<PAGE>
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CMI Corporation
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CMI Corporation
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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(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:
_______________________________________________________________________
[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:________________________________________________________
<PAGE>
CMI CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 3, 1996
To the Shareholders of
CMI Corporation:
The 1996 Annual Meeting of Shareholders of CMI Corporation (the "Company")
will be held on May 3, 1996 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. The approval of certain amendments to Article IV of the Company's
Bylaws; and
3. Such other matters as may properly come before the meeting or any
adjournment thereof.
The close of business on March 15, 1996 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
Thane Swisher, Vice President
Oklahoma City, Oklahoma
March 29, 1996
<PAGE>
CMI CORPORATION
PROXY STATEMENT
May 3, 1996
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 1996 Annual Meeting of Shareholders of the Company on May 3, 1996 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,
1996 unless otherwise stated. The approximate date on which the Proxy Statement
and enclosed form of proxy have been mailed to shareholders is March 29, 1996.
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 15, 1996 (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 20,381,383 shares of Class A Stock,
621 shares of Common Stock and 3,450 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.
1
<PAGE>
<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) 34.16%
901 Mariner's Island Boulevard
Suite 465
San Mateo, California 94404
Recovery Equity Partners, L.P. 7,116,667 (3) 34.16%
901 Mariner's Island Boulevard
Suite 465
San Mateo, California 94404
Joseph J. Finn-Egan 7,116,667 (3) 34.16%
901 Mariner's Island Boulevard
Suite 465
San Mateo, California 94404
Jeffrey A. Lipkin 7,116,667 (3) 34.16%
901 Mariner's Island Boulevard
Suite 465
San Mateo, California 94404
Bill Swisher 3,444,245 (4) 16.87%
I-40 and Morgan Road
Oklahoma City, Oklahoma
Yargo, Inc. 3,450 (5) 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) 34.16%
Larry D. Hartzog 1998 172,700 (6) (9)
Jeffrey A. Lipkin 1997 7,116,667 (3) 34.16%
Thomas P. Stafford 1998 10,000 (7) (9)
Bill Swisher 1996 3,444,245 (4) 16.87%
All directors and
officers as a group 10,830,982 (8) 51.31%
(10 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
2
<PAGE>
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, 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 2,701,341 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; 543,065 shares held individually by Mr.
Swisher's children; 842 shares held individually by a grandchild of Mr. Swisher;
91,390 shares held by trusts for the benefit of Mr. Swisher's grandchildren;
30,000 shares that may be acquired by two of Mr. Swisher's children upon the
exercise of options which are presently exercisable; 1,338,852 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
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<PAGE>
2,701,341 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) Includes only Preferred Stock.
(6) 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.
(7) 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.
(8) 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 option and warrants granted by the Company to them. This amount also
includes 117,000 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.
(9) 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 David I. Anderson and Bill Swisher 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. Anderson and Swisher, 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 DAVID I. ANDERSON AND BILL
SWISHER. 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
4
<PAGE>
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 58) 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. Pursuant to the terms of the Investment
Agreement, REI is currently entitled to designate three persons for election to
the Company's Board of Directors. Mr. Anderson was designated by REI pursuant
to the terms of the Investment Agreement for election to the Company's Board of
Directors.
Mr. Finn-Egan (age 62) 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 was
designated by REI pursuant to the terms of the Investment Agreement for election
to the Company's Board of Directors.
Mr. Hartzog (age 61) 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.
Mr. Lipkin (age 49) 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 was designated by REI pursuant to the terms of the
Investment Agreement for election to the Company's Board of Directors.
Mr. Stafford (age 65), 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
5
<PAGE>
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 65) 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 and Stafford. The Audit Committee held
three meetings during 1995. 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 three times during
1995. 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 1995, 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 1995. 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.
6
<PAGE>
AMENDMENTS TO ARTICLE IV OF THE COMPANY'S BYLAWS
GENERAL
In May 1995, the Company's Class A Stock was listed on the New York Stock
Exchange (the "NYSE"). In connection therewith, the Company agreed to appoint
an additional "outside director," as that term is defined by the rules of the
NYSE, within one year after the effective date of its listing. In order to
satisfy this obligation and to maintain REI's proportionate representation on
the Company's Board, the directors have determined that the size of the Board
should be increased from six members to eight members. One of the two new
directors will be nominated by REI and the other will be selected to satisfy the
NYSE's requirements for an "outside director." Management anticipates that this
expansion of the Board will take place shortly after the Annual Meeting.
Outside legal counsel has advised the Company that the existing directors
are authorized to (i) increase the size of the Board from six to eight members,
and (ii) fill the two newly created directorships. However, after reviewing the
bylaw provisions involved, the Company's outside legal counsel has recommended
that Sections 1 and 3 of Article IV of the Company's Bylaws be amended to
clarify the matters addressed therein. Based upon this recommendation, and as
required by Section 6 of Article IV, the shareholders are being asked to approve
the amendments to Article IV of the Company's Bylaws described below.
SECTION 1 OF ARTICLE IV
The text of Section 1 of Article IV of the Company's Bylaws, as proposed to
be amended, is as follows:
"The business and affairs of this Corporation shall be managed by or
under the direction of its Board of Directors. The exact number of
directors shall be fixed from time to time by the Board of Directors
pursuant to a resolution adopted by a majority of the entire Board of
Directors; provided, however, that the number of directors which shall
constitute the entire Board shall not be less than three nor more than
nine. The directors shall be divided into three classes, as nearly
equal in number as possible, with the term of office of one class
expiring each year. At each annual meeting of shareholders, the
successors to the class of directors whose terms expire at that time
shall be elected to hold office for a term of three years.
The primary purpose of the changes to Section 1 is to clarify that (i) the
exact number of directors constituting the entire Board is to be fixed from time
to time by the then existing directors, and (ii) the classes of directors do not
have to be of identical size. However, each class will be as nearly equal in
number as possible.
7
<PAGE>
SECTION 3 OF ARTICLE IV
The text of Section 3 of Article IV of the Company's Bylaws, as proposed to
be amended, is as follows:
"Newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement,
disqualification, removal from office or any other cause may be filled
by a majority vote of the remaining directors, though less than a
quorum. Any director or directors so chosen shall hold office until
the next election of the class for which such director or directors
shall have been chosen, and until his or their successors shall have
been duly elected."
The primary purpose of the changes to Section 3 is to clarify that, as
contemplated by the Act, newly created directorships and vacancies in the Board
resulting for any reason may be filled by a majority vote of the remaining
directors, even though the remaining directors do not constitute a quorum.
REGUIRED VOTE
Section 6 of Article IV of the Company's Bylaws requires that any amendment
to Article IV must be approved by the holders of at least 75% of the outstanding
shares of Class A Stock, Common Stock and Preferred Stock, voting together as a
single class. Accordingly, if a shareholder abstains from voting certain shares
on this proposal, it will have the effect of a negative vote. Officers and
directors of the Company controlling approximately 47% of the shares of Class A
Stock, Common Stock and Preferred Stock entitled to vote at the Annual Meeting
have indicated that they intend to vote in favor of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PROPOSED
AMENDMENTS TO ARTICLE IV OF THE COMPANY'S BYLAWS.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the Chief
Executive Officer and the three other executive officers of the Company and its
subsidiaries as to whom the total annual salary and bonus for the year ended
December 31, 1995, exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------------------------ -------------
Name
and Other All
Principal Annual Stock Options Other
Position Year Salary Bonus Compensation(1) (Shares) Compensation
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bill Swisher 1995 $275,000 $0 $0 0 $5,964(2)
Chairman of the 1994 250,000 126,250 0 0 3,732
Board and Chief 1993 170,625 75,000 0 0 3,661
Executive Officer
Jim D. Holland 1995 $125,000 $17,500 $0 50,000 $1,978(2)
Sr. Vice President, 1994 110,000 38,885 0 0 1,836
Treasurer & Chief 1993 92,581 25,000 0 0 1,169
Financial Officer
Ralph P. Cordes(3) 1995 $125,000 $17,500 $0 50,000 $20,580(4)
Sr. Vice President 1994 N/A N/A N/A N/A N/A
1993 N/A N/A N/A N/A N/A
Murray Rowe 1995 $ 70,833 $44,005 $0 0 $522(5)
President of 1994 80,000 33,560 0 0 400
Bid-Well Division 1993 85,000 0 0 0 601
</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) Mr. Cordes was employed by the Company effective as of January 1, 1995.
(4) Includes contributions made by the Company to the Tax Savings Retirement
Thrift Plan on behalf of Mr. Cordes, the dollar value of insurance premiums
paid by the Company with respect to term life insurance for the benefit of Mr.
Cordes, and a one-time payment to reimburse Mr. Cordes for costs incurred in
connection with his relocation to Oklahoma City.
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<PAGE>
(5) Contributions made by the Company to the Tax Savings Retirement Thrift
Plan on behalf of Mr. Rowe.
OPTIONS GRANTED
The following table sets forth information concerning stock options
granted during the last fiscal year to the four executive officers named in the
Summary Compensation Table.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN 1995(1)
Potential
Realized Value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term
- -------------------------------------------------------- -----------------------
Percentage of
Total Options
Options Granted to Exercise
Granted Employees Price Expiration
Name (Shares) in 1995 (Per Share) Date 5% 10%
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bill Swisher 0 0 N/A N/A N/A N/A
Jim D. Holland 50,000 50 $6.75 02/17/00 $93,245.01 $206,047.13
Ralph P. Cordes 50,000 50 $6.125 01/01/00 $84,611.21 $186,968.69
Murray Rowe 0 0 N/A N/A N/A N/A
</TABLE>
(1) No stock appreciation rights (SARs) were granted in 1995.
OPTION EXERCISES AND FISCAL YEAR-END Values
The following table sets forth information with respect to the four
executive officers named in the Summary Compensation Table concerning the number
and value of options outstanding at December 31, 1995.
AGGREGATED OPTION/SAR EXERCISES IN 1995 AND 12/31/95 OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
Value of
Number of Unexercised Unexercised
Options at In-the-Money
December 31, 1995 Options at
(Shares) December 31,1995(2)
--------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bill Swisher 0 0 $0 $0
Jim D. Holland 31,250 68,750 $58,593.75 $35,156.25(3)
Ralph P. Cordes 0 50,000 $0(3) $0(3)
Murray Rowe 31,250 18,750 $58,593.75 $35,156.25
</TABLE>
10
<PAGE>
(1) No SARs are outstanding.
(2) Based on the closing price of the Company's Class A Stock on the New York
Stock Exchange on the final trading day of 1995.
(3) The exercise price per share of the 50,000 share option granted to Mr.
Holland on February 17, 1995 and the exercise price per share of the 50,000
share option granted to Mr. Cordes on January 1, 1995 each exceeded the closing
price of the Company's Class A Stock on the New York Stock Exchange on the final
trading day of 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPARTION
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 Mr. Anderson have each been designated by REI for
election to 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,
which accrued interest at the rate of nine percent (9%) per annum and were
subordinated to the Company's secured line-of-credit with its primary lender,
were paid in full on or about July 15, 1995. 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, which expire on January 15, 1997,
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.
The Company leases certain 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. No payments were made on this lease during 1995.
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
11
<PAGE>
amount of the indebtedness. However, at December 31, 1995, 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 1995. Total legal fees paid by the Company to Hartzog
Conger & Cason during 1995 was $323,927.15.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
On or about November 1, 1995, the Company entered into employment
agreements with Jim D. Holland and Ralph P. Cordes. These employment agreements
each provide for the employment of the applicable employee through October 31,
1998, as senior executives of the Company, at a base salary of $125,000 per
year. Both Mr. Holland and Mr. Cordes are also eligible to participate in such
programs for incentive and/or bonus compensation as may be approved by the Board
of Directors from time to time for the Company's senior executive officers.
Each employment agreement also provides compensation and/or termination
benefits to the employee in the event of a change in control of the Company
during the term of the employment agreement. The purpose of these provisions is
to encourage the executives to carry out their duties in the event of a possible
change in control. Under the terms of the employment agreements, a "change in
control" is deemed to have occurred if (i) there shall be consummated (a) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
capital stock are converted into cash, securities or other property (other than
a merger in which the holders of the Company's capital stock immediately prior
to the merger have the same proportionate ownership of capital stock of the
surviving corporation immediately after the merger), or (b) any sale, lease,
exchange or other transfer (whether in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company, or
(ii) any person (as such term is defined in Section 13(d) and Section 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall
become the beneficial owner (within the meaning of Rule 13d-3 of the Exchange
Act) of more than 50% of the Company's then outstanding capital stock, or (iii)
there occurs any change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of the Exchange Act.
The total change in control compensation (the "Change in Control Amount")
payable to Mr. Holland and Mr. Cordes under their employment agreements is
$600,000 and $300,000, respectively. These amounts will be payable to the
employees in installments as follows: (i) upon the effective date of any change
in control, the employee will receive an amount equal to the total Change in
Control Amount times a fraction, the numerator of which is the number of days
that have elapsed during the term of his employment agreement and the
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denominator of which is 1,095; and (ii) the balance of the Change in Control
Amount will be paid in prorated installments as of the last day of each calendar
quarter remaining in the term of his employment agreement.
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 New York Stock Exchange Market Value Index (the "NYSE
Index"), the American Stock Exchange Market Value Index (the "AMEX Index") 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, 1990 in the Company's
Common Stock, the NYSE Index, the AMEX Index and the Peer Group and assumes
reinvestment of dividends. Because the Class A Stock began trading on the NYSE
in May 1995, the Company has included the returns of the NYSE Index in the
graph.
Comparison of 5 Year Cumulative Total Return
of Company, Peer Group, NYSE Index and AMEX Index
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[CAPTION]
<TABLE>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CMI $100.00 $188.89 $322.22 $611.11 $577.78 $455.56
Peer Group $100.00 $96.88 $119.80 $197.65 $245.54 $265.22
NYSE Index $100.00 $129.41 $135.50 $153.85 $150.86 $195.61
AMEX Index $100.00 $123.17 $124.86 $148.34 $131.04 $168.90
</TABLE>
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
nonemployee 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
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individual performance within a competitive salary range for each position that
is established through job evaluation and market comparisons.
ANNUAL INCENTIVE COMPENSATION: In early 1995, the Committee adopted the
1995 Senior Management Incentive Bonus Plan (the "Plan"), which Plan covers all
of the named executive officers other than 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
all cases other than Mr. Bill Swisher, a subjective analysis of the
participant's individual performance. In assessing the overall performance of
the Company (or a particular business unit), the 1995 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, 1995, aggregate bonuses
of $61,766 were paid under the Plan.
Certain employees of the Bid-Well Division of the Company, including Mr.
Rowe, were eligible in 1995 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 EBT of the division
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. For the fiscal year ended December 31, 1995, aggregate bonuses of
$83,377 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"). 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 Section 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 from time to time stock
options giving them the right to purchase shares of Class A Stock at a price not
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less than the fair market value of the Class A Stock on the date the option is
granted. Concurrently with or subsequent to the grant of any stock option, an
employee may also receive a related stock appreciation right permitting the
employee to be paid the appreciation on the stock option in shares of Class A
Stock in lieu of exercising the option. These options and rights have value for
the employees only if the price of the Class A Stock appreciates from the date
the option was granted.
DISCUSSION OF 1995 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 9, Mr. Swisher's base salary was increased in 1995
by $25,000. This increase in base salary was based primarily on a subjective
evaluation of the Company's performance over the past several years, Mr.
Swisher's performance in 1994 and a review of market salary data. No options or
other long-term incentives were granted to Mr. Swisher in 1995.
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 Plan provided that the
amount of any bonus to be paid to Mr. Swisher would be determined solely by
measuring the 1995 EBT of the Company against the EBT targets 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. As a
result, although the Company's 1995 revenues rose slightly from 1994 revenues,
under the terms of the Plan, Mr. Swisher was not entitled to receive a cash
bonus for 1995.
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 LLP as the Company's
independent auditors for the 1996 fiscal year. KPMG Peat Marwick LLP 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 LLP 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.
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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 1997 Annual Meeting of
Shareholders such proposal must be received by the Company at its office in
Oklahoma City prior to November 29, 1996.
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.
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 New York 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 1995, all Section 16(a) filing
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requirements applicable to its executive officers, directors and 10%
shareholders were met. However, Jim D. Holland and Thane Swisher each recently
determined that he inadvertently failed to file a Section 16(a) report relating
to a stock option granted to him in August 1992. Mr. Holland and Mr. Swisher
have since reported their acquisitions of these stock options.
VOTES REQUIRED
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
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 seventy-
five percent (75%) of the outstanding shares of Class A Stock, Common Stock and
Preferred Stock, voting together as a class, is required for the adoption of the
amendments to Article IV of the Company's Bylaws. For purposes of determining
whether the directors have been elected or the proposal to amend Article IV of
the Bylaws has received the required vote, abstentions are the equivalent of a
negative vote. Appraisal rights are not available to the shareholders of the
Company with respect to either of the items of business to be considered at the
Annual Meeting.
By Order of the Board of Directors
Thane Swisher, Vice President
Oklahoma City, Oklahoma
March 29, 1996
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ACCOMPANYING POSTPAID ENVELOPE.
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PROXY
CMI CORPORATION
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 1996
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 15, 1996, at the Annual
Meeting of Shareholders to be held on May 3, 1996 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.)
David I. Anderson
Bill Swisher
2. Amendments to Article IV of the Bylaws.
---------------------------------------
[ ] 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 IV OF THE BYLAWS. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO
VOTE THEREOF.
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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 _____________________, 1996.
____________________________________
Signature
____________________________________
Signature
(Please sign, date and return promptly using the enclosed envelope.)
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