SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant[X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Liqui-Box Corporation
(Name of Registrant as Specified In Its Charter)
Peter J. Linn, Senior Vice President
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(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:
____________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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Preliminary Copy
Liqui-Box Corporation
Post Office Box 494
Worthington, Ohio 43085-0494
Telephone: (614) 888-9280
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
LIQUI-BOX CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Share-
holders (the "Annual Meeting") of Liqui-Box Corporation ("Liqui-
Box") will be held at the Columbus Marriott North, 6500 Doubletree
Avenue, Columbus, Ohio, on Wednesday, April 26, 1995, at 9:00 a.m.
(local time) for the following purposes:
1. To elect four (4) directors to serve for terms of
two years each.
2. To consider and act upon a proposal to amend Section 2
of Article II of the Regulations of Liqui-Box in order
to require advance notice of shareholder nominations for
election to the Board of Directors.
3. To transact such other business as may properly come
before the Annual Meeting or any adjournment or
adjournments thereof.
A copy of the Annual Report for the 1994 fiscal year accom-
panies this Notice.
By Order of the Board of Directors,
Peter J. Linn
Secretary
Dated: March 20, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE FILL
IN, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
Preliminary Copy
Liqui-Box Corporation
Post Office Box 494
Worthington, Ohio 43085-0494
Telephone: (614) 888-9280
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Liqui-Box
Corporation ("Liqui-Box") to be used at its Annual Meeting of
Shareholders (the "Annual Meeting") to be held on April 26, 1995,
and at any adjournment or adjournments thereof. Common shares
represented by properly executed proxies will be voted at the
Annual Meeting. Where a choice is specified by the shareholder,
the proxy will be voted in accordance with such choice. Any proxy
may be revoked at any time insofar as it has not been exercised
provided notice of revocation of the proxy is received by Liqui-Box
either in writing or in open meeting.
This Proxy Statement was first mailed to shareholders on or
about March 20, 1995.
February 28, 1995, has been fixed as the record date for the
determination of shareholders entitled to notice of and to vote at
the Annual Meeting or any adjournment or adjournments thereof. On
the record date, 6,269,881 common shares of Liqui-Box were out-
standing and entitled to vote. The holders of common shares
entitling them to exercise a majority of the voting power of
Liqui-Box will constitute a quorum for the Annual Meeting.
Under the rules of the Securities and Exchange Commission (the
"SEC"), boxes and a designated blank space are provided on the form
of proxy for shareholders to mark if they wish either to abstain
on a proposal presented for shareholder approval or to withhold
authority to vote for one or more nominees for election as a
director of Liqui-Box. Common shares as to which the authority to
vote is withheld will be counted for quorum purposes but will not
be counted toward the election of directors or toward the election
of the individual nominees specified on the form of proxy.
Abstentions are counted as present for quorum purposes; however,
the effect of an abstention on the proposal to approve the proposed
amendment to Section 2 of Article II of the Regulations of Liqui-
Box is the same as a "no" vote.
Brokers/dealers, who hold their customers' common shares in
street name, may, under the applicable rules of the self-regulatory
organizations of which the brokers/dealers are members, sign and
submit proxies for such common shares and may vote such common
shares on routine matters, which, under such rules, typically
include the election of directors, but brokers/dealers may not vote
such common shares on other matters, which typically include
amendments to the regulations of a corporation, without specific
instructions from the customer who owns such common shares.
Proxies signed and submitted by brokers/dealers which have not been
voted on certain matters as described in the previous sentence are
referred to as broker non-votes. Such proxies count towards the
establishment of a quorum. Broker non-votes on the proposal to
approve the proposed amendment to Section 2 of Article II of the
Regulations of Liqui-Box will not be considered as votes entitled
to be cast in determining the outcome of this proposal.
Each shareholder is entitled to one vote for each common share
held and has cumulative voting rights in the election of directors.
A shareholder wishing to exercise cumulative voting must so notify
the President, a Vice President or the Secretary of Liqui-Box in
writing not less than forty-eight hours before the Annual Meeting.
If cumulative voting is requested, each shareholder will have a
number of votes equal to the number of directors to be elected mul-
tiplied by the number of common shares owned by him and will be
entitled to distribute his votes among the nominees as he sees fit.
If cumulative voting is requested, as described above, the enclosed
proxy would grant discretionary authority to the proxies named
therein to cumulate votes and to distribute the votes among the
candidates.
PRINCIPAL HOLDERS OF SECURITIES
The following table sets forth, as of February 28, 1995
(except as otherwise indicated), certain information concerning the
beneficial ownership of Liqui-Box's common shares by the only
persons known to Liqui-Box to own beneficially more than five
percent (5%) of the outstanding common shares of Liqui-Box.
Common Shares of
Name and Liqui-Box
Address of Beneficially Owned (1)(2)
Beneficial Owner Amount % of Total (3)
Samuel B. Davis 1,064,272(4) 16.7%
6950 Worthington-Galena Road
P. O. Box 494
Worthington, Ohio 43085
Jeanette A. Davis 631,524(5) 10.1%
6950 Worthington-Galena Road
P. O. Box 494
Worthington, Ohio 43085
Janus Capital Corporation 374,880(6) 6.0%
100 Fillmore Street, Suite 300
Denver, Colorado 80206-4923
_______________
(1) As of February 28, 1995, except as otherwise indicated.
(2) Sole voting and investment power, unless otherwise indicated.
(3) The percent of total is based upon the sum of 6,269,881 common
shares outstanding on February 28, 1995 and the number of
common shares, if any, as to which the named person has the
right to acquire beneficial ownership upon the exercise of
presently exercisable options.
(4) Includes 109,460 common shares subject to presently exer-
cisable options and 55,982 common shares held for the account
of Mr. Davis in the Liqui-Box Corporation Employee Stock
Ownership Plan (the "Liqui-Box ESOP"). Supplemental
Retirement Discounted Options become exercisable upon
termination of employment. See footnote (2) to the table
under "OPTIONS GRANTED IN THE LAST FISCAL YEAR." Under the
rules of the SEC, options which become exercisable during the
next 60 days are deemed to be presently exercisable options.
For purposes of determining presently exercisable options, it
is assumed that Mr. Davis will not terminate his employment
with Liqui-Box during the next 60 days. Also includes 127,027
common shares deposited with Mr. Davis in his capacity as
voting trustee of the Voting Trust (the "Voting Trust")
created by the Voting Trust and Right of First Refusal
Agreement, effective as of September 29, 1993, between
M.A. Davis, the beneficial owner of such common shares, and
Mr. Davis, both as voting trustee and individually. Mr. Davis
exercises sole voting power with respect to the common shares
deposited in the Voting Trust. M.A. Davis retains investment
power with respect to the common shares deposited in the
Voting Trust subject to a right of first refusal in favor of
Mr. Davis. The Voting Trust expires on September 29, 2003.
(5) Includes 139,722 common shares held of record by JASAM
Foundation ("JASAM") as to which Mrs. Davis, as one of four
trustees of JASAM, has shared voting and investment power.
The Code of Regulations of JASAM requires the approval of
three of the four trustees to vote or dispose of the common
shares held by JASAM or to take any other action with respect
to such common shares.
(6) Based on information contained in filings with the SEC for the
period ending December 31, 1994, Janus Capital Corporation,
a registered investment adviser ("Janus"), may be deemed to
have shared voting and investment power as to 374,880 common
shares held by certain registered investment companies and
individual and institutional clients (the "Janus Managed
Portfolios") as a result of its role as investment adviser or
sub-adviser to the Janus Managed Portfolios. Janus disclaims
beneficial ownership of such common shares. In addition,
Thomas H. Bailey, who owns approximately 12.2% of Janus and
serves as its President and Chairman of the Board, may be
deemed, as a result of such positions, to have the power to
exercise or to direct the exercise of such voting and/or
investment power that Janus may have with respect to the
Liqui-Box common shares held by the Janus Managed Portfolios.
However, Mr. Bailey also disclaims beneficial ownership of
such common shares.
The following table sets forth, as of February 28, 1995,
certain information with respect to Liqui-Box's common shares owned
beneficially by each director of Liqui-Box, each nominee for
election as a director of Liqui-Box, each executive officer of
Liqui-Box named in the SUMMARY COMPENSATION TABLE and by all
directors and executive officers of Liqui-Box as a group:
Common Shares of
Liqui-Box
Name of Beneficially Owned (1)(2)(3)
Beneficial Owner Amount % of Total (4)
Samuel B. Davis 1,064,272(5) 16.7%
Jeanette A. Davis 631,524(6) 10.1%
Robert S. Hamilton 122,142(7) 1.9%
Peter J. Linn 78,212(8) 1.2%
J. Dean Lanier(9) 22,294(10) 0.4%
John A. Maginnis 1,719(11) 0.0%
Carl J. Aschinger, Jr. 486 0.0%
C. William McBee 0 0.0%
All current directors and executive
officers as a group (6 persons) 1,898,355(12) 29.7%
_______________
(1) As of February 28, 1995.
(2) Sole voting and investment power, unless otherwise indicated.
(3) Supplemental Retirement Discounted Options become exercisable
upon termination of employment. See footnote (2) to the table
under "OPTIONS GRANTED IN THE LAST FISCAL YEAR." Under SEC
rules, options which become exercisable during the next 60
days are deemed to be presently exercisable options. For
purposes of determining presently exercisable options, it is
assumed that no current executive officer will terminate his
employment with Liqui-Box during the next 60 days.
(4) See footnote (3) to the preceding table.
(5) See footnote (4) to the preceding table.
(6) See footnote (5) to the preceding table.
(7) Does not include 4,746 common shares as to which his wife has
sole voting and investment power.
(8) Includes 17,520 common shares subject to presently exercisable
options and 16,530 common shares held for his account in the
Liqui-Box ESOP.
(9) Mr. Lanier served as a director and executive officer of
Liqui-Box until his resignation from those positions effective
as of October 1, 1994.
(10) Includes 1,366 common shares subject to presently exercisable
options and 240 common shares held for his account in the
Liqui-Box ESOP.
(11) Includes 1,087 common shares subject to presently exercisable
options and 220 common shares held for his account in the
Liqui-Box ESOP. Does not include 53 common shares as to which
his wife has sole voting and investment power.
(12) Includes, as to all current directors and executive officers
of Liqui-Box as a group, 128,067 common shares subject to
presently exercisable options and 72,732 common shares held
for their respective accounts in the Liqui-Box ESOP.
ELECTION OF DIRECTORS
At the Annual Meeting, four directors will be elected to hold
office until the 1997 Annual Meeting of Shareholders and until
their respective successors are elected and qualified. It is the
intention of the persons named in the accompanying form of proxy
to vote the common shares represented by such proxy for the
election of the persons named in the following table unless the
proxy is marked otherwise. In case any person named in the table
is unable to serve or is unwilling to accept nomination or election
(which is not anticipated), the persons named in the proxy will
vote the common shares represented by such proxy for one or more
substitute nominees designated by the present Board of Directors.
Under Ohio law and Liqui-Box's Code of Regulations, the four
nominees for election as directors in the class whose terms expire
in 1997 receiving the greatest number of votes will be elected as
directors.
The following individuals have been nominated for election to
the class of directors whose terms expire in 1997:
Name, Age, Positions and Offices with
Year Liqui-Box Liqui-Box, Principal Occupation
Directorship Commenced and Other Directorships
Jeanette A. Davis Director of Liqui-Box; Trustee of JASAM
92-1985 Foundation, a private foundation in Columbus, Ohio
Carl J. Aschinger, Jr. Director of Liqui-Box; Chairman and Chief
56-1985 Executive Officer of The Columbus Showcase
Company, a manufacturer of retail and bakery deli
showcases in Columbus, Ohio; Director of The
Huntington National Bank
Peter J. Linn Senior Vice President, Secretary and Director of
53-1984 Liqui-Box
C. William McBee Vice President, Administration and Manufacturing
52 of Liqui-Box
The following directors will continue to serve after the
Annual Meeting until the 1996 Annual Meeting of Shareholders:
Name, Age, Positions and Offices with
Year Liqui-Box Liqui-Box, Principal Occupation
Directorship Commenced and Other Directorships
Samuel B. Davis Chairman, Chief Executive Officer, President
53-1977 and Treasurer of Liqui-Box
Robert S. Hamilton Vice Chairman of Liqui-Box; Director of
66-1984 Lancaster Colony Corporation
John A. Maginnis Vice President, Sales and Director of Liqui-Box
42-1994
Messrs. Davis, Hamilton and Linn have held various offices
with Liqui-Box during the past five years. Mr. Maginnis has been
Vice President, Sales of Liqui-Box since April, 1991. From April,
1990 to April, 1991, he was a consultant and from 1989 to April,
1990, he was Vice President of Sales and Marketing for CMS Gilbreth
Packaging Systems, a subsidiary of Culbro Corporation. Mr. McBee
has been a Vice President of Liqui-Box since February, 1994. Prior
to February, 1994, he was general manager of Stone Container
Corporation, a manufacturer of corrugated cardboard containers.
Each other director and nominee for election as a director has had
the same principal occupation for the past five years.
Jeanette A. Davis is the mother of Samuel B. Davis.
During 1994, there were two meetings of Liqui-Box's Board of
Directors. No director attended less than 75% of the aggregate of
the total number of meetings of the Board of Directors and the
total number of meetings of all committees of the Board of
Directors on which that director served, other than Mrs. Davis who
attended 67%.
Liqui-Box has an Audit Committee consisting of Carl J.
Aschinger, Jr., Jeanette A. Davis and Robert S. Hamilton. The
Audit Committee met one time during 1994. Its function is to
review the adequacy of Liqui-Box's system of internal control, to
investigate the scope and adequacy of the work of Liqui-Box's
auditors and to recommend to the directors a firm of accountants
to serve as Liqui-Box's auditors.
Liqui-Box does not have a compensation committee or a nominat-
ing committee separate from the Board as a whole.
REPORT OF THE BOARD OF DIRECTORS AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of
Liqui-Box's previous filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that might incorporate future filings, including
this Proxy Statement, in whole or in part, this Report and the
graph set forth on page ___ shall not be incorporated by reference
into any such filings.
Decisions on compensation of Liqui-Box's executive officers
are made by the Board of Directors, except that decisions on stock
option compensation are made by the Stock Option Committee. Set
forth below is a report of the Board addressing Liqui-Box's
compensation policies as they affect Samuel B. Davis, the Chief
Executive Officer (CEO), Peter J. Linn and John A. Maginnis, the
other current executive officers of Liqui-Box, and J. Dean Lanier,
who was an executive officer of Liqui-Box until his resignation
effective as of October 1, 1994.
Compensation Principles
Liqui-Box's executive compensation program has existed in its
present form for approximately ten years and consists of base
salary, a bonus based on pretax profits payable under the Liqui-
Box Corporation Profit Participation Plan (the "Liqui-Box PPP"),
contributions to various savings and stock ownership programs and
stock options.
Liqui-Box recognizes the need for executive compensation to
be directly reflective of corporate performance. As such, the
philosophy has been for many years, and continues to be, that base
salaries should constitute a small portion of the executive
officer's total compensation package with the largest portion of
his compensation being based on an allocated percentage of pretax
profits under the Liqui-Box PPP. This practice applies to the
majority of Liqui-Box employees, with the exception that, at lower
levels of responsibility, a greater portion of compensation is base
salary with less of the employees' total compensation being tied
to profit.
Under the Liqui-Box PPP, pretax profits are calculated
quarterly for the first three quarters and are estimated in
December for the fourth quarter. Liqui-Box applies a fixed
percentage (approximately 33 1/3 percent as determined many years
ago) to each quarter's pretax profit to come up with an allocation
to be distributed among all the eligible employees in the form of
a quarterly bonus. This allocation is further broken down to
distribute a greater fixed percentage to those employees who have
a more direct impact on corporate profits (CEO, officers, managers)
and a smaller fixed percentage to those employees who have a less
direct impact on profits. Each employee's share of the pool is
further impacted by the number of employees in the overall bonus
pool in any year.
If Liqui-Box's pretax profits increase, the allocation of
pretax profit dollars to compensation increases. If pretax profits
decrease, so does the allocation of pretax profit dollars to
compensation. This directly impacts compensation of executive
officers, as well as all other eligible employees.
The Board believes that this type of compensation has
attracted, and continues to attract, the type of executive offi-
cers and employees that are critical to the long term success of
Liqui-Box. The Board also believes that this type of compensation
has led, and will continue to lead, to the solid growth of Liqui-
Box while rewarding executive officers and employees for their
joint effort to improve profitability.
Prior to 1992, stock options were not a significant part of
Liqui-Box's executive compensation program. During 1992, a deter-
mination was made to use stock option grants to create long term
incentives to continue the growth in shareholder value. An
independent Stock Option Committee was created. The Stock Option
Committee adopted guidelines for annual option grants under the
1990 Liqui-Box Stock Option Plan. The guidelines call for annual
grants of non-qualified options. The number of non-qualified
options to be granted each year is based on a percentage of the
executive officer's eligible compensation and the exercise price
of the options is 100% of the fair market value of the common
shares of Liqui-Box on the date of grant. In addition, the
guidelines provide for annual grants of Supplemental Retirement
Discounted Options which are exercisable only upon termination of
employment. The Supplemental Retirement Discounted Options are
intended to encourage executive officers to remain in the employ
of Liqui-Box until retirement. See footnote (1) to the table under
"OPTIONS GRANTED IN THE LAST FISCAL YEAR." The number of
Supplemental Retirement Discounted Options to be granted each year
is based on an actuarial formula designed to yield post retirement
income equal to a percentage of the executive officer's average
compensation over the last five years of his employment by
Liqui-Box. The Stock Option Committee believes option grants in
accordance with these guidelines will accomplish the objective of
linking the compensation of executive officers to increases in
shareholder wealth as reflected in the market price of the common
shares.
Section 162(m) of the Internal Revenue Code of 1986, as
amended, prohibits a publicly-held corporation, such as Liqui-Box,
from claiming a deduction on its federal income tax return for
compensation in excess of $1 million paid for a given fiscal year
to the chief executive officer (or person acting in that capacity)
at the close of the corporation's fiscal year and the four most
highly compensated officers of the corporation, other than the
chief executive officer, at the end of the corporation's fiscal
year. The $1 million compensation deduction limitation does not
apply to "performance-based compensation." The Internal Revenue
Service issued proposed regulations on December 15, 1993, which
were amended on December 2, 1994, which give some guidance to
publicly-held corporations about how to qualify compensatory plans
to meet the "performance-based compensation" requirements. The
final regulations under Section 162(m) are not expected to be
issued until at least later this year. Liqui-Box has been
following this matter closely. Liqui-Box has determined that it
is not necessary to modify the Liqui-Box Corporation 1990 Stock
Option Plan at this time since compensation paid to executive
officers under that Plan would be exempted under the transition
provisions of Section 162(m) and the proposed regulations and,
therefore, deductible.
Liqui-Box does not have a policy that requires all
compensation payable in 1995 and thereafter to the covered
executive officers to be deductible under Section 162(m). Whenever
possible, without distorting or discouraging incentives for
performance that enhance the value of Liqui-Box, Liqui-Box will
endeavor to cause such compensation to be structured so that all
of it will be tax deductible. In all cases, however, whether or
not some portion of a covered executive officer's compensation is
tax deductible, Liqui-Box will continue to carefully consider the
net cost value to Liqui-Box of its compensation decisions.
Company Performance and CEO Compensation
As indicated above, Liqui-Box's executive compensation
program is based, in large part, upon business performance. This
pay-for-performance program is exemplified in the compensation of
the CEO.
The Board, has believed, since the mid-1980s when the present
executive compensation program was approved, and continues to
believe that Mr. Davis' base salary of $70,000, which has been
unchanged for several years, is substantially below the base
salaries of CEO's in other comparable companies.
Approximately 92.9% of Mr. Davis' cash compensation for 1994
was paid in the form of a cash bonus under the Liqui-Box PPP. The
amount of this bonus is directly tied to the pretax profits of
Liqui-Box. Had Liqui-Box failed to make a profit, Mr. Davis, as
well as most of the other employees, would have received no bonus
under the Liqui-Box PPP.
Mr. Davis, along with all other executive officers of Liqui-
Box, was granted options during 1994 in accordance with the above-
described guidelines. The amount of his option grants is directly
attributable to the amount of his cash compensation for 1994 and
his five year average compensation.
Submitted by:
Carl J. Aschinger, Jr.*
Jeanette A. Davis*
Samuel B. Davis
Robert S. Hamilton*
Peter J. Linn
John A. Maginnis
_____________
*Member of Stock Option Committee.
SUMMARY COMPENSATION TABLE
The following table summarizes compensation awarded or paid
to, or earned by, each of Liqui-Box's executive officers during
each of the last three years:
Long Term
Compensation
Annual Compensation Awards
Securities
Name and Underlying All Other
Principal Salary Bonus Options/SARs Compensation
Position Year ($) ($) (#)(1) ($)
Samuel B. Davis, 1994 $ 70,000 $913,144 26,705 $ 4,620(2)
Chairman, Chief 1993 $ 70,000 $864,671 19,159 $14,486
Executive Officer, 1992 $ 70,000 $717,640 25,509 $16,824
Treasurer
Peter J. Linn, 1994 $ 65,000 $137,546 4,519 $ 7,610(2)
Senior Vice President 1993 $ 65,000 $127,393 3,510 $15,701
and Secretary 1992 $ 65,000 $110,468 4,675 $14,589
John A. Maginnis, 1994 $ 70,000 $152,839 3,828 $10,110(2)
Vice President - 1993 $ 66,923 $140,966 2,751 $15,166
Sales 1992 $ 60,000 $115,468 2,808 $10,570
J. Dean Lanier, 1994 $ 56,296 $100,698 0 $ 4,620(2)
Vice President - 1993 $ 70,000 $141,671 4,590 $14,569
Manufacturing(3) 1992 $ 70,000 $122,998 5,663 $16,097
______________________
(1) During 1994, two different option grants were made to
executive officers. See the table under "OPTIONS GRANTED IN
THE LAST FISCAL YEAR."
(2) Includes employer contributions to the Liqui-Box ESOP and to
the 401(k) portion of the Liqui-Box Corporation Employees'
Profit Sharing and Salary Deferral Plan (the "Liqui-Box Profit
Sharing and Salary Deferral Plan") during 1994. Does not
include amounts allocable to the named executive officers'
accounts in the deferred profit-sharing portion of the Liqui-
Box Profit Sharing and Salary Deferral Plan for 1994, which
amounts will be calculated during 1995 and disclosed as earned
in 1994 in next year's proxy statement.
(3) Mr. Lanier resigned his positions as an executive officer and
a director of Liqui-Box effective as of October 1, 1994.
OPTIONS GRANTED IN THE LAST FISCAL YEAR
The following table sets forth information concerning
individual grants of options made under the 1990 Liqui-Box Stock
Option Plan during the last fiscal year to each of the named
executive officers. Liqui-Box has never granted stock appreciation
rights.
Potential
Number of % of Total Realizable Value at
Securities Options Granted Assumed Annual Rates of
Underlying to Employees Stock Price Appreciation
Options in Fiscal Exercise Market Expiration for Option Term(1)
Name Granted(#) Year Price($/Sh) Price($/Sh) Date 0% 5% 10%
Samuel B. 17,803(2) 21.12% $15.75 $31.50 (2) $280,397 $1,037,088 $2,695,848
Davis 8,902(3) 10.56% $31.50 $31.50 12/26/04 $ 0 $ 176,350 $ 446,906
Peter J. Linn 2,687(2) 3.19% $15.75 $31.50 (2) $ 42,320 $ 156,527 $ 406,883
1,832(3) 2.17% $31.50 $31.50 12/26/04 $ 0 $ 36,292 $ 91,972
John A. 1,848(2) 2.19% $15.75 $31.50 (2) $ 29,106 $ 199,093 $ 810,369
Maginnis 1,980(3) 2.35% $31.50 $31.50 12/26/04 $ 0 $ 39,224 $ 99,402
J. Dean Lanier -0- 0% -- -- -- -- -- --
_______________
(1) The amounts reflected in this table represent certain assumed
rates of appreciation only. Actual realized values, if any,
on option exercises will be dependent on the actual apprecia-
tion of the common shares of Liqui-Box over the term of the
options. There can be no assurances that the Potential
Realizable Values reflected in this table will be achieved.
(2) 1994 Supplemental Retirement Discounted Options. These
options are intended to encourage executive officers to remain
in the employ of Liqui-Box until retirement and to provide
them a supplemental retirement benefit. The options become
exercisable upon termination of the executive officer's
employment (other than upon termination for cause); provided,
however, that the options become fully exercisable upon an
earlier change in control of Liqui-Box. If the executive
officer's employment is terminated for cause, the options will
be cancelled as of the date of such termination. If the
executive officer's employment is terminated by reason of
retirement or becoming disabled, the options may be exercised
at any time thereafter during his lifetime and at any time
during the six month period after his death. If the executive
officer's employment is terminated by reason of his death, the
options may be exercised at any time during the six month
period after his death. If the executive officer's employment
is terminated for any reason other than retirement, death,
disability or cause, the number of options which may be
exercised is reduced by a maximum of 25%, if termination is
at age 55 or under, to a minimum of 2.5%, if termination is
at age 64 (50% to 5% during the same range of years if the
executive officer does not sign an agreement not to compete),
and the options expire six months after the executive
officer's death. The Potential Realizable Values of the
options assume an expiration date of five years after each
executive officer's normal retirement date.
(3) These options were granted on December 27, 1994, and become
exercisable in 25% per year increments beginning on the first
anniversary of the grant date; provided, however, that the
options become fully exercisable upon an earlier change in
control of Liqui-Box. The options are forfeited upon the
executive officer's leaving the employ of Liqui-Box, except
that if the executive officer's employment is terminated by
reason of his death or becoming disabled, the options may be
exercised at any time during the six month period after his
death or termination of employment, subject to the stated term
of the options. If the executive officer enters into
competition with Liqui-Box within 18 months after the
termination of his employment, the Stock Option Committee may
require him to return to Liqui-Box the economic value of any
option which was realized during the six month period prior
to the date of the termination of his employment.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information with
respect to options exercised during the last fiscal year by each
of the named executive officers and information concerning
unexercised options held at year end by such executive officers:
Number of Number of Securities Under- Value of Unexercised
Securities lying Unexercised Options In-the-Money Options
Underlying at Fiscal Year-End(#) at Fiscal Year-End($)(1)(2)
Options Value
Name Exercised(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
Samuel B. Davis 8,639 $167,424 109,460 65,482 $2,018,729 $903,664
Peter J. Linn 0 $ 0 17,520 11,392 $ 339,168 $146,581
John A. Maginnis 0 $ 0 1,087 8,300 $ 6,301 $ 89,619
J. Dean Lanier 0 $ 0 1,366 8,887 $ 8,401 $130,082
_______________
(1) All values as shown are pre-tax.
(2) Based on the fiscal year-end closing price of $33.25 per
common share.
DIRECTOR COMPENSATION
Directors who are not employees of Liqui-Box receive a $2,500
per quarter retainer.
PEER GROUP COMPARISON
Comparison of Five Year Cumulative Total Return
The following line graph compares the yearly percentage change
in Liqui-Box's cumulative total shareholder return (as measured by
dividing (i) the sum of (A) the cumulative amount of dividends for
the measurement period, assuming dividend reinvestment, and (B) the
difference between Liqui-Box's share price at the end and the
beginning of the measurement period; by (ii) the share price at the
beginning of the measurement period) against the cumulative return
of the Wilshire 500 Index and the Dow Jones: Containers/Packaging
Industry Group Index for the five year period ended December 31,
1994.
Performance graph omitted; represented by the following table:
Comparison of Five-Year Cumulative Total Return
Among Liqui-Box Corporation, Wilshire 5000
and Dow Jones Containers/Packaging Index
1989 1990 1991 1992 1993 1994
Liqui-Box $100 $107 $121 $161 $218 $193
Corporation
Wilshire 5000 $100 $ 94 $126 $137 $153 $153
Dow Jones $100 $ 86 $135 $147 $141 $140
Containers/
Packaging Index
Overall - Each performance graph index begins with a base value of
$100. This base is adjusted by annual stock market price changes
and cumulative annual dividend payments over the time frame of each
index (as specified by the SEC in its disclosure rules).
Liqui-Box Corporation - Stock prices and dividends adjusted for
stock splits.
Wilshire 5000 - The broadest of all indexes, tracking value of all
stock issues for which quotes are available. Changes are measured
against a base value established in December 31, 1980. This index
is market-value weighted.
Dow Jones: Containers/Packaging Industry Group - An industry index
published by Dow Jones of geographically representative companies
in the industry. The index is adjusted to account for stock splits
and dividends.
BOARD OF DIRECTOR INTERLOCKS AND INSIDER PARTICIPATION
Liqui-Box does not have a compensation committee; therefore,
the Board functions as the committee. The Board includes Samuel B.
Davis, Peter J. Linn and John A. Maginnis, current executive
officers of Liqui-Box, and Robert S. Hamilton, a retired executive
officer of Liqui-Box, each of whom participated in Board
discussions concerning executive officer compensation. J. Dean
Lanier, who served as a member of the Board and as an executive
officer of Liqui-Box until his resignation effective as of
October 1, 1994, also participated in Board discussions concerning
executive officer compensation. In addition, John B. Reinhardt,
Jr., Chief Executive Officer and a director of Central Benefits
Mutual Insurance Company, sat on the Board of Liqui-Box until his
resignation effective as of August 25, 1994. Samuel B. Davis,
Chairman of Liqui-Box, sat on the Board of Central Benefits Mutual
Insurance Company until his resignation effective as of __________.
TRANSACTIONS WITH EXECUTIVES
Prior to 1982, Liqui-Box had a loan program whereby officers
and employees could borrow money for the purchase of common shares
of Liqui-Box. Liqui-Box had one unsecured installment loan under
this program outstanding to Samuel B. Davis during the 1994 fiscal
year. This loan was paid in full on December 28, 1994. Interest
at the rate of six percent (6%) per annum was charged on the loan
prior to its repayment. During 1994, the largest principal amount
outstanding under this loan was $61,842.30.
PROPOSAL TO AMEND SECTION 2 OF ARTICLE II OF THE
REGULATIONS OF LIQUI-BOX IN ORDER TO REQUIRE
ADVANCE NOTICE OF SHAREHOLDER NOMINATIONS FOR
ELECTION TO THE BOARD OF DIRECTORS
[Proposal No. 2 on Proxy]
The Board of Directors of Liqui-Box has unanimously approved,
and for the reasons described below unanimously recommends that the
shareholders of Liqui-Box approve, a proposal which amends
Section 2.02 of Article II of the Regulations to require any
shareholder who desires to nominate one or more individuals for
election as directors of Liqui-Box to submit a written proposal of
such nomination to the Secretary of Liqui-Box within a specified
period of time prior to the meeting of shareholders at which
directors are to be elected. Each such written notice of a
proposed nominee must set forth: (1) the name, age and business
or residence address of each proposed nominee; (2) the principal
occupation or employment of each such nominee; (3) the number of
common shares of Liqui-Box owned beneficially and/or of record by
each such nominee and the length of time any such common shares
have been so owned; (4) the name and residence address of the
notifying shareholder; and (5) the number of common shares
beneficially owned by the notifying shareholder. The proposed
amendment to Section 2 of Article II of the Regulations is set
forth in Appendix I attached hereto and made a part hereof.
Section 1701.55 of the Ohio Revised Code provides that only
persons nominated as candidates are eligible for election as
directors at a meeting of shareholders. Section 1701.56(A)(3)
provides that directors shall have such qualifications as are
imposed by the articles or regulations of an Ohio corporation.
Liqui-Box's Regulations presently contain no special nomination
procedures for directors. Under proposed Section 2 of Article II,
no person may be nominated or qualified for election as a director
of Liqui-Box by a shareholder unless such person has been proposed
in a written notice delivered or mailed to the Secretary of Liqui-
Box. In the case of a nominee proposed for election as a director
at an annual meeting of shareholders, such written notice would
have to be submitted to the Secretary on or before the later of
(i) February 1, immediately preceding such annual meeting, or
(ii) the sixtieth (60th) day prior to the first anniversary of the
most recent annual meeting of shareholders of Liqui-Box. In the
case of a nominee proposed for election as a director at a special
meeting of shareholders, such written notice of a proposed nominee
would have to be submitted to the Secretary of Liqui-Box no later
than the close of business on the seventh (7th) day following the
day on which notice of the special meeting was mailed to
shareholders.
If a shareholder attempts to nominate one or more persons for
election as a director at any meeting of shareholders without
having properly identified each such person in a written notice,
each such attempted nomination will be invalid and will be
disregarded unless the person acting as chairman of the meeting
determines that the facts warrant the acceptance of the proposed
nomination.
The purpose of the nomination provisions is to avoid the
possibility of surprise nominations that would preclude management
from investigating, and the shareholders from adequately assessing,
the competence, experience, integrity and other relevant factors
concerning the qualifications of the proposed nominee. In the
absence of such provisions, nominations could be made from the
floor and such nominees could be elected to the Board of Directors
without furnishing information about such nominees to the
shareholders in advance for their consideration in accordance with
the Exchange Act if such persons do not solicit proxies or limit
their proxy solicitation to fewer than ten (10) persons. The Board
of Directors of Liqui-Box believes that shareholders are entitled
to know basic information about the qualifications of persons
nominated for election as directors and that the proposed
nomination provisions will substantially assist management in
ensuring the availability of such information.
A possible adverse effect of the proposed nomination
provisions may be that a person otherwise qualified to serve as a
director and who is proposed for nomination and election by the
holders of a sufficient number of the outstanding common shares to
elect one director may not be nominated or elected due to
inadvertence. Also, the nomination provisions may make it easier
for incumbent directors to solicit proxies to resist a dissident
slate of directors and, thus, retain their status as directors,
even when the dissident nominations might be in the best interest
of Liqui-Box and its shareholders. In this sense, the proposed
nomination provisions can be viewed as advantageous to incumbent
directors and executive officers and may discourage takeover
attempts. However, the Board of Directors believes that the
benefits to the shareholders of the proposed nomination provisions
outweigh any possible disadvantages and that the proposed
nomination provisions are reasonable rules to govern the nominating
process.
The affirmative vote of the holders of common shares entitling
them to exercise a majority of the voting power of Liqui-Box on
such proposal is required to adopt the proposed amendment to
Section 2 of Article II of the Regulations.
THE BOARD OF DIRECTORS OF LIQUI-BOX UNANIMOUSLY RECOMMENDS
THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE
AMENDMENT TO SECTION 2 OF ARTICLE II OF THE REGULATIONS. UNLESS
OTHERWISE DIRECTED, THE PERSONS NAMED IN THE ENCLOSED PROXY WILL
VOTE THE COMMON SHARES REPRESENTED BY ALL PROXIES RECEIVED PRIOR
TO THE ANNUAL MEETING, AND NOT PROPERLY REVOKED, IN FAVOR OF THE
PROPOSAL TO APPROVE THE AMENDMENT.
INDEPENDENT AUDITORS
The Board of Directors of Liqui-Box has not selected an
accounting firm to serve as independent auditors for Liqui-Box for
the 1995 fiscal year. As part of the ongoing review of the
auditing and tax services required by Liqui-Box, the Audit
Committee of the Board of Directors of Liqui-Box has conducted a
review and evaluation of the qualifications and capabilities of
several accounting firms, including its current accounting firm,
to provide such services. Such review has not been completed as
of the date of this Proxy Statement. After completing its review
of such accounting firms' qualifications and capabilities, the
Audit Committee will make its recommendation to the Board of
Directors as to the appointment of independent auditors for
Liqui-Box for the 1995 fiscal year.
Ernst & Young is the accounting firm which served as
independent auditors for Liqui-Box for the 1994 fiscal year.
It is expected that representatives of Ernst & Young will be
present at the Annual Meeting, will have the opportunity to make
a statement if they desire to do so, and will be available to
respond to appropriate questions.
ANNUAL REPORT
The 1994 Annual Report, which includes financial statements
and information concerning Liqui-Box's operations during the 1994
fiscal year, accompanies this Proxy Statement.
Liqui-Box will provide, without charge, to any person solici-
ted (upon written request of such person), a copy of Liqui-Box's
Annual Report on Form 10-K for the 1994 fiscal year, including the
financial statements and the financial statement schedules thereto,
required to be filed with the SEC. Such request should be
addressed to Samuel B. Davis, Chairman, Liqui-Box Corporation, P.O.
Box 494, Worthington, Ohio 43085-0494.
OTHER MATTERS
The management and the Board of Directors do not know of any
other matters which may come before the Annual Meeting. However,
if any other matters properly come before the Annual Meeting, it
is the intention of the persons named in the accompanying form of
proxy to vote the common shares represented by the proxy in their
discretion as the Board of Directors may recommend. The enclosed
proxy is being solicited by the Board of Directors of Liqui-Box
which will bear the cost of solicitation of proxies. In addition
to the use of the mails, proxies may be solicited by officers,
directors and regular employees of Liqui-Box, personally, by
telephone or by telegraph.
SHAREHOLDER PROPOSALS
Any proposals by Liqui-Box shareholders intended to be
presented at the 1996 Annual Meeting of Shareholders must be
received by Liqui-Box prior to November 20, 1995, in order to be
considered for inclusion in Liqui-Box's 1996 Proxy Statement.
By Order of the Board of Directors
Peter J. Linn
Secretary
APPENDIX I
PROPOSED AMENDMENT TO SECTION 2 OF
ARTICLE II OF THE REGULATIONS OF LIQUI-BOX CORPORATION
ARTICLE II
DIRECTORS
Section 2. Qualifications and Nominations.
(A) Directors need not be shareholders.
(B) Any nominee for election as a director of the corporation
may be proposed only by the Board of Directors or by any
shareholder entitled to vote for the election of directors. No
person, other than a nominee proposed by the Board of Directors,
may be nominated for election as a director of the corporation
unless such person shall have been proposed in a written notice,
delivered or mailed by first-class United States mail, postage
prepaid, to the Secretary of the corporation at its principal
office. In the case of a nominee proposed for election as a
director at an annual meeting of shareholders, such written notice
of a proposed nominee shall be received by the Secretary of the
corporation on or before the later of (i) February 1, immediately
preceding such annual meeting or (ii) the sixtieth (60th) day prior
to the first anniversary of the most recent annual meeting of
shareholders of the corporation held for the election of directors;
provided, however, that if the annual meeting for the election of
directors in any year is not held on or before the thirty-first
(31st) day next following such anniversary, then the written notice
required by this subparagraph (A) shall be received by the
Secretary within a reasonable time prior to the date of such annual
meeting. In the case of a nominee proposed by a shareholder for
election as a director at a special meeting of shareholders at
which directors are to be elected, such written notice of a
proposed nominee shall be received by the Secretary of the
corporation no later than the close of business on the seventh
(7th) day following the day on which notice of the special meeting
was mailed to shareholders. Each such written notice of a proposed
nominee shall set forth: (1) the name, age, business or residence
address of each proposed nominee; (2) the principal occupation or
employment of each such nominee; (3) the number of common shares
of the corporation owned beneficially and/or of record by each such
nominee and the length of time any such common shares have been so
owned; (4) the name and residence address of the notifying
shareholder; and (5) the number of common shares beneficially owned
by the notifying shareholder.
(C) If a shareholder shall attempt to nominate one or more
persons for election as a director at any meeting at which
directors are to be elected without having identified each such
person in a written notice given as contemplated by, and/or without
having provided therein the information specified in, subparagraph
(B) of this Section, each such attempted nomination shall be
invalid and shall be disregarded unless the person acting as
chairman of the meeting determines that the facts warrant the
acceptance of such nomination.
Preliminary Copy
LIQUI-BOX CORPORATION
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 26, 1995
The undersigned hereby constitutes and appoints Jeanette A.
Davis, Samuel B. Davis and Peter J. Linn and each of them, with
full power of substitution and revocation, as proxy or proxies to
appear and vote the common shares of Liqui-Box Corporation
("Liqui-Box") which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Shareholders on
April 26, 1995, and any adjournment thereof, for the following
purposes:
1. Election of four (4) directors for terms expiring in 1997.
_____ FOR all nominees listed below (except as marked to
contrary below)*
_____ WITHHOLD AUTHORITY to vote for all nominees listed
below
Carl J. Aschinger, Jr. Peter J. Linn
Jeanette A. Davis C. William McBee
*(INSTRUCTION: To withhold authority to vote for an
individual nominee, write that nominee's name on the line
provided below:)
_________________________________________________________________
2. Amendment of Section 2 of Article II of the Regulations of
Liqui-Box in order to require advance notice of shareholder
nominations for election to the Board of Directors.
_____ FOR _____ AGAINST _____ ABSTAIN
3. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
This proxy when properly executed will be voted as specified by
the shareholders. If no specification is made, this proxy will
be voted FOR Proposals 1 and 2. If any other matters are brought
before the meeting or if a nominee for election as a director
named in the Proxy Statement is unable to serve or for good cause
will not serve, the proxy will be voted in the discretion of the
proxies on such matters or for such substitute nominee(s) as the
directors may recommend.
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting and Proxy Statement and hereby expressly revokes
any and all proxies heretofore given or executed by the under-
signed with respect to the common shares represented by this proxy.
Date _________________________
______________________________
______________________________
(Please sign here exactly as
name appears herein. If
common shares are registered
in two names, both should
sign.) When signing as
attorney, executor,
administrator, trustee,
guardian or corporate
official, please give your
full title.