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:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CBI INDUSTRIES, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(j)(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:(1)
.......................................................
4) Proposed maximum aggregate value of transaction:
.......................................................
(1) Set forth the amount on which the filing is calculated and
state how it was determined.
[ ] 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
PRELIMINARY PROXY STATEMENT
CBI INDUSTRIES, INC.
800 JORIE BOULEVARD
OAK BROOK, ILLINOIS 60521-2268
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1994
To the Shareholders of:
CBI INDUSTRIES, INC.
You are hereby notified that the Annual Meeting of
Shareholders of CBI Industries, Inc. will be held at Drury Lane
Oakbrook Terrace, 100 Drury Lane, Oakbrook Terrace, Illinois, at
10:30 A.M., Central Time, on Thursday, May 12, 1994, for the
following purposes:
1. To elect four directors to serve for a three year term
expiring in 1997;
2. To amend the Company's Certificate of Incorporation to
permit the Company to enter into certain mergers
without shareholder approval (designated as Proposal
No. 1 in the accompanying proxy statement);
3. To adopt the proposed CBI 1994 Restricted Stock Award
Plan (designated as Proposal No. 2 in the accompanying
proxy statement);
4. To adopt the proposed CBI Industries, Inc. Officers'
Bonus Plan (designated as Proposal No. 3 in the
accompanying proxy statement); and
5. To transact such other business as may be properly
brought before the meeting.
Only shareholders of record at the close of business on
March 15, 1994, are entitled to notice of and to vote at the
Annual Meeting and any adjournment thereof. The stock transfer
books will not be closed.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY MAIL THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
C. C. Toerber
Secretary
March _____, 1994
PAGE
CBI INDUSTRIES, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 12, 1994
This proxy statement, which is first being mailed to
shareholders on or about April 6, 1994, is furnished in
connection with the solicitation of proxies on behalf of the
Board of Directors of CBI Industries, Inc. ("CBI" or the
"Company"), who ask you to complete, sign, date and mail the
enclosed proxy for use at the Annual Meeting to be held May 12,
1994, for the purposes set forth in the foregoing notice. Cost
of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited
personally or by telephone or telefax by the directors, officers
and a few regular employees of the Company, without extra
compensation.
The Company's Common Stock, $2.50 par value per share (the
"Common Stock") and the Company's Convertible Voting Preferred
Stock, Series C (the "Series C Preferred Stock") vote together as
a class. Each share of Common Stock entitles the record holder
thereof to one vote on each matter submitted to a vote at the
meeting. The Certificate of Designations for the Series C
Preferred Stock provides that, following the 3-for-2 stock split
in 1991, each share of the Series C Preferred Stock entitles the
record holder thereof to one and one half votes on each matter
submitted to a vote at the meeting. All shares represented by
proxies duly executed and received by the Company prior to the
time a quorum is ascertained at the meeting will be voted at the
meeting or any adjourned session thereof in accordance with the
terms of the proxies. If no choice is indicated on the proxy,
the proxyholders will vote for all the nominees listed herein and
for Proposals No. 1, 2 and 3. If any other business is properly
brought before the meeting, the proxies will be voted in
accordance with the best judgment of the proxyholders.
A shareholder may revoke a proxy at any time before it is
exercised by submitting a document revoking it, by submitting a
duly executed proxy bearing a later date or by attending the
meeting and voting in person.
Only shareholders of record of the __________ shares of the
Common Stock and of the __________ shares of the Series C
Preferred Stock outstanding at the close of business on March 15,
1994, are entitled to notice of and to vote at the meeting.
It is the practice of the Company's management that all
proxies, ballots, consents and voting tabulations that identify
shareholders be kept confidential, except where disclosure may be
required by applicable law, where shareholders write comments on
their proxy cards, where disclosure is expressly requested by a
shareholder, and in the event of a proxy or consent solicitation
not approved and recommended by the Board of Directors, including
a proxy or consent solicitation for a change of control of the
Company based on an opposition proxy or consent statement filed
or required to be filed with the Securities and Exchange
Commission. Inspectors and tabulators of election are
independent and not employees of the Company.
ELECTION OF DIRECTORS
The Board of Directors, which has responsibility for making
broad corporate policy and for the overall management of the
Company, held six regular meetings in 1993.
The Company's Certificate of Incorporation provides for a
Board of Directors of not less than nine nor more than eighteen
members, as determined from time to time by resolution of the
Board, divided into three classes, with members of each class
serving a three year term. Effective January 13, 1993, the size
of the Board is thirteen. Four directors are to be elected to
serve until the Annual Meeting of Shareholders in 1997 or until
their successors shall be elected and qualified. All nominees
have indicated that they are willing and able to serve as
directors if elected and are presently directors of the Company.
If any nominee should be unable to serve for any reason, the
proxyholders may vote for a substitute designated by the Board in
each such case.
Directors will be elected by a majority of the votes cast at
the meeting. Abstentions, directions to withhold authority to
vote for a director-nominee or to withhold authority to vote for
all director-nominees and "broker non-votes" (where a named
entity holding shares for a beneficial owner has not received
voting instructions from the beneficial owner with respect to a
particular matter and such named entity does not possess or
choose to exercise its discretionary authority with respect there
to) will be considered present at the meeting but will not be
counted to determine the total number of votes cast.
Certain information with respect to the nominees for
directors and the nine directors whose terms do not expire this
year is as follows:
Nominees for Election for Term of Three Years Expiring in 1997:
R. J. DANIELS, 60, Executive Vice President since April 21,
1988. President of Liquid Carbonic Industries Corporation since
January 1, 1988, Executive Vice President-U.S. Operations from
1987 to 1988 and Senior Vice President-Chief Financial Officer
from 1983 to 1987. Director of the Company since April 21, 1988.
J. E. JONES, 59, Chairman of the Board, President and Chief
Executive Officer since May 11, 1989, President and Chief
Operating Officer from January 1, 1988 to May 11, 1989, Vice
Chairman of the Board from 1985 to January 1, 1988. Director of
the Company since April 13, 1976. Director of Allied Products
Corporation (diversified manufacturer); Interlake Corporation
(metals, material handling and packaging); Amsted Industries
Incorporated (diversified manufacturer); Valmont Industries, Inc.
(irrigation equipment and industrial products); and NICOR Inc.
(utility).
E. J. MOONEY, JR., 52, President and Director of Nalco
Chemical Company (specialty chemicals) since March 1, 1990,
Executive Vice President and Director from 1988 to 1990, and
Group Vice President and President-Petroleum Division from 1986
to 1988. Director of the Company since December 6, 1988.
Member: Compensation Committee (Chairman); Nominating Committee.
R. G. WALLACE, 67, Retired. Executive Vice President and
Director of Phillips Petroleum Company (petroleum exploration,
production, refining and marketing) from June, 1982 until
October, 1988. Director of the Company since April 17, 1986.
Director of Valmont Industries (irrigation systems, steel tubing
and electrical products) and A. Schulman (plastics compounding
and sales). Member: Audit Committee; Nominating Committee
(Chairman).
Directors to Continue in Office with Terms Expiring in 1995:
E. H. CLARK, JR., 67, Chairman of the Board and Chief
Executive Officer of The Friendship Group (investment
partnership) since January 26, 1989. Chairman of the Board of
Baker-Hughes Incorporated (products and services for the
petroleum and mining industries) from April 3, 1987 to his
retirement on January 25, 1989, Chairman of the Board of Baker
International Corporation from 1980 to April 3, 1987, and Chief
Executive Officer from 1965 to January 28, 1987. Director of the
Company since April 14, 1981. Director of Honeywell, Inc.
(electronic and pneumatic controls and systems); Kerr-McGee
Corporation (oil, gas and mining); Beckman Instruments Inc.
(instrumentation for medical and life sciences); and American
Mutual Fund (a mutual fund for public investment). Member:
Audit Committee; Nominating Committee.
J. T. HORTON, 65, Engineering Consultant. Director of the
Company since November 3, 1959. Director of Beverly Bank
(banking) and Director and Chairman of the Board of Horton
Trading Limited (investments and data processing). Member:
Compensation Committee; Nominating Committee.
G. L. SCHUEPPERT, 55, Executive Vice President-Finance since
August 1, 1987. Director of the Company since May 11, 1989.
Director of Wells Manufacturing Company (steel alloys and
castings).
R. T. STEWART, 61, Chairman, President and Chief Executive
Officer of Scott Paper Limited, a Canadian corporation
(manufacturer of sanitary paper products). Director of the
Company since November 11, 1992. Director of Royal Bank of
Canada (banking) and BC Gas Inc. (natural gas utility company).
Member: Compensation Committee; Nominating Committee.
Directors to Continue in Office with Terms Expiring in 1996:
L. E. AKIN, 56, Executive Vice President since August 2,
1988, Senior Vice President from April, 1988, to August 2, 1988,
and Vice President of the Company from 1986 to 1988. President
of Chicago Bridge & Iron Company since July 1, 1988 and President
of CBI Services, Inc. from 1985 to 1988. Director of the Company
since August 2, 1988.
W. N. CALDWELL, 66, Retired. President of W.W. Grainger,
Inc. (national distributor of industrial and commercial products)
from 1984 until he retired on July 31, 1992. Director of the
Company since December 6, 1988. Director of Consolidated Papers,
Inc. (manufacturer of coated paper); Kewaunee Scientific
Corporation (manufacturer of laboratory furniture and equipment);
and APS Holdings, Inc. (second largest distributor of automotive
parts and supplies). Member: Audit Committee (Chairman);
Nominating Committee.
R. J. DAY, 69, Retired. Chairman of the Board of USG
Corporation (building products) from January, 1990 until he
retired on May 31, 1990, Chairman of the Board and Chief
Executive Officer from February, 1987 until 1990, Chairman of the
Board, President and Chief Executive Officer from 1985 until
1987, and President and Chief Operating Officer from 1981 until
1985, and Director from 1979 to 1990. Director of the Company
since April 13, 1982. Director of GATX Corporation (railcar
leasing and financial services) and Duff & Phelps Selected
Utilities (investment fund). Member: Compensation Committee;
Nominating Committee.
G. E. MACDOUGAL, 57, General Director, New York City Ballet.
Honorary Chairman of the Board of Mark Controls Corporation
(building management systems and flow control products) since
1987 and Chairman of the Board and Chief Executive Officer from
1969 to 1987. Director of the Company since 1981. Since 1987,
Assistant Campaign Manager, George Bush for President, then
United States Delegate and Alternate Representative to the United
Nations General Assembly, 1989-1990. Director (and Chairman of
the Board from 1991-1993) of Bulgarian-American Enterprise Fund,
1991 to present. Director of United Parcel Service (parcel
delivery service); Director and Member of the Executive Committee
of Union Camp Corporation (forest products); and Advisory
Director of Saratoga Partners (venture capital fund). Member:
Compensation Committee; Nominating Committee.
J. F. RIORDAN, 58, President of MidCon Corp. (diversified
natural gas company) since 1988 and Chief Executive Officer since
1990, and Executive Vice President and Director of Occidental
Petroleum Corporation (diversified petroleum, chemical and
natural gas company), the parent company of MidCon Corp., since
1991. Director of the Company since January 13, 1993. Member:
Audit Committee; Nominating Committee.
COMMITTEES OF THE BOARD
The Audit Committee, which held three meetings in 1993, is
charged with reviewing the adequacy and effectiveness of the
internal auditing, accounting and financial controls of the
Company, and coordinating the annual internal audit plan with the
auditing plan of the independent auditors. The Committee
receives reports from the Company's Internal Audit Department,
reviews the annual report to shareholders and the financial
statements contained therein, reviews the audit performed by the
Company's independent auditors and acts as liaison between the
independent auditors and the Board. The Committee makes
recommendations concerning the appointment of the independent
auditor of the Company, the scope of the audit to be performed
and the fees to be paid. The Committee is also authorized to
audit and monitor the compliance by the Company and its
subsidiaries with the laws of the various jurisdictions in which
the company and its subsidiaries conduct business and to report
to the Board and make recommendations with respect to any
problems.
The Compensation Committee, which held two meetings in 1993,
reviews and makes recommendations concerning compensation
philosophy and guidelines for the executive and managerial group
of the Company; reviews compensation and benefit programs for
employees of the Company and its subsidiaries, compares such
programs and compensation against market data and makes
recommendations as to modifications; reviews recommendations or
actions of management concerning benefit plans, incentive plans,
stock option or other stock awards and oversees the
administration of such plans; reviews compensation, and awards
and grants under corporate benefit plans for the Chief Executive
Officer; reviews management recommendations concerning
compensation for certain other officers; administers the CBI
Industries, Inc. Stock Option Plan and the CBI 1989 Restricted
Stock Award Plan; and makes determinations as to which key
officers of the Company or its subsidiaries should be offered
employment and/or termination agreements.
The Nominating Committee, which did not meet in 1993,
establishes criteria regarding the size and composition of the
Board and its Committees, recommends criteria relating to tenure
and eligibility, identifies, reviews and recommends prospective
Board members, recommends candidates for the position of Chief
Executive Officer and Chief Financial Officer, and approves the
nominees for new positions on the Board and vacancies. It will
consider nominees for the Board recommended by shareholders.
Pursuant to the Company's by-laws, recommendations must be
submitted in writing and addressed to the Chairman of the
Nominating Committee, c/o Secretary of the Company, C.C. Toerber,
CBI Industries, Inc., 800 Jorie Boulevard, Oak Brook, IL 60521-
2268 not less than sixty days prior to the first anniversary of
the date of the last meeting of shareholders called for the
election of directors and set forth the name, age, business and
residential address, principal occupation, number of shares of
Common Stock owned and such other information concerning the
nominee as may be required by the Federal securities laws with
respect to an individual nominated as a director for whom proxies
are solicited.
COMMON STOCK OWNERSHIP BY CERTAIN
PERSONS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information with
respect to each person known to the Company to be the beneficial
owner of more than 5% of any class of the Company's outstanding
stock.
Amount and Nature
of Beneficial
Title Name and address Ownership Percent
of Class of Beneficial Owner Class of Class
Common Stock LaSalle National Trust, N.A. 4,761,084 (1) 11.54%
135 South LaSalle Street
Chicago, IL 60603
Common Stock Capital Guardian (2) %
Common Stock Putnam Investments, Inc. 2,709,283 (3) 7.2%
One Post Office Square
Boston, MA 02109
Common Stock State of Wisconsin Investment 2,061,700 (4) 5.5%
Board
P.O. Box 7842
Madison, WI 53707
(1) According to an amended Schedule 13G dated February 10,
1994, these shares are held by LaSalle National Trust, N.A.
in its capacity as Trustee of the CBI Salaried Employee
Stock Ownership Plan (1987) (the "ESOP"). It has shared
power to vote the shares and sole power to dispose of the
shares. Includes 2,487,007 unallocated shares of Series C
Preferred Stock (which are convertible into 3,730,511 shares
of Common Stock). Excludes 792,738 shares of Common Stock
and 1,226,512 shares of Series C Preferred Stock (which are
convertible into 1,839,768 shares of Common Stock) which are
allocated to accounts of ESOP participants.
(2) According to Schedule 13G dated February , 1994 filed by
Capital Guardian, it had sole power to vote
shares, shared power to vote shares, and sole
power to dispose of shares.
(3) According to Schedule 13G dated January 26, 1994 filed by
Putnam Investments, Inc. and its subsidiaries, Putnam
Investment Management, Inc. and The Putnam Advisory Company,
Inc., it had shared power to vote 28,800 shares and shared
power to dispose of 2,709,283 shares.
(4) According to Schedule 13G dated February 8, 1994 filed by
the State of Wisconsin Investment Board, it had sole voting
power and sole dispositive power with respect to the shares.
Security Ownership of Management of the Company
The following table sets forth certain information regarding
the Company's Common Stock beneficially owned on February 16,
1994, by each director and nominee, each named executive officer
and by all directors and executive officers as a group.
Shares of Common Stock Percent of
Shares of Common Stock Outstanding
Name of Beneficially Owned As of Common
Beneficial Owner February 16, 1994 (1) Stock
J. E. Jones 70,536 (2) *
L. E. Akin 28,831 (2) *
W. N. Caldwell 1,200 *
E. H. Clark, Jr. 1,050 *
R. J. Daniels 21,970 (2) *
R. J. Day 1,350 *
J. T. Horton 1,536,114 (3) 4.2%
G. E. MacDougal 3,400 *
E. J. Mooney 1,650 *
J. F. Riordan 1,000 *
G. L. Schueppert 39,105 (2) *
R. T. Stewart 800 *
R. G. Wallace 1,350 *
C. O. Ziemer 25,421 (2) *
All directors and
executive officers as a
group (17 in number) 1,733,777 (2) 4.7%
*Beneficially owns less than one percent of the Company's out-
standing shares of Common Stock.
(1) Share amounts for individual directors and all directors and
officers as a group include shares awarded pursuant to the
CBI restricted stock award plans for which restrictions have
not lapsed, shares of Common Stock held pursuant to the CBI
Salaried Employee Stock Ownership Plan (1987) and shares
owned by spouses and certain other immediate family members.
(2) Excludes shares which are subject to presently exercisable
stock options as follows: J.E. Jones, 137,500 shares; L.E.
Akin, 40,800 shares; R.J. Daniels, 64,500 shares; G.L.
Schueppert, 66,450 shares; C.O. Ziemer 33,700 shares; and
directors and executive officers as a group, 375,550 shares,
and excludes shares of Series C Preferred Stock held
pursuant to the CBI Salaried Employee Stock Ownership Plan
(1987) as follows: J.E. Jones, 4,369 shares; L.E. Akin,
3,827 shares; R.J. Daniels, 3,966 shares; G.L. Schueppert,
4,015 shares; C.O. Ziemer, 3,135 shares; and directors and
executive officers as a group, 23,522 shares.
(3) Includes 1,534,140 shares owned by Mr. Horton as co-trustee
of twenty-one trusts of which he has a one-sixth beneficial
interest.
Compliance with Section 16 of the Exchange Act
Under rules adopted by the Securities and Exchange Commis-
sion effective May 1, 1991, the Company is required to report
certain information about any director, officer, beneficial owner
of more than ten percent of its Common Stock or its Preferred
Stock, or any other person subject to Section 16 of the
Securities Exchange Act of 1934 that failed to file on a timely
basis the reports required by Section 16(a) of the Exchange Act
(the "Reports") during the last fiscal years. Based upon
information furnished to the Company, including the Reports in
question, as contemplated by the rules, it appears that C. T.
Haller, Jr., who was elected Vice President-Administration of the
Company on August 11, 1993, filed his ownership report on Form 3
late.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash and noncash
compensation for each of the last three fiscal years awarded to
or earned by the Chief Executive Officer of the Company and the
four other most highly compensated executive officers of the
Company.
Long Term Compensation
Annual Compensation Awards
(a) (b) (c) (d) (f) (g) (i)
Securities
Restricted Underlying
Stock Options/ All Other
Name and Salary Bonus Award(s) SARs (# Compensation
Principal Position Year ($) ($)<F1> ($)<F2> Shares)<F3> ($)<F4><F5>
J.E. Jones, Chairman of the 1993 530,000 77,000 515,250 28,000 133,222
Board, President, Chief 1992 495,000 456,667 0 28,000 78,395
Executive Officer and 1991 460,000 267,102 536,250 27,000
Director
L.E. Akin, Executive Vice 1993 290,000 35,000 200,375 12,000 76,575
President and Director, 1992 275,000 201,822 0 13,500 42,428
President of Chicago Bridge 1991 250,000 158,419 160,875 13,500
& Iron Company
R.J. Daniels, Executive 1993 265,000 43,515 171,750 11,000 67,456
Vice President and 1992 252,000 148,057 0 12,000 40,191
Director, President of 1991 242,000 81,621 143,000 12,000
Liquid Carbonic Industries
Corporation
G.L. Schueppert, Executive 1993 305,000 35,000 200,375 12,000 87,047
Vice President, Chief 1992 290,000 218,895 0 13,500 46,156
Financial Officer and 1991 270,000 123,898 160,875 14,250
Director
C.O. Ziemer, Senior Vice 1993 192,000 25,000 85,875 6,500 48,064
President and General 1992 185,000 86,589 0 7,000 30,634
Counsel 1991 178,000 53,629 89,375 7,200
<FN>
<F1> The amounts were earned in the stated year and paid in the following year pursuant to annual incentive bonus opportunities
described under the caption "Compensation Committee Report on Compensation Awards."
<F2> Restricted Stock Awards are valued at the closing price on the date of grant. Participants receive dividends on the
Restricted Stock reported in this column. The number and value of the aggregate restricted stock holdings at the end of the last
completed fiscal year, based on the NYSE composite closing price of $30.375/share on 12/31/93, for each named executive officer
are: J.E. Jones 60,750, $1,845,281; L.E. Akin 20,275, $615,853; R.J. Daniels 16,125, $489,797; G.L. Schueppert 24,250, $736,594;
and C.O. Ziemer 12,900, $391,838.
<F3> It is the present policy of the Compensation Committee not to award SARs either at the time of grant or during the term of
the option.
<F4> The compensation reported represents (a) contributions pursuant to the CBI Salaried Employee Stock Ownership Plan (1987)
(the "ESOP") for shares allocated to the executive officer's account, (b) the cost of stock allocated in the form of units to each
executive officer's account in an irrevocable trust under the CBI Benefit Restoration Plan (described under the caption "Pension
and other retirement benefits") for allocations pursuant to the ESOP which otherwise exceed the maximum limit imposed upon such
plan by the Internal Revenue Code (the "Code"), and (c) the dollar value of split-dollar life insurance benefits. The split-
dollar life insurance plan became effective in 1993 and replaced the CBI Supplemental Survivors' Benefit Program. Those three
amounts, expressed in the same order identified above, for each named executive officer are as follows: J.E. Jones, $38,675,
$42,930, $51,617; L.E. Akin $37,425, $7,003, $32,147; R.J. Daniels $37,720, $3,706, $26,030; G.L. Schueppert $37,702, $9,793,
$39,552; C.O. Ziemer $30,371, $0, $17,693.
<F5> Disclosure of "All Other Compensation" for the fiscal year ending December 31, 1991 is not required by the applicable rules
of the Securities and Exchange Commission.
Options and stock appreciation rights
The following tables summarize option grants and exercises
during the fiscal year 1993 to and by the executive officers
named in the Summary Compensation Table above, and the value of
the options held by such persons at the end of fiscal 1993. No
SARs were granted or exercised during fiscal 1993.
OPTION/SAR <F1> GRANTS IN LAST FISCAL YEAR
Grant Value
Individual Grants Date
(a) (b) (c) (d) (e) (f)
Number of
Securities % of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or Grant Date
Granted Employees in Base Price Expiration Present
Name (# Shares)<F2> Fiscal Year ($/Share) Date Value ($)<F3>
J.E. Jones 28,000 12.7% 28.00 3/10/03 274,960
L.E. Akin 12,000 5.4% 28.00 3/10/03 117,840
R.J. Daniels 11,000 5.0% 28.00 3/10/03 108,020
G.L. Schueppert 12,000 5.4% 28.00 3/10/03 117,840
C.O. Ziemer 6,500 3.0% 28.00 3/10/03 63,830
<FN>
<F1> It is the present policy of the Compensation Committee not to award SARs either at the time of grant or during the
term of the option.
<F2> All options were granted at market value and are subject to a one-year holding period. Each option will terminate
and cease to be exercisable if the Participant's employment with the Company terminates for any reason other than death,
retirement for disability or retirement under a retirement plan of the Company.
<F3> The estimated grant date present value reflected in the above table is determined using the Black-Scholes model.
The material assumptions and adjustments incorporated in the Black Scholes model in estimating the value of the options
reflected in the above table include the following: (a)an exercise price of the option ($28.00) equal to the fair
market value of the underlying stock on the date of grant; (b) an interest rate (6.0%) that represents the interest rate
on a U.S. treasury security with a maturity date corresponding to that of the option term; (c) volatility (29%)
calculated using daily stock prices for the one-year period prior to the grant date; (d) a dividend yield of 1.71%,
representing the annualized dividends paid with respect to a share of Common Stock as of the date of grant; and (e) a
16% reduction to reflect both the probability of forfeiture due to termination prior to vesting and the probability of a
shortened option term due to termination of employment prior to the option expiration date. The ultimate values of
options will depend on the future market price of Common Stock, which cannot be forecast with reasonable accuracy. The
actual value, if any, an optionee will realize upon exercise of an option will depend on the excess of the market value
of the Common Stock over the exercise price on the date the option is exercised.
PAGE
AGGREGATED OPTION/SAR<F1> EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
Number of Securities
Underlying Unexercised Value of Unexercised In-
Options/SARs at FY- the-Money Options/SARs
End (#) at FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable<F2>
J.E. Jones 0 NA 137,500/ 855,587/
28,000 66,500
L.E. Akin 0 NA 40,800/ 64,975/
12,000 28,500
R.J. Daniels 0 NA 64,500/ 423,662/
11,000 26,125
G.L. Schueppert 0 NA 66,450/ 401,412/
12,000 28,500
C.O. Ziemer 0 NA 33,700/ 199,712/
6,500 15,438
<FN>
<F1> It is the present policy of the Compensation Committee not to award SARs either at the time of grant or during the
term of the option.
<F2> Value is based on the NYSE composite closing price of $30.375/share on 12/31/93.
/TABLE
Pension and other retirement benefits
The CBI Pension Plan (the "Pension Plan") is non-
contributory and covers substantially all salaried employees and
certain hourly employees of the Company and its participating
subsidiaries. The following table shows approximate annual
pensions payable to salaried employees, including executive
officers, assuming normal retirement at age 65 and that the
current social security tax base remains unchanged:
Average
Annual Years of Service at Retirement
Earnings 15 25 35 40
$100,000 $ 21,540 $ 35,900 $ 50,260 $ 57,440
200,000 42,540 70,900 99,260 113,440
300,000 63,540 105,900 148,260 169,440
400,000 84,540 140,900 197,260 225,440
500,000 105,540 175,900 246,260 281,440
600,000 126,540 210,900 295,260 337,440
700,000 147,540 245,900 344,260 393,440
800,000 168,540 280,900 393,260 449,440
900,000 189,540 315,900 442,260 505,440
Pensions for salaried employees, including Executive
Officers, are based on years of service and the greater of the
average of their last thirty-six consecutive months or any three
consecutive full calendar years of salary and bonuses (excluding
profit-sharing, overseas living adjustments, remuneration related
to Company securities, and compensation otherwise constituting
qualified earnings in excess of an annually adjusted limitation
imposed by the Internal Revenue Code.)
Pension benefits are computed on the basis of a single life
annuity with a surviving spouse benefit. Pension Plan benefits
shown above are offset by a portion of primary Social Security
benefits. In the case of all the named executive officers, such
reduction would not substantially affect their benefits.
Benefits are also offset by an amount equal to the amount of a
monthly annuity that could have been purchased from an insurance
company at the time a participant retires with one-half the cash
value of his ESOP account up to a maximum of one-half the pension
accrued by the participant after 1987.
The Internal Revenue Code limited the annual benefits which
may be paid to any person under the Pension Plan to $115,641 per
year in 1993. In addition, compensation to be used in the
determination of benefits was limited by the Internal Revenue
Code to $235,840 for 1993. The Company has adopted the CBI
Benefit Restoration Plan through which it pays retirement
benefits otherwise determined under the Pension Plan formulas but
in excess of the maximum limit imposed upon qualified pension
plans by the Internal Revenue Code. Certain assets have been
placed in trust with an independent trustee to support the CBI
Benefit Restoration Plan. The Company may not unilaterally amend
such trust after a defined change in control of the Company and
may not revoke the trust in any event.
The number of years of credited service, as of December 31,
1993, for the named executive officers are: J.E. Jones, 36.7
years; G.L. Schueppert, 28.4 years; L.E. Akin, 33.3 years; R.J.
Daniels, 27.9 years; and C.O. Ziemer, 31.3 years. Pursuant to an
agreement between Mr. Jones and the Company, the years credited
to him include years of service with his former employer, but any
pension payable by the Company to him will be offset by any
pension he receives from his former employer. Pursuant to an
agreement between Mr. Schueppert and the Company the years
credited to him include years of service with a former employer,
but any pension payable by the Company to him will be offset by
the amount of accrued and vested pension to which he was entitled
at the former employer.
COMPENSATION OF DIRECTORS
Directors who were not officers of the Company received in
1993 an annual retainer of $20,000, paid in quarterly
installments, plus an amount equal to the value of 300 shares of
Common Stock, valued on the first business day of July, which
each eligible director in 1993 elected to take in the form of
shares of Common Stock, and $1,000 for attendance at each Board
meeting. Directors who were chairpersons of committees received
in 1993 an additional retainer of $4,000. Those who serve on
Board Committees receive $1,000 for each Committee meeting
attended. Directors who are not employees of the Company may
elect on an annual basis to defer their fees. Such electing
director is credited with investment units equivalent to the
number of shares of Common Stock that could have been purchased
on the open market with the amounts to which the director was
entitled under the standard compensation arrangements, plus
credit for dividends that would have been paid on such shares.
TERMINATION AGREEMENTS
Agreements between the Company and each of the named
Executive Officers of the Company provide for each executive's
continued employment for a three year period (or to age 65, if
earlier) following a defined change in control of the Company.
Compensation and benefits for such period are based generally on
the executive's compensation and benefits before such defined
change in control, subject to stipulated increases, and are
payable notwithstanding termination (other than by death,
disability or wilful and material breach of the agreement) of the
executive's employment during such period.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee Report below shall not be deemed
incorporated by reference by a general statement incorporating by
reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates
this information by reference, and shall not otherwise be deemed
filed under such Acts.
The Compensation Committee of the Board of Directors (the
"Committee") is composed entirely of outside directors and is
responsible for reviewing and approving compensation practices
and benefits, in particular those affecting the executive and
management group of employees of the Company and its
subsidiaries, and including recommendations proposed by
management. The Committee determines compensation and awards and
grants under corporate plans for officers of the Company (subject
to review by the Board of Directors), reviews management
recommendations concerning compensation for certain other
executives, and administers the CBI Industries Stock Option Plan
and the CBI Restricted Stock Award Plan.
The Committee uses the services of a nationally-recognized,
independent compensation consultant which provides relevant
competitive compensation data to assist the Committee in making
its decisions. The consultant conducts an annual review of the
Company's executive compensation program and reports its findings
to the Committee. This review is based on a study of the current
comparative compensation practices of an appropriate sample of
other large public corporations comparable in size to the
Company. Throughout this report, reference to "competitive
data," "market levels," "market data," etc., is reference to the
information and values provided by this study. The Company
relies on this array of companies for analysis of executive
compensation rather than the Peer Group chosen for comparing
stockholder return in the Performance Graph because the Committee
believes the Company's competitors for executive talent is better
reflected by this array of companies.
Overall Compensation Philosophy
The Company's executive compensation program is designed to
support the achievement of corporate performance goals, attract
and retain talented people, and link executive and shareholder
interests through equity-based plans with a long-term
perspective. The program provides a competitive total
compensation package that encourages maximum performance through
a combination of short and long-term incentive plans. Cash
compensation, which includes base salary and bonus, is designed
to be at or near competitive market levels with base salaries
approaching market levels and annual target performance bonus
opportunities at market levels. Long-term incentives, which are
stock option grants and restricted stock awards, are designed to
be at or above market levels and to provide an incentive to an
executive which is aligned with shareholder interests.
The following is a detailed description of the current
compensation program.
Base Salary
The Committee annually reviews the salary of each executive
officer of the Company. In determining appropriate salary
levels, the Committee considers level of responsibility,
experience, individual performance, and competitive pay levels as
reflected in the compensation consultant's study. The Committee
sets base salaries slightly below the median market levels as
evaluated by the compensation consultant for persons of similar
responsibility, experience and individual performance as
determined by the Committee.
Annual Incentives
Annual incentive bonus opportunities are made available to
executive officers, including the CEO, to recognize and reward
corporate, business unit, and individual performance. The plan
provides incentives to executive officers of the Company by
making cash payments to those who achieve their business unit and
Company annual goals. The plan uses net income and return on
invested capital performance goals for the Company and business
units and a discretionary evaluation of individual executive
performance. Threshold, target and maximum goals for Company and
business unit performances are established at the beginning of
each year. An executive's target bonus depends upon his
position, responsibility, and ability to impact the Company's
financial success. The competitive market data is reviewed
annually in considering incentive bonus opportunities for
individual employees. The Committee annually reviews and
approves the plan. Corporate and business unit performance goals
for 1993 were not met.
Stock Option Plan and Restricted Stock Award Plan
The overall compensation philosophy is to stress long-term
stock based incentives related to shareholder value.
Opportunities for such incentives are provided in the form of
stock options and restricted stock at a level slightly above
competitive market levels.
Stock Option Plan
Stock options are granted under the CBI Stock Option Plan to
encourage and reward long-term corporate financial success, as
measured by stock price appreciation. Under the plan, the
Committee annually considers grants to executives of options to
purchase shares of Company stock at the closing market price on
the day of the grant. These grants may be exercised after one
year and up to a maximum of ten years from date of grant. The
number of shares granted to an individual employee is based on
the Company's financial success, a qualitative evaluation of the
employee's past performance, the employee's potential, position
and level of responsibility and a review of the competitive
compensation data.
Restricted Stock Award Plan
The Restricted Stock Award Plan is intended to encourage
long-term employment and provide incentive compensation to
Participants for Company financial performance over an extended
period by using stock vesting restrictions. The Committee
believes the Plan has accomplished these goals in the past, and
that changes to the Plan as requested for shareholder approval in
Proposal No. 2 in this Proxy Statement will further these goals
by better aligning the interest of award recipients with other
shareholders. Specifically, the amended Plan requested for
approval includes a provision for awarding a targeted number of
shares only after the Company or a recipient's business unit
achieves a specific level of financial performance from goals set
by the Committee. The performance measurement for which a goal
is set is pre-tax operating income, as a return on net assets.
Goals in a specific year would be selected by the Committee based
on the Company's long-term business plan at that time, and
reviewed each year.
Under the previous Plan, one-half of shares awarded vested
after five years and the other one-half vested upon retirement,
death or disability. Restricted share awards were generally
considered by the Committee approximately every 24 months, and
the number of shares granted to an individual employee based on
the Company's financial success, employee's past performance,
future potential, position and level of responsibility, and a
review of competitive compensation data. Under the proposed
revised Plan, restrictions on all shares would lapse on the fifth
anniversary of the beginning of the year in which performance is
measured for determining the award, and awards would be made
annually. The Committee anticipates setting the target number of
shares for awards by taking into consideration that awards will
now be made on an annual, rather than biennial basis.
CEO Compensation
Mr. John Jones has been Chairman, CEO and President of CBI
Industries since 1989. Mr. Jones' 1993 base salary was $530,000,
an increase of 7.1% over 1992. This increase reflects the
Committee's qualitative evaluation of Mr. Jones' individual
performance in managing the Company.
Based on 1993 financial results, Mr. Jones earned an
incentive bonus of $77,000, down from the $456,667 earned in
1992. Mr. Jones' bonus target is competitively set as a
percentage of his base salary, with most of the amount paid based
upon the same net income and return on invested capital goals for
the Company as described above, and a portion of the amount paid
based on the Committee's discretionary evaluation of Mr. Jones'
performance in 1993. The total amount paid to Mr. Jones could
have ranged from a minimum of 0% to a maximum of 114% of his base
pay, depending on the degree of achievement of net income and
return on invested capital performance goals and his individual
performance.
The 1993 stock option grant of 28,000 shares to Mr. Jones
reflects the Committee's desire to provide significant incentives
which link long-term executive compensation to long-term growth
in equity for all shareholders, as described above, and in Mr.
Jones' case, primarily reflects his position and level of
responsibility within the Company, and, most importantly, the
Committee's qualitative evaluation of Mr. Jones' performance.
The 1993 restricted stock award of 18,000 shares made to Mr.
Jones by the Committee was based on the same considerations as
those for the stock option grant. The amount of the award was
determined separately from the amount of the stock option grant.
In addition to the above factors noted, in each case, as
appropriate, the Committee considered the competitive data
supplied by the consultant.
Internal Revenue Code Limitation on Deductibility of Compensation
The Committee has discussed and considered certain
provisions of Section 162(m) of the Internal Revenue code of
1986, as amended, relating to the deduction of compensation-
related expenses in excess of $1,000,000. The Committee has not
determined at this time what further action, if any, it may take
or recommend with regard to the Company's executive compensation
programs. It will continue to consider these Code provisions
with regard to such programs and any changes to them.
COMPENSATION COMMITTEE
E.J. Mooney (Chairman)
R.J. Day
J.T. Horton
G.E. MacDougal
R.T. Stewart
STOCK PERFORMANCE CHART
The Stock Performance Chart below shall not be deemed
incorporated by reference by a general statement incorporating by
reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates
this information by reference, and shall not otherwise be deemed
filed under such Acts.
The chart below compares the cumulative total shareholder
return on the Common Stock of the Company for the last five
fiscal years with the cumulative total return on the S&P 500
Index and the Dow Jones Diversified Industrial Index for the same
period. The comparison assumes $100 was invested in the
Company's Common Stock, the S&P 500 index and the Dow Jones
Diversified Industrial Index on December 31, 1988, and
reinvestment of all dividends.
COMPARISON OF TOTAL RETURNS
VALUE FOR EACH ONE HUNDRED DOLLARS INVESTED ON 12/31/88
(GAINS IN STOCK PRICE, DIVIDENDS AND REINVESTED DIVIDENDS)
Measurement Period
(Fiscal Year Covered) CBI S&P 500 PEER GROUP*
Measurement Pt-12/31/88 $100 $100 $100
FYE 12/31/89 $130 $132 $126
FYE 12/31/90 $164 $127 $117
FYE 12/31/91 $201 $166 $145
FYE 12/31/92 $187 $179 $168
FYE 12/31/93 $195 $197 $206
*Dow Jones Diversified Industrial Index
PROPOSAL 1
AMENDMENT TO CERTIFICATE OF
INCORPORATION
The Board of Directors recommends approval of an amendment
to the Company's Certificate of Incorporation (the "Amendment")
which would eliminate the requirement for a shareholder's vote to
authorize those mergers that do not required a shareholder vote
under the Delaware Corporation Law. Existing Article Tenth, as
amended by the Amendment, would read in its entirety as follows:
"TENTH: Merger, Consolidation, Dissolution, Sale of Assets,
Charter Amendment. Except as otherwise provided in this
Certificate of Incorporation, the corporation shall not take
any of the following actions, except upon the affirmative
vote of holders of not less than two-thirds (2/3) of the
outstanding Common Stock of the corporation entitled to vote
and the affirmative vote of not less than two-thirds (2/3)
of each series of shares of Preferred stock of the
corporation entitled to vote as a class on such issue, or,
where the Board of Directors has recommended such action,
upon the affirmative vote of holders of a majority of the
outstanding Common Stock of the corporation entitled to vote
and the affirmative vote of a majority of each series of the
outstanding shares of Preferred Stock of the corporation
entitled to vote as a class on such issue:
(a) a merger or consolidation (except where the
corporation owns at least 90 % of the voting securities of a
corporation which merges into this corporation or, unless
otherwise prohibited by this Certificate of Incorporation,
except where the Board of Directors is authorized under the
law of Delaware to approve a merger without shareholder
approval);
(b) dissolution or liquidation;
(c) sale or other disposition of all or substantially
all of the assets of the corporation; or
(d) amendment of the Certificate of Incorporation.
When the Company was reorganized in 1979, its Certificate of
Incorporation (the "Certificate") required, by analogy to
Illinois law as it applied to Chicago Bridge & Iron Company
before the reorganization, a two thirds vote of the outstanding
shares entitled to vote to approve, among other things, all
mergers. In 1983, the Board of Directors recommended that the
Certificate be amended to provide that if the Board of Directors
approved any merger, the vote required would be reduced to a
majority of the outstanding shares entitled to vote. The Board
believed that the amendment would provide the Company and its
shareholders with greater flexibility in dealing with corporate
transactions that are approved by the Board. The shareholders
adopted this amendment in 1983 with over % of
the shares voting in favor of the proposal.
The Delaware General Corporation Law ("Delaware Law")
permits the Board of Directors of a company to authorize the
company to enter into a merger without shareholder approval if
certain conditions are met and shareholder approval is not
otherwise required by the Certificate. Those conditions are,
that as a result of or in connection with the merger, (1) the
Certificate is not amended; (2) each share of stock outstanding
prior to the effective date of the merger will be identical to
outstanding or treasury shares after the merger; and (3) no
shares of common stock of the surviving corporation or securities
convertible into common stock of the surviving corporation are to
be issued, or the authorized unissued shares or the treasury
shares of common stock of the surviving corporation to be issued
or delivered under the plan of merger plus those initially
issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan do not
exceed 20% of the shares of common stock outstanding immediately
prior to the effective date of the merger. Because of the
provisions in the currently existing Article Tenth in the
Company's Certificate, the Company is not able to take advantage
of this flexibility provided by Delaware Law.
The Amendment would eliminate the requirement of a
shareholder vote and permit the directors, if they determine it
to be in the best interests of shareholders and the Company, and
subject to the conditions of the Delaware Law, to authorize those
mergers that do not require a shareholder vote under the Delaware
Law. The Board of Directors believes this is desirable because
it will permit the Company to use Common Stock to effect small
acquisitions by merger which are approved by a majority of the
Board of Directors. A shareholder, however, could be
disadvantaged by the amendment through the elimination of the
shareholder's power to vote on any such mergers using common
stock if the shareholder disagreed with the determination of the
Board. The Company knows of no present transaction to which this
would apply and has no present commitment to acquire any company
by merger.
Vote Required
This proposal requires the affirmative vote of the holders
of a majority of the outstanding shares of the Common Stock and
the Series C Preferred Stock voting together as a class and
represented at the annual meeting.
The Board recommends a vote FOR Proposal 1.
PROPOSAL 2
CBI 1994 RESTRICTED STOCK AWARD PLAN
The Board of Directors recommends that the shareholders
approve the CBI 1994 Restricted Stock Award Plan (the "Plan"),
which has been approved by the Board. The principal features of
the Plan are summarized below, and the complete text of the Plan
is set forth in Exhibit A. Terms defined in this description are
for purposes of this description only and reference is made to
the detailed provisions of the Plan.
Purpose and Adoption of the Plan
Employee ownership has been encouraged by the shareholders,
directors and management over a period of more than 50 years,
first through informal arrangements and later through formal
stock option, stock purchase, restricted stock award, and
employee stock ownership plans (ESOP). The Board believes that
such employee participation in ownership has been exceptionally
successful in promoting the Company's success, and has thus been
beneficial to all shareholders.
The Plan will provide an incentive for management employees
to contribute to continued growth and profitability by
encouraging stock ownership. The Plan is intended to further the
interests of the Company by enabling it to attract and retain the
services of highly qualified and motivated persons. The Board
adopted the Plan on March 9, 1994, to be effective on March 9,
1994, if approved at the annual meeting of the Company on May 12,
1994.
The Plan replaces the CBI 1989 Restricted Stock Award Plan
which expires on April 30, 1994. As of March 1, 1994, 55,000
shares remained reserved under the 1989 plan.
Stock Available for Award
There will be reserved for issue upon granting of awards an
aggregate of 1,250,000 shares of $2.50 par value common stock of
the Company ("shares"). The number of shares reserved will be
adjusted to reflect any stock dividend, stock split,
reclassification or similar change in capitalization. The
aggregate number of shares reserved shall be reduced by the
number of shares awarded by the Company. Forfeited shares may
not be awarded again. Awards may be made from authorized but
unissued shares or from treasury shares.
Eligibility
All employees of the Company (including officers of the
Company but not directors unless they are also employees) and of
its present and future subsidiaries with supervisory or
management responsibility, and certain other key salaried
employees are eligible to be selected to participate. The
Compensation Committee of the Board (the "Committee") shall
select employees to participate. Awards to the Chief Executive
Officer of the Company shall be subject to approval by the Board.
It is estimated that approximately 325 employees will be eligible
to participate in the Plan.
Making of Awards
At the beginning of each fiscal year of the Company, the
Committee shall approve and record specific goals of performance
for the Company and, as appropriate, each of its primary
operating Subsidiaries to be achieved by the end of that current
fiscal year, which goals shall be based on operating income
(before taxes) as a return on net assets for the Company or
Subsidiary, or a combination thereof, as appropriate. After the
close of the fiscal year, the Committee will certify the level of
performance achieved as compared to the goals established at the
beginning of the fiscal year.
At the same time as the performance goals described above
are established, the Committee shall approve specific targets of
numbers of shares of Common Stock ("Target Award"), either by
individual Participant or a class of Participants, which shall
become Awards following the end of such fiscal year only if the
specified performance goals are achieved by the Company. No
Award shall be made until and unless the Committee shall certify
that the performance goals have been achieved for a fiscal year
for which Target Awards have been approved, or the extent to
which such goals have been achieved. The date on which the
Committee makes such certification shall be the Award Date for a
fiscal year for those portions of Awards for which the number of
shares of Common Stock is fixed based on that performance, as
described below. At the same time that the performance goals are
established by the Committee, the Committee may also approve that
Awards for the fiscal year under consideration, if any, shall be
made in an amount more or less than the Target Award, but in no
case greater than 200% of the Target Award, on the basis of a
scale approved by the Committee corresponding to a proportion of
the performance goal actually achieved.
Awards determined for a given fiscal year shall be allocated
(i) 50% to the year for which performance is measured, and this
portion of an Award shall not be subject to increase or decrease,
(ii) 25% to the first fiscal year following ("First Year
Awards"), and (iii) 25% to the second fiscal year following
("Second Year Awards"). First Year Awards and Second Year Awards
shall be further subject to increase or decrease, each one time
only, in the same manner and on the same scale, if applicable, as
the amount of the Target Award may be increased or decreased for
the fiscal year to which the First Year Awards and Second Year
Awards are allocated. Shares which are no longer subject to
increase or decrease will be issued in the name of the
Participant and subject to the rights and restrictions described
below.
It is not possible to determine at the present time the
benefits, if any, or the amounts, if any, that will be received
under the Plan.
Rights of Participants as Shareholders
Participants will have all the rights of a shareholder with
respect to any shares which have been issued, including the right
to vote the shares and to receive all dividends and other
distributions paid with respect to the shares, subject to the
restrictions described below. The shares will be held for the
account of the Participant until the restrictions lapse or the
shares are forfeited.
A Participant shall have no rights to any portion of an
Award until the corresponding shares are issued.
Restrictions on and Forfeitures of Share Awards
No shares may be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed. Shares may be transferred
upon the death of a participant to that Participant's legal
representatives, heirs, and legatee pursuant to the Participant's
will, by the laws of intestate succession or by way of the
Participant naming a beneficiary under the Plan. In addition,
the Committee may in an individual case impose more severe
restrictions, in which event those more severe restrictions will
be controlling. Shares for which restrictions have not lapsed,
are subject to forfeiture, without notice, immediately upon the
occurrence of any of the following events:
(a) The termination of employment for any reason other than
those events which terminate employment described below under
"Release of Restrictions";
(b) The performance of services as an employee, consultant,
or independent contractor for, or the acquisition of an ownership
interest in excess of 5% in, any competitor of the Company or
competitor of any subsidiary of the Company while an employee of
the Company or any subsidiary without the written consent of the
Company;
(c) An attempt to sell, exchange, transfer, pledge,
hypothecate or otherwise dispose of in any manner whether
voluntary or involuntarily any share before these restrictions
are released as described below under Release of Restrictions; or
(d) A violation of any additional restrictions imposed by
the Compensation Committee.
Release of Restrictions
Restrictions on any share will lapse at the beginning of the
year containing the fifth anniversary of the beginning of the
fiscal year for which a Target Award is approved, as to all
shares issued pursuant to such Target Award, as the same may be
increased or decreased in accordance with the Plan. Restrictions
remaining in effect lapse upon the occurrence of (i) death, (ii)
termination of employment by reason of Retirement or Disability,
(iii) termination of employment, for any reason other than for
wilful and material actions causing direct and substantial harm
to the Company or its subsidiaries or affiliates, or any
termination of the Plan, throughout the three year period
following a change of control, as defined in the CBI Pension
Plan, and (iv) involuntary termination of employment pursuant to
a program of workforce reduction, as determined by the authorized
officers of the Company.
Allocations
Awards which are subject to increase or decrease are subject
to the restrictions prior to the date shares are issued in
connection therewith. If any shares are forfeited for any
reason, any Awards which are further subject to increase or
decrease will be forfeited. In the event of the retirement or
involuntary termination of a Participant after the first quarter
of a fiscal year, or the death or disability of a Participant on
any date (the year in which a such event occurs, "Final Year"),
the Participant shall receive an Award for the Final Year,
determined as described herein. The Target Award for the Final
Year shall be pro-rated from the beginning of the Final Year to
the date of such event. The achievement of the performance goal
for determining the amount of the Award for the Final Year and
the adjustment of any First Year Awards and Second Year Awards
allocated to the Final Year, if any, shall be measured using the
same number of calendar quarters as corresponds to the period of
time over which the Performance Goal established by the Committee
for the Final Year is being measured ending on the last day of
the calendar quarter preceding such event. The Committee will
certify the level of performance, compare it to the Performance
Goals and approve the corresponding Award. The entire Award for
the Final Year will be issued as shares and no part of the Award
will be subject to further increase or decrease. Any First Year
Award or Second Year Award which is subject to increase or
decrease during the Final Year will be awarded, subject to the
same adjustment as the Target Award for the Final Year. Any
Second Year Award allocated to a fiscal year subsequent to the
Final Year shall not be subject to increase or decrease and shall
become part of the Award for the Final Year.
Amendment and Termination
The Board may suspend, terminate or amend the Plan at any
time. However, no amendment shall adversely affect rights under
an Award without the consent of the Participant and no amendment
shall change the maximum number of shares available for awards to
all Participants. No Award shall be made under the Plan after
April 30, 2000, or shares issued under the Plan after April 30,
2002, when shares covered by First Year Awards and Second Year
Awards based on the last Target Award under the Plan are no
longer subject to increase or decrease.
Brief Description of Federal Income Tax Consequences
The Company has been advised by counsel that the federal tax
consequences to the Company and Participants in the Plan will be
as follows:
Participants in the Plan will incur no income for federal
income tax purposes at the time they receive an Award unless they
affirmatively elect under Section 83(b) of the Internal Revenue
Code of 1986 (the "Code") to incur income then. Otherwise, each
Participant will realize taxable income (and the Company will be
normally entitled to a corresponding deduction) to the extent
that risk of forfeiture of the awarded stock lapses. The amount
of income will equal the fair market value of the stock affected
at that time. Thereafter, the Participant will realize capital
gain or loss upon the sale or taxable exchange of the stock equal
to the difference between the aggregate income incurred under the
foregoing rules and the price received for the shares. The
holding period for determining whether the gain or loss is long
or short term will begin on the date on which the restrictions
lapse.
In the event a Participant makes the election under Section
83(b) referred to above (within 30 days of his receipt of the
award), the Participant will realize income (and the Company is
normally entitled to a corresponding deduction) at the time of
the Award in an amount equal to the fair market value without
regard to the restrictions on the stock at that time. If the
participant thereafter forfeits the stock, the Company will be
required to recapture any deduction taken as a result of the
Award of that stock. Assuming no forfeitures, upon the lapse of
restrictions, the Participant will not incur taxable income.
Thereafter the Participant will realize capital gain or loss upon
the sale or other taxable exchange of the stock equal to the
difference between the aggregate taxable income incurred under
the foregoing rules and the price received for the stock. The
holding period for determining whether the gain or loss is long
or short term will begin on the date on which the stock was
awarded.
The foregoing tax analysis is intended to assist in
understanding the operation and tax consequences of the Plan.
The Company assumes no responsibility with respect to the income
taxes of its employees or how such taxes should be computed,
reported or paid. Tax laws and regulations are subject to change
at any time.
Withholding of Shares
To the extent the receipt of shares pursuant to a lapse of
restrictions is subject to withholding of income or employment
taxes by the Company for which the Company requires reimbursement
from the recipient, the recipient may elect to reimburse the
Company with shares withheld from the shares to be received, cash
or a combination of shares and cash.
Vote Required
This proposal requires the affirmative vote of the holders
of a majority of the outstanding shares of the Common Stock and
the Series C Preferred Stock voting as a class and represented at
the Annual Meeting.
The Board recommends a vote FOR Proposal 2.
PROPOSAL 3
CBI OFFICERS' BONUS PLAN
The Board of Directors recommends that the shareholders
approve the CBI Officers' Bonus Plan (the "Plan"), which has been
approved by the Board. The principal features of the Plan are
summarized below, and the complete text of the Plan is set forth
in Exhibit B.
Purpose and Adoption of the Plan
The purpose of the Plan is to provide annual short-term
incentives to the executive officers who contribute to the
success of the Company providing an annual direct cash payment
based upon annual business unit and Company performance goals.
The Board adopted the Plan on March 9, 1994, to be effective as
of January 1, 1994, if approved at the annual meeting of the
Company on May 12, 1994. The Plan is substantially similar to
the incentive bonus opportunities disclosed in the Summary
Compensation Table and described under the caption "Compensation
Committee Report on Executive Compensation".
Description of the Plan
Participants in the Plan are the executive officers of the
Company. Payments are made under the Plan following the end of
the fiscal year, and consist of two distinct and separate parts
(a) a performance part, based upon a predetermined formula and
(b) a discretionary part. Each year the Board approves an annual
operating plan which is derived as a composite of the individual
business plans of the major business units. At the beginning of
each year, the Compensation Committee of the Board (the
"Committee") will establish individual target amounts for each
participant based upon achievement of performance goals under the
operating plan. The goals are based upon profit and return on
invested capital. Payment of the performance part of the bonus
is based upon attaining these goals. The maximum performance
bonus can not exceed 100% of base salary. Under the Plan, for
those officers of the Company who are also officers of major
operating business units, "income" is defined as annual operating
income, before minority interest, taxes and interest, and "return
on average capital employed" is measured by dividing annual
operating income by a five-point average of the capital invested
(shareholder's investment and advances) by the Company in the
specific major operating business unit plus the balances of
minority interest and interest-bearing debt maintained and
accounted for by the major operating business unit. For those
officers who are only officers of the Company the financial
measures used in establishing the goals are the Company's annual
consolidated net income before preferred dividends, and return on
average invested capital, which is calculated by dividing annual
net income before preferred dividends by a five-point average of
total interest-bearing debt, and preferred and common
shareholders' investment. Formula bonus payments are made only
after the Compensation Committee has certified the achievement of
the goals.
The discretionary part of the bonus is based on the
Committee's assessment of the individual management performance
of each of the Company's executive officers for the effort and
skill exhibited in supervising their respective areas of
responsibility and the personnel who report to them, and based on
the achievement of individual improvement, not on quantitative
measures. Individual target and maximum amounts payable under
this portion of the Plan are also established and approved by the
Committee at the beginning of the year. The amounts payable are
separate from and are not a substitute for any part of the
performance-based part of the Plan. The amounts paid under the
discretionary part of the Plan are recommended by the management
of the Company, approved by the Committee, and reviewed by the
Board of Directors. The CEO's discretionary part is determined
solely by the Committee and approved by the Board of Directors.
The Plan is substantially the same as the bonus opportunity
reflected in the Summary Compensation Table set forth in this
Proxy Statement. There are presently nine executive officers who
would be eligible to participate in the Plan. The amounts
received by each named executive officer for the year 1993 are
set forth in the Summary Compensation Table. All executives
received an aggregate bonus of $273,125 for the year 1993.
Tax Consequences
The Company has been advised by counsel that the federal tax
consequences to the Participants in the Plan will be that
payments under the Plan will be taxed to the Participant as
ordinary income in the year of payment.
Vote Required
This proposal requires the affirmative vote of the holders
of a majority of the outstanding shares of the Common Stock and
the Series C Preferred Stock voting as a class and represented at
the Annual Meeting.
The Board recommends a vote FOR Proposal 3.
RELATIONSHIP WITH
INDEPENDENT PUBLIC ACCOUNTANTS
The Board will designate an independent auditor of the
Company for 1994 upon receiving a recommendation from its Audit
Committee in 1994. Representatives of Arthur Andersen & Co.,
which has served as the Company's and its predecessor's
independent public accountants from 1939 through 1993, are
expected to be present at the Annual Meeting with the opportunity
to make a statement if they so desire and to respond to
appropriate questions.
SHAREHOLDER PROPOSALS
The Company's by-laws require that any shareholder desiring
to propose new business at an annual meeting first submit such
new business in writing to the Secretary of the Company, C.C.
Toerber, CBI Industries, Inc., 800 Jorie Boulevard, Oak Brook,
Illinois 60521-2268, not later than sixty days prior to the first
anniversary of the date of the last meeting of stockholders
called for the election of directors. Shareholder proposals
which are found to be appropriate for shareholder action will be
included in the proxy material for the 1995 Annual Meeting of
Shareholders if such proposals are received by the Secretary not
later than December 6, 1994.
OTHER MATTERS
The Board has no knowledge of any business to be presented
for consideration at the Annual Meeting other than that discussed
above. Should any other business properly come before the
meeting or any adjournment thereof, it is intended that the
shares represented by proxies will be voted with respect thereto
in accordance with the best judgment of the persons named in such
proxies.
By Order of the Board of Directors
J. E. Jones
Chairman of the Board
March _____, 1994
EXHIBIT A
CBI 1994 RESTRICTED STOCK AWARD PLAN
(Effective March 9, 1994)
1. Purpose. The purpose of this CBI 1994 Restricted
Stock Award Plan (the "Plan") is to provide an incentive for
Participants to contribute to the continued growth and
profitability of the Company by encouraging stock ownership. The
Plan is intended to further the interest of the Company by
enabling it to attract and retain the services of highly
qualified and motivated persons to serve the Company and its
Subsidiaries.
2. Definitions. As used in the Plan, the following terms
shall have the following meanings:
Award - The grant of Common Stock subject to the
restrictions and pursuant to the terms of the Plan.
Award Date - The date on which an Award is made by the
Committee as provided by paragraph 4.2 below.
Board - The Board of Directors of the Company, as from time
to time constituted.
Committee - The Compensation Committee of the Board, no
member of which shall be eligible to participate in the Plan
while serving as such member or in the prior calendar year.
Common Stock - Common Stock, $2.50 par value per share, of
the Company.
Company - CBI Industries, Inc., a Delaware corporation.
Disability - That condition of a Participant, including but
not limited to a physical or mental condition, which makes a
Participant unable to perform the regular duties of that
Participant's employment, as determined by the Committee,
provided, however, that Disability shall not consist of a
condition resulting from a cause which the Committee has
excluded.
Effective Date - March 9, 1994, subject to shareholder
approval.
Involuntary Termination - Termination of employment as
described in paragraph 5.4(a)(iv) below.
Participant - An employee or former employee who has
received an Award under the Plan.
Retirement - The termination of employment of a Participant
with the Company and all Subsidiaries after qualifying for
any retirement as defined under the terms of any qualified
defined benefit pension plan sponsored by the Company or any
Subsidiary in which such Participant also participates, or,
if not participating in such a plan, then after attaining
such age and service as would qualify for retirement under
the terms of the CBI Pension Plan, as amended, or such
earlier termination with the Company's consent and as may be
determined by the Committee to constitute early retirement,
provided, however, that no termination of such employment by
reason of dishonesty, fraud or breach of trust against the
Company or any of its Subsidiaries or affiliates, as
determined by the Committee, shall constitute Retirement.
Subsidiary - Any corporation of which more than 50% (by
number of votes) of the voting stock is owned by the Company
and/or one or more corporations which are themselves
Subsidiaries of the Company.
3. Common Stock Subject to Plan. There will be reserved
for issue upon the granting of Awards during the term of the Plan
an aggregate of 1,250,000 shares of Common Stock, as adjusted by
the Committee as required to reflect any stock dividend, stock
split, reclassification or similar change in capitalization. If
any such adjustment shall result in a fractional share such
fraction shall be disregarded. Upon the granting of an Award,
the number of shares reserved for Award shall be reduced by both
the number of shares so awarded and the number of shares
forfeited to the Company hereunder. Awards may be made from
authorized but unissued shares or from treasury shares. All
authorized but unissued shares awarded hereunder shall be fully
paid and nonassessable shares.
4. Eligibility and Awards.
4.1 Eligibility. All employees (including officers,
but not directors unless also employees) of the Company and
of its present and future Subsidiaries within such levels of
supervisory or management responsibility, and such other key
salaried employees, as designated or approved from time to
time by the Committee are eligible to be Participants.
4.2 Making of Awards. Subject to the express
provisions of the Plan, the Committee shall in its sole
discretion determine the employees who may receive Awards
pursuant to the Plan. In making such determinations, the
Committee shall take into account the recommendations of the
management of the Company and the nature of the services
rendered by the respective employees, their present and
potential contributions to the Company's success and such
other factors as the Committee in its discretion shall deem
relevant. Any employee may not receive Awards more
frequently than once in each calendar year.
(a) The size of a Participant's Award shall be
determined in the following manner:
At the beginning of each fiscal year of the
Company, the Committee shall approve and record
specific goals of performance for the Company and, as
appropriate, each of its primary operating Subsidiaries
to be achieved by the end of that current fiscal year,
which goals shall be based on operating income (before
taxes) as a return on net assets for the Company or
Subsidiary, or a combination thereof, as appropriate.
After the close of the fiscal year, the Committee will
certify the level of performance achieved as compared
to the goals established at the beginning of the fiscal
year.
At the same time as the performance goals
described above are established, the Committee shall
approve specific targets of numbers of shares of Common
Stock ("Target Award"), either by individual
Participant or a class of Participants, which shall
become Awards following the end of such fiscal year
only if the specified performance goals are achieved by
the Company. No Award shall be made until and unless
the Committee shall certify that the performance goals
have been achieved for a fiscal year for which Target
Awards have been approved, or the extent to which such
goals have been achieved. The date on which the
Committee makes such certification shall be the Award
Date for a fiscal year for those portions of Awards for
which the number of shares of Common Stock is fixed
based on that performance, as described below. At the
same time that the performance goals are established by
the Committee, the Committee may also approve that
Awards for the fiscal year under consideration, if any,
shall be made in an amount more or less than the Target
Award, but in no case greater than 200% of the Target
Award, on the basis of a scale approved by the
Committee corresponding to a proportion of the
performance goal actually achieved.
Awards determined for a given fiscal year shall be
allocated (i) 50% to the year for which performance is
measured, and this portion of an Award shall not be
subject to increase or decrease, (ii) 25% to the first
fiscal year following ("First Year Awards"), and (iii)
25% to the second fiscal year following ("Second Year
Awards"). First Year Awards and Second Year Awards
shall be further subject to increase or decrease, each
one time only, in the same manner and on the same
scale, if applicable, as the amount of the Target Award
may be increased or decreased for the fiscal year to
which the First Year Awards and Second Year Awards are
allocated.
(b) In the event of Retirement or Involuntary
Termination of a Participant after the first quarter of a
fiscal year, or the death or Disability of a Participant on
any date, an Award for such Participant relating to the
fiscal year of the date of such event ("Final Year") shall
be made, determined as follows: The Target Award, if any,
for such Participant for the Final Year shall be pro-rated
for that portion of the Final Year ending on the date of the
event, and the achievement of the performance goal for
determining the amount of the Award for the Final Year, and
the adjustment of any First Year Awards and Second Year
Awards allocated to the Final Year, if any, shall be
measured, and certified by the Committee as appropriate, as
of the end of the calendar quarter immediately preceding or
coinciding with the date of the event, using the same number
of calendar quarters immediately preceding the date of the
event as corresponds to the period of time over which the
performance goal established by the Committee for the Final
Year is being measured. Any Second Year Awards allocated to
a fiscal year subsequent to the Final Year shall not be
subject to increase or decrease, and shall become part of
the Award for the Final Year. In the event of Retirement or
Involuntary Termination of a Participant during the first
quarter of a fiscal year, the Participant shall not be
eligible to receive a Target Award for the Final Year, but
all First Year Awards and Second Year Awards allocated to
the Final Year and any Second Year Awards allocated to a
fiscal year subsequent to the Final Year shall not be
subject to increase or decrease and shall become part of the
Award for the Final Year.
(c) No more than 50,000 shares shall be issued to any
person in any fiscal year.
4.3 Form of Award. As soon as reasonably practicable
after making a determination as provided in paragraph 4.2
above, the Committee or its designee shall advise the
Participant in writing of the making of the Award, the
number of shares not subject to increase or decrease, the
amount of First Year Awards and Second Year Awards still
subject to increase or decrease, the restrictions on any
shares and incidents of forfeiture thereof, and any other
terms and conditions relating thereto; except, however, that
in the case of any Award to the Chief Executive Officer of
the Company, the Committee shall first submit such Award to
the Board, which in its discretion may disapprove or reduce
the Award.
5. Restrictions on Awards.
5.1 Rights of Participants as Shareholders. Shares
awarded hereunder which are not subject to increase or
decrease in accordance with this Plan shall forthwith be
duly issued and identified on the books of the Company in
the Participant's name as of an Award Date, as determined
herein. The Participant shall thereupon be a shareholder
with respect to all such shares and shall have all the
rights of a shareholder with respect to all such shares,
including the right to vote such shares and to receive all
dividends and other distributions (subject to the provisions
of paragraph 5.2 below) paid with respect to such shares;
provided, however, that such shares shall be subject to the
restrictions hereinafter described, and to such additional
or more severe restrictions (including more severe
provisions relating the lapsing of restrictions) as may be
imposed by the Committee in approving any Target Awards.
In aid of such restrictions, shares issued as of an
Award Date shall be held by the Company in its control for
the account of such Participant until such restrictions
lapse as provided in paragraph 5.4 below or such shares are
theretofore forfeited to the Company as provided by
paragraph 5.3 below. No Participant shall be considered to
be a shareholder with respect to any part of an Award which
is still subject to increase or decrease in accordance with
this Plan.
5.2 Changes in Capitalization. In the event that, as
the result of a stock dividend, stock split,
reclassification or similar change in capitalization, the
Participant shall, as the owner of shares subject to
restrictions hereunder, be entitled to new or additional or
different shares of stock or securities, the certificate or
certificates for, or other evidences of, such new or
additional or different shares or securities, shall also be
held by the Company in its control for the account of such
Participant as provided in paragraph 5.1 above. Any
allocated portion of an Award subject to adjustment as
described in paragraph 4.2 above shall be increased or
decreased in the same manner as shares already issued to a
Participant subject to restrictions. All provisions of the
Plan relating to restrictions and lapse of restrictions
herein set forth shall thereupon be applicable to such new
or additional or different shares or securities to the
extent they were issued to a Participant; provided, however,
that if the Participant shall receive rights, warrants or
fractional interests in respect of any of such shares, such
rights or warrants may be held, exercised, sold or otherwise
disposed of, and such fractional interests may be settled,
by the Participant free and clear of the restrictions
hereafter set forth.
5.3 Imposition of Restrictions. Each share issued to
a Participant under the Plan shall be subject to the
following restrictions except to the extent that such
restrictions have lapsed pursuant to paragraph 5.4 below:
5.3.1 Transfer Restrictions. None of such shares
shall be sold, exchanged, transferred, pledged,
hypothecated, or otherwise disposed of in any manner,
whether voluntarily or involuntarily.
5.3.2 Forfeitures. All of such shares issued, and
all shares subject to Awards, shall be forfeited to the
Company without notice immediately upon the occurrence
of any of the following events:
a. The termination of the employment
of the Participant with the Company and all
Subsidiaries for any reason other than
Retirement, Disability, Involuntary
Termination or death, or
b. The performance of services by the
Participant, while an employee of the Company
or any Subsidiary, as an employee, consultant
or independent contractor for, or the
acquisition of an ownership interest in
excess of five percent (5%) in, any
competitor of the Company or competitor of
any Subsidiary without the express written
consent of the Company, or
c. An attempt to transfer or cause to
transfer such shares, whether voluntarily or
involuntarily, in violation of paragraph
5.3.1 above, or
d. A violation of such additional or
more severe restrictions which may be imposed
by the Committee pursuant to paragraph 5.1.
5.4 Release of Restrictions. Subject to any
adjustments required by paragraph 4.2(b) above, the
restrictions set forth in paragraph 5.3 above on shares
issued to Participants under the Plan, to the extent such
shares have not been forfeited pursuant to paragraph 5.3
above, shall lapse:
(a) on the first to happen of (i) the date of the
Participant's death, (ii) the termination of the
Participant's employment by reason of his Retirement or
Disability, (iii) termination of employment for any reason
other than wilful and material actions causing direct and
substantial damage to the Company or its Subsidiaries or
affiliates, or any termination of the Plan, throughout the
three-year period following a "change of control", as
defined in the CBI Pension Plan, (iv) involuntary
termination of employment pursuant to a program of workforce
reduction, as determined by the authorized officers of the
Company, and (v) the fifth anniversary of the beginning of
the fiscal year for which a Target Award is approved, as to
all shares issued pursuant to such Target Award, as the same
may be increased or decreased in accordance with the Plan;
or
(b) pursuant to such additional or more severe
restrictions imposed by the Committee pursuant to paragraph
5.1.
5.5 Effect of Death Prior to Release of
Restrictions. Should a Participant die, all shares to be
issued by the Company with respect to such Participant under
this Plan shall be transferred on the books of the Company
and issued to such beneficiary or beneficiaries as have been
effectively designated by the Participant or, if none, then
to the deceased Participant's surviving spouse or, if none,
then to the Participant's lawful descendants, per stirpes as
defined by common law, or, if none, then to the deceased
Participant's estate. Any such transfer shall be made
effective as of the date of death of the Participant. To be
effective, the designation of such beneficiary must be filed
with the Committee or its designee in such written form as
it requires and may include secondary, successive or
contingent beneficiaries. Any Participant may change a
beneficiary designation at any time by filing with the
Committee or its designee a new beneficiary designation
meeting the above requirements. The determination of the
Committee as to the identity of a beneficiary, or whether a
beneficiary is living or dead, pursuant to any
determinations of rights under this Plan shall be conclusive
and binding on all concerned.
5.6 Withholding of Shares. To the extent the receipt
of shares pursuant to a lapse of restrictions is subject to
the withholding of any income or employment taxes by the
Company for which the Company requires reimbursement from
the recipient, the recipient may elect to reimburse the
Company with shares withheld from the shares to be received,
or cash, or a combination of such shares and cash, of
sufficient value to make such reimbursement. Any such
withholding or reimbursement shall comply with all
applicable governing laws and regulations.
6. Miscellaneous.
6.1 Administration. Subject to the express provisions
of the Plan, the Committee shall have complete authority to
interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to it, and to make all other
determinations necessary or advisable for the administration
of the Plan. The Committee's determinations on the matters
referred to herein shall be final and conclusive.
6.2 Limitation. Nothing in the Plan or in any Award
shall confer on any employee the right to continue in the
employ of the Company or any of its Subsidiaries nor
interfere in any way with the right of the Company or its
Subsidiaries to terminate the employment of that employee at
any time.
6.3 Amendment and Termination. The Board may suspend
or terminate the Plan, or amend the Plan in such respect as
it shall deem advisable, provided, however, that such
amendment shall not, without the consent of the Participant
to whom any Award shall theretofore have been granted under
the Plan, adversely affect the rights of such Participant
under such Award, including shares which may still be
subject to increase or decrease as provided under the Plan,
and further provided that such amendment shall not change
the maximum number of shares available under the Plan or
available for any one Participant.
6.4 Effectiveness of the Plan. The Plan shall become
effective on March 9, 1994. No Awards shall be made under
the Plan after April 30, 2000, nor shares issued under the
Plan after April 30, 2002 when shares covered by First Year
Awards and Second Year Awards based on the last Target Award
under the Plan are no longer subject to increase or
decrease, or such earlier date as the Plan may have been
terminated pursuant to paragraph 6.3.
EXHIBIT B
CBI INDUSTRIES, INC.
OFFICERS' BONUS PLAN
The CBI Industries, Inc., Officers' Bonus Plan (the "Plan") is an
annual short-term incentive plan. Participants in the Plan are
the executive officers of CBI Industries, Inc. (the "Company").
Payments are made under the Plan following the end of the fiscal
year, and consist of two distinct and separate parts: (a) a
formula, performance-based part, and (b) an individual,
discretionary part.
The performance-based part of the Plan is based on the annual
operating plan of the Company for the fiscal year, which is
approved by the Board of Directors, and derived as a composite of
the individual annual business plans within the major operating
business units of the Company. Individual target bonus amounts
for each covered officer are approved by the Compensation
Committee of the Board at the beginning of the year. Achievement
and payment of the performance part of the Plan is based strictly
on attaining specific goals of income and return on capital, both
of which are also approved by the Compensation Committee at the
beginning of the year. Under the Plan, for those officers of the
Company who are also officers of major operating business units,
"income" is defined as annual operating income, before minority
interest, taxes and interest, and "return on average capital
employed" is measured by dividing annual operating income by a
five-point average of the capital invested (shareholder's
investment and advances) by the Company in the specific major
operating business unit plus the balances of minority interest
and interest-bearing debt maintained and accounted for by the
major operating business unit. For those officers who are only
officers of the Company the financial measures used in
establishing the goals are the Company's annual consolidated net
income before preferred dividends, and return on average invested
capital, which is calculated by dividing annual net income before
preferred dividends by a five-point average of total interest-
bearing debt, and preferred and common shareholders' investment.
Formula bonus payments are made only after the Compensation
Committee has certified the achievement of the goals. The
maximum bonus payable under the formula, performance-based, part
of the Plan is 100% of base salary.
The discretionary part of the bonus is based on an assessment of
the management performance of each of the Company's executive
officers and the effort and skill exhibited in supervising their
respective areas of responsibility and the personnel who report
to them. It is qualitative based on individual performance and
not on quantitative Company-wide measures. Individual target and
maximum amounts payable under this portion of the Plan are also
established and approved by the Compensation Committee at the
beginning of the year. The amounts payable are separate from,
and are not a substitute for, any part of the performance-based
payments under of the Plan. The amounts paid under the
discretionary part of the Plan are recommended by Company
management, approved by the Compensation Committee, and reviewed
by the Board of Directors. The CEO's discretionary part is
determined solely by the Compensation Committee, subject to
review by the Board.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS-MAY 12, 1994
CBI INDUSTRIES, INC.
The undersigned hereby appoints J.E. Jones and G.L. Schueppert,
or either of them, as the proxies or proxy of the undersigned,
with full power of substitution, to vote the number of shares of
common stock and Convertible Voting Preferred Stock, Series C, of
CBI Industries, Inc. which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of the Company to be held at
Drury Lane Oakbrook Terrace, 100 Drury Lane, Oakbrook Terrace,
Illinois, at 10:30 A.M., Central Time, on May 12, 1994, and at
any adjournment thereof, as fully as the undersigned could do if
personally present, for the transaction of such business as may
properly come before such meeting, and specifically as appears on
the other side of this card.
This proxy should be signed exactly as your name or names appear
in the space at the left. If signing in any fiduciary or
representative capacity, give full title as such.
Dated: , 1994
Signature of Shareholder
PLEASE COMPLETE, SIGN, DATE AND MAIL THIS PROXY AS SOON AS
POSSIBLE IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED FOR
MAILING IN THE UNITED STATES.
(over)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY
PAGE
(continued from other side)
INDICATE VOTING AUTHORITY BY MARKING IN THE APPROPRIATE BOX
Election of the following nominees as directors for a three year
term:
R. J. Daniels, J. E. Jones, E. J. Mooney, Jr. and R. G. Wallace
/_/ For All Nominees Listed /_/Withhold Authority to Vote
Above For All Nominees Listed Above
/_/ For All Nominees Listed Above
Except Nominees Written in Space
Below:
The Board of Directors recommends a vote FOR Proposals No. 1, 2
and 3
1. Proposal No. 1 (Amendment to the Certificate of
Incorporation)
/_/ For /_/ Against /_/ Abstain
2. Proposal No. 2 (CBI 1994 Restricted Stock Award Plan)
/_/ For /_/ Against /_/ Abstain
3. Proposal No. 3 (CBI Officer's Bonus Plan)
/_/ For /_/ Against /_/ Abstain
This proxy, when properly executed, will be voted in the manner
directed herein. If no choice is indicated on this proxy, votes
represented by this proxy will be voted FOR all the nominees
listed above and FOR Proposals No. 1, 2 and 3. In their discre-
tion, the proxies are authorized to vote upon such other business
as may properly come before the meeting.