. It determines that the strategic and development plans are consistent
with each other and with the overall corporate direction and it advises the
Board periodically and as required with regard to the results of its findings.
The Corporate Strategy Committee met once during the 1994 fiscal year.
The Executive Committee reviews and, where appropriate, approves corporate
action with respect to the conduct of the business of the Company between Board
meetings. Actions taken by the Executive Committee are regularly reported to the
Board at its next meeting. The Executive Committee met once during the 1994
fiscal year.
The Nominations Committee considers and proposes nominees for membership on
the Board of Directors. Nominees suggested by stockholders and sent to the
Committee in care of the Chairman of the Board will be considered by the
Committee. The Nominations Committee met three times during the 1994 fiscal
year.
The SH&E Committee reviews the Company's safety, health and environmental
management programs and major hazards analyses and consults with the Company's
internal and outside advisors regarding the management of those programs. It
also reviews the Company's environmental spending. The SH&E Committee met three
times during the 1994 fiscal year.
Directors who are not employees of the Company were compensated during
fiscal year 1994 by the issuance of 800 shares (after giving effect to a
two-for-one stock split, in the form of a stock dividend, which became effective
in August 1994) of Common Stock, pursuant to the Company's Non-Employee
Directors' Stock Compensation Plan, and by the payment quarterly of a cash fee
of $3,500. Non-employee directors also received $1,200 for attendance by them at
each Board meeting and at each meeting of a Committee of which they are a
member. Non-employee directors who are Committee chairmen also received an
additional fee of $500 per quarter. Directors who are employees of the Company
received no additional compensation for their duties as directors. All directors
were also reimbursed for travel expenses incurred for attending all Board and
Committee meetings.
From time to time the Company's directors provide advice and consultation
to the Company, in addition to their regular duties as directors, for which they
are compensated by the Company. During the 1994 fiscal year Mr. Tanenbaum was
paid $1,200 for such services.
All directors attended at least 75% of the meetings of the Board and
Committees held while they were members during the 1994 fiscal year.
BENEFICIAL STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND PERSONS OWNING
MORE THAN FIVE PERCENT OF COMMON STOCK
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of November 22, 1994 (including
shares of Common Stock subsequently issued to the CRISP for Company
contributions accrued as of that date) by (a) each person known by the Company
to own beneficially more than 5% of its Common Stock, (b) each director of the
Company and each of the executive officers named in the Summary Compensation
Table below, and (c) all current directors and executive officers as a group.
The number of shares of Common Stock shown as beneficially owned by State Street
Bank and Trust Company includes shares issuable upon conversion of Convertible
Preferred Stock held as trustee of the Employee Stock Plan. The number of shares
of Common Stock shown for each person who is an employee of the Company includes
shares issuable upon conversion of shares of Convertible Preferred
7
<PAGE> 12
Stock allocated to his respective account under the Employee Stock Plan and
shares issuable upon the exercise of vested stock options. Shares shown as
beneficially owned by the executive officers with respect to the CRISP and
Employee Stock Plan are also reflected in the total number of shares owned
beneficially by State Street Bank and Trust Company (see note 1 below).
<TABLE>
<CAPTION>
VOTING POWER INVESTMENT POWER
--------------------- --------------------- PERCENT OF
NAME SOLE SHARED SOLE SHARED TOTAL CLASS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Holders of More than Five
- -------------------------
Percent of Common Stock
-----------------------
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA................ 261,032 764,800 4,584,433 778,500 5,362,933(1) 12.98
Directors and Executive Officers
- --------------------------------
Damaris Ames................. 3,361 -0- 3,361 -0- 3,361 *
Samuel W. Bodman............. 484,000 5,844 484,000 5,844 645,516(2) 1.69
Jane C. Bradley.............. 56,540 1,161,338 56,540 1,161,338 1,217,878(3) 3.20
Kennett F. Burnes............ 93,240 5,063 93,240 5,063 185,475(4) *
John G.L. Cabot.............. 819,056 800,992 819,056 800,992 1,708,552(5) 4.48
Robert A. Charpie............ 28,800 57,660 28,800 57,660 86,460(6) *
John D. Curtin, Jr........... 90,000 4,585 90,000 4,585 167,089(7) *
Robert P. Henderson.......... 5,400 -0- 5,400 -0- 5,400 *
Arnold S. Hiatt.............. 1,200 -0- 1,200 -0- 1,200 *
Gerrit Jeelof................ 3,144 -0- 3,144 -0- 3,144 *
John H. McArthur............. 3,822 -0- 3,822 -0- 3,822 *
John F. O'Brien.............. 3,600 -0- 3,600 -0- 3,600 *
David V. Ragone.............. 4,800 18,800 4,800 18,800 23,600(8) *
Charles P. Siess, Jr......... 18,534 -0- 18,534 -0- 18,534 *
Morris Tanenbaum............. 20,428 -0- 20,428 -0- 20,428 *
Lydia W. Thomas.............. -0- -0- -0- -0- -0- *
Robert Rothberg.............. 28,000 961 28,000 961 28,961(9) *
All directors and executive
officers as a group (18
persons).................. 1,675,325 1,535,954 1,675,325 1,535,954 3,628,133(10) 9.44
- ---------------
<FN>
* Less than one percent.
(1) Shares of Common Stock shown as being beneficially owned by the State Street Bank and Trust Company
include: (i) 1,238,529 shares of Common Stock held as trustee of the CRISP; and (ii) 111,303 shares
of Common Stock, and 3,097,269 additional shares of Common Stock issuable upon conversion of 70,819
shares of Convertible Preferred Stock (100% of the class), held as trustee of the Employee Stock Plan.
(2) Includes the following shares held for the benefit of Mr. Bodman by the trustee of the following
Company benefit plans: CRISP -- 2,426 shares of Common Stock; Employee Stock Plan -- 3,418 shares
of Common Stock (including 2,719 shares issuable upon conversion of 62 shares of Convertible Preferred
Stock held for his benefit). The shares of Convertible Preferred Stock allocated to Mr. Bodman's account
under the Employee Stock Plan constitute less than 1% of the Convertible Preferred Stock of the Company.
Shares of Common Stock shown as being beneficially owned by Mr. Bodman include 155,672 shares of Common
Stock which Mr. Bodman has the right to acquire pursuant to currently exercisable stock options and
24,000 shares as to which beneficial ownership is disclaimed.
</TABLE>
8
<PAGE> 13
(3) Includes 1,161,338 shares as to which beneficial ownership is disclaimed
and 522,410 shares as to which voting power is shared with John G.L. Cabot
and is reflected in the aggregate number of shares owned beneficially by
Mr. Cabot (see note 5 below).
(4) Includes the following shares held for the benefit of Mr. Burnes by the
trustee of the following Company benefit plans: CRISP -- 2,071 shares of
Common Stock; Employee Stock Plan -- 2,992 shares of Common Stock
(including 2,430 shares issuable upon conversion of 55 shares of
Convertible Preferred Stock held for his benefit). The shares of
Convertible Preferred Stock allocated to Mr. Burnes' account under the
Employee Stock Plan constitute less than 1% of the Convertible Preferred
Stock of the Company. Shares of Common Stock shown as being beneficially
owned by Mr. Burnes include 87,172 shares of Common Stock which Mr. Burnes
has the right to acquire pursuant to currently exercisable stock options
and 240 shares as to which beneficial ownership is disclaimed.
(5) Includes the following shares held for the benefit of Mr. Cabot by the
trustee of the following Company benefit plans: CRISP -- 44,186 shares of
Common Stock; Employee Stock Plan -- 3,100 shares of Common Stock
(including 2,505 shares issuable upon conversion of 57 shares of
Convertible Preferred Stock held for his benefit). The shares of
Convertible Preferred Stock allocated to Mr. Cabot's account under the
Employee Stock Plan constitute less than 1% of the Convertible Preferred
Stock of the Company. Shares of Common Stock shown as being beneficially
owned by Mr. Cabot include (i) 88,504 shares of Common Stock which Mr.
Cabot has the right to acquire pursuant to currently exercisable stock
options, (ii) 753,706 shares as to which beneficial ownership is
disclaimed, and (iii) 522,410 shares as to which voting power is shared
with Jane C. Bradley and is reflected in the aggregate number of shares
owned beneficially by Ms. Bradley (see note 3 above).
(6) Includes 57,660 shares as to which beneficial ownership is disclaimed.
(7) Includes the following shares held for the benefit of Mr. Curtin by the
trustee of the following Company benefit plans: CRISP -- 2,143 shares of
Common Stock; Employee Stock Plan -- 2,442 shares of Common Stock
(including 2,029 shares issuable upon conversion of 46 shares of
Convertible Preferred Stock held for his benefit). The shares of
Convertible Preferred Stock allocated to Mr. Curtin's account under the
Employee Stock Plan constitute less than 1% of the Convertible Preferred
Stock of the Company. Shares of Common Stock shown as being beneficially
owned by Mr. Curtin include 72,504 shares of Common Stock which Mr. Curtin
has the right to acquire pursuant to currently exercisable stock options.
(8) Includes 6,000 shares as to which beneficial ownership is disclaimed.
(9) Includes the following shares held for the benefit of Mr. Rothberg by the
trustee of the following Company benefit plans: CRISP -- 628 shares of
Common Stock; Employee Stock Plan -- 333 shares of Common Stock (including
303 shares issuable upon conversion of 6 shares of Convertible Preferred
Stock held for his benefit). The shares of Convertible Preferred Stock
allocated to Mr. Rothberg's account under the Employee Stock Plan
constitute less than 1% of the Convertible Preferred Stock of the Company.
(10) Shares of Common Stock shown as being beneficially owned by directors and
executive officers as a group include: (i) 416,854 shares which such
individuals have the right to acquire pursuant to currently exercisable
stock options; (ii) 52,796 shares held for their benefit by the State
Street Bank and Trust Company as trustee of the CRISP; and (iii) 14,064
shares of Common Stock, (including 11,514 shares issuable upon conversion
of 263 shares of Convertible Preferred Stock) held for their benefit by the
State Street Bank and Trust Company as trustee of the Employee Stock Plan
(see note 1 above).
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table provides certain compensation information
for the Chief Executive Officer and the four other most highly compensated
executive officers of the Company who were employed by the Company on September
30, 1994, for services rendered by them during fiscal years 1994, 1993 and 1992.
The information includes base salaries, bonuses and long-term compensation
grants made to each such
9
<PAGE> 14
executive officer in those years as well as information regarding the value of
certain other compensation reportable for such executive officers.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL AWARDS
COMPENSATION -------------
--------------------- RESTRICTED ALL OTHER
NAME & PRINCIPAL SALARY BONUS STOCK COMPENSATION
POSITION YEAR ($) ($) ($)(1) ($)(2)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Samuel W. Bodman 1994 $581,250 $500,000 $368,438 $132,784
Chairman of the 1993 $550,000 $150,000 $228,120 $ 56,810
Board & President 1992 $520,833 $200,000 $163,625 --
John G.L. Cabot 1994 $375,000 $100,000 $122,813 $ 52,905
Vice Chairman & 1993 $375,000 $ 75,000 $114,060 $ 23,235
Chief Financial Officer 1992 $360,417 $100,000 $105,188 --
Kennett F. Burnes 1994 $395,833 $300,000 $245,625 $ 87,195
Executive Vice 1993 $375,000 $100,000 $171,090 $ 38,693
President 1992 $360,417 $125,000 $128,563 --
John D. Curtin, Jr. 1994 $375,000 $100,000 $184,219 $ 67,905
Executive Vice 1993 $375,000 $100,000 $171,094 $ 38,693
President 1992 $360,417 $125,000 $128,563 --
Robert Rothberg(3) 1994 $225,595 $100,000 $456,188 $ 44,030
Vice President &
General Counsel
<FN>
- ---------------
(1) The value of the shares of restricted stock set forth in the Table was determined based upon the
fair market value of such shares on the date of grant less the amount paid by the named executive
officer to the Company for such shares. The named executive officers were granted the following
shares of restricted stock in May 1994 under the Company's Equity Incentive Plan: Mr. Bodman:
30,000 shares; Mr. Cabot: 10,000 shares; Mr. Burnes: 20,000 shares; Mr. Curtin: 15,000 shares; and
Mr. Rothberg: 10,000 shares. In addition, Mr. Rothberg received an aggregate of 18,000 shares of
restricted stock upon joining the Company in October 1993.
The number and value (calculated at fair market value as of September 30, 1994 ($27.25 per share),
less the amount paid by the named executive officer) of all restricted stock of the Company held by
the named executive officers on September 30, 1994 (including the shares referred to in the column
headed "Restricted Stock"), were as follows: Mr. Bodman: 64,000 shares ($983,810); Mr. Cabot: 29,000
shares ($448,187); Mr. Burnes: 46,000 shares ($708,217); Mr. Curtin: 41,000 shares ($633,374); and
Mr. Rothberg: 28,000 shares ($472,561). The restricted stock set forth in the Table vests, in whole,
three years from the date of grant, except that with respect to Mr. Rothberg, 6,000 of such shares
vest in equal annual installments over a three year period from the date of grant. In accordance
with the Company's long-term incentive compensation program under the Equity Incentive Plan, each of
the named individuals paid to the Company 50% of the fair market value of the shares of stock listed
in this footnote on the date of grant (except for 6,000 of the shares held by Mr. Rothberg, which
shares were granted to him without payment). Some of the funds for the payment for restricted stock
were borrowed from Merrill Lynch Bank & Trust Company by three of the named executive officers under
a loan facility available to all recipients of restricted stock grants under this program. The
recipients, including the named executive officers, borrowing funds from that Bank are obligated to
pay interest on the loans at the prime rate and to repay the funds borrowed. Shares purchased with
borrowed funds must be pledged to the Bank as collateral for the loans when the restrictions lapse.
The Company also guarantees payment of the loans in the event the recipients fail to honor their
obligations. Dividends are paid on the shares of restricted stock.
(2) Information regarding All Other Compensation has not been included for fiscal year 1992 in accordance
with the Securities and Exchange Commission's transitional rules relating to executive compensation.
</TABLE>
10
<PAGE> 15
The information in the column headed "All Other Compensation" includes
contributions to the CRISP and accruals under a supplemental profit sharing
plan or arrangement for fiscal year 1994 and contributions to the Employee
Stock Plan and accruals under a supplemental employee stock ownership plan
or arrangement ("ESOP") for fiscal year 1994 on behalf of the named
executive officers in the following amounts: Mr. Bodman: CRISP: $86,284,
ESOP: $46,500; Mr. Cabot: CRISP: $37,905, ESOP: $15,000; Mr. Burnes: CRISP:
$55,528, ESOP: $31,667; Mr. Curtin: CRISP: $37,905, ESOP: $30,000; and Mr.
Rothberg: CRISP: $25,982, ESOP: $18,048. The supplemental profit sharing
plan and supplemental employee stock ownership plan were established by the
Company to provide benefits to executive officers and other officers and
managers of the Company in circumstances in which the maximum limits
established under the Employee Retirement Income Security Act of 1974
("ERISA") and the Internal Revenue Code (the "Code") prevent participants
in the CRISP or the Employee Stock Plan from receiving some of the benefits
provided under those qualified plans. In addition to the supplemental
benefits relating to such limits, Messrs. Bodman, Burnes, Curtin and
Rothberg each accrue, subject to certain vesting requirements, an
additional benefit under the supplemental employee stock ownership plan
equal to the total benefit each would have accrued for the fiscal year
under the Employee Stock Plan if the limitations of ERISA and the Code were
not applicable.
The Company provides executive officers and other managers, including the
named executive officers, with death benefit protection in the amount of
three times their salaries, including $50,000 of group life insurance
coverage. No amount has been included in the column headed All Other
Compensation for this benefit because no amount was accrued by the Company
for the benefit and the benefit, other than the group life insurance (which
is available to all employees in amounts determined by the level of their
salaries), is not funded by insurance on the lives of any of the named
executive officers other than Mr. Cabot. The Company's cost of the program
generally is funded by insurance on the lives of various other present and
former managers of the Company. The value of this benefit, based upon the
taxable income which it would constitute if it were insurance, does not
exceed approximately $16,500 per year for any named executive officer.
(3) Mr. Rothberg joined the Company in October 1993.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
The following table shows the number of unexercised stock options held by
each named executive officer on September 30, 1994, and the value of the
unexercised in-the-money options at that date. The options shown in the table
were granted during the years 1988 through 1991 and vest in equal amounts over a
period of four years from the date of grant. Unexercisable options refer to
options which were not vested at September 30, 1994. No options were exercised
by any of the named executive officers during fiscal year 1994.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS OPTIONS AT FISCAL
AT FISCAL YEAR-END(#) YEAR-END($)*
------------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Samuel W. Bodman........................ 155,672 15,000 $1,549,609 $ 173,438
John G.L. Cabot......................... 88,504 7,500 $ 889,324 $ 86,719
Kennett F. Burnes....................... 87,172 7,500 $ 883,833 $ 86,719
John D. Curtin, Jr...................... 72,504 7,500 $ 697,903 $ 86,719
Robert Rothberg......................... -0- -0- -0- -0-
- ---------------
<FN>
* The value of unexercised in-the-money options at September 30, 1994, was determined by taking the difference
between the fair market value of Cabot Common Stock at the close of business on September 30, 1994 ($27.25
per share) and the option exercise price, times the number of options outstanding at that date. THE VALUES
HAVE NOT BEEN REALIZED AND MAY NOT BE REALIZED. THE OPTIONS HAVE NOT BEEN EXERCISED AND MAY NEVER BE EXERCISED.
IN THE EVENT THE OPTIONS ARE EXERCISED, THEIR VALUE WILL DEPEND UPON THE FAIR MARKET VALUE OF THE UNDERLYING
CABOT COMMON STOCK ON THE DATE OF EXERCISE.
</TABLE>
11
<PAGE> 16
PENSION PLAN TABLE
Under the Cash Balance Plan (the "Plan"), for each year beginning with the
Plan year commencing October 1, 1988, the Company provides participants
including the executive officers named in the Summary Compensation Table with
annual pay-based credits of 3% of eligible compensation during the first five
years of service, 3.5% for the next five years and 4% after 10 years of service
plus additional credits of 2% of earnings in excess of the Social Security Wage
Base. All balances in the accounts of participants are credited with interest at
the one-year U.S. Treasury bill rate determined as of November of the previous
year until the participants commence receiving benefit payments. For the Plan
year 1994, the interest rate was 3.58%. At retirement, participants eligible for
benefits may receive the balance standing in their account in a lump sum or as a
monthly pension having equivalent actuarial value. Benefits for service through
September 30, 1988 are based on the Plan formula then in effect, and have been
provided for through the purchase of an insured group annuity contract. Certain
employees, including Mr. Cabot, have additional balances attributable to their
previous participation in the Plan or prior plans, as explained further below.
The Plan, as amended effective October 1, 1988, included special
grandfathering provisions for participants who met certain age and service
requirements at September 30, 1988. The Plan provides for the payment to those
participants of any shortfall if the sum of (a) the amount actually payable
under the Plan attributable to their account balances, (b) the value of their
insured annuity, and (c) the amount which would be standing to the participant's
credit at retirement if the Company had contributed 4% of earnings after October
1, 1988 with interest credited at the rate of the change in the Standard &
Poor's 400 stock index does not equal or exceed the value of the retirement
income calculated on the basis of the pre-amendment pension formula. The pension
figures for Mr. Cabot appearing below include the effect of the grandfathering
described in this paragraph.
The Pension Plan Table appearing below sets forth the estimated annual
benefit payable to each of the individuals named in the Summary Compensation
Table as a single life annuity at age 65 under the Cash Balance Plan and under a
supplemental plan or arrangement, if applicable. A supplemental plan and
arrangement were created by the Company to provide benefits to executive
officers and other officers and managers of the Company in circumstances in
which the maximum limits established under ERISA and the Code prevent
participants from receiving some of the benefits provided under the Cash Balance
Plan, a qualified plan. In addition to the supplemental benefit relating to such
limits, Messrs. Bodman, Burnes, Curtin and Rothberg each accrue an additional
benefit under the supplemental cash balance plan equal to the total benefit each
would have accrued for the fiscal year under the Cash Balance Plan if such
limitations were not applicable. The amounts set forth in the following table
assume each named individual continues to be employed by the Company until age
65 at his annual base salary at September 30, 1994, and, in the case of Mr.
Cabot, using current Social Security benefit levels and his current five-year
average compensation for purposes of determining grandfathered benefits.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
ANNUAL BENEFIT
EXECUTIVE OFFICER PAYABLE
---------------------------------------------
<S> <C>
Samuel W. Bodman............ $219,631
John G.L. Cabot............. $217,695
Kennett F. Burnes........... $205,854
John D. Curtin, Jr.......... $ 48,740
Robert Rothberg............. $140,499
</TABLE>
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
None of the executive officers named in the Summary Compensation Table has
an employment agreement with the Company.
All of the executive officers named in the Summary Compensation Table
participate in benefit plans sponsored by the Company including the Cash Balance
Plan, CRISP, Employee Stock Plan and Equity Incentive Plan. Each of those plans
provides that upon the occurrence of a change in control, any benefits
12
<PAGE> 17
granted or contributed by the Company for the benefit of participants, including
those executive officers, will vest in such individuals.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of Cabot Corporation
is composed of five non-employee directors. It is responsible for, among other
matters, establishing policies applicable to the compensation of the Company's
executive officers and reporting on such policies to the Board of Directors and
stockholders; determining the salaries, incentive compensation and other
remuneration of executive officers of Cabot who are directors; and reviewing
such salaries, compensation and remuneration for all other officers of Cabot.
The Committee regularly reviews the effectiveness of the Company's executive
compensation practices and revises them as appropriate. This is a report on the
compensation philosophy and practices of the Committee during fiscal year 1994.
Executive Compensation Philosophy
The Committee's philosophy is to compensate the Company's executive
officers based on their performance and the responsibilities given to them, in a
range that is generally competitive with compensation paid by other comparable
companies. Certain of the companies compared for compensation purposes are
included in the Standard & Poor's ("S&P") Chemicals Index or the S&P Specialty
Chemicals Index, both of which indices are used in the Performance Graph on page
15. The objectives of the Committee's executive compensation practices are to
attract and retain highly qualified executives, motivate them to achieve the
business objectives of the Company and link their long-term interests with those
of the stockholders.
The principal components of Cabot's executive compensation are salary,
performance-based annual incentive payments and long-term incentive grants. The
salary and annual incentive payments are intended to recognize current
responsibilities and reward past and current performance. They are aimed
primarily at satisfying the objectives of attracting, retaining and motivating
executives.
The long-term grants are intended to promote superior future performance.
They are aimed primarily at retaining executives and satisfying the objective of
linking executives' long-term interests with those of the stockholders. Each
long-term incentive grant involves a specific number of shares of Common Stock,
which the executive officer may elect either to purchase as restricted stock at
50% of the market price of the stock on the date of grant or to receive as
non-qualified stock options exercisable at 100% of the market price of the stock
on the date of the grant. Both the restricted stock and the stock options are
subject to a three-year vesting period, and the benefits (other than dividends
paid on the restricted stock) will be forfeited if the officer leaves the
Company prior to the end of such three-year period for any reason other than
death, disability or retirement, unless the Committee, in its sole discretion,
determines otherwise.
The Committee's evaluations of Cabot's executive officers have been based
on the Committee's review of each officer's performance and take into
consideration Mr. Bodman's views of the performance of the other executive
officers. The Committee also obtains other Board members' evaluations of Mr.
Bodman's performance and seeks their input on Mr. Bodman's compensation. In
1994, the Committee's evaluations have included judgments on overall performance
and have relied, in part, on performance measured against objectives in the
Company's budget for fiscal 1994.
Chief Executive Officer's Compensation
The Committee determines Mr. Bodman's compensation level based upon the
performance of the Company as a whole, his individual efforts to improve the
Company and advance the interests of the stockholders, achievement of budget
objectives, progress toward implementation of long range strategic plans and
other factors. The Committee also compares Mr. Bodman's compensation with data
for chief executive officers of similar companies as selected by the Committee
and reported by the Company's compensation consultants.
Salary. A $75,000 salary increase was granted to Mr. Bodman in fiscal year
1994, based upon the Company's improved sales and operating profit, progress in
the Company's cost control program, the implementation of the Company's product
differentiation strategy, and to make Mr. Bodman's compensation more in line
with the compensation paid to the chief executive officers of companies selected
by the Committee for compensation comparison.
13
<PAGE> 18
Annual Incentive Payment. For purposes of determining a performance-based
annual incentive payment for the Chief Executive Officer, the Committee reviewed
the financial results of the Company for the 1994 fiscal year compared to those
of the prior year, as well as the Company's budget objectives for the current
year. In evaluating Mr. Bodman's performance in 1994, the Committee considered
the fruition of several years of effort to restructure the Company and
substantially improve its competitive position and financial performance. As a
result of those efforts and the success achieved, the Company attained record
earnings from continuing operations in 1994. Furthermore, steady progress was
made in 1994 in expanding the Company's international operations and improving
their structure. None of these factors was given more weight than any other.
The Committee considered these results highly satisfactory and reflective
of outstanding performance by Mr. Bodman, justifying significant incentive
recognition. Accordingly, the Committee determined to make a $500,000
performance-based incentive payment to Mr. Bodman for 1994, as shown in the
Summary Compensation Table.
Long-Term Incentive Grant. The Committee determines long-term incentive
grants for the Chief Executive Officer on the basis of his responsibilities, his
past performance and his opportunity to affect the future performance of the
Company. On this basis, in fiscal year 1994, Mr. Bodman received a grant of
30,000 shares of Cabot Common Stock (after giving effect to a two-for-one stock
split, effectuated in the form of a stock dividend which was declared in August
1994). Factors considered by the Committee in making that grant included the
significant progress in implementing and further developing the long range
strategic plan mentioned above and the Committee's desire to increase the
incentives for the successful implementation of such plan. Mr. Bodman exercised
his grant by purchasing shares of restricted stock, and elected under Section
83(b) of the Internal Revenue Code to be taxed currently on the compensation
relating to the purchase of the restricted stock, notwithstanding the three-year
vesting provision.
One Million Dollar Cap on Deductibility of Compensation
The Committee has reviewed the proposed regulations under the recently
enacted Section 162(m) of the Internal Revenue Code which limits the
deductibility of compensation paid by public companies to specified executive
officers whose compensation, under certain circumstances, exceeds one million
dollars in a particular year. Those regulations are not applicable to the
Company until fiscal year 1995. Based on Mr. Bodman's and the other named
executive officers' compensation in fiscal 1994, it does not appear that Section
162(m) will have a significant impact on the Company in the near term.
Nevertheless, the Committee is considering modifications to the Company's
incentive plans that may improve the effectiveness of the plans and lessen the
impact of Section 162(m) on the Company. However, given the importance to the
Company of proper incentives and the relative costs to the Company under Section
162(m), the Committee believes that the proper focus should be on improving the
effectiveness of the plans and not primarily on the costs under Section 162(m).
The Committee will continue to monitor the impact of Section 162(m) on the
Company.
Other Executive Officers' Compensation
Salary increases and short- and long-term incentive compensation grants to
each of the other four most highly compensated executive officers, to the extent
made, were based upon Mr. Bodman's recommendations to the Committee and the
Committee's evaluation of each individual's responsibilities, achievements in
managing his individual business units or staff responsibilities, expectations
of future performance and the Committee's desire to keep its executives'
compensation competitive with the compensation paid by comparable companies.
None of these factors was given more weight than any other. In the case of Mr.
Rothberg, however, certain awards of restricted stock (see note 1 to the Summary
Compensation Table above) were made upon commencement of his employment with the
Company as an incentive for his joining the Company and as a long-term
incentive.
December 21, 1994
Robert P. Henderson (Chairman)
Jane C. Bradley
Arnold S. Hiatt
John H. McArthur
Morris Tanenbaum
14
<PAGE> 19
<TABLE>
PERFORMANCE GRAPH
The following graph compares the cumulative return for Cabot Common Stock during the five
fiscal years commencing October 1, 1989, with the S&P 500 Stock Index, the S&P Specialty Chemicals
Index and the S&P Chemicals Index. The graph assumes $100 was invested on October 1, 1989 in Cabot
Common Stock and $100 in each of the S&P Indexes. The comparison assumes that all dividends are
reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<CAPTION>
S&P SPE-
MEASUREMENT PERIOD CABOT CORPO- S&P 500 STOCK CIALTY CHEMI- S&P CHEMI-
(FISCAL YEAR COVERED) RATION INDEX CALS INDEX CALS INDEX
<S> <C> <C> <C> <C>
1989 100.00 100.00 100.00 100.00
1990 72.82 90.76 87.32 74.92
1991 102.98 119.04 117.32 109.90
1992 153.81 132.20 136.58 120.57
1993 181.99 149.38 147.93 130.42
1994 182.30 154.89 142.07 171.68
</TABLE>
CERTAIN SECURITIES FILINGS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's stock, to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC") and New
York Stock Exchange. Executive officers, directors and greater than 10%
beneficial owners are required by SEC regulation to furnish the Company with all
Section 16(a) reports they file with the SEC.
The Company has been advised by Mrs. Jane C. Bradley, a director, that the
beneficial ownership of shares of Cabot Common Stock by a newly created trust,
of which she is a co-trustee, had not been timely reported on a Form 3. A report
has subsequently been filed.
The Company has also been informed by Mr. Thomas D. Cabot, a director
emeritus, that the beneficial ownership of shares held by his spouse as reported
in his Form 3, filed in 1991, and in subsequent filings, did not include 5,000
shares of Cabot stock acquired by her in 1990. A corrective report has
subsequently been filed.
FUTURE STOCKHOLDER PROPOSALS
Any stockholder proposal intended for inclusion in the proxy statement for
the 1996 Annual Meeting must be received by the Company at its offices at 75
State Street, Boston, Massachusetts 02109-1806, by August 23, 1995, and should
be sent to the attention of Mr. Charles D. Gerlinger, Secretary.
SOLICITATION OF PROXIES
The cost of soliciting proxies in the enclosed form will be borne by the
Company. In addition to solicitation by mail, officers and other employees of
the Company may solicit proxies personally, by telephone, by facsimile and by
telegraph. The Company may request banks and brokers or other similar agents or
15
<PAGE> 20
fiduciaries to transmit the proxy material to the beneficial owners for their
voting instructions and will reimburse them for their expenses in so doing. D.F.
King & Co, Inc., New York, New York, has been retained to assist the Company in
the solicitation of proxies at a fee estimated not to exceed $10,000.
MISCELLANEOUS
The management does not know of any matters to be presented at the Annual
Meeting other than those set forth in the Notice of Annual Meeting of
Stockholders. However, if any other matters properly come before the Annual
Meeting, the persons named in the enclosed proxy card intend to vote the shares
to which the proxy card relates on such matters in accordance with their best
judgment unless otherwise specified in the proxy card.
By order of the Board of Directors,
Charles D. Gerlinger
Secretary
Boston, Massachusetts
December 21, 1994
16
<PAGE> 21
[LOGO]
CABOT CORPORATION
P
R Annual Meeting of Stockholders -- February 10, 1995
O
X THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Y
The undersigned hereby appoints Samuel W. Bodman, Robert Rothberg and
Charles D. Gerlinger, and each of them, proxies, with power of substitution, to
vote the shares of stock of Cabot Corporation which the undersigned is entitled
to vote, as specified on the reverse side of this card, and, if applicable,
hereby directs the trustee of employee benefit plan(s) shown on the reverse
side hereof to vote the shares of stock of Cabot Corporation allocated to the
account(s) of the undersigned which the undersigned is entitled to vote, as
specified on the reverse side of this card, at the Annual Meeting of
Stockholders of Cabot Corporation to be held on February 10, 1995, at 10:00
a.m., EST, in the Enterprise Room on the fifth floor at 225 Franklin Street,
Boston, Massachusetts, and at any adjournment thereof.
WHEN THIS PROXY IS PROPERLY EXECUTED, THE SHARES TO WHICH THIS PROXY
RELATES WILL BE VOTED AS SPECIFIED AND, IF NO SPECIFICATION IS MADE, WILL BE
VOTED FOR ALL NOMINEES, AND IT AUTHORIZES THE ABOVE DESIGNATED PROXIES AND
TRUSTEE, AS APPLICABLE, TO VOTE IN ACCORDANCE WITH THEIR JUDGMENT ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
SEE REVERSE
SIDE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 22
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE .
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1
1. Election of Directors. 2. To transact such other
NOMINEES: Kennett F. Burnes, John G.L. Cabot, business as may properly
Robert P. Henderson, John F. O'Brien, come before the Annual
Charles P. Siess, Jr. and Lydia W. Thomas Meeting and any
adjournment thereof.
FOR ____ WITHHELD ____
ALL FROM
NOMINEES ____ ALL ____
NOMINEES
For, except vote withheld from the
following nominee(s):
__________________________________
PLEASE SIGN, DATE, AND RETURN THIS PROXY CARD
PROMPTLY.
MARK HERE ____
FOR ADDRESS
CHANGE AND ____
NOTE AT LEFT
Signature: __________________ Date __________
Signature: __________________ Date __________
<PAGE> 23
ATTACHMENT A
December 20, 1994
Dear Plan Participant:
The Annual Meeting of Cabot Corporation will be held on February 10, 1995. The
record date for determining stockholders entitled to vote at the meeting was
December 16, 1994. Through your participation in the Cabot Corporation
Employee Stock Ownership Plan (ESOP), Cabot Retirement Incentive Savings Plan
(CRISP) and/or the Cabot Oil & Gas Corporation Savings Investment Plan (SIP),
you are the beneficial owner of Cabot Common Stock and/or its Convertible
Preferred Stock and have the right to instruct the Trustee of the Plan or Plans
in which you participate how to vote your shares.
The number of shares allocated to you appears at the top of the voting card on
which your name appears. If you are a participant in the CRISP, the number of
shares of Cabot Common Stock held for your account is shown at the top of the
card and is followed by the letters "CSP". If you are a participant in the
ESOP, the number followed by the letters "ESP" represents the number of shares
of Cabot Common Stock you are entitled to vote in your ESOP account, including
the shares of Common Stock issuable upon conversion of Cabot Convertible
Preferred Stock held in your account. If you are a participant in the SIP, the
number of shares of Cabot Common Stock held for your account is followed by the
letters "SIP".
I encourage you to exercise your right to vote these shares by completing the
enclosed proxy card instructing the trustee as to your wishes. Your vote has a
doubly important impact. When you vote your shares, you participate directly
in the affairs of the Company equally with all other stockholders. In
addition, your vote also directs the Trustees of the CRISP and ESOP how to vote
those shares for which no instructions are received from other Plan
participants plus all of those shares held in each of those Plans that have not
been allocated to participants' accounts.
To vote your shares, read the Notice of Meeting and Proxy Statement carefully,
mark and sign the enclosed proxy card, and return it to the Trustee before
February 6, 1995 in the enclosed self-addressed envelope.
The Trustee of each Plan will have the voting instructions of each participant
in the Plan tabulated and will vote the shares of the participants by
submitting a final proxy card representing each Plan's shares for inclusion in
the tally at the Annual Meeting. Your individual vote will not be disclosed to
anyone in the Company.
Sincerely,
Samuel W. Bodman
Chairman of the Board, President
and Chief Executive Officer
