<PAGE>
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
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CMI Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CMI Corporation
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
[X] 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:
----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------------------
Notes:
<PAGE>
CMI CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 1995
To the Shareholders of
CMI Corporation:
The 1995 Annual Meeting of Shareholders of CMI Corporation (the "Company")
will be held on May 5, 1995 at 10 A.M. (Oklahoma City time), at the corporate
offices, Interstate 40 and Morgan Road, Oklahoma City, Oklahoma 73101. The
items of business to be considered are:
1. The election of two directors for a term of three years each;
2. An amendment to Article Sixth of the Company's Amended and Restated
Certificate of Incorporation regarding the 4.75% ownership
limitation on shares of the Company's Voting Class A Common Stock;
and
3. Such other matters as may properly come before the meeting or any
adjournment thereof.
The close of business on March 8, 1995 has been fixed as the record date
for the determination of the holders of Voting Class A Common Stock, Voting
Common Stock and Series B Preferred Stock entitled to notice of and to vote at
the Annual Meeting.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING,
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED ENVELOPE TO ASSURE REPRESENTATION OF YOUR SHARES. SHOULD YOU ATTEND,
YOU MAY, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
Jim D. Holland, Senior Vice President
Oklahoma City, Oklahoma
April 5, 1995
<PAGE>
CMI CORPORATION
PROXY STATEMENT
---------------
May 5, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CMI Corporation (the "Company") to be voted
at the 1995 Annual Meeting of Shareholders of the Company on May 5, 1995 at 10
A.M. (Oklahoma City time), which meeting will be held at the offices of the
Company, located at Interstate 40 and Morgan Road (P.O. Box 1985), Oklahoma
City, Oklahoma 73101. Information in this Proxy Statement is as of March 1,
1995 unless otherwise stated. The approximate date on which the Proxy Statement
and enclosed form of proxy have been mailed to shareholders is April 5, 1995.
Any shareholder giving a proxy has the power to revoke the proxy at any
time before it is voted by giving written notice to the Company. Any proxy
which is not revoked will be voted at the Annual Meeting. Giving a proxy will
not affect your right to vote in person if you attend the Annual Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of record at the close of business on March 8, 1995 (the "Record
Date") of shares of Voting Class A Common Stock, $0.10 par value ("Class A
Stock"), Voting Common Stock, $0.10 par value ("Common Stock"), and 7% Series B
Preferred Stock, $1,000 per share redemption value ("Preferred Stock"), are
entitled to notice of and to vote on all matters presented at the Annual
Meeting. As of the Record Date there were 20,351,591 shares of Class A Stock,
621 shares of Common Stock and 4,500 shares of Preferred Stock issued and
outstanding. Each share of Class A Stock, Common Stock and Preferred Stock is
entitled to one vote on each item of business to be considered at the Annual
Meeting.
The following tables set forth certain information regarding the Company's
Class A Stock and Preferred Stock owned by (i) each shareholder of the Company
who is known by the Company to beneficially own more than five percent of the
Company's outstanding Class A Stock or Preferred Stock, (ii) each of the
Company's directors, and (iii) all directors and officers of the Company as a
group.
<TABLE>
<CAPTION>
Number of Shares
Name and Address and Nature of Percent of Percent of
of Beneficial Owner Beneficial Ownership(1) Class A Stock (2) Preferred Stock
- --------------------------------- ------------------------ ----------------- ----------------
<S> <C> <C> <C>
Recovery Equity Investors, L.P. 7,116,667 (3) 34.21%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
Recovery Equity Partners, L.P. 7,116,667 (3) 34.21%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
</TABLE>
1
<PAGE>
<TABLE>
<S> <C> <C> <C>
Joseph J. Finn-Egan 7,116,667 (3) 34.21%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
Jeffrey A. Lipkin 7,116,667 (3) 34.21%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
Bill Swisher 3,471,669 (4) 17.04%
I-40 and Morgan Road
Oklahoma City, Oklahoma
Dimensional Fund Advisors, Inc. 1,253,597 (5) 6.16%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Yargo, Inc. 4,500 (6) 100%
Perryville Corporate Park
Clinton, New Jersey 08809-4000
</TABLE>
DIRECTORS AND ALL DIRECTORS AND OFFICERS AS A GROUP
<TABLE>
<CAPTION>
No. of Shares of
Term of Class A Stock and Nature Percent
Name of Director Office Expires of Beneficial Ownership (1) of Class
- ---------------------------------------- -------------- ---------------------------- ---------
<S> <C> <C> <C>
David I. Anderson 1996 0 0
Joseph J. Finn-Egan 1997 7,116,667 (3) 34.21%
Larry D. Hartzog 1995 172,700 (7) (10)
Jeffrey A. Lipkin 1997 7,116,667 (3) 34.21%
Thomas P. Stafford 1995 10,000 (8) (10)
Bill Swisher 1996 3,471,669 (4) 17.04%
All directors and
officers as a group 10,851,306 (9) 51.54%
(11 individuals including the above)
</TABLE>
(1) All shares are held directly unless indicated otherwise.
(2) In order to reduce the likelihood of an "ownership change" as defined in
Section 382 of the Internal Revenue Code of 1986, as amended, which would limit
or eliminate the Company's ability to use the approximately $44.3 million in
federal income tax net operating loss carry forwards available to the Company at
December 31, 1990, on February 14, 1992, the Company effected a one-for-two
thousand reverse split (the "Reverse Split") of its Common Stock and declared a
stock dividend (the "Stock Dividend") of 1,999 shares of Class A Stock for each
share of Common Stock outstanding following the Reverse Split. Thereafter, on
February 26, 1992, the Company commenced an exchange offer (the "Exchange
Offer") offering to exchange one share of its Class A Stock for each outstanding
whole share of Common Stock. As a result of the Reverse Split, Stock Dividend
and Exchange Offer, approximately 99% of the Company's outstanding capital stock
(excepting the Company's Preferred Stock) is now Class A Stock which is subject
to transfer restrictions designed to prevent an ownership change. Following the
Reverse Split, Stock Dividend and Exchange Offer,
2
<PAGE>
however, 621 shares of Common Stock are still outstanding and held of record by
38 persons. For purposes of computing the percent of Class A Stock held by a
beneficial owner, director or officer, the 621 shares of Common Stock have been
treated as shares of Class A Stock.
(3) All of the shares beneficially owned by Recovery Equity Investors, L.P., a
Delaware limited partnership ("REI"), are included in the shares beneficially
owned by Recovery Equity Partners, L.P., the general partner of REI, and Messrs.
Finn-Egan and Lipkin, the general partners of Recovery Equity Partners, L.P.
This amount includes 450,000 shares of Class A Stock which REI has the right to
acquire pursuant to the terms of a warrant purchased by REI from the Company on
January 15, 1993. This amount does not, however, include 2,713,141 shares of
Class A Stock beneficially owned by Bill Swisher and certain members of his
family, with respect to which shares REI may (i) elect to acquire pursuant to a
right of first refusal or participate in the sale thereof pursuant to tag-along
rights, in each case under a certain Shareholders Agreement (the "Shareholders
Agreement"), dated August 19, 1991, between REI, the Company, Bill Swisher and
certain members of Mr. Swisher's family, and (ii) vote or direct the voting of
in favor of all persons designated by REI for election to the Company's Board of
Directors pursuant to the terms of a certain Investment Agreement (the
"Investment Agreement"), dated August 19, 1991, between the Company and REI.
(4) Includes 440,040 shares of Class A Stock held by trusts for the benefit of
certain of Mr. Swisher's children; 544,314 shares held individually by Mr.
Swisher's children; 842 shares held individually by a grandchild of Mr. Swisher;
67,565 shares held by trusts for the benefit of Mr. Swisher's grandchildren;
20,000 shares that may be acquired by two of Mr. Swisher's children upon the
exercise of options which are presently exercisable; 1,398,852 shares held by a
revocable trust of which Mr. Swisher is the sole trustee and beneficiary during
his lifetime; and 500,000 shares held by a charitable remainder trust of which
Mr. Swisher and his wife are the sole trustees and have a unitrust interest
during their joint lifetimes. Mr. Swisher disclaims beneficial ownership of all
shares held by or for the benefit of his children or grandchildren. Pursuant to
the terms of the Shareholders Agreement, Mr. Swisher and certain members of his
family are required to vote or grant to REI a proxy to vote 2,713,141 shares of
this Class A Stock in favor of the election of all persons designated by REI for
election to the Company's Board of Directors pursuant to the terms of the
Investment Agreement.
(5) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, was deemed to have beneficial ownership of 1,253,597 shares of Class A
Stock as of December 31, 1994, all of which shares are held in the portfolios of
DFA Investment Dimensions Group, Inc., a registered open-end investment company,
or in series of the DFA Investment Trust Company, a Delaware business trust, or
the DFA Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all such shares.
(6) Includes only Preferred Stock. On November 8, 1994, Yargo, Inc. filed suit
against the Company seeking payment of $1,417,500 of dividends accrued but not
paid on the 4,500 shares of Preferred Stock and any dividends accruing after the
date of the lawsuit on such shares. In addition, Yargo is asking that the
Company be required to redeem 4,250 shares of the Preferred Stock at a cost of
$4,250,000. The Company has denied that it is obligated at this time to redeem
any shares of Preferred Stock and/or pay all dividends accrued thereon.
(7) Includes 150,000 shares of Class A Stock which Mr. Hartzog has the right to
acquire pursuant to the terms of a warrant purchased by Mr. Hartzog from the
Company on January 15, 1993 and 22,700 shares held by a trust of which Mr.
Hartzog is the trustee and beneficiary.
(8) Includes 10,000 shares of Class A Stock which Mr. Stafford has the right to
acquire pursuant to the terms of a stock option granted by the Company to him on
February 19, 1993.
(9) Includes 610,000 aggregate shares of Class A Stock which Messrs. Hartzog
and Stafford and REI have the right to acquire pursuant to the terms of the
stock options and warrants granted by the Company to them.
3
<PAGE>
This amount also includes 100,000 shares of Class A Stock which may be acquired
upon the exercise of options which are presently exercisable by executive
officers and two of Mr. Swisher's children.
(10) Constitutes less than one percent of the outstanding Class A Stock.
ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of Directors shall consist of
not less than three nor more than nine members. The current number of directors
is six. For election purposes, directors are divided into three groups of two
directors each. Each group holds office for three years. The Bylaws provide
that one group of the Board be elected at each Annual Meeting.
At the Annual Meeting, management will present as nominees and recommend to
the shareholders that Larry D. Hartzog and Thomas P. Stafford be elected to
serve on the Board of Directors for a term of three years and until their
successors are duly elected and qualified. Shares represented by the
accompanying proxy will be voted for the election of Messrs. Hartzog and
Stafford, unless otherwise indicated on the proxy.
Each nominee for election as a director of the Company must be elected by
the affirmative vote of the holders of a majority of the outstanding shares of
Class A Stock, Common Stock and Preferred Stock, voting together as a class,
present in person or by proxy at the Annual Meeting. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" THE ELECTION OF NOMINEES LARRY D. HARTZOG AND THOMAS P.
STAFFORD. Unless a shareholder requests that the voting of the proxy be
withheld for any one or more of the nominees for director, the shares
represented by the enclosed proxy will be voted for the election of all
nominees. Should either of these nominees become unable to serve for any
reason, which is not anticipated, the Board of Directors may designate
substitute nominees in which event the persons named in the enclosed proxy will
vote for the election of such substitute nominee or nominees.
The following is a brief account of the business experience during the past
five years of each director and each person nominated to become a director,
including his principal occupation and employment during that period, and the
name and principal business of any corporation or other organization in which
each person has been occupied or employed. Directorships in certain companies
presently held by each director or nominee are also set forth.
Mr. Anderson (age 57) has been a director of the Company since May 7, 1993.
Since 1982, Mr. Anderson has been a partner of Morris-Anderson & Associates,
Ltd., a management consulting firm. Prior to founding Morris-Anderson &
Associates, Ltd., Mr. Anderson was the Senior Vice President and Chief Financial
Officer of Xonics, Inc., a manufacturer and distributor of medical imaging
systems. Mr. Anderson is also a limited partner in Recovery Equity Partners,
L.P., the general partner of REI. Mr. Anderson was designated by REI pursuant
to the terms of the Investment Agreement to be appointed to the Company's Board
of Directors.
Mr. Finn-Egan (age 61) has been a director of the Company since August 30,
1991. Since 1987, Mr. Finn-Egan has been a general partner of Recovery Equity
Partners, L.P., the general partner of REI. Prior to co-founding REI with Mr.
Lipkin, Mr. Finn-Egan was a private investor who principally invested in and
managed troubled companies in a variety of industries. Mr. Finn-Egan is also a
director of The Foothill Group, Inc. Mr. Finn-Egan was designated by REI
pursuant to the terms of the Investment Agreement to be appointed to the
Company's Board of Directors.
Mr. Hartzog, (age 60), has practiced law in Oklahoma City, Oklahoma since
1961 and is presently a director and stockholder of Hartzog Conger & Cason, an
Oklahoma City law firm. Mr. Hartzog became a director of the Company in 1975.
4
<PAGE>
Mr. Lipkin (age 48) has been a director of the Company since August 30,
1991. Since 1987, Mr. Lipkin has been a general partner of Recovery Equity
Partners, L.P., the general partner of REI. Prior to co-founding REI with Mr.
Finn-Egan, Mr. Lipkin was a partner in Gaston & Snow, a national law firm, from
1984 to 1989. Mr. Lipkin is also a director of The Foothill Group, Inc. Mr.
Lipkin was designated by REI pursuant to the terms of the Investment Agreement
to be appointed to the Company's Board of Directors.
Mr. Stafford (age 64) USAF (Ret. Lt. Gen.), has held various positions in
government and industry throughout his career and currently is a consultant with
General Technical Services, Inc. Mr. Stafford became a director of the Company
in 1983. Since 1980 Mr. Stafford has served as Chairman of the Board of Omega
Watch Corporation of America. He also is currently a member of the board of
directors of Allied-Signal, Inc., Tremont, Inc., Fischer Scientific, Inc.,
Pacific Scientific, Inc., Wheelbrator Technologies, Inc., Seagate Technology,
Inc. and Tracor, Inc.
Mr. Swisher (age 64) has been Chairman of the Board and Chief Executive
Officer of the Company since 1965 and a director since 1966. Mr. Swisher is a
director of Oklahoma Gas and Electric Company. Mr. Swisher's son, Thane
Swisher, is a Vice President and Secretary of the Company.
The Board of Directors of the Company has a standing Audit Committee, the
members of which are Messrs. Hartzog, Lipkin and Stafford. The Audit Committee
held five meetings during 1994. The Audit Committee's principal
responsibilities are to generally review the overall scope and results of the
audit by the Company's independent auditors and to recommend to the Board of
Directors the appointment of the independent auditors. The Board of Directors
also has a standing Compensation Committee, consisting of Messrs. Anderson,
Finn-Egan, Hartzog, Lipkin and Stafford. The Compensation Committee met four
times during 1994. The principal functions of the Compensation Committee are
(i) to review the objectives, structure, cost and administration of the
Company's major compensation and benefit policies and programs, (ii) to review
annually officers' salaries, management incentives and stock options, and (iii)
to administer the Company's stock option plan, management incentive plans and
other long-term incentive plans. The Company does not have a Nominating
Committee.
During 1994, each director who was not an officer of the Company was
compensated at the rate of $1,000 per month for his services on the Board of
Directors and as a member of any Board committee. Each director who was not an
officer of the Company also received $1,000 for each meeting of the Board
actually attended. Directors who are also officers and employees of the Company
were not paid for their services as directors or for attendance at meetings.
The Board of Directors of the Company held four meetings during 1994. All
directors attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors, and (ii) the total number of meetings held
by all committees of the Board on which he served.
AMENDMENT TO ARTICLE SIXTH OF THE COMPANY'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has approved and recommends that the shareholders
approve a proposal to amend the Company's Amended and Restated Certificate of
Incorporation by amending Section (D) of Article Sixth. The text of Section (D)
of Article Sixth, as proposed to be amended, is set forth in Exhibit "A"
attached to this proxy statement.
In February 1992, the shareholders of the Company approved numerous
amendments to the Company's Certificate of Incorporation including, without
limitation, an amendment generally prohibiting any person from acquiring (other
than from the Company) any Class A Stock of the Company or any rights to acquire
Class A Stock if the person was, or would thereby become, a holder of 4.75% or
more of the fair market value of the Company's issued and outstanding capital
stock, unless the Company's Board of Directors consents to the acquisition and,
if requested by the Board of Directors, after receiving an opinion of counsel as
to the effect of the transfer on the federal income tax net operating loss
carryforwards ("Carryforwards")
5
<PAGE>
then available to the Company. The purpose of this particular amendment was to
facilitate the Company's ability to preserve and utilize its Carryforwards free
of the limitations imposed under Section 382 of the Internal Revenue Code of
1986, as amended.
The Board has determined that the Company's Class A Stock should be listed
on the New York Stock Exchange ("NYSE"). During the Company's initial
eligibility review for such listing, the NYSE raised certain procedural issues
with the existing provisions of Section (D) of Article Sixth. The NYSE was
concerned with the treatment afforded the seller of shares in a transaction
which would violate Section (D) of Article Sixth. Under the existing Article
Sixth, "all rights with respect to the Prohibited Shares shall remain the
property of the person who initially purported to Transfer the Prohibited Shares
to the Purported Acquiror (the "Initial Transferor") until such time as the
Prohibited Shares are resold as set forth in subparagraph (1) or subparagraph
(2) below. . . ." The NYSE is concerned that this and other language in Section
(D) of Article Sixth does not allow for a settlement of the transaction if the
seller retains rights to the shares and has advised the Company that if such
language were to remain in the Company's Amended and Restated Certificate of
Incorporation, the Company would not be eligible to apply for listing on the
NYSE. In order to satisfy the NYSE, the proposed amendment clearly states that
"nothing contained in this Section (D) shall preclude the settlement of any
transaction entered into through the facilities of the New York Stock Exchange,
Inc. or any other stock exchange on which the Voting Class A Common Stock is
traded." The proposed amendment further states that "all rights with respect to
the Prohibited Shares shall be deemed to be held by an agent designated by the
Corporation from time to time (the "Agent") until such time as the Prohibited
Shares are resold as set forth in subparagraph (1) or subparagraph (2) below."
The NYSE has reviewed the proposed amendment to Section (D) of Article
Sixth and has stated that if such amendment is approved by the Company's
shareholders and certain other requirements are met (none of which require
shareholder approval), the Company is eligible to apply for listing on the NYSE.
THE BOARD RECOMMENDS A VOTE "FOR" THE AMENDMENT. IF A CHOICE IS SPECIFIED
ON THE PROXY BY A SHAREHOLDER, THE SHARES WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" APPROVAL OF THE AMENDMENT.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the Chief
Executive Officer and the four other executive officers of the Company and its
subsidiaries as to whom the total annual salary and bonus for the year ended
December 31, 1994, exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Name ----------------------------------------- -------------
and Other
Principal Annual Stock Options Other
Position Year Salary Bonus Compensation(1) (Shares) Compensation
- ---------------------------- ---- ------- -------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Bill Swisher 1994 $250,000 $126,250 $0 0 $ 3,732(2)
Chairman of the 1993 170,625 75,000 0 0 3,661
Board and Chief 1992 157,917 0 0 0 3,574
Executive Officer
William S. Locke 1994 $128,750 $ 29,110 $0 0 $ 3,476(2)
President of Load King 1993 125,000 0 0 0 3,457
Division 1992 116,551 0 0 50,000 3,420
Jim D. Holland 1994 $110,000 $ 38,885 $0 0 $ 1,836(2)
Senior Vice President, 1993 92,581 25,000 0 0 1,169
Treasurer and Chief Financial 1992 85,412 0 0 50,000 1,286
Officer
Murray Rowe 1994 $ 80,000 $ 33,560 $0 0 $ 400(3)
President of Bid-Well 1993 85,000 0 0 0 601
Division 1992 85,000 35,067 0 50,000 425
Lou Aguilera (4) 1994 $ 80,000 $ 25,681(5) $0 0 $16,132(6)
Executive Vice President - 1993 1,442 0 0 40,000 0
International Operations 1992 N/A N/A N/A N/A N/A
</TABLE>
(1) Excludes perquisites and other benefits, the aggregate amount of which does
not exceed the lesser of $50,000 or 10% of the total of such officer's annual
salary and bonus.
(2) Includes contributions made by the Company to the Tax Savings Retirement
Thrift Plan on behalf of the named officer and the dollar value of insurance
premiums paid by the Company with respect to term life insurance for the benefit
of the named officer.
(3) Contributions made by the Company to the Tax Savings Retirement Thrift Plan
on behalf of Mr. Rowe.
(4) Mr. Aguilera was not an executive officer during 1992 or the vast majority
of 1993. Mr. Aguilera was employed by the Company on December 27, 1993.
(5) Unlike the other executive officers named, the amount of Mr. Aguilera's
1994 bonus was not determined in accordance with the terms of the Company's
annual incentive compensation programs. Rather, Mr. Aguilera received a
commission on all international sales made by the Company in 1994.
(6) Includes contributions made by the Company to the Tax Savings Retirement
Thrift Plan on behalf of Mr. Aguilera and a one-time payment to reimburse Mr.
Aguilera for costs incurred in connection with his relocation to Oklahoma City.
7
<PAGE>
OPTIONS GRANTED
The following sets forth information concerning stock option grants during
the last fiscal year to the five executive officers named in the Summary
Compensation Table.
OPTION/SAR GRANTS IN 1994
<TABLE>
<CAPTION>
Potential
Individual Grants Realized Value at
- -------------------------------------------------------------------------- Assumed Annual
Percentage of Rates of Stock Price
Total Options/ Appreciation
Options/SARs SARs Granted Exercise for Option Term
Granted to Employees Price Expiration --------------------
Name (Shares) in 1994 (Per Share) Date 5% 10%
- ---- ------------ -------------- ---------- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Bill Swisher 0 0 N/A N/A N/A N/A
William S. Locke 0 0 N/A N/A N/A N/A
Jim D. Holland 0 0 N/A N/A N/A N/A
Murray Rowe 0 0 N/A N/A N/A N/A
Lou Aguilera 0 0 N/A N/A N/A N/A
</TABLE>
8
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to the five
executive officers named in the Summary Compensation Table concerning the number
and value of options outstanding at December 31, 1994.
AGGREGATED OPTION/SAR EXERCISES IN 1994 AND 12/31/94 OPTION/SAR VALUES(1)(2)
<TABLE>
<CAPTION>
Value of
Number of Unexercised Unexercised
Options/SARs at In-the-Money
December 31, 1994 Options/SARs at
Name (Shares) December 31, 1994(3)
---- --------------------- --------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Bill Swisher 0 0 $ 0 $ 0
William S. Locke 18,750 31,250 $60,937.50 $101,562.50
Jim D. Holland 18,750 31,250 $60,937.50 $101,562.50
Murray Rowe 18,750 31,250 $60,937.50 $101,562.50
Lou Aguilera 5,000 35,000 $ 0(4) $ 0(4)
</TABLE>
(1) No SARs are outstanding.
(2) None of the named executive officers exercised options during 1994.
(3) Based on the closing price of the Company's Class A Stock on the American
Stock Exchange on December 31, 1994.
(4) The exercise price per share of Mr. Aguilera's option exceeded the closing
price of the Company's Class A Stock on the American Stock Exchange on December
31, 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
David I. Anderson, Joseph J. Finn-Egan, Larry D. Hartzog, Jeffrey A. Lipkin
and Thomas P. Stafford are each members of the Compensation Committee of the
Company's Board of Directors. Mr. Finn-Egan and Mr. Lipkin are the general
partners of Recovery Equity Partners, L.P., which is the general partner of REI.
Mr. Finn-Egan, Mr. Lipkin and David Anderson have each been designated by REI to
serve on the Company's Board of Directors pursuant to the terms of the
Investment Agreement dated August 19, 1991, between REI and the Company.
On January 15, 1993, the Company entered into separate unsecured lending
transactions with REI and Larry D. Hartzog, whereby the Company borrowed
$1,477,500 from REI and an additional $492,000 from Mr. Hartzog. Both loans (i)
are payable in full on July 15, 1995, (ii) accrue interest at the rate of nine
percent (9%) per annum, and (iii) are subordinated to the Company's secured
line-of-credit with its primary lender. In connection with the unsecured
lending transactions, REI and Mr. Hartzog also purchased for $37,500 and
$12,500, respectively, warrants entitling them to acquire up to 450,000 shares
and 150,000 shares, respectively, of Class A Stock for $3.75 per share. The
closing price of the Class A Stock on the American Stock Exchange on January 14,
1993 was $3.50 per share. The warrants purchased by REI and Mr. Hartzog each
provide that one-half of the shares of Class A Stock subject thereto may be
purchased at any time prior to January 15, 1997. With respect to the remaining
shares of Class A Stock purchasable, the warrants vest pro-rata between
9
<PAGE>
August 15, 1993 and July 15, 1995; provided, however, upon its payment of all
obligations owing under the loan, the Company has the right to purchase from the
holder of the warrant its rights with respect to all unvested warrant shares at
a per share price of $0.0875. The warrants, which expire on January 15, 1997,
also provide that the number of shares of Class A Stock which may be purchased
and/or the exercise price at which the warrants may be exercised will be
adjusted upon the occurrence of certain events diluting REI's and Mr. Hartzog's
rights under the warrants. In addition, the exercise price of the warrants will
be adjusted to the lesser of (i) fifty percent (50%) of the then effective
exercise price and (ii) fifty percent (50%) of the current market price of the
Class A Stock upon the occurrence of certain events such as, among other things,
the Company's failure to repay the loan in accordance with its terms.
The firm of Office Technologies, Inc. ("OTI"), in which Thomas P. Stafford,
a director of the Company, is a director and shareholder, received approximately
$745,000 during 1994 for contract labor services rendered to the Company. Mr.
Stafford became a director of and acquired his ownership interest in OTI in May
1994. Less than $10,000 of this $745,000 was paid by the Company to OTI after
the time that Mr. Stafford acquired his ownership interest in OTI.
The Company leases certain equipment and real property from a partnership
(the "Partnership"), 80% of which is owned by Bill Swisher, Chairman of the
Board and Chief Executive Officer of the Company, and 20% of which is owned by
his father, George Swisher. Aggregate payments made on these leases during 1994
were $93,906.75.
From time to time during 1983 through 1985, Bill Swisher, Chairman of the
Board and Chief Executive Officer of the Company, loaned to CMI Energy
Conversion Systems, Inc. ("CMI Energy"), a wholly-owned subsidiary of the
Company, amounts aggregating $651,000. CMI Energy has repaid the principal
amount of the indebtedness. However, at December 31, 1994, interest in the
amount of approximately $260,000 was still owed to Mr. Swisher on the loans.
The law firm of Hartzog Conger & Cason, in which Larry D. Hartzog, a
director of the Company, is a director and stockholder, rendered legal services
to the Company during 1994.
10
<PAGE>
PERFORMANCE GRAPH
The following graph shows the cumulative total shareholder return on the
Company's Class A Stock/Common Stock over the last five fiscal years as compared
to the returns of the American Stock Exchange Market Value Index (the "Broad
Market") and a peer group (the "Peer Group") selected by the Company. This Peer
Group consists of Astec Industries, Inc., Caterpillar, Inc., Athey Products
Corp., Clark Equipment Company, Hein-Werner Corp., Portec, Inc., Rexworks, Inc.,
and Terex Corp. The graph assumes $100 was invested on December 31, 1989 in the
Company's Common Stock, the Broad Market and the Peer Group and assumes
reinvestment of dividends.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
CMI $ 100.00 $ 47.37 $ 89.47 $ 152.63 $ 289.47 $ 273.68
Peer Group $ 100.00 $ 80.70 $ 77.82 $ 93.70 $ 159.79 $ 195.80
Broad Market $ 100.00 $ 84.80 $ 104.45 $ 105.88 $ 125.79 $ 111.12
</TABLE>
11
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company (the
"Committee") establishes the general compensation policies of the Company,
establishes the compensation plans and specific compensation levels for the
Company's executive officers and administers the Company's stock option plan and
other management incentive plans. The Committee is composed of the five outside
directors of the Company.
COMPENSATION PHILOSOPHY AND OVERALL OBJECTIVES OF EXECUTIVE COMPENSATION PROGRAM
Under the supervision of the Committee, the Company has developed and
implemented compensation policies and plans which seek to enhance the
profitability of the Company and, thus, shareholder value by aligning closely
the financial interests of the Company's executive officers with those of its
shareholders. In furtherance of those goals, the Committee has established the
following fundamental objectives:
1) Provide a competitive compensation package that will enable the Company
to attract and retain key executives.
2) Integrate all compensation policies and plans with the Company's short-
term and long-term business objectives and strategies, and focus executive
behavior on the fulfillment of those objectives.
3) Provide compensation opportunities that are linked to performance of
the Company and increases in shareholder value.
COMPONENTS OF COMPENSATION PROGRAM
Each year, the Committee reviews the Company's compensation program to
ensure that pay levels and incentive opportunities are competitive and reflect
the actual performance of the Company. The Company's compensation program is
based on the following three components, each of which is intended to serve the
Company's overall compensation philosophy.
BASE SALARY: Base salary levels of the Company's executive officers are
largely determined through comparisons with companies in the same or similar
businesses of the Company and its subsidiaries. Actual salaries are based on
individual performance within a competitive salary range for each position that
is established through job evaluation and market comparisons.
ANNUAL INCENTIVE COMPENSATION: In early 1994, the Committee adopted the
Senior Management Incentive Bonus Plan (the "Plan"), which Plan covers all of
the named executive officers other than Mr. Aguilera and Mr. Rowe, as well as
other mid-level management personnel. Participants in the Plan are eligible to
earn cash bonuses based on (i) the overall performance of the Company and/or the
business unit of the Company in which the participant is primarily involved, and
(ii) in some cases, a subjective analysis of the participant's individual
performance. In assessing the overall performance of the Company (or a
particular business unit), the 1994 earnings before taxes ("EBT") of the Company
(or business unit) are measured against EBT targets established by the Committee
for the Company and each of its business units. In assessing the individual
performance of a participant, the Committee considers performance factors
particular to each participant, such as the participant's level of
responsibility within the Company and individual managerial accomplishments.
For the fiscal year ended December 31, 1994, aggregate bonuses of $243,027 were
paid under the Plan.
Certain employees of the Bid-Well Division of the Company, including Mr.
Rowe, were eligible in 1994 to participate in a separate management incentive
plan (the "Bid-Well Plan") for the division. Under the terms of the Bid-Well
Plan, the eligible employees could earn cash bonuses if the income of the
division
12
<PAGE>
exceeded certain predetermined levels. Like the Plan, the objective of the Bid-
Well Plan is to advance the interests of the Company and its shareholders by
providing incentives to the attainment of consistent steady growths in revenue
and income. In 1994, aggregate bonuses of $67,121 were paid under the Bid-Well
Plan. Of the executive officers named in the Summary Compensation Table, only
Mr. Rowe participated in the Bid-Well Plan.
Payments under both the Plan and the Bid-Well Plan were made after receipt
of annual audited financial statements for the Company and its subsidiaries.
STOCK OPTION PROGRAM: In 1992, the Company established the 1992 Incentive
Stock Option Plan (the "Stock Option Plan") and granted options to 30 employees
of the Company and its subsidiaries entitling the employees to purchase up to
475,000 aggregate shares of Class A Stock at a per share exercise price of
$3.25. In 1993, options were granted to one additional employee of the Company
and its subsidiaries entitling the employee to purchase up to 40,000 shares of
Class A Stock. The per share price of this option was $6.875. In 1994, no
options were granted to employees of the Company and its subsidiaries. The
purpose of the Stock Option Plan is to advance the interests of the Company and
its shareholders by providing long-term incentives to certain key employees of
the Company and its subsidiaries who contribute significantly to the long-term
performance and growth of the Company and its subsidiaries by enabling such
employees to acquire a proprietary interest in the Company. The Stock Option
Plan provides for both the grant of incentive stock options pursuant to (S) 422
of the Internal Revenue Code of 1986, as amended, and options which do not
qualify as incentive stock options, as well as alternative rights to receive the
appreciation on stock. Executive officers (excepting Bill Swisher) and other
employees of the Company and its subsidiaries are eligible to receive stock
options or stock appreciation rights from time to time giving them the right to
purchase shares of Class A Stock at a specified price in the future. 505,258
shares of Class A Stock remain available for grant under the terms of the Stock
Option Plan.
DISCUSSION OF 1994 COMPENSATION FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The Committee applied the executive compensation policies and programs
described above in determining the total compensation of Bill Swisher, the
Company's Chairman and Chief Executive Officer. As reflected in the Summary
Compensation Table on page 7, Mr. Swisher's base salary was increased in 1994 by
approximately $80,000. This increase in base salary was based primarily on a
subjective evaluation of the Company's performance in 1993 (and, in particular,
the increase in net income and revenues for 1993), Mr. Swisher's performance in
1993 and a review of market salary data.
Pursuant to the Plan described above, the Committee awarded Mr. Swisher a
cash bonus of $126,250. No options or other long-term incentives were granted
to Mr. Swisher in 1994. In adopting the Plan, the Committee determined that the
amount of any bonus paid to Mr. Swisher should not be based in whole or in part
upon a subjective analysis of Mr. Swisher's performance. Rather, the amount of
Mr. Swisher's bonus was determined by measuring the 1994 EBT of the Company
against the EBT target established by the Committee for the Company and its
subsidiaries. The Committee chose to tie Mr. Swisher's bonus to the Company's
EBT because of the direct correlation between increases in the profitability of
the Company and shareholder value.
13
<PAGE>
The EBT of the Company and its subsidiaries for 1994 was approximately
$13.1 million, which amount slightly exceeded the EBT target established by the
Committee.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
DAVID I. ANDERSON
JOSEPH J. FINN-EGAN
LARRY D. HARTZOG
JEFFREY A. LIPKIN
THOMAS P. STAFFORD
APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick as the Company's
independent auditors for the 1995 fiscal year.
KPMG Peat Marwick is the accounting firm which audited and reported on the
Company's financial statements for the last fiscal year. A representative of
KPMG Peat Marwick is expected to attend the Annual Meeting. The representative
will be afforded an opportunity to make a statement, if he desires to do so. It
is anticipated that the representative will also be available to answer
appropriate questions.
OTHER INFORMATION
COST OF PROXY SOLICITATION
The Company will bear the cost of soliciting proxies. In addition to
solicitation by mail, arrangements have been made with brokerage houses,
nominees, and other custodians and fiduciaries to send proxy material to their
principals and the Company will reimburse them for their expenses in doing so.
Proxies also may be solicited personally or by telephone or telegraph. All such
solicitations will be made by officers or other employees of the Company who
will not receive extra compensation therefor.
ADDITIONAL MATTERS
While the notice for the Annual Meeting calls for the transaction of any
other business as may be properly presented, management is not aware of any
business to be submitted at the Annual Meeting not referred to in the proxy. If
any further business is presented, the persons named in the proxy will act
according to their best judgment on behalf of the shareholders they represent.
SHAREHOLDERS' PROPOSALS
If a shareholder wishes to present a proposal at the 1996 Annual Meeting of
Shareholders such proposal must be received by the Company at its office in
Oklahoma City prior to December 5, 1995.
SEC FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR ITS LATEST FISCAL
YEAR IS AVAILABLE WITHOUT CHARGE TO ANY SHAREHOLDER OF THE COMPANY WHO REQUESTS
A COPY IN WRITING FROM MR. JIM D. HOLLAND, SENIOR VICE PRESIDENT, TREASURER AND
CHIEF FINANCIAL OFFICER, CMI CORPORATION, P.O. BOX 1985, OKLAHOMA CITY, OKLAHOMA
73101.
14
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who beneficially own more than 10% of
the Company's Class A Stock to file certain reports with the Securities and
Exchange Commission (the "SEC") and the American Stock Exchange concerning their
beneficial ownership of the Company's Class A Stock. The SEC regulations also
require that a copy of all such Section 16(a) forms must be furnished to the
Company by the executive officers, directors and 10% shareholders.
Based on a review of the copies of such forms and amendments thereto
received by the Company, or written representations that no filings were
required, the Company believes that during 1994 all Section 16(a) filing
requirements applicable to its executive officers, directors and 10%
shareholders were met with the exception of one report. Mr. Holland did not
timely file a report relating to his purchase of 20 shares of Class A Stock.
Bill Swisher also recently determined that he inadvertently failed to file a
Section 16(a) report relating to his acquisition in 1987 of 2,350 shares;
however, Mr. Swisher has since corrected this oversight.
VOTE REQUIRED FOR ELECTION OF DIRECTORS AND ADOPTION OF COMPANY PROPOSAL
Under the Company's Bylaws, the holders of one-third of the issued and
outstanding shares of Class A Stock, Common Stock and Preferred Stock, present
in person or represented by proxy at the Annual Meeting, will constitute a
quorum for all purposes unless otherwise provided by law or by the Company's
Amended and Restated Certificate of Incorporation or Bylaws. Where a quorum is
present, the affirmative vote of a majority of the stock represented at the
meeting is required for the election of the directors. The affirmative vote of a
majority of the outstanding shares of the Class A Stock, the Common Stock and
the Preferred Stock is required for the adoption of the amendment to Article
Sixth of the Company's Amended and Restated Certificate of Incorporation. For
purposes of determining whether the directors have been elected or the proposed
amendment has received the required vote, abstentions are the equivalent of a
negative vote.
By Order of the Board of Directors
Jim D. Holland, Senior Vice President
Oklahoma City, Oklahoma
April 5, 1995
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ACCOMPANYING POSTPAID ENVELOPE.
15
<PAGE>
EXHIBIT "A"
SECTION (D) OF ARTICLE SIXTH OF THE COMPANY'S AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION, AS PROPOSED TO BE AMENDED
-------------------------------------------------------
(D) Shares of Voting Common Stock and Voting Class A Common Stock shall be
identical in all respects and, subject to the prior rights, if any, of any
holders of Preferred Stock that may be outstanding from time to time, shall
share equally on a per share basis in any dividends declared and paid by the
Corporation or in the proceeds of any liquidation, dissolution or winding up of
the Corporation, except that no share of Voting Class A Common Stock shall be
transferable or assignable in any respect, either of record or beneficially,
unless such transfer or assignment is permitted under the following provisions:
(a) Until the earliest of January 1, 2006, such date as the
Corporation shall no longer have any unutilized federal income tax net
operating loss carryovers or capital loss carryovers, whether or not such
carryovers are currently in existence (the "Carryforwards") or such date
after which Section 382 of the Internal Revenue Code of 1986, as amended
(the "Code"), is repealed or so substantially modified such that, in the
opinion of counsel to the Corporation, the restrictions on transfer
described herein are no longer necessary to accomplish their intended
purpose: (1) any attempted sale, transfer, assignment or other disposition
(including the granting of any option (within the meaning of section 382 of
the Code and the Income Tax Regulations as now in effect or hereafter
promulgated pursuant thereto (the "Regulations")) (any such option being
referred to hereinafter as an "Option") or entering into of any agreement
for the sale, transfer or other disposition), whether voluntary or
involuntary, whether of record or beneficially and whether by operation of
law or otherwise (a "Transfer"), of any share or shares of the Voting Class
A Common Stock of the Corporation or of any Option to acquire such stock,
to any person or entity or group of persons or entities acting in concert
(a "Transferee") who or which owns or owned, directly, indirectly or by
application of the constructive ownership rules set forth in Sections 382
and 318 of the Code and the Regulations, or in any other manner
representing "ownership" under any circumstances for purposes of section
382 of the Code and the Regulations (collectively, "Owns" or "Owned"), at
any time during the 3-year period ending on the day of the Transfer, an
aggregate number of shares of the Corporation's stock (taking into account
for this purpose all interests in the Corporation that are treated as stock
for purposes of Section 382(g)(1) of the Code and no other interests in the
Corporation (any interest that is so treated being referred to hereinafter
as "Stock")) having a fair market value equal to or greater than 4.75
percent of the fair market value of the Corporation's then outstanding
Stock shall be void ab initio insofar as it purports to transfer ownership
to such Transferee of any shares of Voting Class A Common Stock or any
Option to acquire Voting Class A Common Stock and (2) any attempted
Transfer of any share or shares of the Voting Class A Common Stock of the
Corporation or of any Option to acquire Voting Class A Common Stock to any
Transferee not described in clause (1) hereof who or which would Own, as a
result
<PAGE>
of the Transfer or as a result of a subsequent Transfer of any share or
shares of the Corporation's Stock or of any Option to acquire the
Corporation's Stock, an aggregate number of shares of the Corporation's
Stock, having a fair market value equal to or greater than 4.75 percent of
the aggregate fair market value of all of the Corporation's Stock then
outstanding, shall, as to the number of shares representing such excess
over 4.75 percent, be void ab initio insofar as it purports to transfer
ownership to such Transferee of any shares of Voting Class A Common Stock
or any Option to acquire Voting Class A Common Stock; provided, however,
that nothing contained in this Section (D) shall preclude the settlement
of any transaction entered into through the facilities of the New York
Stock Exchange, Inc. or any other stock exchange on which the Voting
Class A Common Stock is traded.
(b) The restrictions contained in paragraph (a) of this Section (D) of
this Article Sixth have been included herein for the purpose of reducing
the risk of occurrence of an "ownership change" within the meaning of
Section 382(g) of the Code and the Regulations that would result in the
disallowance or limitation of the Corporation's utilization of the
Carryforwards and to maintain the tax advantage of the Corporation
associated with the Carryforwards.
(c) Neither clause (1) nor clause (2) of paragraph (a) of this Section
(D) of this Article Sixth shall restrict any Transfer of Voting Class A
Common Stock of the Corporation if (1) the prior written approval of the
Board of Directors of the Corporation (based on a majority vote of the
Board of Directors) shall have been obtained with respect to such Transfer
and (2) if so requested by the Board of Directors, counsel to the
Corporation shall have delivered its opinion that such Transfer would not
result in an "ownership change" within the meaning of Section 382(g) of the
Code and the Regulations that would result in the elimination or limitation
of the Corporation's utilization of the Carryforwards. The Board of
Directors shall have the authority, in its sole discretion, to adopt
procedures for the orderly and effective administration and implementation
of this Section (D) and, in deciding whether to approve any proposed
Transfer of Voting Class A Common Stock of the Corporation, the Corporation
acting through any officer may request all relevant information, as well as
an opinion of counsel in form and substance reasonably satisfactory to the
Board of Directors. No employee or agent of the Corporation shall be
permitted to record any attempted or purported Transfer of Voting Class A
Common Stock of the Corporation made in violation of this Article Sixth and
no Transferee of Voting Class A Common Stock of the Corporation effected in
violation of this Article Sixth shall be deemed to have acquired ownership
of Voting Class A Common Stock for any purpose. Such intended Transferee
shall not be entitled to any rights as a shareholder of the Corporation
with respect to such Voting Class A Common Stock including, but not limited
to, the right to vote such Voting Class A Common Stock or to receive any
distributions in respect thereof, whether as dividends or in liquidation.
2
<PAGE>
(d) If the procedures adopted by the Board of Directors so require,
the Corporation's transfer agent shall not issue any certificates
transferring, assigning or disposing of or purporting to transfer, assign
or otherwise dispose of legal ownership of any shares of Voting Class A
Common Stock unless the transfer agent receives from the proposed
Transferee, in addition to any other information requested by it, a
certificate signed under penalty of perjury attesting to the fact that the
Transferee does not, and will not become as a result of the proposed
Transfer, assignment or other disposition, Own an aggregate number of
shares of the Corporation's outstanding Stock having a fair market value
equal to or greater than 4.75 percent of the aggregate fair market value of
all of the Corporation's outstanding Stock. If at any time the
Corporation's transfer agent receives a request to make a change in record
ownership of shares of Voting Class A Common Stock of the Corporation
which, if effected, would appear to the transfer agent on the basis of
information in its possession to constitute a violation of this Article
Sixth, then, prior to registering such change in ownership on the books of
the Corporation, the transfer agent shall notify the Corporation. If the
Board of Directors or an officer of the Corporation designated by the Board
of Directors determines that the proposed change in ownership would violate
this Article Sixth, then the Corporation shall so advise the transfer agent
and the transfer agent shall not make such change in ownership on the books
of the Corporation.
(e) Unless approval of the Board of Directors is obtained as provided
in Paragraph (c) above, any attempted Transfer of shares of Voting Class A
Common Stock of the Corporation or any Option to acquire shares of Voting
Class A Common Stock of the Corporation in excess of the shares that could
be Transferred to the Transferee without restriction under paragraph (a)
above shall not be effective to Transfer ownership of such excess shares or
Options (the "Prohibited Shares") to the purported acquiror thereof (the
"Purported Acquiror"), who shall not be entitled to any rights as a
shareholder of the Corporation with respect to the Prohibited Shares
(including, without limitation, the right to vote or to receive dividends
with respect thereto). All rights with respect to the Prohibited Shares
shall be deemed to be held by an agent designated by the Corporation from
time to time (the "Agent") until such time as the Prohibited Shares are
resold as set forth in subparagraph (1) or subparagraph (2) below. The
Purported Acquiror, by acquiring ownership of shares of Voting Class A
Common Stock of the Corporation that are not Prohibited Shares, shall be
deemed to have consented to all of the provisions of this Section (D) and
to have agreed to act as provided in the following subparagraph (1).
(1) Upon demand by the Corporation, the Purported Acquiror shall
transfer any certificate, or other evidence of purported ownership of
the Prohibited Shares within the Purported Acquiror's possession or
control, along with any dividends or other distributions paid by the
Corporation with respect to the Prohibited Shares that were received
by the Purported Acquiror (the "Prohibited Distributions"), to the
Agent. If the Purported
3
<PAGE>
Acquiror has sold the Prohibited Shares to an unrelated party in any
arm's-length transaction after purportedly acquiring them, the
Purported Acquiror shall be deemed to have sold the Prohibited Shares
on behalf of the Agent and, in lieu of transferring the Prohibited
Shares and Prohibited Distributions to the Agent, shall transfer to
the Agent the Prohibited Distributions and the proceeds of such sale
(the "Resale Proceeds") except to the extent that the Agent grants
written permission to the Purported Acquiror to retain a portion of
the Resale Proceeds not exceeding the amount that would have been
payable by the Agent to the Purported Acquiror pursuant to the
following subparagraph (2) if the Prohibited Shares had been sold by
the Agent rather than by the Purported Acquiror. Any purported
transfer of the Prohibited Shares by the Purported Acquiror other than
a transfer described in one of the two preceding sentences shall not
be effective to transfer any ownership of the Prohibited Shares.
(2) The Agent shall sell in an arm's-length transaction (through
the stock exchange, if any, on which the Voting Class A Common Stock
is traded, if possible) any Prohibited Shares transferred to the Agent
by the Purported Acquiror, and the proceeds of such sale (the "Sales
Proceeds"), or the Resale Proceeds, if applicable, and any Prohibited
Distributions shall be distributed as follows: (i) first, to the
Agent and/or the Corporation for any costs incurred in respect of
their efforts to enforce the provisions of this Section (D) of this
Article Sixth, (ii) second, with respect to the Sales Proceeds (or
Resale Proceeds) only, to the Purported Acquiror, in an amount up to
the purported purchase price paid or value of consideration
surrendered by the Purported Acquiror for the Prohibited Shares (or,
where the purported Transfer of the Prohibited Shares to the Purported
Acquiror was by gift, inheritance, or any similar purported Transfer,
the fair market value of the Prohibited Shares at the time of such
purported Transfer), and (iii) the remainder, if any, to any entity
designated by the Corporation that is described in Section 501(c)(3)
of the Code. The recourse of any Purported Acquiror in respect of any
Prohibited Shares shall be limited to the amount specified in clause
(ii) of the preceding sentence. With respect to the application of
clause (i) of the second preceding sentence, any Prohibited
Distributions will first be applied to reimburse the Agent and/or the
Corporation for any costs incurred in respect of their efforts to
enforce the provisions of this Section (D) of this Article Sixth prior
to application of the Sales Proceeds or the Resale Proceeds, as the
case may be. Except as otherwise provided herein, in no event shall
the proceeds of any sale of Prohibited Shares pursuant to this Article
Sixth inure to the benefit of the Corporation or the Agent.
(3) Within thirty (30) business days of learning of a purported
Transfer of Prohibited Shares to a Purported Acquiror, the Corporation
through its Secretary shall demand that the Purported Acquiror
surrender
4
<PAGE>
to the Agent the certificates representing the Prohibited Shares, or
any Resale Proceeds, and any Prohibited Distributions, and if such
surrender is not made by the Purported Acquiror within thirty (30)
business days from the date of such demand, the Corporation shall
institute legal proceedings to compel such transfer; provided,
however, that nothing in this paragraph shall preclude the Corporation
in its discretion from immediately bringing legal proceedings without
a prior demand, and also provided that failure of the Corporation to
act within the time periods set out in this paragraph shall not
constitute a waiver of any right of the Corporation to compel any
transfer required by this paragraph.
(4) Upon a determination by the Board of Directors that there has
been or is threatened a purported Transfer of Prohibited Shares to a
Purported Acquiror, the Board of Directors may take such action in
addition to any action required by the preceding subparagraph as it
deems advisable to give effect to the provisions of this Section (D),
including, without limitation, refusing to give effect on the books of
the Corporation to such purported Transfer of the Prohibited Shares or
instituting proceedings to enjoin such purported Transfer of the
Prohibited Shares.
(f) Until the earliest of January 1, 2006, such date as the
Corporation shall no longer have any unutilized Carryforwards or such date
after which Section 382 of the Code is repealed or so substantially
modified such that, in the opinion of counsel to the Corporation, the
restrictions on transfer described in this Section (D) of this Article
Sixth are no longer necessary to accomplish their intended purpose, all
certificates representing shares of Voting Class A Common Stock shall
conspicuously bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFERS SET FORTH IN ARTICLE SIXTH OF THE
CORPORATION'S CERTIFICATE OF INCORPORATION, THE TEXT OF WHICH IS
SUMMARIZED ON THE REVERSE SIDE OF THIS CERTIFICATE. ANY ATTEMPT TO
ACQUIRE VOTING CLASS A COMMON STOCK OF THE CORPORATION IN VIOLATION OF
SUCH RESTRICTIONS SHALL BE NULL AND VOID AND MAY RESULT IN FINANCIAL
LOSS TO THE PERSON OR ENTITY ATTEMPTING SUCH ACQUISITION."
5
<PAGE>
CMI CORPORATION
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thane Swisher and Jim D. Holland, or
either of them, as proxies, each with full power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated below,
all of the shares of Voting Class A Common Stock, Voting Common Stock or
Preferred Stock of CMI Corporation held of record by the undersigned on
March 8, 1995, at the Annual Meeting of shareholders to be held on May 5,
1995 or any adjournment thereof.
1. Election of Directors.
[_] For all nominees listed below (except as marked to the contrary
below).
[_] Withhold authority to vote for all nominees listed below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Larry D. Hartzog
Thomas P. Stafford
2. Amendment of Article Sixth of the Amended and Restated Certificate of
Incorporation.
[_] For [_] Against [_] Abstain
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED ABOVE AND FOR THE
AMENDMENT OF ARTICLE SIXTH OF THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO VOTE THEREOF.
- -------------------------------------------------------------------------------
The undersigned hereby acknowledges receipt of the Proxy Statement and
hereby expressly revokes any and all proxies heretofore given or executed
by him with respect to the shares represented by the proxy.
Please sign exactly as name appears on stock certificate. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated this_____day of___________, 1995.
_____________________________
Signature
_____________________________
Signature
(Please sign, date and return promptly using the enclosed envelope.)
