<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
LIQUI-BOX 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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: _______
(2) Aggregate number of securities to which transaction applies: __________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ____________
(4) Proposed maximum aggregate value of transaction: ______________________
(5) Total fee paid: _______________________________________________________
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: _______________________________________________
(2) Form, Schedule or Registration Statement No.: _________________________
(3) Filing Party: _________________________________________________________
(4) Date Filed: ___________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
LIQUI-BOX CORPORATION
POST OFFICE BOX 494
WORTHINGTON, OHIO 43085-0494
TELEPHONE: (614) 888-9280
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
LIQUI-BOX CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Liqui-Box Corporation ("Liqui-Box") will be held at the Columbus
Marriott North, 6500 Doubletree Avenue, Columbus, Ohio, on Wednesday, April 26,
1995, at 9:00 a.m. (local time) for the following purposes:
1. To elect four (4) directors to serve for terms of two years each.
2. To consider and act upon a proposal to amend Section 2 of Article
II of the Regulations of Liqui-Box in order to require advance
notice of shareholder nominations for election to the Board of
Directors.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
A copy of the Annual Report for the 1994 fiscal year accompanies this
Notice.
By Order of the Board of Directors,
Peter J. Linn
Secretary
Dated: March 18, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE FILL IN, SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE
NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
<PAGE> 3
LIQUI-BOX CORPORATION
POST OFFICE BOX 494
WORTHINGTON, OHIO 43085-0494
TELEPHONE: (614) 888-9280
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Liqui-Box Corporation ("Liqui-Box") to be
used at its Annual Meeting of Shareholders (the "Annual Meeting") to be held on
April 26, 1995, and at any adjournment or adjournments thereof. Common shares
represented by properly executed proxies will be voted at the Annual Meeting.
Where a choice is specified by the shareholder, the proxy will be voted in
accordance with such choice. Any proxy may be revoked at any time insofar as it
has not been exercised provided notice of revocation of the proxy is received by
Liqui-Box either in writing or in open meeting.
This Proxy Statement was first mailed to shareholders on or about March 20,
1995.
February 28, 1995, has been fixed as the record date for the determination
of shareholders entitled to notice of and to vote at the Annual Meeting or any
adjournment or adjournments thereof. On the record date, 6,269,881 common shares
of Liqui-Box were outstanding and entitled to vote. The holders of common shares
entitling them to exercise a majority of the voting power of Liqui-Box will
constitute a quorum for the Annual Meeting.
Under the rules of the Securities and Exchange Commission (the "SEC"),
boxes and a designated blank space are provided on the form of proxy for
shareholders to mark if they wish either to abstain on a proposal presented for
shareholder approval or to withhold authority to vote for one or more nominees
for election as a director of Liqui-Box. Common shares as to which the authority
to vote is withheld will be counted for quorum purposes but will not be counted
toward the election of directors or toward the election of the individual
nominees specified on the form of proxy. Abstentions are counted as present for
quorum purposes; however, the effect of an abstention on the proposal to approve
the proposed amendment to Section 2 of Article II of the Regulations of
Liqui-Box is the same as a "no" vote.
Brokers/dealers, who hold their customers' common shares in street name,
may, under the applicable rules of the self-regulatory organizations of which
the brokers/dealers are members, sign and submit proxies for such common shares
and may vote such common shares on routine matters, which, under such rules,
typically include the election of directors, but brokers/dealers may not vote
such common shares on other matters, which typically include amendments to the
regulations of a corporation, without specific instructions from the customer
who owns such common shares. Proxies signed and submitted by brokers/dealers
which have not been voted on certain matters as described in the previous
sentence are referred to as broker non-votes. Such proxies count towards the
establishment of a quorum. Broker non-votes on the proposal to approve the
proposed amendment to Section 2 of Article II of the Regulations of Liqui-Box
will not be considered as votes entitled to be cast in determining the outcome
of this proposal.
Each shareholder is entitled to one vote for each common share held and has
cumulative voting rights in the election of directors. A shareholder wishing to
exercise cumulative voting must so notify the President, a Vice President or the
Secretary of Liqui-Box in writing not less than forty-eight hours before the
Annual Meeting. If cumulative voting is requested, each shareholder will have a
number of votes equal to the number of directors to be elected multiplied by the
number of common shares owned by him and will be entitled to distribute his
votes among the nominees as he sees fit. If cumulative voting is requested, as
described above, the enclosed proxy would grant discretionary authority to the
proxies named therein to cumulate votes and to distribute the votes among the
candidates.
<PAGE> 4
<TABLE>
PRINCIPAL HOLDERS OF SECURITIES
The following table sets forth, as of February 28, 1995 (except as
otherwise indicated), certain information concerning the beneficial ownership of
Liqui-Box's common shares by the only persons known to Liqui-Box to own
beneficially more than five percent (5%) of the outstanding common shares of
Liqui-Box.
<CAPTION>
COMMON SHARES OF
LIQUI-BOX
NAME AND BENEFICIALLY OWNED (1)(2)
ADDRESS OF ----------------------------------
BENEFICIAL OWNER AMOUNT % OF TOTAL (3)
- ------------------------------ --------- --------------
<S> <C> <C>
Samuel B. Davis 1,064,272(4) 16.7%
6950 Worthington-Galena Road
P. O. Box 494
Worthington, Ohio 43085
Jeanette A. Davis 631,524(5) 10.1%
6950 Worthington-Galena Road
P. O. Box 494
Worthington, Ohio 43085
Janus Capital Corporation 374,880(6) 6.0%
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4923
<FN>
- ---------------
(1) As of February 28, 1995, except as otherwise indicated.
(2) Sole voting and investment power, unless otherwise indicated.
(3) The percent of total is based upon the sum of 6,269,881 common shares
outstanding on February 28, 1995 and the number of common shares, if any, as
to which the named person has the right to acquire beneficial ownership upon
the exercise of presently exercisable options.
(4) Includes 109,460 common shares subject to presently exercisable options and
55,982 common shares held for the account of Mr. Davis in the Liqui-Box
Corporation Employee Stock Ownership Plan (the "Liqui-Box ESOP").
Supplemental Retirement Discounted Options become exercisable upon
termination of employment. See footnote (2) to the table under "OPTIONS
GRANTED IN THE LAST FISCAL YEAR." Under the rules of the SEC, options which
become exercisable during the next 60 days are deemed to be presently
exercisable options. For purposes of determining presently exercisable
options, it is assumed that Mr. Davis will not terminate his employment with
Liqui-Box during the next 60 days. Also includes 127,027 common shares
deposited with Mr. Davis in his capacity as voting trustee of the Voting
Trust (the "Voting Trust") created by the Voting Trust and Right of First
Refusal Agreement, effective as of September 29, 1993, between M.A. Davis,
the beneficial owner of such common shares, and Mr. Davis, both as voting
trustee and individually. Mr. Davis exercises sole voting power with respect
to the common shares deposited in the Voting Trust. M.A. Davis retains
investment power with respect to the common shares deposited in the Voting
Trust subject to a right of first refusal in favor of Mr. Davis. The Voting
Trust expires on September 29, 2003.
(5) Includes 139,722 common shares held of record by JASAM Foundation ("JASAM")
as to which Mrs. Davis, as one of four trustees of JASAM, has shared voting
and investment power. The Code of Regulations of JASAM requires the approval
of three of the four trustees to vote or dispose of the common shares held
by JASAM or to take any other action with respect to such common shares.
(6) Based on information contained in filings with the SEC for the period ending
December 31, 1994, Janus Capital Corporation, a registered investment
adviser ("Janus"), may be deemed to have shared voting and investment power
as to 374,880 common shares held by certain registered investment companies
and individual and institutional clients (the "Janus Managed Portfolios") as
a result of its role as investment adviser or sub-adviser to the Janus
Managed Portfolios. Janus disclaims beneficial ownership of such common
shares. In addition, Thomas H. Bailey, who owns approximately 12.2% of Janus
and serves as its President and Chairman of the Board, may be deemed, as a
result of such positions, to have the power to
2
<PAGE> 5
exercise or to direct the exercise of such voting and/or investment power
that Janus may have with respect to the Liqui-Box common shares held by the
Janus Managed Portfolios. However, Mr. Bailey also disclaims beneficial
ownership of such common shares.
</TABLE>
<TABLE>
The following table sets forth, as of February 28, 1995, certain
information with respect to Liqui-Box's common shares owned beneficially by each
director of Liqui-Box, each nominee for election as a director of Liqui-Box,
each executive officer of Liqui-Box named in the SUMMARY COMPENSATION TABLE and
by all directors and executive officers of Liqui-Box as a group:
<CAPTION>
COMMON SHARES OF
LIQUI-BOX
BENEFICIALLY OWNED (1)(2)(3)
NAME OF -----------------------------------------
BENEFICIAL OWNER AMOUNT % OF TOTAL (4)
- ---------------------------------------- --------- --------------
<S> <C> <C>
Samuel B. Davis 1,064,272(5) 16.7%
Jeanette A. Davis 631,524(6) 10.1%
Robert S. Hamilton 122,142(7) 1.9%
Peter J. Linn 78,212(8) 1.2%
J. Dean Lanier(9) 22,294(10) 0.4%
John A. Maginnis 1,719(11) 0.0%
Carl J. Aschinger, Jr. 486 0.0%
C. William McBee 0 0.0%
All current directors and executive
officers as a group (6 persons) 1,898,355(12) 29.7%
<FN>
- ---------------
(1) As of February 28, 1995.
(2) Sole voting and investment power, unless otherwise indicated.
(3) Supplemental Retirement Discounted Options become exercisable upon
termination of employment. See footnote (2) to the table under "OPTIONS
GRANTED IN THE LAST FISCAL YEAR." Under SEC rules, options which become
exercisable during the next 60 days are deemed to be presently exercisable
options. For purposes of determining presently exercisable options, it is
assumed that no current executive officer will terminate his employment
with Liqui-Box during the next 60 days.
(4) See footnote (3) to the preceding table.
(5) See footnote (4) to the preceding table.
(6) See footnote (5) to the preceding table.
(7) Does not include 4,746 common shares as to which his wife has sole voting
and investment power.
(8) Includes 17,520 common shares subject to presently exercisable options and
16,530 common shares held for his account in the Liqui-Box ESOP.
(9) Mr. Lanier served as a director and executive officer of Liqui-Box until
his resignation from those positions effective as of October 1, 1994.
(10) Includes 1,366 common shares subject to presently exercisable options and
240 common shares held for his account in the Liqui-Box ESOP.
(11) Includes 1,087 common shares subject to presently exercisable options and
220 common shares held for his account in the Liqui-Box ESOP. Does not
include 53 common shares as to which his wife has sole voting and
investment power.
(12) Includes, as to all current directors and executive officers of Liqui-Box
as a group, 128,067 common shares subject to presently exercisable options
and 72,732 common shares held for their respective accounts in the
Liqui-Box ESOP.
</TABLE>
3
<PAGE> 6
ELECTION OF DIRECTORS
At the Annual Meeting, four directors will be elected to hold office until
the 1997 Annual Meeting of Shareholders and until their respective successors
are elected and qualified. It is the intention of the persons named in the
accompanying form of proxy to vote the common shares represented by such proxy
for the election of the persons named in the following table unless the proxy is
marked otherwise. In case any person named in the table is unable to serve or is
unwilling to accept nomination or election (which is not anticipated), the
persons named in the proxy will vote the common shares represented by such proxy
for one or more substitute nominees designated by the present Board of
Directors. Under Ohio law and Liqui-Box's Code of Regulations, the four nominees
for election as directors in the class whose terms expire in 1997 receiving the
greatest number of votes will be elected as directors.
<TABLE>
The following individuals have been nominated for election to the class of
directors whose terms expire in 1997:
<CAPTION>
NAME, AGE, POSITIONS AND OFFICES WITH
YEAR LIQUI-BOX LIQUI-BOX, PRINCIPAL OCCUPATION
DIRECTORSHIP COMMENCED AND OTHER DIRECTORSHIPS
- ----------------------- ----------------------------------------------------------------------
<S> <C>
Jeanette A. Davis Director of Liqui-Box; Trustee of JASAM Foundation, a private
92-1985 foundation in Columbus, Ohio
Carl J. Aschinger, Jr. Director of Liqui-Box; Chairman and Chief Executive Officer of The
56-1985 Columbus Showcase Company, a manufacturer of retail and bakery deli
showcases in Columbus, Ohio; Director of The Huntington National
Bank
Peter J. Linn Senior Vice President, Secretary and Director of Liqui-Box
53-1984
C. William McBee Vice President, Administration and Manufacturing of Liqui-Box
52
</TABLE>
<TABLE>
The following directors will continue to serve after the Annual Meeting
until the 1996 Annual Meeting of Shareholders:
<CAPTION>
NAME, AGE, POSITIONS AND OFFICES WITH
YEAR LIQUI-BOX LIQUI-BOX, PRINCIPAL OCCUPATION
DIRECTORSHIP COMMENCED AND OTHER DIRECTORSHIPS
- ----------------------- ----------------------------------------------------------------------
<S> <C>
Samuel B. Davis Chairman, Chief Executive Officer, President and Treasurer of
53-1977 Liqui-Box
Robert S. Hamilton Vice Chairman of Liqui-Box; Director of Lancaster Colony Corporation
66-1984
John A. Maginnis Vice President, Sales and Director of Liqui-Box
42-1994
</TABLE>
Messrs. Davis, Hamilton and Linn have held various offices with Liqui-Box
during the past five years. Mr. Maginnis has been Vice President, Sales of
Liqui-Box since April, 1991. From April, 1990 to April, 1991, he was a
consultant and from 1989 to April, 1990, he was Vice President of Sales and
Marketing for CMS Gilbreth Packaging Systems, a subsidiary of Culbro
Corporation. Mr. McBee has been a Vice President of Liqui-Box since February,
1994. Prior to February, 1994, he was general manager of Stone Container
Corporation, a manufacturer of corrugated cardboard containers. Each other
director and nominee for election as a director has had the same principal
occupation for the past five years.
Jeanette A. Davis is the mother of Samuel B. Davis.
During 1994, there were two meetings of Liqui-Box's Board of Directors. No
director attended less than 75% of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings of all committees of
the Board of Directors on which that director served, other than Mrs. Davis who
attended 67%.
4
<PAGE> 7
Liqui-Box has an Audit Committee consisting of Carl J. Aschinger, Jr.,
Jeanette A. Davis and Robert S. Hamilton. The Audit Committee met one time
during 1994. Its function is to review the adequacy of Liqui-Box's system of
internal control, to investigate the scope and adequacy of the work of
Liqui-Box's auditors and to recommend to the directors a firm of accountants to
serve as Liqui-Box's auditors.
Liqui-Box does not have a compensation committee or a nominating committee
separate from the Board as a whole.
REPORT OF THE BOARD OF DIRECTORS AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of Liqui-Box's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that might incorporate
future filings, including this Proxy Statement, in whole or in part, this Report
and the graph set forth on page 10 shall not be incorporated by reference into
any such filings.
Decisions on compensation of Liqui-Box's executive officers are made by the
Board of Directors, except that decisions on stock option compensation are made
by the Stock Option Committee. Set forth below is a report of the Board
addressing Liqui-Box's compensation policies as they affect Samuel B. Davis, the
Chief Executive Officer (CEO), Peter J. Linn and John A. Maginnis, the other
current executive officers of Liqui-Box, and J. Dean Lanier, who was an
executive officer of Liqui-Box until his resignation effective as of October 1,
1994.
COMPENSATION PRINCIPLES
Liqui-Box's executive compensation program has existed in its present form
for approximately ten years and consists of base salary, a bonus based on pretax
profits payable under the Liqui-Box Corporation Profit Participation Plan (the
"Liqui-Box PPP"), contributions to various savings and stock ownership programs
and stock options.
Liqui-Box recognizes the need for executive compensation to be directly
reflective of corporate performance. As such, the philosophy has been for many
years, and continues to be, that base salaries should constitute a small portion
of the executive officer's total compensation package with the largest portion
of his compensation being based on an allocated percentage of pretax profits
under the Liqui-Box PPP. This practice applies to the majority of Liqui-Box
employees, with the exception that, at lower levels of responsibility, a greater
portion of compensation is base salary with less of the employees' total
compensation being tied to profit.
Under the Liqui-Box PPP, pretax profits are calculated quarterly for the
first three quarters and are estimated in December for the fourth quarter.
Liqui-Box applies a fixed percentage (approximately 33 1/3 percent as determined
many years ago) to each quarter's pretax profit to come up with an allocation to
be distributed among all the eligible employees in the form of a quarterly
bonus. This allocation is further broken down to distribute a greater fixed
percentage to those employees who have a more direct impact on corporate profits
(CEO, officers, managers) and a smaller fixed percentage to those employees who
have a less direct impact on profits. Each employee's share of the pool is
further impacted by the number of employees in the overall bonus pool in any
year.
If Liqui-Box's pretax profits increase, the allocation of pretax profit
dollars to compensation increases. If pretax profits decrease, so does the
allocation of pretax profit dollars to compensation. This directly impacts
compensation of executive officers, as well as all other eligible employees.
The Board believes that this type of compensation has attracted, and
continues to attract, the type of executive officers and employees that are
critical to the long term success of Liqui-Box. The Board also believes that
this type of compensation has led, and will continue to lead, to the solid
growth of Liqui-Box while rewarding executive officers and employees for their
joint effort to improve profitability.
5
<PAGE> 8
Prior to 1992, stock options were not a significant part of Liqui-Box's
executive compensation program. During 1992, a determination was made to use
stock option grants to create long term incentives to continue the growth in
shareholder value. An independent Stock Option Committee was created. The Stock
Option Committee adopted guidelines for annual option grants under the 1990
Liqui-Box Stock Option Plan. The guidelines call for annual grants of
non-qualified options. The number of non-qualified options to be granted each
year is based on a percentage of the executive officer's eligible compensation
and the exercise price of the options is 100% of the fair market value of the
common shares of Liqui-Box on the date of grant. In addition, the guidelines
provide for annual grants of Supplemental Retirement Discounted Options which
are exercisable only upon termination of employment. The Supplemental Retirement
Discounted Options are intended to encourage executive officers to remain in the
employ of Liqui-Box until retirement. See footnote (1) to the table under
"OPTIONS GRANTED IN THE LAST FISCAL YEAR." The number of Supplemental Retirement
Discounted Options to be granted each year is based on an actuarial formula
designed to yield post retirement income equal to a percentage of the executive
officer's average compensation over the last five years of his employment by
Liqui-Box. The Stock Option Committee believes option grants in accordance with
these guidelines will accomplish the objective of linking the compensation of
executive officers to increases in shareholder wealth as reflected in the market
price of the common shares.
Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits
a publicly-held corporation, such as Liqui-Box, from claiming a deduction on its
federal income tax return for compensation in excess of $1 million paid for a
given fiscal year to the chief executive officer (or person acting in that
capacity) at the close of the corporation's fiscal year and the four most highly
compensated officers of the corporation, other than the chief executive officer,
at the end of the corporation's fiscal year. The $1 million compensation
deduction limitation does not apply to "performance-based compensation." The
Internal Revenue Service issued proposed regulations on December 15, 1993, which
were amended on December 2, 1994, which give some guidance to publicly-held
corporations about how to qualify compensatory plans to meet the
"performance-based compensation" requirements. The final regulations under
Section 162(m) are not expected to be issued until at least later this year.
Liqui-Box has been following this matter closely. Liqui-Box has determined that
it is not necessary to modify the Liqui-Box Corporation 1990 Stock Option Plan
at this time since compensation paid to executive officers under that Plan would
be exempted under the transition provisions of Section 162(m) and the proposed
regulations and, therefore, deductible.
Liqui-Box does not have a policy that requires all compensation payable in
1995 and thereafter to the covered executive officers to be deductible under
Section 162(m). Whenever possible, without distorting or discouraging incentives
for performance that enhance the value of Liqui-Box, Liqui-Box will endeavor to
cause such compensation to be structured so that all of it will be tax
deductible. In all cases, however, whether or not some portion of a covered
executive officer's compensation is tax deductible, Liqui-Box will continue to
carefully consider the net cost value to Liqui-Box of its compensation
decisions.
COMPANY PERFORMANCE AND CEO COMPENSATION
As indicated above, Liqui-Box's executive compensation program is based, in
large part, upon business performance. This pay-for-performance program is
exemplified in the compensation of the CEO.
The Board, has believed, since the mid-1980s when the present executive
compensation program was approved, and continues to believe that Mr. Davis' base
salary of $70,000, which has been unchanged for several years, is substantially
below the base salaries of CEO's in other comparable companies.
Approximately 92.9% of Mr. Davis' cash compensation for 1994 was paid in
the form of a cash bonus under the Liqui-Box PPP. The amount of this bonus is
directly tied to the pretax profits of Liqui-Box. Had Liqui-Box failed to make a
profit, Mr. Davis, as well as most of the other employees, would have received
no bonus under the Liqui-Box PPP.
6
<PAGE> 9
Mr. Davis, along with all other executive officers of Liqui-Box, was
granted options during 1994 in accordance with the above-described guidelines.
The amount of his option grants is directly attributable to the amount of his
cash compensation for 1994 and his five year average compensation.
Submitted by:
Carl J. Aschinger, Jr.*
Jeanette A. Davis*
Samuel B. Davis
Robert S. Hamilton*
Peter J. Linn
John A. Maginnis
- ---------------
*Member of Stock Option Committee.
<TABLE>
SUMMARY COMPENSATION TABLE
The following table summarizes compensation awarded or paid to, or earned
by, each of Liqui-Box's executive officers during each of the last three years:
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#)(1) ($)
- ---------------------------- ---- ------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Samuel B. Davis, 1994 $70,000 $913,144 26,705 $ 4,620(2)
Chairman, Chief 1993 $70,000 $864,671 19,159 $ 14,486
Executive Officer and 1992 $70,000 $717,640 25,509 $ 16,824
Treasurer
Peter J. Linn, 1994 $65,000 $137,546 4,519 $ 7,610(2)
Senior Vice President 1993 $65,000 $127,393 3,510 $ 15,701
and Secretary 1992 $65,000 $110,468 4,675 $ 14,589
John A. Maginnis, 1994 $70,000 $152,839 3,828 $ 10,110(2)
Vice President--Sales 1993 $66,923 $140,966 2,751 $ 15,166
1992 $60,000 $115,468 2,808 $ 10,570
J. Dean Lanier, 1994 $56,296 $100,698 0 $ 4,620(2)
Vice President-- 1993 $70,000 $141,671 4,590 $ 14,569
Manufacturing(3) 1992 $70,000 $122,998 5,663 $ 16,097
<FN>
- ---------------
(1) During 1994, two different option grants were made to executive officers.
See the table under "OPTIONS GRANTED IN THE LAST FISCAL YEAR."
(2) Includes employer contributions to the Liqui-Box ESOP and to the 401(k)
portion of the Liqui-Box Corporation Employees' Profit Sharing and Salary
Deferral Plan (the "Liqui-Box Profit Sharing and Salary Deferral Plan")
during 1994. Does not include amounts allocable to the named executive
officers' accounts in the deferred profit-sharing portion of the Liqui-Box
Profit Sharing and Salary Deferral Plan for 1994, which amounts will be
calculated during 1995 and disclosed as earned in 1994 in next year's proxy
statement.
(3) Mr. Lanier resigned his positions as an executive officer and a director of
Liqui-Box effective as of October 1, 1994.
</TABLE>
7
<PAGE> 10
<TABLE>
OPTIONS GRANTED IN THE LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
options made under the 1990 Liqui-Box Stock Option Plan during the last fiscal
year to each of the named executive officers. Liqui-Box has never granted stock
appreciation rights.
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO TERM(1)
OPTIONS EMPLOYEES IN EXERCISE MARKET EXPIRATION ----------------------------------
NAME GRANTED(#) FISCAL YEAR PRICE($/SH) PRICE($/SH) DATE 0% 5% 10%
- ----------------- ---------- ------------ ----------- ------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Samuel B. Davis 17,803(2) 21.12% $ 15.75 $31.50 (2) $ 280,397 $1,037,088 $2,695,848
8,902(3) 10.56% $ 31.50 $31.50 12/26/04 $ 0 $ 176,350 $ 446,906
Peter J. Linn 2,687(2) 3.19% $ 15.75 $31.50 (2) $ 42,320 $ 156,527 $ 406,883
1,832(3) 2.17% $ 31.50 $31.50 12/26/04 $ 0 $ 36,292 $ 91,972
John A. Maginnis 1,848(2) 2.19% $ 15.75 $31.50 (2) $ 29,106 $ 199,093 $ 810,369
1,980(3) 2.35% $ 31.50 $31.50 12/26/04 $ 0 $ 39,224 $ 99,402
J. Dean Lanier -0- 0% -- -- -- -- -- --
<FN>
- ---------------
(1) The amounts reflected in this table represent certain assumed rates of
appreciation only. Actual realized values, if any, on option exercises will
be dependent on the actual appreciation of the common shares of Liqui-Box
over the term of the options. There can be no assurances that the Potential
Realizable Values reflected in this table will be achieved.
(2) 1994 Supplemental Retirement Discounted Options. These options are intended
to encourage executive officers to remain in the employ of Liqui-Box until
retirement and to provide them a supplemental retirement benefit. The
options become exercisable upon termination of the executive officer's
employment (other than upon termination for cause); provided, however, that
the options become fully exercisable upon an earlier change in control of
Liqui-Box. If the executive officer's employment is terminated for cause,
the options will be cancelled as of the date of such termination. If the
executive officer's employment is terminated by reason of retirement or
becoming disabled, the options may be exercised at any time thereafter
during his lifetime and at any time during the six month period after his
death. If the executive officer's employment is terminated by reason of his
death, the options may be exercised at any time during the six month period
after his death. If the executive officer's employment is terminated for any
reason other than retirement, death, disability or cause, the number of
options which may be exercised is reduced by a maximum of 25%, if
termination is at age 55 or under, to a minimum of 2.5%, if termination is
at age 64 (50% to 5% during the same range of years if the executive officer
does not sign an agreement not to compete), and the options expire six
months after the executive officer's death. The Potential Realizable Values
of the options assume an expiration date of five years after each executive
officer's normal retirement date.
(3) These options were granted on December 27, 1994, and become exercisable in
25% per year increments beginning on the first anniversary of the grant
date; provided, however, that the options become fully exercisable upon an
earlier change in control of Liqui-Box. The options are forfeited upon the
executive officer's leaving the employ of Liqui-Box, except that if the
executive officer's employment is terminated by reason of his death or
becoming disabled, the options may be exercised at any time during the six
month period after his death or termination of employment, subject to the
stated term of the options. If the executive officer enters into competition
with Liqui-Box within 18 months after the termination of his employment, the
Stock Option Committee may require him to return to Liqui-Box the economic
value of any option which was realized during the six month period prior to
the date of the termination of his employment.
</TABLE>
8
<PAGE> 11
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with respect to options
exercised during the last fiscal year by each of the named executive officers
and information concerning unexercised options held at year end by such
executive officers:
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SECURITIES OPTIONS AT AT FISCAL
UNDERLYING FISCAL YEAR-END(#) YEAR-END($)(1)(2)
OPTIONS VALUE -------------------------- --------------------------
NAME EXERCISED(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Samuel B. Davis 8,639 $167,424 109,460 65,482 $2,018,729 $ 903,664
Peter J. Linn 0 $ 0 17,520 11,392 $ 339,168 $ 146,581
John A. Maginnis 0 $ 0 1,087 8,300 $ 6,301 $ 89,619
J. Dean Lanier 0 $ 0 1,366 8,887 $ 8,401 $ 130,082
<FN>
- ---------------
(1) All values as shown are pre-tax.
(2) Based on the fiscal year-end closing price of $33.25 per common share.
</TABLE>
DIRECTOR COMPENSATION
Directors who are not employees of Liqui-Box receive a $2,500 per quarter
retainer.
PEER GROUP COMPARISON
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following line graph compares the yearly percentage change in
Liqui-Box's cumulative total shareholder return (as measured by dividing (i) the
sum of (A) the cumulative amount of dividends for the measurement period,
assuming dividend reinvestment, and (B) the difference between Liqui-Box's share
price at the end and the beginning of the measurement period; by (ii) the share
price at the beginning of the measurement period) against the cumulative return
of the Wilshire 500 Index and the Dow Jones: Containers/Packaging Industry Group
Index for the five year period ended December 31, 1994.
9
<PAGE> 12
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG LIQUI-BOX CORPORATION, WILSHIRE 5000
AND DOW JONES CONTAINERS/PACKAGING INDEX
<TABLE>
<CAPTION>
DOW JONES
CONTAINERS/
PACKAGING
LIQUI-BOX WILSHIRE 5000 INDEX
<S> <C> <C> <C>
1989 $ 100 $ 100 $ 100
1990 107 94 86
1991 121 126 135
1992 161 137 147
1993 218 153 141
1994 193 153 140
</TABLE>
OVERALL -- Each performance graph index begins with a base value of $100.
This base is adjusted by annual stock market price changes and cumulative annual
dividend payments over the time frame of each index (as specified by the SEC in
its disclosure rules).
LIQUI-BOX CORPORATION -- Stock prices and dividends adjusted for stock
splits.
WILSHIRE 5000 -- The broadest of all indexes, tracking value of all stock
issues for which quotes are available. Changes are measured against a base value
established in December 31, 1980. This index is market-value weighted.
DOW JONES: CONTAINERS/PACKAGING INDUSTRY GROUP -- An industry index
published by Dow Jones of geographically representative companies in the
industry. The index is adjusted to account for stock splits and dividends.
BOARD OF DIRECTOR INTERLOCKS AND INSIDER PARTICIPATION
Liqui-Box does not have a compensation committee; therefore, the Board
functions as the committee. The Board includes Samuel B. Davis, Peter J. Linn
and John A. Maginnis, current executive officers of Liqui-Box, and Robert S.
Hamilton, a retired executive officer of Liqui-Box, each of whom participated in
Board discussions concerning executive officer compensation. J. Dean Lanier, who
served as a member of the Board and as an executive officer of Liqui-Box until
his resignation effective as of October 1, 1994, also participated in Board
discussions concerning executive officer compensation. In addition, John B.
Reinhardt, Jr., Chief Executive Officer and a director of Central Benefits
Mutual Insurance Company, sat on the Board of Liqui-Box until his resignation
effective as of August 25, 1994. Samuel B. Davis, Chairman of Liqui-Box, sat on
the Board of Central Benefits Mutual Insurance Company until his resignation in
August, 1994.
10
<PAGE> 13
TRANSACTIONS WITH EXECUTIVES
Prior to 1982, Liqui-Box had a loan program whereby officers and employees
could borrow money for the purchase of common shares of Liqui-Box. Liqui-Box had
one unsecured installment loan under this program outstanding to Samuel B. Davis
during the 1994 fiscal year. This loan was paid in full on December 28, 1994.
Interest at the rate of six percent (6%) per annum was charged on the loan prior
to its repayment. During 1994, the largest principal amount outstanding under
this loan was $61,842.30.
PROPOSAL TO AMEND SECTION 2 OF ARTICLE II OF THE
REGULATIONS OF LIQUI-BOX IN ORDER TO REQUIRE
ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS FOR
ELECTION TO THE BOARD OF DIRECTORS
[Proposal No. 2 on Proxy]
The Board of Directors of Liqui-Box has unanimously approved, and for the
reasons described below unanimously recommends that the shareholders of
Liqui-Box approve, a proposal which amends Section 2 of Article II of the
Regulations to require any shareholder who desires to nominate one or more
individuals for election as directors of Liqui-Box to submit a written proposal
of such nomination to the Secretary of Liqui-Box within a specified period of
time prior to the meeting of shareholders at which directors are to be elected.
Each such written notice of a proposed nominee must set forth: (1) the name, age
and business or residence address of each proposed nominee; (2) the principal
occupation or employment of each such nominee; (3) the number of common shares
of Liqui-Box owned beneficially and/or of record by each such nominee and the
length of time any such common shares have been so owned; (4) the name and
residence address of the notifying shareholder; and (5) the number of common
shares beneficially owned by the notifying shareholder. The proposed amendment
to Section 2 of Article II of the Regulations is set forth in Appendix I
attached hereto and made a part hereof.
Section 1701.55 of the Ohio Revised Code provides that only persons
nominated as candidates are eligible for election as directors at a meeting of
shareholders. Section 1701.56(A)(3) provides that directors shall have such
qualifications as are imposed by the articles or regulations of an Ohio
corporation. Liqui-Box's Regulations presently contain no special nomination
procedures for directors. Under proposed Section 2 of Article II, no person may
be nominated or qualified for election as a director of Liqui-Box by a
shareholder unless such person has been proposed in a written notice delivered
or mailed to the Secretary of Liqui-Box. In the case of a nominee proposed for
election as a director at an annual meeting of shareholders, such written notice
would have to be submitted to the Secretary on or before the later of (i)
February 1, immediately preceding such annual meeting, or (ii) the sixtieth
(60th) day prior to the first anniversary of the most recent annual meeting of
shareholders of Liqui-Box. In the case of a nominee proposed for election as a
director at a special meeting of shareholders, such written notice of a proposed
nominee would have to be submitted to the Secretary of Liqui-Box no later than
the close of business on the seventh (7th) day following the day on which notice
of the special meeting was mailed to shareholders.
If a shareholder attempts to nominate one or more persons for election as a
director at any meeting of shareholders without having properly identified each
such person in a written notice, each such attempted nomination will be invalid
and will be disregarded unless the person acting as chairman of the meeting
determines that the facts warrant the acceptance of the proposed nomination.
The purpose of the nomination provisions is to avoid the possibility of
surprise nominations that would preclude management from investigating, and the
shareholders from adequately assessing, the competence, experience, integrity
and other relevant factors concerning the qualifications of the proposed
nominee. In the absence of such provisions, nominations could be made from the
floor and such nominees could be elected to the Board of Directors without
furnishing information about such nominees to the shareholders in advance for
their consideration in accordance with the Exchange Act if such persons do not
solicit proxies or limit their proxy solicitation to fewer than ten (10)
persons. The Board of Directors of Liqui-Box believes that shareholders are
entitled to know basic information about the qualifications of persons nominated
for election
11
<PAGE> 14
as directors and that the proposed nomination provisions will substantially
assist management in ensuring the availability of such information.
A possible adverse effect of the proposed nomination provisions may be that
a person otherwise qualified to serve as a director and who is proposed for
nomination and election by the holders of a sufficient number of the outstanding
common shares to elect one director may not be nominated or elected due to
inadvertence. Also, the nomination provisions may make it easier for incumbent
directors to solicit proxies to resist a dissident slate of directors and, thus,
retain their status as directors, even when the dissident nominations might be
in the best interest of Liqui-Box and its shareholders. In this sense, the
proposed nomination provisions can be viewed as advantageous to incumbent
directors and executive officers and may discourage takeover attempts. However,
the Board of Directors believes that the benefits to the shareholders of the
proposed nomination provisions outweigh any possible disadvantages and that the
proposed nomination provisions are reasonable rules to govern the nominating
process.
The affirmative vote of the holders of common shares entitling them to
exercise a majority of the voting power of Liqui-Box on such proposal is
required to adopt the proposed amendment to Section 2 of Article II of the
Regulations.
THE BOARD OF DIRECTORS OF LIQUI-BOX UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE AMENDMENT TO SECTION 2 OF
ARTICLE II OF THE REGULATIONS. UNLESS OTHERWISE DIRECTED, THE PERSONS NAMED IN
THE ENCLOSED PROXY WILL VOTE THE COMMON SHARES REPRESENTED BY ALL PROXIES
RECEIVED PRIOR TO THE ANNUAL MEETING, AND NOT PROPERLY REVOKED, IN FAVOR OF THE
PROPOSAL TO APPROVE THE AMENDMENT.
INDEPENDENT AUDITORS
The Board of Directors of Liqui-Box has not selected an accounting firm to
serve as independent auditors for Liqui-Box for the 1995 fiscal year. As part of
the ongoing review of the auditing and tax services required by Liqui-Box, the
Audit Committee of the Board of Directors of Liqui-Box has conducted a review
and evaluation of the qualifications and capabilities of several accounting
firms, including its current accounting firm, to provide such services. Such
review has not been completed as of the date of this Proxy Statement. After
completing its review of such accounting firms' qualifications and capabilities,
the Audit Committee will make its recommendation to the Board of Directors as to
the appointment of independent auditors for Liqui-Box for the 1995 fiscal year.
Ernst & Young is the accounting firm which served as independent auditors
for Liqui-Box for the 1994 fiscal year. It is expected that representatives of
Ernst & Young will be present at the Annual Meeting, will have the opportunity
to make a statement if they desire to do so, and will be available to respond to
appropriate questions.
ANNUAL REPORT
The 1994 Annual Report, which includes financial statements and information
concerning Liqui-Box's operations during the 1994 fiscal year, accompanies this
Proxy Statement.
LIQUI-BOX WILL PROVIDE, WITHOUT CHARGE, TO ANY PERSON SOLICITED (UPON
WRITTEN REQUEST OF SUCH PERSON), A COPY OF LIQUI-BOX'S ANNUAL REPORT ON FORM
10-K FOR THE 1994 FISCAL YEAR, INCLUDING THE FINANCIAL STATEMENTS AND THE
FINANCIAL STATEMENT SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SEC. SUCH
REQUEST SHOULD BE ADDRESSED TO SAMUEL B. DAVIS, CHAIRMAN, LIQUI-BOX CORPORATION,
P.O. BOX 494, WORTHINGTON, OHIO 43085-0494.
12
<PAGE> 15
OTHER MATTERS
The management and the Board of Directors do not know of any other matters
which may come before the Annual Meeting. However, if any other matters properly
come before the Annual Meeting, it is the intention of the persons named in the
accompanying form of proxy to vote the common shares represented by the proxy in
their discretion as the Board of Directors may recommend. The enclosed proxy is
being solicited by the Board of Directors of Liqui-Box which will bear the cost
of solicitation of proxies. In addition to the use of the mails, proxies may be
solicited by officers, directors and regular employees of Liqui-Box, personally,
by telephone or by telegraph.
SHAREHOLDER PROPOSALS
Any proposals by Liqui-Box shareholders intended to be presented at the
1996 Annual Meeting of Shareholders must be received by Liqui-Box prior to
November 18, 1995, in order to be considered for inclusion in Liqui-Box's 1996
Proxy Statement.
By Order of the Board of Directors
Peter J. Linn
Secretary
13
<PAGE> 16
APPENDIX I
PROPOSED AMENDMENT TO SECTION 2 OF
ARTICLE II OF THE REGULATIONS OF LIQUI-BOX CORPORATION
ARTICLE II
DIRECTORS
SECTION 2. QUALIFICATIONS AND NOMINATIONS.
(A) Directors need not be shareholders.
(B) Any nominee for election as a director of the corporation may be
proposed only by the Board of Directors or by any shareholder entitled to vote
for the election of directors. No person, other than a nominee proposed by the
Board of Directors, may be nominated for election as a director of the
corporation unless such person shall have been proposed in a written notice,
delivered or mailed by first-class United States mail, postage prepaid, to the
Secretary of the corporation at its principal office. In the case of a nominee
proposed for election as a director at an annual meeting of shareholders, such
written notice of a proposed nominee shall be received by the Secretary of the
corporation on or before the later of (i) February 1, immediately preceding such
annual meeting or (ii) the sixtieth (60th) day prior to the first anniversary of
the most recent annual meeting of shareholders of the corporation held for the
election of directors; provided, however, that if the annual meeting for the
election of directors in any year is not held on or before the thirty-first
(31st) day next following such anniversary, then the written notice required by
this subparagraph (A) shall be received by the Secretary within a reasonable
time prior to the date of such annual meeting. In the case of a nominee proposed
by a shareholder for election as a director at a special meeting of shareholders
at which directors are to be elected, such written notice of a proposed nominee
shall be received by the Secretary of the corporation no later than the close of
business on the seventh (7th) day following the day on which notice of the
special meeting was mailed to shareholders. Each such written notice of a
proposed nominee shall set forth: (1) the name, age, business or residence
address of each proposed nominee; (2) the principal occupation or employment of
each such nominee; (3) the number of common shares of the corporation owned
beneficially and/or of record by each such nominee and the length of time any
such common shares have been so owned; (4) the name and residence address of the
notifying shareholder; and (5) the number of common shares beneficially owned by
the notifying shareholder.
(C) If a shareholder shall attempt to nominate one or more persons for
election as a director at any meeting at which directors are to be elected
without having identified each such person in a written notice given as
contemplated by, and/or without having provided therein the information
specified in, subparagraph (B) of this Section, each such attempted nomination
shall be invalid and shall be disregarded unless the person acting as chairman
of the meeting determines that the facts warrant the acceptance of such
nomination.
I-1
<PAGE> 17
LIQUI-BOX CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 26, 1995
The undersigned hereby constitutes and appoints Jeanette A. Davis, Samuel B.
Davis and Peter J. Linn and each of them, with full power of substitution and
revocation, as proxy or proxies to appear and vote the common shares of
Liqui-Box Corporation ("Liqui-Box") which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders on April 26,
1995, and any adjournment thereof, for the following purposes:
1. Election of four (4) directors for terms expiring in 1997.
<TABLE>
<S> <C>
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to contrary below)* to vote for all nominees listed below
Carl J. Aschinger, Jr. Jeanette A. Davis Peter J. Linn C. William McBee
</TABLE>
* (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW:)
- --------------------------------------------------------------------------------
2. Amendment of Section 2 of Article II of the Regulations of Liqui-Box in
order to require advance notice of shareholder nominations for election to
the Board of Directors.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Over)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED BY THE
SHAREHOLDERS. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2. IF ANY OTHER MATTERS ARE BROUGHT BEFORE THE MEETING OR IF A
NOMINEE FOR ELECTION AS A DIRECTOR NAMED IN THE PROXY STATEMENT IS UNABLE TO
SERVE OR FOR GOOD CAUSE WILL NOT SERVE, THE PROXY WILL BE VOTED IN THE
DISCRETION OF THE PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEE(S) AS
THE DIRECTORS MAY RECOMMEND.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement and hereby expressly revokes any and all proxies heretofore
given or executed by the undersigned with respect to the common shares
represented by this proxy.
Date.........................
.............................
.............................
(Please sign here exactly as
name appears herein. If
common shares are registered
in two names, both should
sign.) When signing as
attorney, executor,
administrator, trustee,
guardian or corporate
official, please give your
full title.
