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
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)
[ ] 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, if other than
Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
.......................................................
2) Aggregate number of securities to which transaction
applies:
.......................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined:
.......................................................
4) Proposed maximum aggregate value of transaction:
.......................................................
5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
.......................................................
2) Form, Schedule or Registration Statement No.:
.......................................................
3) Filing Party:
.......................................................
4) Date Filed:
.......................................................
</page>
CBI INDUSTRIES, INC.
800 JORIE BOULEVARD
OAK BROOK, ILLINOIS 60521-2268
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1995
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 11, 1995, for the
following purposes:
1. To elect five directors to serve for a three year term
expiring in 1998;
2. To adopt the proposed CBI Industries, Inc. 1995 Stock
Option Plan (designated as Proposal No. 1 in the
accompanying proxy statement);
3. To amend the Company's Certificate of Incorporation to
increase the number of authorized shares of common
stock from one hundred twenty million to two hundred
forty million (designated as Proposal No. 2 in the
accompanying proxy statement);
4. To transact such other business as may be properly
brought before the meeting.
Only shareholders of record at the close of business on
March 13, 1995, 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.
Charlotte C. Toerber
Secretary
April 6, 1995
Preliminary Proxy Statement
CBI INDUSTRIES, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1995
This proxy statement, which is first being mailed to
shareholders on or about April 6, 1995, 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 11,
1995, for the purposes set forth in the foregoing notice. Cost
of solicitation of proxies will be borne by the Company. Proxies
will be solicited by MacKenzie Partners, Inc. for an approximate
fee of $20,000. In addition, 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 and 2. 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 13, 1995, 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 nine meetings in 1994.
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 November 9, 1994, the size
of the Board is fourteen. Five directors are to be elected to
serve until the Annual Meeting of Shareholders in 1998 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
thereto) 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 1998:
E. HUBERT CLARK, JR., 68, 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.
JOHN T. HORTON, 66, 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.
STEPHANIE PACE MARSHALL, 49, Founding Executive Director of
the Illinois Mathematics and Science Academy, in Aurora, IL.
Director of the Company since November 9, 1994. Advisor to the
Panel on Education of the President's Council of Science
Advisors; former member of the National Policy Council and the
Forum of Educational Organizational Leaders; member of the
Resource Council of the Metropolitan Planning Council of Chicago,
the Northwestern University President's Advisory Council, and the
Illinois Institute of Technology National Commission; and an
associate of the Cambridge Group, an international corporation
specializing in strategic planning for schools, universities and
corporations. Member: Nominating Committee.
GEORGE L. SCHUEPPERT, 56, Executive Vice President-Finance
since August 1, 1987. Director of the Company since May 11,
1989.
ROBERT T. STEWART, 62, Retired Chairman 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;
Environment and Safety Committee.
Directors to Continue in Office with Terms Expiring in 1997:
ROBERT J. DANIELS, 61, 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.
JOHN E. JONES, 60, 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 systems, steel tubing and electrical products); and
NICOR Inc. (utility).
EDWARD J. MOONEY, JR., 53, Chairman of the Board, President
and Chief Executive Officer of Nalco Chemical Company (specialty
chemicals) since 1994, President from 1990 to 1994, 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.
ROBERT G. WALLACE, 68, 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 1996:
LEWIS E. AKIN, 57, 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.
WILEY N. CALDWELL, 67, 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.
ROBERT J. DAY, 70, 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.
GARY E. MACDOUGAL, 58, Chairman of the Governor's Task Force
for Human Services Reform for the State of Illinois and a Trustee
of the Annie Casey Foundantion (for disadvantaged children).
General Director of the New York City Ballet from 1993 to 1994,
Chairman of the Board and Chief Executive Officer of Mark
Controls Corporation (building management systems and flow
control products) from 1969 to 1988. Director of the Company
since 1981. Prior to 1990, United States delegate and Alternate
Representative to the United Nations. Director of United Parcel
Service of America, Inc. (parcel delivery service); Bulgarian-
American Enterprise Fund; and Union Camp Corporation (forest
products). Member: Compensation Committee, Nominating
Committtee, Environment and Safety Committee (Chairman).
JOHN F. RIORDAN, 59, 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; Environment and Safety
Committee.
COMMITTEES OF THE BOARD
The Audit Committee, which held three meetings in 1994, 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 four meetings in
1994, 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
Company's stock option plans and restricted stock award plans;
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 held two meetings in 1994,
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 on the
Board. 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, Charlotte 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.
The Environmental and Safety Committee, which was
established, but did not meet, in 1994, reviews and makes
recommendations concerning the environmental and safety
philosophies and standards of the Company and its operating
subsidiaries, reviews existing compliance programs and monitors
environmental and safety compliance of the Company and its
subsidiaries.
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.
Title Name and address Amount and Nature ofPercent
of Class of Beneficial Owner Beneficial OwnershipofClass
Common Stock LaSalle National Trust, N.A. 7,063,258* 16.30%
135 South LaSalle Street
Chicago, IL 60603
Common Stock The Capital Group Companies, Inc.3,642,710** 9.57%
333 South Hope Street
Los Angeles, CA 90071
Common Stock Putnam Investments, Inc. 2,088,700*** 5.5%
One Post Office Square
Boston, MA 02109
* According to an amended Schedule 13G dated February 13, 1995,
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 859,082.464 shares of Common Stock
and 2,115,318.001 shares of Series C Preferred Stock (which are
convertible into 3,172,977.002 shares of Common Stock) which are not
allocated to accounts of ESOP participants, and 868,798.536 shares of
Common Stock and 1,441,599.999 shares of Series C Preferred Stock
(which are convertible into 2,162,399.999 shares of Common Stock)
which are allocated to accounts of ESOP participants.
** According to an amended Schedule 13G dated February 6, 1995 filed
by The Capital Group Companies, Inc. and its subsidiaries, Capital
Guardian Trust Company and Capital Research and Management Company, it
had sole power to vote 2,572,610 shares and sole power to dispose of
3,642,710 shares.
*** According to an amended Schedule 13G dated January 23, 1995 filed
by Putnam Investments, Inc. and its subsidiaries, Putnam Investment
Management, Inc. and The Putnam Advisory Company, Inc., it had shared
power to dispose of 2,088,700 shares.
/page
Security Ownership of Management of the Company
The following table sets forth certain information regarding
the Company's Common Stock beneficially owned on February 15,
1995, by each director and nominee, each named executive officer
and by all directors and executive officers as a group.
Percent of
Shares of Common Stock Outstanding
Name of Beneficially Owned Common
Beneficial Owner As of February 15, 1995 (1)Stock
John E. Jones 71,776 (2) *
Lewis E. Akin 28,957 (2) *
Wiley N. Caldwell 1,500 *
E. Hubert Clark, Jr. 1,350 *
Robert J. Daniels 23,327 (2) *
Robert J. Day 1,650 *
John T. Horton 1,536,439 (3) 4.2%
Gary E. MacDougal 4,650 *
Stephanie Pace Marshall 200 *
Edward J. Mooney 1,950 *
John F. Riordan 1,100 *
George L. Schueppert 40,682 (2) *
Robert T. Stewart 1,100 *
Robert G. Wallace 1,650 *
Charles O. Ziemer 26,600 (2) *
All directors and executive
officers as a group
(18 in number) 1,766,053 (2) 4.6%
*Beneficially owns less than one percent of the Company's
outstanding shares of Common Stock.
(1) Share amounts for individual directors and officers 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: John E. Jones, 165,500 shares; Lewis
E. Akin, 52,800 shares; Robert J. Daniels, 75,500 shares; George
L. Schueppert, 78,450 shares; Charles O. Ziemer 40,200 shares;
and directors and executive officers as a group, 436,250 shares,
and excludes shares of Series C Preferred Stock held pursuant to
the CBI Salaried Employee Stock Ownership Plan (1987) as follows:
John E. Jones, 5,317 shares; Lewis E. Akin, 4,750 shares; Robert
J. Daniels, 4,896 shares; George L. Schueppert, 4,946 shares;
Charles O. Ziemer, 3,887 shares; and directors and executive
officers as a group, 28,461 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.</page>
Section 16(a) Reporting Delinquencies
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 year. Based upon
information furnished to the Company, including the Reports in
question, as contemplated by the rules, it appears that Mr.
MacDougal filed one Form 4 late with regard to one sale
transaction and that two officers, Mr. Duffy, Vice President-
Human Resources, and Mr. Schneider, Vice President and
Controller, each filed one Form 5 late with regard to reporting
transactions under the Company's Dividend Reinvestment Plan.
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.
Annual Compensation Long Term Compensation
Awards
(a) (b) (c) (d) (f) (g) (i)
Securities
Restricted Underlying All Other
Stock Options/ Compen-
Name and Bonus Award(s) SARs (# sation
Principal Position Year Salary($) ($)(1) ($)(2)(3) Shares(4) ($)(5)
John E. Jones, Chairman 1994 530,000 552,497 137,000 31,000 115,042
of the Board, President, 1993 530,000 77,000 515,250 28,000 133,222
Chief Executive Officer 1992 495,000 456,667 0 28,000 78,395
and Director
Lewis E. Akin, Executive 1994 290,000 210,189 48,020 14,000 96,045
Vice President and 1993 290,000 35,000 200,375 12,000 76,575
Director, President 1992 275,000 201,822 0 13,500 42,428
of Chicago Bridge & Iron
Company
Robert J. Daniels, 1994 265,000 193,507 48,020 14,000 89,021
Executive Vice President 1993 265,000 43,515 171,750 11,000 67,456
and Director, President 1992 252,000 148,057 0 12,000 40,191
of Liquid Carbonic
Industries Corporation
George L. Schueppert, 1994 305,000 261,591 48,020 14,000 105,848
Executive Vice President,1993 305,000 35,000 200,375 12,000 87,047
Chief Financial Officer 1992 290,000 218,895 0 13,500 46,156
and Director
Charles O. Ziemer, Senior1994 195,000 101,056 20,580 7,000 63,725
Vice President 1993 192,000 25,000 85,875 6,500 48,064
and General Counsel 1992 185,000 86,589 0 7,000 30,634
(1) 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."
(2) Amounts earned in 1994 (but awarded in 1995) were pursuant to the CBI
1994 Restricted Stock Award Plan (see description under the caption "Long
Term Incentive Plans" and "Compensation Committee Report on Compensation
Awards") and reflects restricted stock earned pursuant to 50% of the target
awards granted in 1994 for which performance is measured at the end of
1994. Restrictions on these shares expire January 1, 1999. Amounts
awarded in 1993 were pursuant to the CBI 1989 Restricted Stock Award Plan.
(3) 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 $25.625 per share on 12/31/94, for each named
executive officer are: John E. Jones 60,750, $1,556,719; Lewis E. Akin
20,275, $519,547; Robert J. Daniels 16,125, $413,203; George L. Schueppert
24,250, $621,406; and Charles O. Ziemer 12,900, $330,562.
(4) 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.
(5) 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. Those three amounts,
expressed in the same order identified above, for each named executive
officer are as follows: John E. Jones, $57,048, $19,375, $38,619; Lewis E.
Akin $54,866, $17,500, $23,679; Robert J. Daniels $55,635, $14,375,
$19,011; George L. Schueppert $55,586, $19,375, $30,887; Charles O. Ziemer
$45,064, $5,625, $13,036.
/page
Options and stock appreciation rights
The following tables summarize option grants and exercises
during the fiscal year 1994 to and by the executive officers
named in the Summary Compensation Table above, and the value of
the options held by such persons at the end of fiscal 1994. No
SARs were granted or exercised during fiscal 1994.
OPTIONS/SAR(1) GRANTS IN LAST FISCAL YEAR
Grant Value
Individual Grants Date
(a) (b) (c) (d) (e) (f)
% of
Number of Total
Securities Options/
Underlying SARs Grant
Options/ Granted to Date
SARs Employees Exercise or Present
Granted (# in Base Price Expiration Value
Name Shares)(2) Fiscal Year ($/Share) Date ($)(3)
John E. Jones 31,000 13.5% 30.125 5/02/04 364,560
Lewis E. Akin 14,000 6.1% 30.125 5/02/04 164,640
Robert J. Daniels 14,000 6.1% 30.125 5/02/04 164,640
George L. 14,000 6.1% 30.125 5/02/04 164,640
Schueppert
Charles O. Zeimer 7,000 3.0% 30.125 5/02/04 82,320
(1) 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.
(2) 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.
(3) 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 of $30.125 equal to the fair market value of
the underlying stock on the date of grant; (b) an interest rate of 6.48%
that represents the interest rate on a U.S. treasury security with a
maturity date corresponding to that of the option term; (c) volatility of
33.249% calculated using daily stock prices for the one-year period prior
to the grant date; (d) dividends at the rate of $0.48 per share,
representing the annualized dividends paid with respect to a share of
Common Stock at the date of grant; (e) an approximately 4.0% reduction to
reflect the probability of forfeiture due to termination prior to vesting
and approximately 12.33% reduction to reflect the probability of a
shortened option term due to termination of employment prior to the option
expiration date; and (f) an option term of ten years. The ultimate values
of options will depend on the future market price of Common Stock, which
cannot be forecast with reasonable accuracy. The actual value, if any, an
optionee will realize upon exercise of an option will depend on the excess
of the market value of the Common Stock over the exercise price on the date
the option is exercised.
</page>
AGGREGATED OPTION/SAR(1) EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/ Options/
SARs at FY-End SARs at FY-
Shares (#) End ($)
Acquired Value
on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable(2)
John E. Jones 0 NA 165,500/ 464,710/
31,000 0
Lewis E. Akin 0 NA 52,800/ 0/
14,000 0
Robert J. Daniels 0 NA 75,500/ 231,798/
14,000 0
George L.
Schueppert 0 NA 78,450/ 218,158/
14,000 0
Charles O.
Ziemer 0 NA 40,200/ 107,385/
7,000 0
(1) 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.
(2) Value is based on the NYSE composite closing price of $25.625/share on
12/31/94.
</page>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
Under the Company's 1994 Restricted Stock Award Plan, at
the beginning of each year, the performance goals and target
awards are set. Target awards are allocated 50% to the current
year for which the target award was made ("50% award"), 25% to
the first year following ("first year award") and 25% to the
second year following ("second year award"). Target awards are
subject to adjustment based upon measurement of pre-tax operating
income as a return on net assets over a three year period ending
with the year in which the measurement of performance is made.
The 50% award is adjusted at the end of the year in which the
target award is made. The first year award is adjusted at the
end of the year in which the target award is made and at the end
of the subsequent year. The second year award is adjusted at the
end of the year in which the target award is made and again at
the end of the second year following the year the target award is
made. The target award, as it may be adjusted, will be earned if
100% of the performance goal is achieved. The threshold number
of shares will be earned at the achievement of 75% of the
performance goal, and the maximum number of shares will be earned
at the achievement of 125% of the performance goal. No dividends
will be paid during the performance period.
Number Performance Estimated Future Payouts Under
of Shares of Other Non-Stock Price-Based Plans
Units Period Until
or other Maturation Threshold Target Maximum
Name Rights (#) or Payout (#) (#) (#)
John E. Jones 2,500 1992-4, 1993-5 1400 2,800 5,600
2,500 1992-4, 1994-6 1400 2,800 5,600
Lewis E. Akin 875 1992-4, 1993-5 490 980 1,960
875 1992-4, 1994-6 490 980 1,960
Robert J. Daniels 875 1992-4, 1993-5 490 980 1,960
875 1992-4, 1994-6 490 980 1,960
George L. 875 1992-4, 1993-5 490 980 1,960
Schueppert 875 1992-4, 1994-6 490 980 1,960
Charles O. Ziemer 375 1992-4, 1993-5 94 420 840
375 1992-4, 1994-6 94 420 840
</page>
Actual performance against the performance goal for the
three year period ended December 31, 1994 has been certified by
the Compensation Committee and the restricted stock earned
pursuant to the 50% award for 1994 has been allocated. (See
Summary Compensation Table - Restricted Stock). The amounts
listed in the table above under "Number of Shares, Units, or
other Rights" indicate the first year award and second year award
that are part of a target award made in 1994. Amounts listed
under "Estimated Future Payouts Under Non-Stock Price Based
Plans" have been adjusted as aforesaid to take into account
actual performance against the performance goal for the three
year period ended December 31, 1994.
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 20 25 30 35 40
$ 100,000 $ 21,540 $ 28,720 $ 35,900 $ 43,080 $ 50,260 $ 57,440
200,000 42,540 56,720 70,900 85,080 99,260 113,440
300,000 63,540 84,720 105,900 127,080 148,260 169,440
400,000 84,540 112,720 140,900 169,080 197,260 225,440
500,000 105,540 140,720 175,900 211,080 246,260 281,440
600,000 126,540 168,720 210,900 253,080 295,260 337,440
700,000 147,540 196,720 245,900 295,080 344,260 393,440
800,000 168,540 224,720 280,900 337,080 393,260 449,440
900,000 189,540 252,720 315,900 379,080 442,260 505,440
1,000,000 210,540 280,720 350,900 421,080 491,260 561,440
1,100,000 231,540 308,720 385,900 463,080 540,260 617,440
1,200,000 252,540 336,720 420,900 505,080 589,260 673,440
</page>
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 the participant's 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 $120,000 per
year in 1994. In addition, compensation to be used in the
determination of benefits was limited by the Internal Revenue
Code to $150,000 for 1994. 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,
1994, for the named executive officers are: John E. Jones, 37.7
years; George L. Schueppert, 29.4 years; Lewis E. Akin, 34.3
years; Robert J. Daniels, 28.9 years; and Charles O. Ziemer, 32.3
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
1994 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 1994 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 1994 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 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 Company's stock option plans, the
CBI Officers' Bonus Plan and the CBI 1994 Restricted Stock Award
Plan.
The Committee uses the services of Hewitt Associates LLC, 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 competition for executive
talent, based on both the Company's geographic location and the
industries in which the Company operates, 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, to
attract, retain and motivate talented people, and to link
executive and shareholder interests through equity-based plans
with a long-term perspective. The program consists of short and
long-term incentive plans which emphasize pay for both individual
and corporate performance and stock based incentives. Because
the Committee believes that it is in the best interest of
shareholders to operate the business with a long term perspective
and reward those who do so, the program is intended to more
greatly emphasize its longer-term components. 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 a) stock
option grants and b) restricted stock awards based on longer-term
corporate performance, are designed to provide opportunity for
resulting compensation from such incentives at or above the
median values indicated by the competitive data 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 salaries of the executive
officers of the Company. In determining appropriate salary
levels, the Committee primarily considered (weighing all the
factors on a generally equivalent basis) level of responsibility,
experience, individual performance, and competitive pay levels as
reflected in the compensation consultant's study.
Annual Incentives
Through the CBI Officers' Bonus Plan, 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/or Company annual goals
and a discretionary payment for individual performance as
described below.
The performance portion of the plan uses income and return
on invested capital performance goals for the Company.
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 achievement of the
Company's performance goals. The competitive market data is
reviewed annually in considering appropriate levels of incentive
bonus opportunities for individual employees. The Committee
annually reviews and approves the plan's target opportunities and
performance goals.
Annual incentive bonus opportunities are made available
pursuant to the discretionary portion of the CBI Officers' Bonus
Plan by permitting cash payments to executive officers for the
effort and skill exhibited in supervising their respective areas
of responsibility and the personnel who report to them.
Individual target and maximum amounts payable under this portion
of the Plan are established and approved by the Committee.
In 1994, the Company and its business units' performance
goals were exceeded, and the amounts paid consisted of both a
performance portion and a discretionary portion under the Plan.
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 targeted 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,
in general order of importance, the employee's potential impact
on the Company's performance based upon the employee's position
and level of responsibility, a qualitative evaluation of the
employee's past performance, a review of the competitive
compensation data and the number of options granted in previous
years.
Restricted Stock Award Plan
The Restricted Stock Award Plan is intended to encourage
long-term employment and provide incentive compensation to
Participants over an extended period by using a combination of
specific longer-term financial goals and stock vesting
restrictions. The Plan provides for awarding a target number of
restricted shares to an individual recipient, or a percentage
thereof, only after the Company achieves the performance goals
set by the Committee. Restrictions on shares awarded lapse at
the beginning of the fifth year following the year for which
performance is measured. Assignment of a target award of
restricted stock to an individual employee is based on, in
general order of importance, the employee's potential impact on
the Company's performance based upon the employee's position and
level of responsibility, a qualitative evaluation of the
employee's past performance, a review of the competitive
compensation data and the number of restricted shares awarded in
previous years. The performance goal is based on pre-tax
operating income, as a return on net assets. The Committee each
year also approves the levels of the target awards. In 1994, the
Company exceeded its performance goals under the Plan.
CEO Compensation
Mr. John Jones has been Chairman, CEO and President of CBI
Industries since 1989. Mr. Jones' 1994 base salary was $530,000,
the same as in 1993. In light of the financial results for 1993,
Mr. Jones recommended to the Committee no adjustment to his
salary for 1994, and upon consideration the Committee accordingly
granted no salary increase to him. The amount of Mr. Jones' 1994
base salary remained slightly below the median value as reflected
in the competitive data of the compensation study.
Based on 1994 financial results, Mr. Jones earned an
incentive bonus of $552,497. This amount was up from the $77,000
paid for 1993, which consisted solely of a bonus paid under the
discretionary portion of the Plan. As the corporate performance
goals under the CBI Officers' Bonus Plan were exceeded in 1994,
this amount consisted of both a performance-based portion and a
discretionary portion under the Plan. Mr. Jones' bonus target
was set as a percentage of his base salary, taking into
consideration the competitive data for such targets, with most of
the amount paid based upon net income and return on invested
capital performance goals for the Company, and a discretionary
portion. The discretionary portion of Mr. Jones' bonus was based
on the Committee's consideration of Mr. Jones' leadership in
long-term strategic planning, his focus on the increasing global
market opportunities for the Company, and his management ability
as the Company undergoes change to adapt to these conditions.
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 the amount of the discretionary
portion under the Plan.
The 1994 stock option grant of 31,000 shares to Mr. Jones
was based on his potential impact on the Company's performance
based upon his position and level of responsibility within the
Company, and its consideration of the factors described above
relating to the discretionary bonus. The Committee also
considered the number of options granted in previous years. The
potential value represented by this grant was close to the median
value of similar stock option grants as reflected in the
competitive data.
In 1994, the Committee established a target of 10,000 shares
for Mr. Jones under the 1994 CBI Restricted Stock Award Plan.
The amount of the target award was determined separately from the
amount of the stock option grant. The Committee also considered
the number of restricted shares awarded under previous plans in
previous years in setting Mr. Jones' 1994 target award under the
Plan. The amount of the target award was slightly above the
median value as reflected in the competitive data of the
compensation study. Taken together, the value of the options
granted and the restricted stock target award was slightly above
the median value of total long term incentive compensation as
reflected in the compensation study. Based upon 1994 financial
results, Mr. Jones earned a restricted stock award of 11,200
shares, of which 5,600 shares were awarded subject to
restrictions and 5,600 shares are subject to adjustment based
upon attainment of the performance goals for 1995 and 1996.
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
determined not to take further action at this time 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; however, the Committee believes the
Company's interests are best served by retaining a flexible
approach and that there may be circumstances in which it is
appropriate to pay certain amounts or forms of compensation that
will not be fully deductible under these Code provisions.
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.
COMPENSATION COMMITTEE
Edward J. Mooney (Chairman)
Robert J. Day
John T. Horton
Gary E. MacDougal
Robert 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, 1989, and
reinvestment of all dividends.
COMPARISON OF TOTAL RETURNS
VALUE FOR EACH ONE HUNDRED DOLLARS INVESTED ON 12/31/89
(GAINS IN STOCK PRICE, DIVIDENDS AND REINVESTED DIVIDENDS)
Mesurement Period
(fiscal Year Covered) CBI S&P 500 PEER GROUP*
Measurement Pt.-12/31/89 $100 $100 $100
FYE 12/31/90 127 97 93
FYE 12/31/91 155 127 115
FYE 12/31/92 144 136 134
FYE 12/31/93 150 150 164
FYE 12/31/94 129 152 150
* Dow Jones Diversified Industrial Index
PROPOSAL 1
CBI INDUSTRIES, INC. 1995 STOCK OPTION PLAN
The Board of Directors recommends that the shareholders
approve the CBI Industries, Inc. 1995 Stock Option Plan (referred
to in the following discussion of Proposal 1 as the "Plan"),
which has been approved by the Board. The description of the
Plan set forth below is qualified in its entirety by reference to
the complete text of the Plan as set forth in Exhibit A.
Purpose of the Plan
The purpose of the Plan is to aid the Company and its
subsidiaries in securing and retaining key employees of
outstanding ability by making it possible to offer them an
increased incentive in the form of a proprietary interest in the
Company, to join or continue in the service of the Company and to
increase their efforts for its welfare.
Creation of the Plan
The Board of Directors adopted the Plan on January 11, 1995,
to be effective as of January 1, 1995, subject to approval by the
shareholders of the Company at the Annual Meeting on May 11,
1995.
The Plan replaces the CBI Industries, Inc. Stock Option Plan
which expires on May 10, 1995. As of March 1, 1995, 1,000 shares
remained reserved under that plan.
Description of the Plan
The Plan authorizes the granting of incentive stock options
qualified under Section 422A under the Code and non-qualified
stock options ("Non-Qualified Stock Options") to purchase, or
stock appreciation rights to receive, a maximum of 1,700,000
shares of Common Stock. This number is subject to adjustment by
the Committee (described below) to reflect stock dividends,
split-ups and other changes in the capitalization of the Company.
The fair market value (as of the date an option is granted) of
the shares for which a participant may exercise Incentive Stock
Options in any calendar year (regardless of the total value of
such options granted) cannot exceed $100,000. This Code
limitation may be amended by the Board of Directors if the Code
is amended. Shares subject to options that expire without
exercise will be available again for option under the Plan.
However, the shares subject to Non-Qualified Stock Options that
are cancelled upon exercise of an associated stock appreciation
right (as described below) shall no longer be available for
grant.
The Plan shall be administered by the Compensation Committee
of the Company's Board of Directors (the "Committee"), no member
of which shall be eligible to participate in the Plan or any
other stock option plan maintained by the Company during
Committee membership or within one year prior thereto. The
Committee shall administer and interpret the Plan. The
designation of the key employees (defined in the Plan to be any
full time employee of the Company, including officers, who in the
opinion of the Committee are or are expected to be primarily
responsible for the management, growth or protection of some part
or all of the business of the Company), the number of shares that
may be optioned to any such employee and, subject to the
limitations of the Plan, the terms and conditions upon which such
options are granted, are entirely within the discretion of the
Committee.
Under the Plan: (a) the option price of all options shall
not be less than fair market value of the Common Stock at the
time of grant; (b) an option may be exercised for ten years after
the date of grant unless an earlier expiration date is provided
in the option; (c) payment of the option price shall be made in
full and, in the discretion of the Committee, made either in
cash, shares of Common Stock or by a combination of cash and such
shares; (d) no option or stock appreciation rights shall be
granted after the tenth anniversary of shareholder approval, but
options and stock appreciation rights already granted may be
extended beyond that date; (e) during the lifetime of a
Participant, an option or stock appreciation right may only be
exercised by the optionee, and, unless otherwise designated by
the Committee, may not be transferred other than by will, the
laws of descent and distribution, or by the provision for the
designation of a beneficiary in accordance with the Plan; and (f)
a stock appreciation right may not be transferred on death except
to the transferee of the related option.
An unexercised option will expire upon termination of
employment for other than death, retirement for disability or
retirement under a retirement plan of the Company. If an
optionee dies while employed or retires due to disability, an
Incentive Stock Option will expire at the earlier of ten years
from the date of grant or one year from the date of death or such
retirement; if an optionee retires under a Company plan, other
than for disability, then an Incentive Stock Option will expire
at the earlier of ten years from the date of grant or three
months after retirement. A Non-Qualified Stock Option will
expire at the expiration date set forth in the option, if
employment terminates due to any retirement; if employment
terminates due to death, then a Non-Qualified Stock Option will
expire at the earlier of ten years from the date of grant or one
year after death. The Plan permits the Committee to extend the
expiration date of an option initially granted for less than ten
years, but not beyond ten years.
The Plan permits the grant of stock appreciation rights in
conjunction with options in the form of "Rights", either at the
time of the option grant or during the option's term. Stock
appreciation rights permit an optionee to receive (a) shares of
Common Stock, (b) cash or (c) a combination of such shares and
cash in value equal to the amount by which the fair market value
of all shares subject to the related option exceeds the exercise
price of such option. The determination of whether stock
appreciation rights will be settled in stock, cash or a
combination will be made by the Committee. To the extent an
option is exercised, in whole or in part, any related stock
appreciation right shall terminate. Likewise, to the extent a
stock appreciation right is exercised, the related option shall
terminate. To the extent any stock appreciation right is not
exercised or cancelled, it shall be deemed exercised
automatically on the last day on which its related option may be
exercised. It is the present policy of the Committee not to
award Rights either at the time of grant or during the term of
the option.
The Plan also permits the grant of "Limited Rights" in
conjunction with the grant of options, whereby the Committee may
specify, as to individual options, other conditions or
circumstances under which options may be terminated by payment of
cash in lieu of the exercise of the related option. Such
circumstances may include automatic termination following a
substantial change in the ownership, control or management of the
Company. The exercise of either the Limited Right or the related
option shall pro rata cancel the other.
The Board of Directors may amend the Plan at any time, but
may not change the Plan without shareholder approval to (a)
increase the maximum number of shares authorized, (b) reduce the
minimum option price, (c) extend the period within which options
or stock appreciation rights may be granted, (d) change the basis
upon which shares or cash may be distributed upon exercise of a
stock appreciation right or (e) provide for an option or stock
appreciation right exercisable more than ten years from the date
of grant. The terms of any previously granted option may not be
changed to adversely affect the rights of the holder without the
holder's consent.
The Board of Directors may suspend or terminate the Plan at
any time, but any such action shall not affect options or stock
appreciation rights then in effect.
Federal income Tax Consequences
Under present laws and regulations, the Federal income tax
consequences of receiving options and purchasing shares under the
Plan, and ultimately disposing of such shares, are as follows:
The grant of an option under the Plan will not, by itself,
result in the recognition of taxable income to the optionee or
entitle the Company or any of its subsidiaries to a deduction at
the time of such grant.
The exercise of an Incentive Stock Option within the meaning
of Section 422A of the Code will not, by itself, result in the
recognition of taxable income to the optionee or entitle the
Company or any of its subsidiaries to a deduction at the time of
such exercise. The excess of the market value of the shares over
the option price at the time of exercise will be a tax preference
item for purposes of the alternative minimum tax determination of
the optionee. The exercise of a Non-Qualified Stock Option will
result in the recognition of ordinary income by the optionee, and
entitle the optionee's employer to a deduction in an amount equal
to the difference between the exercise price and the fair market
value of the shares acquired pursuant to the option. The
exercise of a stock appreciation right (whether a Right or a
Limited Right) will result in the recognition of ordinary income
by the optionee in an amount equal to the amount of cash received
and/or the fair market value of the shares acquired pursuant to
the exercise, and entitle the optionee's employer to a deduction
equal to the amount of ordinary income recognized by the optionee
at the time the optionee recognizes it. For these purposes, the
tax is imposed and the fair market value of the shares is
determined as of the date of exercise unless the shares are not
then freely transferable due to insider trading restrictions
under the securities laws, in which case the applicable date is
six months after the date of exercise unless the optionee elects
to be taxed and have the fair market value of the shares
determined as of the date of exercise.
The optionee will recognize capital gain or loss upon resale
of the shares received upon the exercise of an Incentive Stock
Option, provided that the optionee held such shares for at least
one year after transfer of the shares to the optionee or two
years after the grant of the option, whichever is later. The
amount of gain or loss will be the difference between the amount
realized by the seller and the seller's tax basis for the stock
(the price paid for the stock if the option price is paid in
cash, the basis in the stock exchanged to the extent an equal
number of shares are received if the option price is paid in
shares of Common Stock, and zero for those shares received in
excess of the number of shares exchanged if the option price is
paid in shares of Common Stock). Generally, if the shares are
not held for the requisite period, the optionee will recognize
ordinary income upon disposition in an amount equal to the lesser
of (a) the difference between the exercise price and the fair
market value on the date of exercise of the shares acquired
pursuant to the option or (b) the excess of the fair market value
on the date of disposition over the exercise price; and the
optionee's employer will be allowed a deduction equal to the
amount of ordinary income, if any, recognized by the optionee at
such time as the optionee recognizes it.
NEW PLAN BENEFITS
This plan is substantially the same as the CBI Industries,
Inc. Stock Option Plan which expires May 10, 1995. The following
sets forth the number of stock options granted under the expiring
plan in January, 1995, which is the same number of options each
person would have received under the proposed plan if options had
been granted under the proposed plan in 1995.
Number of
Named Officers Stock Options
John E. Jones 45,000
Lewis E. Akin 18,000
Robert J. Daniels 9,000
George L. Schueppert 18,000
Charles O. Ziemer 9,000
All Current Executive Officers 116,000
Non-Executive Directors or Nominees -0-
Non-Executive Officers -0-
All Employees 176,400
(excluding Current Executive Officers)
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 1.
PROPOSAL 2
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors recommends the approval of an
amendment to the Certificate of Incorporation (the "Certificate")
pursuant to which the number of shares of Common Stock authorized
for issuance would be increased from 120,000,000 shares to
240,000,000 shares. As of December 31, 1994, there were issued
and outstanding 38,096,964 shares of Common Stock. In addition,
approximately 3,708,184 shares were reserved for issuance
pursuant to the 1994 CBI Restricted Stock Award Plan, the
Employee Stock Purchase Plans and the CBI stock option plans
(assuming adoption of the CBI Industries, Inc. 1995 Stock Option
Plan), approximately 5,335,377 shares were reserved for issuance
in connection with the conversion of the Series C Preferred Stock
and 1,686,650 shares were held as treasury stock by the Company.
As a result, the Company has 71,172,825 shares of Common Stock
which are not outstanding or reserved for any purpose and are,
therefore, available for issuance.
The Board believes the additional shares may be required for
the Company's future growth and by reason of stock dividends or
splits which in the long run may tend to broaden ownership of the
Company's stock. The additional authorized shares could be used
for any other proper corporate purpose approved by the Board,
including possible future financing, acquisition transactions and
employee benefit plans. Having such additional shares available
will provide the Company with greater flexibility in financing
such transactions and enable the Company to act without the
expense and delay involved in special meetings of shareholders
when favorable opportunities arise. The Company currently has no
commitments or understandings (except with respect to existing
employee stock plans, the Stock Option Plan described in Proposal
1 and the Amendment and Restatement dated as of August 8, 1989 of
a Rights Agreement dated as of March 4, 1986 between the Company
and First Chicago Trust Company of New York, as Rights Agent, as
amended) for the issuance of shares of Common Stock or for stock
dividends or splits, although such matters have been and will
continue to be considered from time to time. This proposal to
increase the authorized Common Stock might be considered as
having the effect of discouraging attempts to take over control
of the Company, as the issuance of the shares could be used in a
private placement or to dilute stock ownership of, or increase
the cost to, any person seeking to obtain control. Issuances of
additional shares of Common Stock could also have the effect of
diluting the earnings per share and book value per share of
existing shares of Common Stock and reducing the proportionate
voting power of the Series C Preferred Stock.
The New York Stock Exchange requires shareholder approval
for the issuance of any amount of stock resulting in a change of
control or, except in the case of a stock split, stock dividend
or under certain other circumstances, an increase of outstanding
stock of approximately 20% or more (currently approximately
7,600,000 shares with respect to the Company). The Company does
not anticipate that it will seek authorization from shareholders
for issuance of additional shares unless required by applicable
laws or stock exchange regulations and has no present plans to
issue additional shares. There are no preemptive rights
available to shareholders in connection with the issuance of any
such shares.
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.
RELATIONSHIP WITH
INDEPENDENT PUBLIC ACCOUNTANTS
The Board will designate an independent auditor of the
Company for 1995 upon receiving a recommendation from its Audit
Committee in 1995. Representatives of Arthur Andersen & Co.,
which has served as the Company's and its predecessor's
independent public accountants from 1939 through 1994, 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,
Charlotte 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 1996 Annual
Meeting of Shareholders if such proposals are received by the
Secretary not later than December 8, 1995.
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
John E. Jones
Chairman of the Board
April 6, 1995
EXHIBIT A
CBI INDUSTRIES, INC.
1995 CBI STOCK OPTION PLAN
(Effective January 1, 1995)
1. Purpose of Plan
The purpose of the CBI Industries, Inc., 1995 Stock Option
Plan (the "Plan") is to aid CBI Industries, Inc. and its
Subsidiaries (collectively the "Company") in securing and
retaining Key Employees of outstanding ability by making it
possible to offer them an increased incentive in the form of a
proprietary interest in the Company, to join or continue in the
service of the Company and to increase their efforts for its
welfare.
2. Definitions
As used in this Plan, the following words shall have the
following meanings:
(a) "CBI" means CBI Industries, Inc.;
(b) "Board of Directors" means the Board of Directors of
CBI;
(c) "Common Stock" means common stock of CBI;
(d) "Holder" means either a Participant or a person other
than a Participant to whom an Option or a Right has
been transferred in accordance with Section 8(d)
herein;
(e) "Incentive Stock Option" means an option to purchase
shares of Common Stock which is intended to qualify as
an "incentive stock option" as defined in Section 422A
of the Internal Revenue Code;
(f) "Key Employee" means any person, including officers, in
the regular full-time employment of the Company who, in
the opinion of the Committee referred to in Section 3,
is or is expected to be primarily responsible for the
management, growth or protection of some part or all of
the business of the Company;
(g) "Limited Right" means a right to receive cash in lieu
of the exercise of an Option, if granted pursuant to
Section 5(e);
(h) "Officers Exercise Period" means any period beginning
on the third business day following the date of public
release of a summary statement of CBI's quarterly or
annual sales and earnings and ending on the twelfth
business day following such date;
(i) "Non-Qualified Stock Option" means an option to
purchase shares of Common Stock which is intended not
to qualify as an incentive stock option as defined in
Section 422A of the Internal Revenue Code;
(j) "Option" means an Incentive Stock Option or a
Non-Qualified Stock Option;
(k) "Participant" means a person to whom an Option is
granted that has not terminated and ceased to be
exercisable under the Plan;
(l) "Right" means a stock appreciation right to elect to
receive shares of Common Stock with a fair market
value, at the time of any exercise of such stock
appreciation right, equal to the amount by which the
fair market value of all shares subject to the Option
(or part thereof) in respect of which such stock
appreciation right was granted exceeds the exercise
price of said Option (or part thereof), or to receive
from CBI, in lieu of such shares, the fair market value
thereof in cash, as provided in Section 7; and
(m) "Subsidiary" means any corporation other than CBI in an
unbroken chain of corporations beginning with CBI if
each of the corporations other than the last
corporation in the unbroken chain owns 50% or more of
the voting stock in one of the other corporations in
such chain.
3. Administration of Plan
The Plan shall be administered by the Compensation Committee
of the Board of Directors (the "Committee"). None of the members
of the Committee shall be eligible to be selected for the grant
of an Option, Right, Limited Right, or any other option, stock
appreciation right or shares under the Plan or the grant of any
stock or option under any other plan maintained by the Company
during such membership or have been so eligible for selection
within one year prior thereto or thereafter. The Committee may
adopt its own rules of procedure, and the action of a majority of
the Committee, taken at a meeting or taken without a meeting by a
writing signed by such majority, shall constitute action by the
Committee. The Committee shall have the power and authority to
administer, construe and interpret the Plan, to make rules for
carrying it out and to make changes in such rules.
4. Granting of Options
The Committee may from time to time grant Options under the
Plan to such Key Employees and for such numbers of shares as the
Committee may determine. The Committee may grant Options in
such amounts and may impose such conditions on the grant of an
Option as it deems advisable.
5. Terms of Options
The terms of each Option granted under the Plan shall be as
determined from time to time by the Committee and shall be set
forth in an Incentive Stock Option Agreement or a Non-Qualified
Stock Option Agreement, as shall be appropriate, in a form
approved by the Committee, consistent, however, with the
following:
(a) The Option price per share shall not be less than fair
market value at the time the Option is granted.
(b) The Option shall be exercisable in whole or in part
from time to time during the period beginning at the
completion of the required holding period stated in the
Option, if any, and ending at the expiration of ten
years from the date of grant of the Option, unless an
earlier expiration date shall be stated in the Option
or the Option shall cease to be exercisable pursuant to
paragraph (d) of this Section 5.
(c) Payment in full of the Option price shall be made upon
exercise of each Option and may be made in cash, by the
delivery of shares of Common Stock with a fair market
value equal to the Option price, or by a combination of
cash and such shares whose fair market value together
with such cash shall equal the Option price.
(d) If a Participant's employment with the Company
terminates other than by reason of the Participant's
death, retirement for disability or retirement under a
retirement plan of the Company, the Participant's
Option shall terminate and cease to be exercisable. If
a Participant's employment with the Company terminates
by reason of death or retirement due to disability, an
Incentive Stock Option shall terminate and cease to be
exercisable at the earlier of ten years from the date
of grant or one year from the date of death or such
retirement; if by reason of retirement under a plan,
then at the earlier of ten years from the date of grant
or three months from the date of such retirement. The
Committee may, upon written request of a Holder,
convert an Incentive Stock Option into a Non-Qualified
Stock Option, and if such request is granted, the
provisions concerning termination of Non-Qualified
Stock Options shall apply to the Option in question
which has been converted. A Non-Qualified Stock Option
shall terminate at the earlier of ten years from the
date of grant or one year from the date of termination
of employment if such termination is due to death.
Following any retirement of a Participant, a
Non-Qualified Stock Option shall terminate on the
expiration date of the Option. If the terms of an
Option provide for its expiration prior to ten years
from the date of grant, the Committee may at any time
extend the expiration date of the Option but not beyond
ten years from its date of grant. In the event any
date specified herein falls on a day that is not a
business day, then such date shall be deemed to be the
next following business day.
(e) An Option may contain a Limited Right to receive cash
in lieu of shares under conditions to be set forth in
the Option, in the discretion of and as determined by
the Committee, in addition to Rights.
6. Granting of Rights
The Committee, at the time of grant of an Option or at any
time prior to the expiration of the term of an Option may also
grant, subject to the terms and conditions of the Plan, Rights in
respect of all or part of such Option to a Holder, provided that,
if granted to a Participant, the Participant at such time is a
Key Employee.
7. Exercise of Options and Rights
(a) A Holder who decides to exercise an Option or Right in
whole or in part shall give notice in writing to the
Secretary of CBI of such exercise on a form approved by
the Committee. A notice exercising a Right shall also
specify the extent, if any, to which the Holder elects
to receive shares of Common Stock and the extent, if
any, to which the Holder elects to receive cash, but
shall in any event be subject to the determination by
the Committee as provided in paragraph (d) of this
Section 7. Any exercise shall be effective as of the
date specified in the notice of exercise, but not
earlier than the date the notice of exercise is
actually received by the Secretary of CBI, and in the
case of exercise of an Option, when payment in full of
the Option price is actually received by the Secretary
of CBI.
(b) To the extent an Option is exercised in whole or in
part, any Right granted in respect of such Option (or
part thereof) shall terminate and cease to be exer-
cisable. To the extent a Right is exercised in whole
or in part, the Option (or part thereof) in respect of
which such Right was granted shall terminate and cease
to be exercisable.
(c) Subject to Section 6, a Right shall be exercisable only
during the period in which the Option (or part thereof)
in respect of which such Right was granted is exer-
cisable and, in addition, if the Holder of such Right
is an officer of CBI and elects to receive cash for all
or part of the payments upon exercise, or who exercises
for such cash, such Holder may so elect or exercise
such Right only during an Officer's Exercise Period.
For this purpose only, the fair market value of shares
of CBI stock shall be deemed to be the average of the
closing prices for public trading on the largest
national securities exchange on which such shares trade
for all of the business days within such Officer's
Exercise Period.
(d) The Committee shall have sole discretion to determine
the form in which payment will be made following
exercise of a Right. All or any part of the obligation
arising out of an exercise of a Right may be settled:
(i) by payment in shares of Common Stock with a fair
market value equal to the cash that would
otherwise be paid,
(ii) by payment in cash, or
(iii) by payment in a combination of such shares
and cash.
(e) To the extent that any Right shall not have been
exercised or cancelled or become non-exercisable, it
shall be deemed to have been exercised automatically,
without any notice of exercise, on the last day on
which the Right's related Option is exercisable, or, in
the case of officers of CBI, on the last day of the
Officer's Exercise Period before the last day on which
the Right's related Option is exercisable, provided
that any other conditions or limitations on the Right's
exercise other than notice of exercise are satisfied
and the Right shall then have value. Such exercise
shall be deemed to specify that, subject to
determination by the Committee as provided in paragraph
(d) of this Section 7, the Holder elects to receive
cash and that such exercise of a Right shall be
effective as of the time of the exercise.
(f) The aggregate fair market value of the shares for which
any Key Employee may exercise Incentive Stock Options
in any calendar year under all plans of CBI shall not
exceed the sum of $100,000 plus the amount which may be
carried forward to that year. For purposes of the
preceding sentence, the aggregate fair market value
shall be determined as of the time an Incentive Stock
Option is granted, and the amount which may be carried
forward from each previous calendar year is $100,000
minus the amount of Incentive Options first exercisable
and actually exercised in that previous calendar year.
This provision shall be applied by taking options into
account in the order in which they were granted.
(g) To the extent the receipt of shares of Common Stock
pursuant to the exercise of any Option or Right is
subject to the withholding of any income or employment
taxes by CBI for which CBI requires reimbursement from
the recipient, the recipient may elect to reimburse CBI
with shares of Common Stock 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.
8. Limitations and Conditions
(a) The total number of shares of Common Stock that may be
optioned or issued or transferred upon exercise of
Rights under the Plan is 1,700,000 shares. Such total
number of shares may consist, in whole or in part, of
unissued shares or reacquired shares. The foregoing
number of shares may be increased or decreased by the
events set forth in of Section 10.
(b) Any shares that have been optioned that cease to be
subject to an Option (other than by reason of exercise
of the Option) shall again be available for option and
shall not be considered as having been theretofore
optioned. Any shares subject to an Option (or part
thereof) that is cancelled upon exercise of a Right
shall be treated as if the Option itself were exercised
and such shares shall no longer be available for grant.
(c) No Option or Right shall be granted under the Plan
after January 1, 2005 but Options and Rights
theretofore granted may extend beyond that date. At
the time an Option or Right is granted or amended or
the terms or conditions of an Option or Right are
changed, the Committee may provide for limitations or
conditions on the exercisability of the Option or
Right.
(d) (i) A Non-Qualified Stock Option shall be non-
transferrable unless the Committee designates
otherwise. An Incentive Stock Option or a Right
associated therewith shall not be transferable by
the Participant otherwise than by will or by the
laws of descent and distribution or by the
provisions for the designation of a beneficiary in
accordance with (ii) below. A Right shall never
be transferred except to the transferee of the
related Option. During the lifetime of the
Participant, an Incentive Stock Option or a Right
associated therewith shall only be exercisable by
the Participant.
(ii) Upon the death of a Participant, any outstanding
and unexercised Options or Rights held by such
Participant on the date of death shall be
transferred 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 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 designate 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 a new
beneficiary designation meeting the above require-
ments. 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.
(e) No person shall have any rights of a stockholder (i) as
to shares under option until, after proper exercise of
the Option, such shares shall have been recorded on
CBI's official stockholder records as having been
issued or transferred or (ii) as to shares to be
delivered following exercise of a Right until, after
proper exercise of the Right and determination by the
Committee to make payment therefor in shares, such
shares shall have been recorded on CBI's official
stockholder records as having been issued or
transferred.
(f) CBI shall not be obligated to deliver any shares until
they have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange
upon which outstanding shares of such class at the time
are listed nor until there has been compliance with
such laws or regulations as CBI may deem applicable.
CBI shall use its best efforts to effect such listing
and compliance. No fractional shares shall be
delivered.
(g) The total number of shares of Common Stock that may be
optioned to a Participant in any year shall not exceed
100,000 shares.
9. Transfers and Leaves of Absence
For the purposes of the Plan: (a) a transfer of a
Participant's employment without an intervening period from CBI
to a Subsidiary or vice versa, or from one Subsidiary to another,
shall not be deemed a termination of employment, and (b) a
Participant who is granted in writing a leave of absence shall be
deemed to have remained in the employ of the Company during such
leave of absence.
10. Stock Adjustments
In the event of any merger, consolidation, stock dividend,
split-up, combination or exchange of shares or recapitalization
or change in capitalization, the total number of shares set forth
in paragraph (a) of Section 8 shall be proportionately and
appropriately adjusted. In any such case, the number and kind
of shares that are subject to any Option (including any Option
outstanding after termination of employment), the Option price
per share and the number of Rights granted in connection
therewith, if any, shall be proportionately and appropriately
adjusted by the Committee without any change in the aggregate
Option price to be paid therefor upon exercise of the Option.
11. Amendment and Termination
(a) The Board of Directors shall have the power to amend
the Plan, including the power to change the amount of
the aggregate fair market value of the shares for which
any Key Employee may exercise Incentive Stock Options
under Section 4 to the extent provided in Section 422A,
or any successor provision, of the Internal Revenue
Code. It shall not, however, except as otherwise
provided in the Plan, increase the maximum number of
shares authorized for the Plan, nor reduce the basis
upon which the minimum Option price is determined, nor
extend the period within which Options or Rights under
the Plan may be granted, nor change the basis upon
which shares or cash may be distributed upon exercise
of a Right, nor provide for an Option or Right that is
exercisable more than ten years from the date of grant.
It shall have no power (without the consent of the
person or persons at the time entitled to exercise the
Option) to change the terms and conditions of any
Option in a manner that would adversely affect the
rights of such person or persons except to the extent,
if any, provided in the Option.
(b) The Board of Directors may suspend or terminate the
Plan at any time. No such suspension or termination
shall affect Options or Rights then in effect.
12. Effective Date
The Plan shall be effective as of January 1, 1995, subject
to its approval by the stockholders of CBI and subject to any
modification that may be made herein prior to such stockholder
approval that may be deemed required or appropriate by the Board
of Directors to meet legal requirements. All Options, together
with related Rights or Limited Rights, if any, which have been or
may be granted under the Plan prior to stockholder approval,
shall be conditioned upon, and may not be exercised until after,
such stockholder approval.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS-MAY 11, 1995
CBI INDUSTRIES, INC.
The undersigned hereby appoints John E. Jones and George 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 11, 1995, 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: , 1995
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:
E. Hubert Clark, Jr., John T. Horton, Stephanie Pace Marshall,
George L. Schueppert, and Robert T. Stewart
/_/ For All Nominees Listed Above /_/ Withhold
Authority to Vote 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. 1and 2
1. Proposal No. 1 (CBI Industries, Inc. 1995 Stock Option
Plan)
/_/ For /_/ Against /_/ Abstain
2. Proposal No. 2 (Amendment to the Certificate of
Incorporation)
/_/ 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. 1and 2. In their discretion,
the proxies are authorized to vote upon such other business as
may properly come before the meeting.