<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
----------------------------------------------------------------
(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:
_____________________________________________________________________
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:
_______________________________________________________________________
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:
_______________________________________________
2) Form, Schedule or Registration Statement No.:
_________________________
3) Filing Party:
_________________________________________________________
4) Date Filed:
___________________________________________________________
<PAGE>
CMI CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 14, 1999
To the Shareholders of
CMI Corporation:
The 1999 Annual Meeting of Shareholders of CMI Corporation (the "Company")
will be held on May 14, 1999 at 10:00 A.M. (Oklahoma City time), at the
Company's 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;
2. The ratification of certain amendments to the Company's 1992
Incentive Stock Option Plan; and
3. Such other matters as may properly come before the meeting or any
adjournment thereof.
The close of business on April 12, 1999 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
April 14, 1999
<PAGE>
CMI CORPORATION
PROXY STATEMENT
---------------
May 14, 1999
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 1999 Annual Meeting of Shareholders of the Company on May 14, 1999 at
10:00 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,
1999 unless otherwise stated. The approximate date on which this Proxy
Statement and enclosed form of proxy have been mailed to shareholders is April
14, 1999.
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 April 12, 1999 (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 21,548,883 shares of Class A Stock and 602 shares of
Common Stock issued and outstanding. Each share of Class A Stock and each share
of Common Stock is entitled to one vote on each item of business to be
considered at the Annual Meeting.
The following table sets 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 certain executive
officers, and (iii) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
Number of Shares
Name and Address and Nature of Percent of
of Beneficial Owner(1) Beneficial Ownership (2) Class A Stock(3)
- --------------------------------- ------------------------- ----------------
<S> <C> <C>
Recovery Equity Investors, L.P. 7,116,667 (4) 33.0%
Suite 465
901 Mariner's Island Boulevard
San Mateo, California 94404
Recovery Equity Partners, L.P. 7,116,667 (4) 33.0
Suite 465
901 Mariner's Island Boulevard
San Mateo, California 94404
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Name and Address and Nature of Percent of
of Beneficial Owner(1) Beneficial Ownership (2) Class A Stock(3)
- --------------------------------- ------------------------- ----------------
<S> <C> <C>
Joseph J. Finn-Egan 7,116,667 (4) 33.0
Jeffrey A. Lipkin 7,116,667 (4) 33.0
Bill Swisher 2,127,683 (5) 9.9
Larry D. Hartzog 172,700 (6) *
Albert L. Basey 100,000 *
Jim D. Holland 94,120 *
Robert L. Curtis 32,500 *
Thomas P. Stafford 10,000 *
Tom Engelsman 0 0
Kenneth J. Barker 0 0
J. Larry Nichols 0 0
All directors and
officers as a group
(12 persons) 10,081,201 (7) 46.4
</TABLE>
(1) Unless otherwise indicated, the address for each listed shareholder is c/o
CMI Corporation, P. O. Box 1985, Oklahoma City, Oklahoma 73101.
(2) Includes shares which may be acquired under options within 60 days of the
Record Date. All shares are held directly unless indicated otherwise.
(3) For purposes of computing the percent of Class A Stock held by a beneficial
owner, director or officer, the 602 outstanding shares of Common Stock have been
treated as shares of Class A Stock.
(4) 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 2,659,029 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") 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") between
the Company and REI.
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<PAGE>
(5) Includes 1,627,234 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 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.
(6) Includes 22,700 shares held by a trust of which Mr. Hartzog is the trustee
and beneficiary.
(7) Includes 241,456 shares held by various trusts of which Thane Swisher, the
Vice President and Secretary of the Company, is a trustee or a co-trustee.
* 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 Kenneth J. Barker, Tom Engelsman 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. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" THE ELECTION OF NOMINEES KENNETH J. BARKER, TOM
ENGELSMAN 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 any of these nominees become unable to serve for any reason,
which is not anticipated, the Board of Directors may designate a substitute
nominee 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 57) 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 for election to the Company's Board of Directors pursuant to
the terms of the Investment Agreement. Mr. Barker's term on the Board of
Directors expires in 1999.
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<PAGE>
Mr. Engelsman (age 49) has been Chief Executive Officer of the Company
since October 1998 and a director of the Company since November 1998. From
February 1998 to October 1998, Mr. Engelsman was a private investor. Mr.
Engelsman was the President and Chief Operating Officer of Beloit Corporation, a
subsidiary of Harnischfeger Industries Inc., from 1994 to February 1998. From
1991 to 1994, Mr. Engelsman was the President and Chief Executive Officer of
Landis & Gyr Corporation, a control system manufacturing company located in
Switzerland. From 1987 to 1991, he was the President of Sales of Dresser-Rand
Company and from 1971 to 1987, Mr. Engelsman held various positions with
Ingersoll-Rand. Mr. Engelsman was designated by REI for election to the
Company's Board of Directors pursuant to the terms of the Investment Agreement.
Mr. Engelsman's term on the Board of Directors expires in 1999.
Mr. Finn-Egan (age 65) 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. Mr. Finn-Egan also serves as a
director of Chadmore Wireless Group, Inc. Mr. Finn-Egan was designated by REI
for election to the Company's Board of Directors pursuant to the terms of the
Investment Agreement. Mr. Finn-Egan's term on the Board of Directors expires in
2000.
Mr. Hartzog (age 64) 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. Hartzog's term on the Board of Directors expires in 2001.
Mr. Lipkin (age 52) 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 of Gaston & Snow, a national law firm, from
1984 to 1989. Mr. Lipkin also serves as a director of Chadmore Wireless Group,
Inc. Mr. Lipkin was designated by REI for election to the Company's Board of
Directors pursuant to the terms of the Investment Agreement. Mr. Lipkin's term
on the Board of Directors expires in 2000.
Mr. Nichols (age 56) 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, the Natural Gas Supply
Association and the National Petroleum Council. Mr. Nichols also serves as a
director of Smedvig asa and as President of the Oklahoma Nature Conservancy.
Mr. Nichols is also a member of the Board of Governors of the American Stock
Exchange. Mr. Nichols' term on the Board of Directors expires in 2000.
Mr. Stafford (age 68), USAF (Ret. Lt. Gen.), has held various positions in
government and industry throughout his career and currently is a consultant with
General Technical Services, Inc. Mr. Stafford became a director of the Company
in 1983. Since 1980, Mr. Stafford has served as Chairman of the Board of Omega
Watch Corporation of America. He also is currently a member of the board of
directors of Allied-Signal, Inc., Tremont, Inc., Seagate Technology, Inc. and
Timet, Inc. Mr. Stafford's term on the Board of Directors expires in 2001.
Mr. Swisher (age 68) has been Chairman of the Board of the Company since
1965 and a director since 1966. Mr. Swisher also served as Chief Executive
Officer of the Company from 1965 to October 1998. Mr. Swisher is a director of
OGE Energy Corp. Mr. Swisher's son, Thane Swisher, is a Vice President and
Secretary of the Company. Mr. Swisher's term on the Board of Directors expires
in 1999.
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<PAGE>
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 two
meetings during 1998. 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 1998, Messrs. Finn-Egan, Hartzog, Lipkin and
Stafford served on the Compensation Committee. The Compensation Committee met
once during 1998. 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 1998, 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 five meetings during 1998. All
directors attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors, and (ii) the total number of meetings held
by all committees of the Board on which he served.
AMENDMENT OF INCENTIVE STOCK OPTION PLAN
The CMI Corporation 1992 Incentive Stock Option Plan (the "Stock Option
Plan") was adopted by the Company's Board of Directors on June 15, 1992.
Thereafter, in August 1992, the Stock Option Plan was approved by the
shareholders of the Company. Under its terms, the Stock Option Plan can be
amended by the Board of Directors at any time and from time to time; provided
that no amendment will be effective unless the approval of the Company's
shareholders has been obtained if such approval is required (i) in order for the
Stock Option Plan to meet the conditions specified in Rule 16b-3 of the
Securities and Exchange Commission, (ii) to comply with the requirements of
Section 422 of the Internal Revenue Code, or (iii) by any other provision of
applicable law. The Board of Directors has adopted various amendments to the
Stock Option Plan which will be incorporated by restating the Stock Option Plan
in its entirety. The approval of the shareholders of the following amendments
to the Stock Option Plan is necessary in order for such amendments to be
effective.
Summary of Material Amendments
Increase in Shares Subject to the Stock Option Plan: The Stock Option
Plan, as originally adopted, allowed the Company to grant options to purchase a
maximum of 1,000,000 shares of the Company's Class A Stock. As amended, the
number of shares of Class A Stock which can be issued pursuant to the Stock
Option Plan will be increased from 1,000,000 shares to 2,100,000 shares.
Persons Eligible to Receive Options: As it was originally adopted, the
Stock Option Plan permitted only employees of the Company who were not members
of the Stock Option Plan Committee and who were not members of the Company's
Board of Directors to receive options or stock appreciation rights under the
Stock Option Plan. As amended, the Stock Option Plan will allow stock options
and/or stock appreciation rights to be granted to employees of the Corporation
who are also directors of the Corporation and employees who are members of the
Stock Option Plan Committee.
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<PAGE>
Terms of Non-Qualified Options: The Stock Option Plan, as originally
adopted, provided that a non-qualified stock option granted under the Stock
Option Plan would expire to the extent it was not exercised on the earlier of
(i) the fifth anniversary of the date the option was granted or (ii) three
months after the date of the optionee's termination of employment for reasons
other than total disability or twelve months from the date of the optionee's
termination of employment for reasons of total disability. Non-qualified stock
options granted pursuant to the Stock Option Plan, as amended, may, at the
discretion of the Stock Option Plan Committee, determined as of the date the
non-qualified stock option is granted, be exercised at any time prior to the
expiration of the stated term of the option regardless of the date of the
optionee's termination of employment with the Company.
Payment of Exercise Price: The Stock Option Plan, as originally adopted,
allowed the exercise price of a stock option to be paid with shares of Class A
Stock previously acquired by the optionee. As amended, the Stock Option Plan
requires that shares of Class A Stock previously acquired through the exercise
of an option be held for at least six (6) months before the shares can be used
as payment for the exercise price of an option.
Administration of Plan: As it was originally adopted, the Stock Option Plan
was to be administered by a committee of at least two directors appointed by the
Board of Directors and it was contemplated that the Compensation Committee of
the Board of Directors would serve as the Stock Option Plan Committee. As
amended, the Stock Option Plan removes the reference to the Compensation
Committee and confirms that, at the Board's discretion, the entire Board of
Directors can serve as the Stock Option Committee.
Change of Name: The name of the Stock Option Plan as initially adopted was
the CMI Corporation 1992 Incentive Stock Option Plan. The name has been changed
to the CMI Corporation Stock Option Plan.
Summary of 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 such companies by enabling such key
employees to acquire a proprietary interest in the Company. The Stock Option
Plan provides for both the grant of incentive stock options (an "ISO"
individually and "ISO's" collectively) pursuant to Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and options which do not qualify
as ISO's ("Non-Qualified Stock Options"), as well as alternative rights to
receive the appreciation on stock ("Appreciation Rights").
Administration of the Stock Option Plan: The Stock Option Plan is
administered by the Stock Option Plan Committee (the "Committee") comprised of
at least two members of the Board of Directors of the Company. The entire Board
may serve as the Committee.
The Committee determines (i) which employees are key employees, (ii) the
number of ISO or Non-Qualified Options (collectively "Options") and/or
Appreciation Rights, if any, to be granted to key employees, and (iii) the terms
and conditions thereof consistent with the terms and conditions of the Stock
Option Plan. The Committee is also empowered to interpret the Stock Option
Plan, the terms of any Options and Appreciation Rights and agreements evidencing
such Options and Appreciation Rights and to adopt, amend, interpret and repeal
such rules, guidelines and practices of the administration, interpretation and
application of the Stock Option Plan as are consistent with the terms of the
Stock Option Plan.
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<PAGE>
Shares Subject to the Stock Option Plan: As amended, the total number of
shares of Class A Stock which may be issued under the Stock Option Plan may not
exceed 2,100,000. If there is a stock split, stock dividend or other similar
change in the shares of Class A Stock of the Company or a reorganization,
merger, consolidation, recapitalization, reclassification or a combination or
exchange of such shares or similar corporate transaction involving a change in
the Company's capitalization, or if the Committee otherwise determines that as a
result of the corporate transaction it is appropriate, an equitable adjustment
in the total number and kind of shares issued upon the exercise of Options or
Appreciation Rights will be made. If an Option expires without having been
exercised in full, the shares not purchased pursuant to such Option will again
be available for future grants under the Stock Option Plan.
Eligible Employees: As amended, any key employee selected by the Committee
(including directors of the Company) will be eligible to participate in the
Stock Option Plan.
Terms of Options: Subject to the specific requirements set forth below,
the terms and conditions which govern an Option are determined by the Committee
and are set forth in an Option agreement approved by the Committee. The
following conditions apply to all Options:
Transferability. Options are not transferable except as permitted
under the applicable laws of descent and distribution and only the
optionee, or the optionee's legal guardian in the case of a disabled
optionee, may exercise the Option during the optionee's lifetime.
Exercise Price. The Option exercise price is set by the Committee and
is not less than 100% of the fair market value of the shares covered by the
Option on the date the Option is granted. In the event an Option is
granted to a key employee who is also the owner of 10% or more of the
outstanding total combined voting power of all classes of stock of the
Company or any subsidiary, the Option exercise price will not be less than
110% of the fair market value on the date the Option is granted.
Termination of Option. Unless otherwise provided by the Committee in
the terms of an Option agreement, an Option expires, to the extent it is
not exercised, on the earlier of (i) the fifth anniversary of the date the
Option is granted or (ii) three (3) months after the date of the optionee's
termination of employment for reasons other than total disability or twelve
(12) months from the date of the optionee's termination of employment for
reasons of total disability. Without limiting the authority of the
Committee described above, Non-Qualified Stock Options can, at the
discretion of Committee, be exercised at any time prior to the expiration
of their stated term regardless of the date of or reason for an optionee's
termination of employment.
Payment of Exercise Price. Full payment for shares to be received
upon the exercise of any Option must be delivered to the Company on the
date the notice of exercise is delivered to the Company. In lieu of cash,
the optionee may make this payment by delivering shares of Class A Stock
owned by the optionee; provided, however, that if the shares to be
delivered to the Company were acquired as a result of a prior exercise of
an Option such shares must have been held for at least six (6) months.
Appreciation Rights: In addition to the Options available under the Stock
Option Plan, the Committee may also grant Appreciation Rights which allow the
optionee to be paid the appreciation on an Option in shares of Class A Stock in
lieu of exercising the Option. The amount to which an optionee will be entitled
to receive upon the exercise of an Appreciation Right will be equal to 100% of
the amount by which the fair market value of the Class A Stock on the exercise
date exceeds the Option exercise price with respect to the Option to which
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the Appreciation Right relates. Appreciation Rights are subject to the same
conditions and restrictions as Options granted pursuant to the Stock Option
Plan. Specifically, but without limitation, Appreciation Rights are subject to
the same terms and conditions as the Options to which they relate; are not
transferable except as permitted under applicable laws of descent and
distribution and only the optionee, or the optionee's legal guardian in the case
of a disabled optionee, may exercise an Appreciation Right during the optionee's
lifetime.
Certain Federal Income Tax Consequences: The following discussion of
relevant federal income tax consequences is a summary only, and each employee
granted an Option or Appreciation Rights under the Stock Option Plan is urged to
consult with the employee's tax advisor with respect to these and other federal,
state and local tax consequences before exercising any such Option or
Appreciation Rights and before disposing of any shares of the Company's Class A
Stock acquired upon the exercise thereof.
Incentive Stock Options. An employee receiving an ISO will not be in
receipt of taxable income upon the grant of the ISO or upon its timely
exercise. The exercise of an ISO will be timely if made during its term
and if the employee remains an employee of the Company (or any subsidiary
of the Company) at all times during the period beginning on the date the
ISO is granted and ending on the date three months before the date of
exercise (or one year before the date of exercise in the case of
termination of employment by reason of disability). Upon ultimate sale of
the shares of the Company's Class A Stock received upon such exercise,
except as noted below, the employee will recognize a long-term capital gain
or loss (if the stock is a capital asset in the possession of the employee)
equal to the difference between the amount realized and the Option exercise
price. The Company will not be entitled to any federal income tax
deduction in connection with either the issuance or the exercise of the ISO
or the sale of the Class A Stock by the employee.
If, however, the shares of the Company's Class A Stock acquired
pursuant to the exercise of an ISO are disposed of by the employee within
two years of the date the ISO is granted or within one year from the date
the stock is transferred to the employee upon exercise (a "Disqualifying
Disposition") any gain realized by the employee generally will be taxable
at the time of such Disqualifying Disposition as follows: (i) at ordinary
income rates to the extent the Option exercise price is less than the
lesser of the fair market value of the shares of the Company's Class A
Stock on the date the ISO is exercised or the amount realized on such
Disqualifying Disposition and (ii) if the shares of Class A Stock are a
capital asset in the possession of the employee, as short-term or long-term
gain to the extent of the excess of the amount realized on such
Disqualifying Disposition over the fair market value of the shares of Class
A Stock on the date the ISO is exercised. In such case, the Company will
generally be entitled to a tax deduction, in accordance with its method of
accounting at the time of the Disqualifying Disposition, for the amount
taxable to the employee as ordinary income. In addition, any capital gain
being recognized in such case by the employee will be long-term capital
gain if the employee's holding period for the shares of Class A Stock at
the time of disposition is sufficient to meet the holding period
requirement in effect for such purpose under the Code at the time of
exercise of the ISO (the "Requisite Holding Period"); otherwise it will be
short-term. Also, the amount by which the fair market value of the shares
of the Company's Class A Stock on the exercise date of an ISO exceeds the
Option exercise price will constitute an item of tax preference for
purposes of the employee's "alternative minimum tax" calculation.
If the employee pays the Option exercise price in full or in part with
shares of previously acquired shares of Class A Stock of the Company,
regulations currently proposed by the Internal Revenue Service would
provide the following rules which modify the foregoing discussion. If the
shares
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surrendered in payment of the exercise price of an ISO are shares of the
Company's Class A Stock acquired pursuant to the exercise of an incentive
stock option and if, at the date of surrender, the applicable incentive
stock option holding period for such shares had not been met (as discussed
above) such surrender will constitute a Disqualifying Disposition giving
rise to ordinary income (as discussed above). Otherwise, when shares of the
Company's Class A Stock are surrendered upon exercise of an ISO, in general
(i) no gain or loss will be recognized as a result of the exchange and (ii)
for purposes of determining the amount and character of any gain or loss on
the ultimate disposition of the shares received upon exercise (a) the
number of shares received that is equal in number to the shares surrendered
will have a basis equal to the shares surrendered and (except for purposes
of determining whether a disposition will be a Disqualifying Disposition)
will have a holding period that includes the holding period of the shares
exchanged and (b) any additional shares received will have a zero basis and
will have a holding period that begins on the date of the exchange. If any
of the shares received are disposed of within two years of the date on
which the ISO is granted or within one year after exercise, the shares with
the lowest basis will be deemed to be disposed of first and such
disposition will be a Disqualifying Disposition giving rise to ordinary
income as discussed above.
Non-Qualified Stock Options. Generally an employee will not be taxed
upon the grant of a Non-Qualified Stock Option. Rather, at the time the
Non-Qualified Stock Option is exercised, the employee, except as noted
below, will recognize ordinary income for federal income tax purposes in an
amount equal to the excess of the fair market value of the shares purchased
over the Option exercise price. In addition, except as noted below, if, at
the Company's election, an employee receives cash or shares in lieu of
paying the Option exercise price, the employee will recognize ordinary
income in an amount equal to the cash or fair market value of the shares
received. If shares of the Company's Class A Stock acquired upon the
exercise of a Non-Qualified Stock Option are later sold or exchanged, the
difference between the sales price and the fair market value of such stock
on the date of exercise will be taxable as capital gain or loss (if the
stock is a capital asset in the possession of the employee) which will be
long-term or short-term capital gain or loss depending on the length of
time the Optionee has held the Class A Stock.
The Company will generally be entitled to a tax deduction in
accordance with its method of accounting at such time and in the same
amount the employee recognizes ordinary income.
Based upon a published ruling of the Internal Revenue Service, an
employee who pays the Option exercise price in whole or in part by
delivering shares of the Company's Class A Stock already owned by the
employee will recognize no gain or loss for federal income tax purposes on
the shares surrendered (except possibly if the shares were acquired upon
the exercise of an ISO in which case the above discussion under "Incentive
Stock Options" will apply) but otherwise will be taxed according to the
rules described in the two preceding paragraphs (including the rule that an
employee should recognize an amount of ordinary income which is equal to
the amount of income which would be recognized if the Option exercise price
for the Non-Qualified Stock Option were paid for with cash). With respect
to those shares acquired upon exercise equal in number to the shares
surrendered, the basis per share of the shares acquired will be equal to
the basis per share of the shares surrendered and the holding period for
the shares acquired will include the holding period of the shares
surrendered. The basis of any additional shares received upon exercise
will be equal to the fair market value of such additional shares on the
date of exercise and the holding period for such additional shares will
commence on the date the Non-Qualified Stock Option is exercised.
-9-
<PAGE>
Appreciation Rights. Generally, an employee will not be taxed upon
the grant of an Appreciation Right. The employee will, however, recognize
ordinary income for federal income tax purposes at the time the
Appreciation Right is exercised in an amount equal to the fair market value
of the shares of Class A Stock received by the employee upon exercise of
the Appreciation Right. If the shares of Class A Stock acquired upon the
exercise of the Appreciation Right are later sold or exchanged, the
difference between the sales price and the fair market value of such stock
on the date of exercise will be taxable to the employee as capital gain or
loss (if the stock is a capital asset in the possession of the employee)
which will be long-term or short-term capital gain or loss depending on the
length of time the employee has held the Class A Stock. Generally, the
Company will be entitled to a tax deduction at such time and in the same
amount as the employee's ordinary income recognition in accordance with the
Company's method of accounting at such time.
Summary of Benefits Provided Under the Stock Option Plan
The number of and value of Options to be granted to employees in the future
is not presently known and will be determined by the Committee. Since the
adoption of the Stock Option Plan in 1992, Options to purchase a total of
1,400,000 shares of Class A Stock have been granted. Optionees have exercised
Options to purchase a total of 443,652 shares and Options to purchase 171,348
shares have terminated. As of the Record Date, there were outstanding Options
to purchase 785,000 shares of Class A Stock. This number represents 3.6% of the
total number of shares of Class A Stock issued and outstanding as of the Record
Date.
From the adoption of the Stock Option Plan through the Record Date, Options
to purchase 770,000 shares of Class A Stock have been granted to current
executive officers of the Company and Options to purchase 630,000 shares have
been granted to other current and former employees.
Mr. Engelsman, the Company's Chief Executive Officer and a nominee to the
Company's Board of Directors, has been granted options to purchase 500,000
shares of Class A Stock. In the event the amendments to the Stock Option Plan
are not approved by the shareholders, Mr. Engelsman will only be able to
purchase 220,202 shares pursuant to Options granted under the Stock Option Plan
and options to purchase an additional 279,798 shares of Class A Stock will be
provided outside of the Stock Option Plan. Thus, in any event, Mr. Engelsman
will receive Options to purchase a total of 500,000 shares of Class A Stock.
Approval Required
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 is required to ratify the amendments made to
the Stock Option Plan as described above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
AMENDMENTS TO THE STOCK OPTION PLAN.
-10-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets certain forth information with respect to Bill
Swisher and the three other executive officers of the Company as to whom the
total annual salary and bonus for the year ended December 31, 1998 exceeded
$100,000. The table also sets forth certain information with regard to the
compensation of Tom Engelsman, who was appointed as the Chief Executive Officer
of the Company in October 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
==========================================================================================================
Long-Term
Annual Compensation Compensation
Awards
Name All
and Other Other
Principal Annual Stock Options Compensation
Position Year Salary Bonus Compensation(1) (Shares)
<S> <C> <C> <C> <C> <C> <C>
Tom Engelsman 1998 $ 75,000 $ 0 $0 500,000 $ 4,788 (3)
Chief Executive Officer (2) 1997 N/A N/A N/A N/A N/A
1996 N/A N/A N/A N/A N/A
Bill Swisher 1998 $330,000 $50,000 $0 0 $ 7,800 (5)
Chairman of the 1997 330,000 0 0 0 6,465
Board and Chief 1996 300,000 25,200 0 0 5,990
Executive Officer(4)
Albert L. Basey 1998 $175,000 $35,000 $0 0 $ 5,010 (5)
President (6) 1997 157,163 0 0 100,000 4,233
1996 N/A N/A N/A N/A N/A
Jim D. Holland 1998 $160,000 $30,000 $0 0 $ 2,939 (5)
Senior Vice President, Treasurer 1997 160,000 0 0 0 2,577
and Chief Financial Officer 1996 141,667 25,410 0 50,000 1,956
Robert L. Curtis 1998 $155,000 $25,000 $0 50,000 $ 3,692 (5)
Vice President-Sales and 1997 142,500 0 0 0 19,525 (8)
Marketing(7) 1996 17,813 0 0 50,000 300 (5)
==========================================================================================================
</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) Mr. Engelsman was employed by the Company in October 1998.
(3) Includes the dollar value of insurance premiums paid by the Company with
respect to term life insurance for the benefit of Mr. Engelsman and payments
made to reimburse Mr. Engelsman for housing costs incurred in connection with
his relocation to Oklahoma City.
(4) Mr. Swisher served as the Chief Executive Officer of the Company until
October 1998.
(5) 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.
(6) Mr. Basey was employed by the Company in February 1997.
(7) Mr. Curtis was employed by the Company in November 1996.
(8) Includes contributions made by the Company to the Tax Savings Retirement
Thrift Plan on behalf of Mr. Curtis, the dollar value of insurance premiums paid
by the Company with respect to term life insurance for the benefit of Mr.
Curtis, and payments made to reimburse Mr. Curtis for costs incurred in
connection with his relocation to Oklahoma City.
-11-
<PAGE>
Options Granted
The following table sets forth information concerning stock options granted
during the last fiscal year to the five executive officers named in the Summary
Compensation Table.
OPTION/SAR GRANTS IN 1998(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 1998 (Per Share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Tom Engelsman 500,000 91% $6.25 10/01/08 $1,965,300 $4,980,450
Bill Swisher 0 0 N/A N/A N/A N/A
Albert L. Basey 0 0 N/A N/A N/A N/A
Jim D. Holland 0 0 N/A N/A N/A N/A
Robert L. Curtis 50,000 9% $6.25 10/01/03 $ 86,350 $ 190,800
=====================================================================================================================
</TABLE>
(1)No stock appreciation rights were granted in 1998.
Option Exercises and Fiscal Year-End Values
The following table provides certain information on stock option exercises
in 1998 by the named executive officers and the value of such officers'
unexercised options at December 31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND 12/31/98 OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
=====================================================================================================================
Value of
Number of Unexercised Unexercised
Number of Options at In-the-Money
Name Shares Acquired December 31, 1998 Options at
on Exercise Value Realized (Shares) December 31, 1998(2)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Tom Engelsman 0 N/A 0 500,000 $ 0 $843,750
Bill Swisher 0 N/A 0 0 $ 0 $ 0
Albert L. Basey 0 N/A 100,000 0 $343,750 $ 0
Jim D. Holland 0 N/A 35,350 64,650 $ 41,978 $208,022
Robert L. Curtis 0 N/A 26,250 73,750 $ 81,797 $186,953
=====================================================================================================================
</TABLE>
(1) No stock appreciation rights are outstanding.
(2) Based on the closing price of the Company's Class A Stock on the New York
Stock Exchange on December 31, 1998.
-12-
<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 and Mr. Lipkin have each been designated by REI for election to the
Company's Board of Directors pursuant to the terms of the Investment Agreement
between REI and the Company.
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 1998.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
Mr. Engelsman serves as Chief Executive Officer of the Company pursuant to
an employment agreement entered into on October 1, 1998. The employment
agreement provides for Mr. Engelsman's employment through April 1, 2004 (subject
to early termination in certain circumstances) at a base salary of $300,000 per
year. The expiration date of the employment agreement will be automatically
extended until September 30, 2008 unless, prior to January 1, 2004, either the
Company or Mr. Engelsman gives notice to the other that it elects not to extend
the term of the employment agreement beyond April 1, 2004. Under the employment
agreement, Mr. Engelsman is entitled to receive bonus compensation for fiscal
years 1999-2003, inclusive, equal to 75% of his base salary if the Company's
basic earnings per share equal or exceed certain targeted levels established by
the Board of Directors. If the expiration date of the employment agreement is
extended until September 30, 2008, the Board of Directors of the Company and Mr.
Engelsman will negotiate in good faith targeted earnings per share levels or
other performance criteria to be used in determining Mr. Engelsman's bonus
compensation for fiscal years 2004-2008.
In connection with the employment of Mr. Engelsman, on October 1, 1998, the
Company granted to Mr. Engelsman stock options to purchase up to 500,000 shares
of Class A Stock of the Company at an exercise price of $6.25 per share. If the
shareholders of the Company do not ratify the amendments to the Stock Option
Plan described herein, Mr. Engelsman will only be able to purchase 220,202
shares under the Stock Option Plan and the options to purchase the additional
279,798 shares of Class A Stock will be provided outside of the Stock Option
Plan. One-fifth of the options become exercisable each year commencing in 2000
and continuing through 2004 if the basic earnings per share of the Company for
the previous fiscal year equal or exceed certain targeted levels. In addition,
all options will immediately become exercisable if, among other things, Mr.
Engelsman is employed by the Company on March 31, 2006 or a change in control of
the Company occurs. Options also become exercisable upon the occurrence of
certain other events.
The Company has the right to terminate Mr. Engelsman's employment at any
time, with or without "cause," as that term is defined in the employment
agreement. Mr. Engelsman also has the right to terminate the employment
agreement at any time, with or without "cause." If Mr. Engelsman's employment
is terminated by the Company without "cause" or by Mr. Engelsman for "cause,"
Mr. Englesman will be entitled to continue to receive his base salary for a
period of 18 months following the termination date and all of the stock options
granted to Mr. Engelsman in connection with his employment will vest
immediately.
On November 1, 1998, the Company entered into an agreement with Jim D.
Holland in which the Company agreed to pay one years' salary to Mr. Holland if
he is terminated by the Company at any time prior to November 1, 2000 without
"cause," as that term is defined in the agreement.
-13-
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company
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 Compensation Committee is currently composed of Messrs.
Finn-Egan, Hartzog, Lipkin and Stafford.
Compensation Philosophy and Overall Objectives of Executive Compensation Program
Under the supervision of the Compensation 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 Compensation 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 Compensation 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 1998, the Compensation Committee
adopted the 1998 Senior Management Incentive Bonus Plan (the "Senior Management
Plan"), which Senior Management Plan covered all of the named executive officers
other than Mr. Engelsman, as well as other mid-level management personnel.
Participants in the Senior Management Plan were 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) a
subjective analysis of the participant's individual performance. In assessing
the overall performance of the Company (or a particular business unit), the 1998
earnings before taxes ("EBT") of the Company (or business unit) were measured
against EBT targets established by the Compensation Committee for the Company
and each of its business units. In assessing the individual performance of a
participant, the Compensation Committee considered 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, 1998, aggregate bonuses of $204,500 were
paid under the Senior Management Plan.
-14-
<PAGE>
Certain employees of the Bid-Well Division of the Company were eligible in
1998 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 Senior Management Plan, the objective of the Bid-
Well Plan was 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, 1998, aggregate bonuses of
$77,096 were paid under the Bid-Well Plan. None of the executive officers named
in the Summary Compensation Table participated in the Bid-Well Plan.
Payments under both the Senior Management 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 Stock Option
Plan. As previously described, 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.
Discussion of 1998 Compensation for the Chief Executive Officers
The Compensation Committee applied the executive compensation policies and
programs described above in determining the total compensation of Bill Swisher,
the Company's Chairman and former Chief Executive Officer. As reflected in the
Summary Compensation Table, Mr. Swisher's base salary for 1998 was $330,000, the
same base salary that Mr. Swisher received in 1997. In addition, Mr. Swisher
received a cash bonus of $50,000 under the Senior Management Plan. No options
or other long-term incentives were granted to Mr. Swisher in 1998.
In October 1998, Mr. Engelsman entered into a sixty-six month employment
agreement with the Company. Under the agreement, Mr. Engelsman's annual salary
was set at $300,000. This amount was determined based upon a review of salaries
paid by selected peer companies and a subjective assessment of the nature of the
position and Mr. Engelsman's experience. The reported salary in the Summary
Compensation Table differs due to Mr. Engelsman's employment beginning on
October 1, 1998. In connection with his employment, the Company granted to Mr.
Engelsman stock options to purchase up to 500,000 shares of Class A Stock at an
exercise price of $6.25 (the market value of the Class A Stock on the day of
grant). Due to the fact that Mr. Engelsman was employed for only three months
of 1998, he did not receive any bonus for 1998.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Joseph J. Finn-Egan
Larry D. Hartzog
Jeffrey A. Lipkin
Thomas P. Stafford
-15-
<PAGE>
Performance Graph
The following graph shows the cumulative total shareholder return on the
Company's Class A 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.,
Hein-Werner Corp., Portec, Inc., and Terex Corp. The graph assumes $100 was
invested on December 31, 1993 in the Company's Class A Stock, the NYSE Index and
the Peer Group and assumes reinvestment of dividends.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
==============================================================================
<S> <C> <C> <C> <C> <C> <C>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
CMI $100.00 $94.55 $74.55 $63.77 $76.24 $117.32
Peer Group $100.00 $124.04 $134.06 $175.62 $232.15 $229.77
NYSE Index $100.00 $98.06 $127.15 $153.16 $201.50 $239.77
==============================================================================
</TABLE>
APPOINTMENT OF AUDITORS
The Board of Directors has selected KPMG, L.L.P. as the Company's
independent auditors for the 1999 fiscal year.
KPMG, 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, 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.
-16-
<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.
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 1998, 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, inadvertently failed to report four transactions
involving trusts for the benefit of his children and his siblings and of which
Mr. Swisher is either the trustee or a co-trustee.
Shareholders Proposals
Proposals of shareholders intended to be presented at the 2000 Annual
Meeting, which is currently expected to be held in May 2000, must be received by
the Company by December 15, 1999 for inclusion in the Company's proxy statement
and proxy relating to that meeting. Upon receipt of any such proposal, the
Company will determine whether or not to include the proposal in the proxy
statement and proxy in accordance with regulations governing the solicitation of
proxies.
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.
-17-
<PAGE>
Holland, Senior Vice President, Treasurer and Chief Financial Officer, CMI
Corporation, P.O. Box 1985, Oklahoma City, Oklahoma 73101.
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. If a quorum is present, directors are elected by a
plurality of the votes cast at the Annual Meeting. "Plurality" means that the
individuals who receive the largest number of votes are elected as directors up
to the maximum number of directors to be chosen at the Annual Meeting. An
abstention or broker non-vote will have no effect on the election of directors
under Oklahoma law. To ratify the amendments to the Stock Option Plan, the
affirmative vote of a majority of the shares present or represented at the
Annual Meeting is required. Abstentions will have the effect of votes against
the proposal to ratify the amendments. Broker non-votes will have no effect on
the outcome of the proposal.
By Order of the Board of Directors
/s/ JIM D. HOLLAND
-------------------------------------
Jim D. Holland, Senior Vice President
Oklahoma City, Oklahoma
April 14, 1999
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ACCOMPANYING POSTAGE PAID ENVELOPE.
-18-
<PAGE>
PROXY
CMI CORPORATION
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1999
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 April 12, 1999, at the
Annual Meeting of Shareholders to be held on May 14, 1999 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.)
Kenneth J. Barker
Tom Engelsman
Bill Swisher
2. Ratification of Amendments to 1992 Incentive Stock Option Plan.
[_] 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
RATIFICATION OF THE AMENDMENTS TO THE 1992 INCENTIVE STOCK OPTION PLAN. 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 or limited liability company,
please sign in the name of the legal entity by authorized person.
Dated this day of , 1999.
_____________________________
Signature
_____________________________
Signature
(Please sign, date and return promptly using the enclosed envelope.)
