<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
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
CMI Corporation
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(Name of Registrant as Specified In Its Charter)
----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
-------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
CMI CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 2, 1997
To the Shareholders of
CMI Corporation:
The 1997 Annual Meeting of Shareholders of CMI Corporation (the "Company")
will be held on May 2, 1997 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 three directors for a term of three years each; and
2. Such other matters as may properly come before the meeting or any
adjournment thereof.
The close of business on March 18, 1997 has been fixed as the record date
for the determination of the holders of Voting Class A Common Stock and Voting
Common 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
/s/ JIM D. HOLLAND
--------------------------------------------------
Jim D. Holland, Senior Vice President
Oklahoma City, Oklahoma
March 28, 1997
<PAGE>
CMI CORPORATION
PROXY STATEMENT
---------------
May 2, 1997
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 1997 Annual Meeting of Shareholders of the Company on May 2, 1997 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,
1997 unless otherwise stated. The approximate date on which the Proxy Statement
and enclosed form of proxy have been mailed to shareholders is March 28, 1997.
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 18, 1997 (the "Record
Date") of shares of Voting Class A Common Stock, $0.10 par value ("Class A
Stock"), and Voting Common Stock, $0.10 par value ("Common Stock"), are entitled
to notice of and to vote on all matters presented at the Annual Meeting. As of
the Record Date there were 21,072,383 shares of Class A Stock and 621 shares of
Common Stock issued and outstanding. Each share of Class A Stock and Common
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 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, (ii) each of the Company's directors, and (iii) all directors and
officers of the Company as a group.
Number of Shares
Name and Address and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Class A Stock (2)
- --------------------------------- ------------------------ -----------------
Recovery Equity Investors, L.P. 7,116,667 (3) 33.77%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
Recovery Equity Partners, L.P. 7,116,667 (3) 33.77%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
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<PAGE>
Joseph J. Finn-Egan 7,116,667 (3) 33.77%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
Jeffrey A. Lipkin 7,116,667 (3) 33.77%
901 Mariner's Island Boulevard
Suite 555
San Mateo, California 94404
Bill Swisher 2,254,667 (4) 10.70%
I-40 and Morgan Road
Oklahoma City, Oklahoma
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>
Kenneth J. Barker 1999 0 0
Joseph J. Finn-Egan 1997 7,116,667 (3) 33.77%
Larry D. Hartzog 1998 172,700 (5) (8)
Ronald A. Kahn 1998 0 0
Jeffrey A. Lipkin 1997 7,116,667 (3) 33.77%
J. Larry Nichols 1997 0 0
Thomas P. Stafford 1998 10,000 (6) (8)
Bill Swisher 1999 2,254,667 (4) 10.70%
All directors and
officers as a group
(14 individuals including
the above) 10,372,141 (7) 48.82%
</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
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 32 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.
-2-
<PAGE>
(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 does not, however, include 2,698,162 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 1,754,218 shares held by a revocable trust of which Mr. Swisher is
the sole trustee and beneficiary during his lifetime; 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; and 449
shares held by a trust for the benefit of Mr. Swisher's father of which Mr.
Swisher is a co-trustee. Mr. Swisher disclaims beneficial ownership of all
shares held by or for the benefit of his father. Pursuant to the terms of the
Shareholders Agreement, Mr. Swisher is required to vote or grant to REI a proxy
to vote all of his shares of 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 22,700 shares held by a trust of which Mr. Hartzog is the trustee
and beneficiary.
(6) Includes 10,000 shares 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.
(7) Includes 10,000 shares which Mr. Stafford has the right to acquire pursuant
to the terms of the stock option granted by the Company to him. This amount
also includes 162,180 shares which may be acquired upon the exercise of options
which are presently exercisable by executive officers, and 489,000 shares held
by various trusts of which Thane Swisher, the Vice President and Secretary of
the Company, is a trustee or a co-trustee.
(8) 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 eight. For election purposes, directors are divided into two groups of three
directors and a third group of two directors. Each group holds office for three
years. The Bylaws provide that one group of the Board shall be elected at each
Annual Meeting.
At the Annual Meeting, management will present as nominees and recommend to
the shareholders that Joseph J. Finn-Egan, Jeffrey A. Lipkin and J. Larry
Nichols 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. Finn-Egan,
Lipkin and Nichols, 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 and Common 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 JOSEPH J. FINN-EGAN, JEFFREY A. LIPKIN AND J. LARRY
NICHOLS. 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
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<PAGE>
be voted for the election of all nominees. Should any 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. Barker (age 55) has been a director of the Company since January 10,
1997. Since July 1994, Mr. Barker has been President of Custom Products
Corporation, a manufacturer of precision metal components. From October 1993 to
March 1994, Mr. Barker was Chief Operating Officer of Customer Products
Corporation. Prior to October 1993, Mr. Barker held various management
positions with several manufacturing businesses such as American Fibrit, Inc.,
Allen Industries, Rockwell International and Chrysler Corporation. Mr. Barker
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 63) 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 a
director of Kiwi International Air Line, Inc. 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 62) 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. Kahn (age 48) has been Senior Vice President of Corporate Finance of
Mesirow Financial, a financial services company based in Chicago, since 1992.
Previously, he was a managing director in the corporate finance department of
Rodman and Renshaw, a financial services company located in Chicago. Mr. Kahn
became a director of the Company in August 1996. Mr. Kahn was designated by REI
pursuant to the terms of the Investment Agreement for election to the Company's
Board of Directors.
Mr. Lipkin (age 50) 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 a director of Kiwi International Air Line, Inc.
Mr. Lipkin was designated by REI pursuant to the terms of the Investment
Agreement for election to the Company's Board of Directors.
Mr. Nichols (age 54) is the President and Chief Executive Officer of Devon
Energy Corporation, an oil and gas company headquartered in Oklahoma City. Mr.
Nichols has been a director of Devon Energy since 1971, President since 1976 and
Chief Executive Officer since 1980. He serves as a director of the Independent
Petroleum Association of America. He is President of the Domestic Petroleum
Council and is also a director of the Independent Petroleum Association of New
Mexico, the Oklahoma Independent Petroleum Association and the National
Petroleum Council. Mr. Nichols also serves as a director of the National
Association of Manufacturers, Smedvig asa, and of the Oklahoma Nature
Conservancy.
Mr. Stafford (age 66), 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
-4-
<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., Wheelabrator Technologies, Inc., Seagate Technology,
Inc. and Tracor, Inc.
Mr. Swisher (age 66) 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 OGE Energy Corp. 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 1996. 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. During 1996, Messrs. David Anderson, Finn-
Egan, Hartzog, Lipkin and Stafford served on the Compensation Committee. The
Compensation Committee met one time during 1996. 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 1996, 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 1996. 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.
-5-
<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, 1996, exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
============================================================================================================
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 1996 $300,000 $ 25,200 $0 0 $ 5,990(2)
Chairman of the 1995 275,000 0 0 0 5,964
Board and Chief 1994 250,000 126,250 0 0 3,732
Executive Officer
- ------------------------------------------------------------------------------------------------------------
Jim D. Holland 1996 $141,667 $ 25,410 $0 50,000 $ 1,956(2)
Senior Vice President, 1995 125,000 17,500 0 50,000 1,978
Treasurer and Chief Financial 1994 110,000 38,885 0 0 1,836
Officer
- ------------------------------------------------------------------------------------------------------------
Ralph P. Cordes(3) 1996 $137,500 $ 14,910 $0 50,000 $ 1,927(2)
Senior Vice President 1995 125,000 17,500 0 50,000 20,580(4)
1994 N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------
Murray Rowe 1996 $ 70,450 $ 78,527 $0 0 $ 593(5)
President of Bid-Well 1995 70,833 44,005 0 0 522
Division 1994 80,000 33,560 0 0 400
============================================================================================================
</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.
(5) Contributions made by the Company to the Tax Savings Retirement Thrift Plan
on behalf of Mr. Rowe.
-6-
<PAGE>
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.
OPTION/SAR GRANTS IN 1996(1)
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------
Potential
Realized Value at
Assumed Annual
Rates of Stock Price
Appreciation
for Option Term
--------------------
Percentage of
Total Options
Options Granted to Exercise
Granted Employees Price Expiration
Name (Shares) in 1996 (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 33.33 $4.125 11/01/2002 $70,144.71 $159,134.46
- ----------------------------------------------------------------------------------------------
Ralph P. Cordes 50,000 33.33 $4.125 11/01/2001 $56,983.06 $125,917.69
- ---------------------------------------------------------------------------------------------
Murray Rowe 0 0 N/A N/A N/A N/A
=============================================================================================
</TABLE>
(1) No stock appreciation rights (SARs) were granted in 1996.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides certain information on stock option exercises
in 1996 by the named executive officers and the value of such officers'
unexercised options at December 31, 1996.
AGGREGATED OPTION/SAR EXERCISES IN 1996 AND 12/31/96 OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
=================================================================================================================
Number of Unexercised Value of
Options at Unexercised
Number of December 31, 1996 In-the-Money
Name Shares Acquired (Shares) Options at
on Exercise Value Realized December 31, 1996(2)
-------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bill Swisher 0 N/A 0 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------
Jim D. Holland 1,000 $2,000 51,540 97,460 $48,093.75 $19,531.25(3)
- -----------------------------------------------------------------------------------------------------------------
Ralph P. Cordes 0 N/A 12,500 87,500 $ 0(3) $ 12,500(3)
- -----------------------------------------------------------------------------------------------------------------
Murray Rowe 0 N/A 43,750 6,250 $49,218.75 $ 7,031.25
=================================================================================================================
</TABLE>
(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 1996.
(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 1996.
-7-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Joseph J. Finn-Egan, Larry D. Hartzog, Jeffrey A. Lipkin and Thomas P.
Stafford are the current 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, Mr. Kahn and Mr. Barker 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. On January 8, 1997, REI exercised its warrant in full
by paying the sum of $1,687,500 to the Company and receiving in return 450,000
shares of Class A Stock. On January 15, 1997, Mr. Hartzog exercised his warrant
in full by paying the sum of $562,500 to the Company and receiving in return
150,000 shares of Class A Stock.
The Company uses certain real property owned by 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. During 1996, no payments were made by CMI to the Partnership
for the use of this real property.
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, 1996, 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 1996.
Mesirow Financial rendered financial advisory services to the Company
during 1996. Ronald A. Kahn, a director of the Company, is Senior Vice
President of Corporate Finance of Mesirow Financial.
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 not less than
$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.
-8-
<PAGE>
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
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.
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 currently composed of
Messrs. Finn-Egan, Hartzog, Lipkin and Stafford. Prior to his resignation in
December 1996, David Anderson served on the Committee.
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.
-9-
<PAGE>
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 1996, the Committee adopted the
1996 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 1996 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, 1996, aggregate bonuses
of $95,322 were paid under the Plan.
Certain employees of the Bid-Well Division of the Company, including Mr.
Rowe, were eligible in 1996 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 for the attainment of consistent growth in revenue and
income. For the fiscal year ended December 31, 1996, aggregate bonuses of
$148,787 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 (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 from time to time stock options
giving them the right to purchase shares of Class A Stock at a price not 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.
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<PAGE>
DISCUSSION OF 1996 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 6, Mr. Swisher's base salary was increased in 1996 by
$25,000. This increase was based primarily upon a subjective evaluation of Mr.
Swisher's performance in 1995 and a review of market salary data. No options or
other long-term incentives were granted to Mr. Swisher in 1996.
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 1996 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. Under the
terms of the Plan, Mr. Swisher received a cash bonus of $25,200 for the fiscal
year ended December 31, 1996.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
JOSEPH J. FINN-EGAN
LARRY D. HARTZOG
JEFFREY A. LIPKIN
THOMAS P. STAFFORD
-11-
<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 New York Stock Exchange Market Value Index (the "NYSE
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, 1991 in the
Company's Common Stock, the NYSE Index and the Peer Group and assumes
reinvestment of dividends.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN OF
COMPANY, PEER GROUP AND NYSE INDEX
[GRAPH APPEARS HERE]
================================================================================
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
CMI $ 100.00 $ 170.59 $ 323.53 $ 305.88 $ 241.18 $ 206.33
Peer Group $ 100.00 $ 123.66 $ 203.95 $ 253.33 $ 273.58 $ 358.40
NYSE Index $ 100.00 $ 104.70 $ 118.88 $ 116.57 $ 151.15 $ 182.08
==============================================================================
APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG Peat Marwick, L.L.P. as the
Company's independent auditors for the 1997 fiscal year.
KPMG Peat Marwick, L.L.P. 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, L.L.P. 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.
-12-
<PAGE>
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 1998 Annual Meeting of
Shareholders such proposal must be received by the Company at its office in
Oklahoma City prior to November 28, 1997.
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.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, except as described below, during 1996, all
Section 16(a) filing requirements applicable to its executive officers,
directors and 10% shareholders were met. Thane Swisher, Vice President and
Secretary of the Company, recently determined that he inadvertently failed to
report several transactions occurring prior to December 31, 1996 in which trusts
of which he is either a trustee or a co-trustee and which were established for
the benefit of members of Mr. Swisher's immediate family received gifts of Class
A Stock. Thane Swisher has since reported his indirect beneficial ownership of
such shares. Bill Swisher also recently determined that he inadvertently failed
to file a Section 16(a) report relating to 449 shares of Class A Stock acquired
in 1995 by a trust of which Bill Swisher is a co-trustee.
-13-
<PAGE>
VOTE REQUIRED
Under the Company's Bylaws, the holders of one-third of the issued and
outstanding shares of Class A Stock and Common 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. For purposes of determining whether the directors have been
elected, abstentions are the equivalent of a negative vote.
By Order of the Board of Directors
/s/ JIM D. HOLLAND
------------------------------------------------
Jim D. Holland, Senior Vice President
Oklahoma City, Oklahoma
March 28, 1997
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ACCOMPANYING POSTAGE PAID ENVELOPE.
-14-
<PAGE>
CMI CORPORATION
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 1997
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 and Voting Common Stock of
CMI Corporation held of record by the undersigned on March 18, 1997, at the
Annual Meeting of Shareholders to be held on May 2, 1997 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.)
Joseph J. Finn-Egan
Jeffrey A. Lipkin
J. Larry Nichols
2. 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. 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 , 1997.
_____________________________
Signature
_____________________________
Signature
(Please sign, date and return promptly using the enclosed envelope.)
