-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C/4EbbgXFet7e+naAa6S79HGePdX4gHN6w0VBZoOeVaOM072XMxojqlklPZUiTwU Veqj2pP0Hhcp76XfiKzWcw== 0000950128-98-000646.txt : 19980331 0000950128-98-000646.hdr.sgml : 19980331 ACCESSION NUMBER: 0000950128-98-000646 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980320 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLAIR CORP CENTRAL INDEX KEY: 0000071525 STANDARD INDUSTRIAL CLASSIFICATION: 5961 IRS NUMBER: 250691670 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-00878 FILM NUMBER: 98570160 BUSINESS ADDRESS: STREET 1: 220 HICKORY ST CITY: WARREN STATE: PA ZIP: 16366 BUSINESS PHONE: 8147233600 FORMER COMPANY: FORMER CONFORMED NAME: NEW PROCESS CO DATE OF NAME CHANGE: 19890507 DEF 14A 1 BLAIR CORPORATION PROXY 1 SCHEDULE 14A (RULE 14A) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [ X ] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [ X ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
BLAIR CORPORATION (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) BLAIR CORPORATION (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT) Payment of filing fee (Check the appropriate box): [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: --------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: --------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): --------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: --------------- (5) Total fee paid: ------------------------------------------------ [ ] 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: ---------------------------------------------------- [ X ] No fee required 2 BLAIR CORPORATION Warren, Pennsylvania ------------------------ NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS OF BLAIR CORPORATION to be held on Tuesday, April 21, 1998 ------------------------ TO THE STOCKHOLDERS: Notice is hereby given that the Annual Meeting of Stockholders of Blair Corporation (the "Company"), a Delaware corporation, will be held in the Knights of Columbus Building, 219 Second Avenue, Warren, Pennsylvania, on Tuesday, April 21, 1998 at 11:00 a.m., for the following purposes: 1. To elect thirteen directors to serve for a term of one year and until their successors are elected and qualified. 2. To approve, adopt and ratify the Company's Stock Accumulation and Deferred Compensation Plan for non-employee directors of the Company. 3. To ratify the appointment of Ernst & Young LLP as independent public accountants of the Company for the year 1998. 4. To transact such other business as may lawfully come before the meeting or any adjournments thereof. The Board of Directors has fixed the close of business on February 27, 1998 as the record date for the determination of stockholders entitled to notice of and to vote at the meeting, or any postponements or adjournments thereof. To assure that your shares are represented at the meeting, please date, sign and return the enclosed proxy. A postage-paid, self addressed envelope is enclosed for your convenience in returning the proxy. If you decide to attend the meeting, you may revoke the proxy at any time before it is voted. DAVID A. BLAIR Secretary Dated: March 20, 1998 Warren, Pennsylvania 3 BLAIR CORPORATION Warren, Pennsylvania March 20, 1998 PROXY STATEMENT This Proxy Statement solicits proxies on behalf of the Board of Directors of Blair Corporation (the "Company") for use at the Annual Meeting of Stockholders of the Company, to be held on Tuesday, April 21, 1998 at the Knights of Columbus Building, 219 Second Avenue, Warren, Pennsylvania. The Company's principal executive offices are located at 220 Hickory Street, Warren, Pennsylvania 16366. Under Delaware law, any person giving a proxy pursuant to this solicitation may revoke it at any time before it is voted by filing a written notice of revocation with the Secretary of the Company, by delivering to the Company a duly executed proxy bearing a later date, or by attending the Annual Meeting and voting in person. The shares represented by proxies received by the Company's Board of Directors will be voted at the meeting, or at any adjournment thereof, in accordance with the specifications made therein. If no specification is made on a proxy card, it will be voted FOR the matters specified on the proxy card. All proxies not voted will not be counted toward establishing a quorum. Stockholders should note that while broker non-votes and votes for ABSTAIN will count toward establishing a quorum, passage of any proposal considered at the Annual Meeting will occur only if a sufficient number of votes are cast FOR the proposal. Accordingly, votes to ABSTAIN and votes AGAINST will have the same effect in determining whether the proposal is approved. As of February 27, 1998, there were 8,987,343 shares of the Company's Common Stock outstanding, which amount represents the figure reported as outstanding by the Company's transfer agent as of the record date (9,007,366 shares) reduced by 20,023 shares repurchased by the Company prior to the record date but not reflected on the books of the transfer agent. Such shares are considered to be Treasury Stock as of February 27, 1998, and therefore, cannot be voted. Only stockholders of record at the close of business on February 27, 1998 will be entitled to notice of and to vote at the meeting and any adjournments thereof, with each share being entitled to one vote. The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the shares of the Company's Common Stock outstanding on February 27, 1998 is necessary to constitute a quorum. A copy of the 1997 Annual Report of the Company, including financial statements and a description of its operations for 1997, accompanies this Proxy Statement, but is not incorporated in this Proxy Statement by this reference. This Proxy Statement, Notice of Meeting and the enclosed proxy card are first being mailed to stockholders on or about March 20, 1998. ELECTION OF DIRECTORS One of the purposes of the meeting is to elect thirteen directors to serve until the next Annual Meeting of Stockholders and until their successors have been elected and qualified. The persons named in the proxy intend to vote the proxy for the election as directors of the nominees named below. If, however, any nominee is unwilling or unable to serve as a director, which is not now expected, the persons named in the proxy reserve the right to vote for such other person as may be nominated by the Board of Directors. Directors will be elected by a plurality of the votes cast at the Annual Meeting. 4 The table below sets forth the name of each nominee for election as a director and the nominee's age, position with the Company, business experience and principal occupation during the past five years, and family relationships with other directors. All of the nominees were elected as directors at the Company's 1997 Annual Meeting of Stockholders.
BUSINESS POSITION WITH DIRECTOR EXPERIENCE DURING NAME AGE COMPANY SINCE PAST FIVE YEARS ---- --- ------- ----- --------------- David A. Blair(1).............. 47 Secretary and Order 1988 Secretary for the past five Handling Service Director years; Order Handling Service Director, June 1, 1993--present; Customer Relations Manager, June 1, 1982--May 31, 1993. Robert W. Blair(1)............. 67 Director 1962 Director, 1962--present; Executive Vice President, January 1, 1990--December 31, 1990; Secretary, July 16, 1963--December 31, 1990; member of Executive Committee, April 16, 1968--December 31, 1990. Steven M. Blair(2)............. 54 Vice President 1986 Vice President (Order Handling) (Order Handling) for the past five years. Robert D. Crowley.............. 48 Vice President (Menswear) 1994 Vice President (Menswear) for the past five years. John O. Hanna.................. 66 Director 1992 Director, President and Chief Executive Officer, Northwest Savings Bank, Warren, PA, January, 1977--present; Director, President and Chief Executive Officer of Northwest Bancorp, Inc., Warren, PA, February, 1998--present; Director, Jamestown Savings Bank, Jamestown, NY, November, 1995--present. Gerald A. Huber................ 69 Director 1992 Director and Secretary, Warren Foundation, February 1, 1987--present; Senior Vice President and Manager, Warren Area Trust Department, Marine Bank, Erie, PA, July 1, 1982--June 30, 1992. Craig N. Johnson............... 56 Director 1997 Managing Director and Partner, Glenthorne Capital, Inc., Philadelphia, PA, February 1, 1994--present; Chief Operating Officer and President, Maritrans, Inc., Philadelphia, PA, February, 1990--December, 1993.
2 5
BUSINESS POSITION WITH DIRECTOR EXPERIENCE DURING NAME AGE COMPANY SINCE PAST FIVE YEARS ---- --- ------- ----- --------------- Murray K. McComas.............. 61 President, Chairman of the 1977 President, Chairman of the Board Board and member of and member of Executive Committee Executive Committee for the past five years. Thomas P. McKeever............. 49 Vice President (Corporate 1994 Vice President (Corporate Affairs Affairs and Human and Human Resources), January 1, Resources) and member of 1997--present; member of Executive Committee Executive Committee, October 16, 1996--present; Vice President (Employee and Public Relations), July, 1989--December, 1996; Director, Blair Holdings, Inc., September, 1996--present. Michael J. Samargya............ 64 Vice President 1973 Vice President (Information (Information Services) Services) for the past five years. Kent R. Sivillo................ 51 Vice President and 1996 Vice President and Treasurer, Treasurer January 1, 1997--present; Assistant Treasurer and Assistant Vice President, April 17, 1990--December 31, 1996; Director, Blair Holdings, Inc., September, 1993--present; President, Blair Holdings, Inc., September, 1996--present; Vice President and Treasurer, Blair Holdings, Inc., September, 1993--September, 1996. Blair T. Smoulder.............. 55 Executive Vice President 1986 Executive Vice President and and member of Executive member of Executive Committee for Committee the past five years. John E. Zawacki................ 49 Vice President 1988 Vice President (Womenswear) for (Womenswear) and member the past five years; member of of Executive Committee Executive Committee, October 16, 1996--present.
- - --------- (1) Mr. David A. Blair is the nephew of Mr. Robert W. Blair. (2) Mr. Steven M. Blair is not related to either Mr. Robert W. Blair or Mr. David A. Blair. 3 6 The table below sets forth the name of each executive officer of the Company not listed above, his name, age, position with the Company, present principal occupation and business experience during the past five years.
EXECUTIVE BUSINESS POSITION WITH OFFICER EXPERIENCE DURING NAME AGE COMPANY SINCE PAST FIVE YEARS ---- --- ------- ----- --------------- Timothy J. Baker............... 51 Vice President 1990 Vice President (Planning) for the (Planning) past five years. Patrick J. Kennedy............. 48 Vice President 1996 Vice President (Home Products), (Home Products) November 4, 1996--present; Senior Vice President Marketing, Geo. W. Park Seed Co. Inc., Greenwood, SC, March, 1995-- August, 1996; Senior Vice President Merchandising, Gander Mountain, Inc., Wilmot, WI, December, 1991--February, 1995. John A. Lasher................. 46 Vice President 1987 Vice President (Advertising) for (Advertising) the past five years; Director, Blair Holdings, Inc., September, 1993--present. Randall A. Scalise............. 43 Vice President 1993 Vice President (Merchandise (Merchandise Handling) Handling), January 20, 1993--present; Assistant Vice President (Merchandise Handling), April, 1991--January, 1993. James H. Smith................. 51 Vice President (Corporate 1995 Vice President (Corporate Development and Facilities) Development and Facilities), April, 1997--present; Vice President (Building and Property), January 18, 1995--April, 1997; Assistant Vice President (Building and Property), April 17, 1990--January 17, 1995. William A. Tucker.............. 44 Vice President (Mailing) 1989 Vice President (Mailing) for the past five years. Lawrence R. Vicini............. 49 Vice President 1992 Vice President (International (International Trade) Trade) for the past five years.
PRINCIPAL HOLDERS OF COMMON STOCK* (a) Security Ownership of Certain Beneficial Owners. Unless otherwise indicated, the table below sets forth information as of February 27, 1998 with respect to each person and institution known to the 4 7 Company's management to be the beneficial owner of more than five percent of the outstanding shares of the Company's Common Stock.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS ------------------- -------------------- -------- John L. Blair 108 East Street Warren, PA 16365.............. 1,225,001(1) 13.63% PNC Bank Corporation 5th Ave. & Wood Street Pittsburgh, PA 15222.......... 1,041,605(2) 11.59% Dimensional Fund Advisors Inc. 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401........ 608,500(3) 6.77% FMR Corp. 82 Devonshire Street Boston, MA 02109.............. 662,700(4) 7.37%
- - --------- * For purposes of calculating the percent of class ownership, the figure used for the amount of outstanding Common Stock is 8,987,343, which amount represents the figure reported as outstanding by the transfer agent as of the record date (9,007,366 shares) reduced by 20,023 shares repurchased by the Company prior to the record date but not reflected on the books of the transfer agent. (1) Such amount includes (i)153,309 shares of Common Stock held in a trust of which Mr. John L. Blair is a co-trustee with a commercial bank; and (ii) 58,646 shares of Common Stock held in two trusts, each of 29,323 shares, of which Mr. John L. Blair is a co-trustee with a commercial bank, for the benefit of each of Mr. Blair's children. Such amount does not include 110,252 shares of Common Stock, owned of record by Mr. John L. Blair's wife, as to which Mr. John L. Blair disclaims beneficial ownership. (2) All of these shares are held by PNC Bank, N.A., in a safekeeping agency account with the Depository Trust Company. PNC Bank, N.A. currently serves as the trustee, administrator or registered owner of 75 separate trust, custodial and estate accounts which are the record or beneficial owners of the Company's Common Stock, none of which is individually the record or beneficial owner of five percent or more of the Company's outstanding Common Stock. PNC Bank, N.A. disclaims beneficial ownership of these shares. This information was provided to the Company by PNC Bank in a letter dated March 5, 1998. (3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 608,500 shares of the Company's Common Stock as of December 31, 1997, all of which shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, all of which Dimensional Fund Advisors Inc. serves as investment manager. Dimensional disclaims beneficial ownership of all such shares. Sole Voting Power = 420,000 shares** Shared Voting Power = 0 Sole Dispositive Power = 608,500 Shared Dispositive Power = 0
** Persons who are officers of Dimensional Fund Advisors Inc. also serve as officers of DFA Investment Dimensions Group Inc. (the "Fund") and The DFA Investment Trust Company (the "Trust"), each an open-end management investment company registered under the Investment Company Act of 1940. In their capacity as officers of the Fund and the Trust, these persons vote 55,800 additional shares which are owned by the Fund and 132,700 shares which are owned by the Trust (both included in Sole Dispositive Power above). This information was provided to the Company by Dimensional Fund Advisors Inc. in a transmittal dated March 11, 1998. 5 8 (4) Fidelity Management & Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp. and an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, is the beneficial owner of 662,700 shares or 7.37% of the Common Stock outstanding of the Company as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. One of these investment companies, Fidelity Low-Priced Stock Fund (the "Fund"), owns 662,700 shares or 7.37% of the Common Stock outstanding of the Company. The Fund has its principal business office at 82 Devonshire Street, Boston, Massachusetts 02109. Edward C. Johnson 3d, Chairman of FMR Corp., and FMR Corp., through its control of Fidelity, each has sole power to dispose of the 662,700 shares owned by the Fund. Neither FMR Corp. nor Edward C. Johnson 3d has the power to vote or direct the voting of the shares owned directly by the Fund, which power resides with the Funds' Board of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds' Board of Trustees. Members of the Edward C. Johnson 3d family and trusts for their benefit are the predominant owners of Class B shares of common stock of FMR Corp., representing approximately 49% of the voting power of FMR Corp. Mr. Johnson 3d owns 12.0% and Abigail P. Johnson, Director of FMR Corp, owns 24.5% of the aggregate outstanding voting stock of FMR Corp. The Johnson family group and all other Class B shareholders have entered into a shareholders' voting agreement under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Accordingly, through their ownership of voting common stock and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR Corp. This information was provided to the U.S. Securities and Exchange Commission in a Schedule 13G filed on February 14, 1998 by FMR Corp. and in a letter to the Company dated March 3, 1998. (b) Security Ownership of Management. The following table sets forth, as of February 27, 1998, certain information with respect to the Company's Common Stock owned beneficially by each director and nominee for election as a director, which includes all of the executive officers named below under "Executive Compensation," and by all directors and executive officers of the Company as a group.
NUMBER OF SHARES NAME OF AND NATURE OF PERCENT BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS ---------------- -------------------- -------- David A. Blair.......................... 49,328(2)(3) 0.55% Robert W. Blair......................... 286,557(3) 3.19% Steven M. Blair......................... 23,995(3) 0.27% Robert D. Crowley....................... 17,248(3) 0.19% John O. Hanna........................... 5,200(3) 0.06% Gerald A. Huber......................... 2,410(3) 0.03% Craig N. Johnson........................ 500 0% Murray K. McComas....................... 50,755(3) 0.56% Thomas P. McKeever...................... 11,050 0.12% Michael J. Samargya..................... 23,150 0.26% Kent R. Sivillo......................... 11,150 0.12% Blair T. Smoulder....................... 23,050(3) 0.26% John E. Zawacki......................... 17,979(3) 0.20% All directors and executive officers as a group (includes 20 persons)......... 589,587(2)(3)(4) 6.56%
- - --------- (1) Unless otherwise indicated, each person has sole voting and investment power with respect to the shares beneficially owned. (2) Such share totals include, with respect to Mr. David A. Blair, 39,500 shares held in a revocable trust established by Mr. David A. Blair and administered by a commercial bank. (3) The share totals include the following shares of stock held by a bank as trustee for the benefit of the indicated nominees, as to which the indicated nominees have no voting or investment power, beneficial interest in which shares is disclaimed by such nominees: Mr. Robert W. Blair (46,667 6 9 shares) and Mr. David A. Blair (2,833 shares). The share totals in the table include the following shares of Common Stock held by and for the benefit of members of the immediate families of certain nominees, as to which the indicated nominees have no voting or investment power, beneficial interest in which is disclaimed by such nominees: Mr. David A. Blair (2,995 shares), Mr. Robert W. Blair (7,160 shares), Mr. Steven M. Blair (7,500 shares), Mr. Robert D. Crowley (9,998 shares), Mr. John O. Hanna (1,200 shares), Mr. Gerald A. Huber (10 shares), Mr. Murray K. McComas (980 shares), Mr. Blair T. Smoulder (8,900 shares) and Mr. John E. Zawacki (11,629 shares). In addition, the share totals include 1,565 shares of Common Stock which are held by or for the benefit of members of the immediate families of executive officers of the Company not identified individually in this chart, as to which such executive officers have no voting or investment power, beneficial interest in which is disclaimed by such executive officers. (4) Such share totals include an aggregate of 7,100 shares of Common Stock jointly owned by the directors and executive officers with their spouses. EXECUTIVE COMPENSATION The following table summarizes the compensation awarded to, earned by, or paid to the Company's chief executive officer, Mr. Murray K. McComas, and its four most highly compensated executive officers other than Mr. McComas for all services rendered to the Company during 1997 and for each of the previous two years: SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION --------------------------------------- NAME AND OTHER ANNUAL ALL OTHER PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) COMPENSATION(3) COMPENSATION(4) - - ------------------ ---- --------- -------- --------------- --------------- Murray K. McComas..................... 1997 $518,622 $ 0 $ 46,011 $47,763 President and 1996 517,840 0 9,823 57,321 Chairman of the Board 1995 507,316 15,220 166,744 68,781 John Lasher........................... 1997 271,284 0 14,397 29,442 Vice President 1996 270,874 0 6,185 30,592 (Advertising) 1995 265,358 7,823 52,551 28,026 Michael J. Samargya................... 1997 329,056 0 2,077 52,403 Vice President 1996 328,560 0 3,450 42,750 (Information Services) 1995 321,884 9,657 55,867 48,603 Blair T. Smoulder..................... 1997 380,354 0 22,745 49,825 Executive Vice 1996 379,780 0 5,036 54,331 President 1995 372,056 11,162 81,392 48,606 John E. Zawacki....................... 1997 279,734 0 21,744 24,492 Vice President 1996 279,312 0 6,439 28,754 (Womenswear) 1995 273,632 8,209 51,228 34,627
(1) There were no directors' fees paid to the named executive officers during the years 1995, 1996 and 1997. (2) For fiscal years 1995, 1996 and 1997, the Company's executive officers earned bonuses in accordance with the bonus schedule approved by the Executive Officer Compensation Committee on December 16, 1993 as set forth herein in the "Report of the Executive Officer Compensation Committee". The applicable bonus percentage was 3% of 1995 salary income earned, 0% of 1996 salary income earned and 0% of 1997 salary income earned. The 1995 bonuses were paid by the Company in February, 1996, and no bonuses were paid by the Company in 1997 with respect to 1996 or in 1998 with respect to 1997. (3) This aggregate figure includes the dollar value of the difference between the price paid by the named executive officer for stock and the fair market value of the stock purchased on the date of purchase pursuant to the Company's Employee Stock Purchase Plan, and the sum of amounts 7 10 reimbursed for payment of taxes on restricted stock awards and interest imputed on the deferred payment for restricted stock not yet fully paid for with respect to the named executive officer. Aggregate restricted stock award holdings at the end of the Company's last fiscal year for each of the named executive officers were:
NUMBER OF SHARES DOLLAR VALUE ---------------- ------------- (ON 12/31/97) Murray K. McComas........................... 16,350 $192,398 John A. Lasher.............................. 5,750 67,385 Michael J. Samargya......................... 4,750 50,435 Blair T. Smoulder........................... 8,550 100,136 John E. Zawacki............................. 6,250 75,860
Restricted stock awards are made under the Company's Employee Stock Purchase Plan. The purchase price for shares purchased under the Plan is paid over time out of cash dividends, when and if declared and paid by the Company. No cash is received by the Company at the time the shares are purchased, although the participant receives the rights to receive dividends and vote the shares at that time. Shares are subject to repurchase by the Company, if the participant's employment with the Company terminates for reasons other than death, retirement or disability, upon payment to the participant of an amount equal to the dividends paid with respect to the shares and the amount (if any) prepaid by the participant for the shares. There is no vesting schedule, and vesting occurs when stock received under said Plan is fully paid, which will vary with the Company's dividend policy from year to year. Dividends will be paid on all shares of restricted stock received pursuant to this Plan as and when dividends are declared by the Company with respect to all of its outstanding Common Stock. (4) Includes the Company's contributions made for the benefit and on behalf of the named executive officer under the following: A. Life Insurance--The dollar value of premiums for term life insurance (having a face value in excess of $50,000) paid by the Company for the benefit of each of the named executive officers is:
1995 1996 1997 ---- ---- ---- Murray K. McComas............................... $ 3,757 $ 3,757 $ 3,757 John A. Lasher.................................. 439 771 773 Michael J. Samargya............................. 3,822 3,923 3,931 Blair T. Smoulder............................... 1,855 1,902 2,621 John E. Zawacki................................. 780 799 800
B. The Dollar Value of All Unused Personal and Vacation Days Paid by the Company to Each of the Named Executive Officers is:
1995 1996 1997 ---- ---- ---- Murray K. McComas............................... 0 0 0 John A. Lasher.................................. 0 $ 4,092 $ 5,217 Michael J. Samargya............................. $ 6,023 6,204 18,984 Blair T. Smoulder............................... 0 14,629 14,629 John E. Zawacki................................. 0 0 0
C. The Company's Profit Sharing and Savings Plan--The Company's Profit Sharing and Savings Plan has two components, a savings component and a profit sharing component. Under the savings component, which is available to all full-time employees of the Company with one year of service, the Company matches employees' contributions to the Plan of 1% to 5% of their salary. The Company's contributions, and the earnings thereon, are subject to divestiture in accordance with a vesting schedule under which 20% vests after three years of service to the 8 11 Company, with an additional 20% vesting after each year thereafter until full vesting is achieved after seven years of service. Amounts allocated to the named executive officers are:
1995 1996 1997 ---- ---- ---- Murray K. McComas............................... $ 9,384 $11,160 $11,295 John A. Lasher.................................. 4,772 10,919 12,029 Michael J. Samargya............................. 9,366 10,949 13,314 Blair T. Smoulder............................... 9,369 10,700 11,954 John E. Zawacki................................. 9,381 11,212 11,232
Under the profit sharing component of the Company's Profit Sharing and Savings Plan, which covers all employees of the Company, the Company contributes 10% of its "adjusted net income," as defined in the Plan, to the Plan's trust fund. Amounts contributed by the Company to the trust fund are allocated among participating employees based on salary and years of service to the Company, but allocations to the executive officers listed in this table are limited to $30,000 (adjusted to take into account cost-of-living adjustments provided for under Section 415(d) of the Internal Revenue Code since 1986). The amounts allocated are invested in accordance with the instructions of the individual Plan participants in investments approved by the Plan trustees. Amounts allocated to the named executive officers are:
1995 1996 1997 ---- ---- ---- Murray K. McComas............................... $ 9,401 $ 5,419 $ 5,478 John A. Lasher.................................. 9,315 5,369 5,431 Michael J. Samargya............................. 9,389 5,412 5,471 Blair T. Smoulder............................... 9,370 5,401 5,461 John E. Zawacki................................. 9,340 5,383 5,444
D. Benefit Restoration Plans--The following amounts were paid as reimbursement under the Company's benefit restoration plans to compensate the named executive officers for benefits not otherwise paid under the Company's Profit Sharing and Savings Plan due to limitations imposed by tax law:
1995 1996 1997 ---- ---- ---- Murray K. McComas............................... $46,239 $36,986 $27,233 John A. Lasher.................................. 13,499 9,442 5,992 Michael J. Samargya............................. 20,003 16,263 10,703 Blair T. Smoulder............................... 28,011 21,658 15,159 John E. Zawacki................................. 15,126 11,360 7,015
COMMITTEES OF THE BOARD OF DIRECTORS The Company has a standing Executive Committee of the Board of Directors, consisting of Murray K. McComas, Thomas P. McKeever, Blair T. Smoulder, and John E. Zawacki, a standing Audit Committee of the Board of Directors, consisting of David A. Blair, John O. Hanna, and Gerald A. Huber, and a standing Nominating Committee, consisting of Robert W. Blair, John O. Hanna, Craig N. Johnson, and Murray K. McComas. The Executive Officer Compensation Committee, currently consisting of Robert W. Blair, John O. Hanna, Gerald A. Huber, and Craig N. Johnson, recommends policies for and levels of executive officer compensation other than awards under the Company's Employee Stock Purchase Plan. The Executive Payroll Compensation Committee, currently consisting of Murray K. McComas, Thomas P. McKeever, Blair T. Smoulder, and John E. Zawacki recommends policies and levels of compensation for non-executive officers. In addition, the Employee Stock Purchase Plan Committee, currently consisting of Robert W. Blair, John O. Hanna, and Gerald A. Huber, administers the Company's Employee Stock Purchase Plan. During 1997, the Board of Directors held nine meetings. The Executive Committee held nineteen meetings, and the Employee Stock Purchase Plan Committee met once. The Executive Officer Compensation Committee held three meetings, and the Audit Committee held two meetings. The Executive Payroll Compensation Committee met seven times in 1997. Each nominee for election to the 9 12 Board of Directors attended more than 75 percent of the total number of meetings of the Board of Directors and the total number of meetings of all committees of the Board on which he served (during the periods that he served). COMPENSATION OF DIRECTORS In 1997, non-management members of the Board of Directors each received an annual retainer of a stock grant of 500 shares of the Company's Common Stock for transfer on April 15, 1997 and a cash grant equal to the value of 500 shares of the Company's Common Stock calculated as of the close of business on April 15, 1997. The aggregate value of this April 15, 1997 cash grant was $22,125. In 1997, non-management members also received compensation in the amount of $750 for each meeting of the Board of Directors attended and $400 for each meeting attended of each of the Committees of the Board of Directors. Management members of the Board of Directors are not compensated for attending meetings of the Board of Directors or its Committees. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Executive Officer Compensation Committee consists of Robert W. Blair, John O. Hanna, Gerald A. Huber, and Craig N. Johnson. The Employee Stock Purchase Plan Committee consists of Robert W. Blair, John O. Hanna, and Gerald A. Huber. Mr. Hanna, Mr. Huber and Mr. Johnson are non-management directors of the Company. Mr. Robert W. Blair was a Vice President and Executive Vice President of the Company in 1989 and 1990, respectively, but he has not served as a Company employee since that time. Although not an appointed member of the Executive Officer Compensation Committee, Murray K. McComas, the Company's President, participated in the evaluation and discussion of appropriate salary levels for all executive officers other than himself and Mr. Blair T. Smoulder, Executive Vice President, at the request of the Executive Officer Compensation Committee. COMPENSATION COMMITTEE REPORTS ON EXECUTIVE OFFICER COMPENSATION For fiscal year 1997, decisions on compensation for executive officers of the Company were made by the Executive Officer Compensation Committee and the Employee Stock Purchase Plan Committee. In accordance with the rules of the Securities and Exchange Commission (the "SEC") designed to enhance disclosure of policies with respect to executive compensation, set forth below are reports submitted by these committees addressing the Company's compensation policies with respect to executive officers for fiscal year 1997. Report of the Executive Officer Compensation Committee The Executive Officer Compensation (the "EOC") Committee of the Board of Directors is responsible for salary levels and bonuses for all officers of the Company deemed by the Board of Directors to be within the SEC's definition of "executive officer", i.e., a company's president, any vice president in charge of a principal business unit, division or function or any other officer or person who performs similar policymaking functions for the Company. The minutes of meetings of the EOC Committee at which compensation decisions are reached are acknowledged and approved by the full Board of Directors of the Company. The EOC Committee's decisions on salary levels for executive officers ultimately were subjective, based on consideration of a number of factors. No one factor was determinative of the salary level of any of the executive officers. Moreover, the EOC Committee did not weigh any one factor against any other in a way that makes it possible to assign a numerical value to the weight of any factor in the determination of the salaries of the executive officers. 10 13 Murray K. McComas, the Chairman and President of the Company, participated in the evaluation and discussion of appropriate salary levels for all executive officers other than himself and the Company's Executive Vice President, Mr. Blair T. Smoulder. Mr. McComas did not participate in the discussion when the EOC Committee evaluated him and determined his salary level and the salary level of Mr. Smoulder. On June 11, 1997, the EOC Committee approved a new schedule for the establishment of base salaries for the Company's executive officers which places a greater emphasis on incentive or at-risk compensation. This new base salary schedule is consistent with the recommendations of the Corporation's Salary Review Task Force Committee and Towers Perrin, compensation consultants, which conducted a review of compensation for the Company's exempt employees, inclusive of all executive officers. The compensation review, which included a comparative analysis of the Company's salary plan with the compensation plans of companies of comparable size or business focus, revealed that, although the Company's plan was generally competitive with the compensation plans of peer companies, the Company's total compensation was much more heavily weighted towards base salary, rather than bonuses or other incentive-based awards, particularly at the executive officer level. Due in part to those conclusions, the EOC Committee adopted on June 11, 1997 a new schedule for base salary increases under which a job grade is assigned to each executive officer depending on his responsibilities. Compensation ranges were established for these levels through a review process that included an analysis of both proxy statements and compensation surveys of related position responsibilities among similar industries, as well as the regional market, provided by Towers Perrin. Individual salaries were determined by the person's job grade, experience and individual performance. None of the Company's five most highly compensated executive officers received a base salary increase with respect to 1997. In view of the former imbalance in the Company's salary plan, the new salary schedule requires that all executive officers exceeding the "Base Salary Range" have their salaries reduced to fall within the range of their respective job levels over a 3-year period from 1998-2000. Accordingly, Mr. McComas advised the committee that in 1997 annual salary adjustments for executive officers would range from 0% (for those currently exceeding the range) to 10% for those who had recently received significant promotions or increases in responsibility. All salary increases proposed were within the range of the new salary structure. Nine of the sixteen executive officers of the Company (including all five of the most highly compensated executive officers) begin a base-salary reduction process in April, 1998. The EOC Committee's decisions with respect to bonuses for executive officers in 1997 were made in accordance with the executive officer bonus schedule established and approved by the Committee on December 16, 1993. On December 31, 1996, the EOC Committee reviewed and approved the bonus schedule for fiscal year 1997. Under the bonus schedule, executive officers may receive bonuses equal to a percentage of their salary income for the year. The percentage is dependent upon the range of the Company's after-tax net income for the year. The base payout goal is $25,000,000, such that no bonuses are received unless the Company's after-tax net income equals or exceeds this figure. If the Company's after-tax net income falls within a higher range, the executive officers receive a larger bonus. In fiscal year 1996, the Company had net income of $14,726,221, and, as a result, the Company's executive officers did not earn or receive bonuses with respect to 1996. The EOC Committee decided to maintain the same payout goal and award levels for executive officer bonuses in fiscal year 1997 as in fiscal year 1996. Because the Company had net income of $13,253,928 in fiscal year 1997, the Company's executive officers also did not earn or receive bonuses with respect to 1997. 11 14 In 1996, the Company retained Towers Perrin to conduct a comprehensive salary and compensation study for all exempt employees, including executive officers. As a further part of their above-referenced compensation study, Towers Perrin has provided to the Company options and recommendations for enhanced incentive pay opportunities for the Company's executive officers that are more consistent with industry practice. The Board of Directors intends to implement new incentive bonus arrangements in 1998 utilizing such options and recommendations. MEMBERS OF THE EXECUTIVE OFFICER COMPENSATION COMMITTEE Gerald A. Huber (Chairman) Robert W. Blair John O. Hanna Craig N. Johnson Report of the Employee Stock Purchase Plan Committee Awards under the Company's Employee Stock Purchase Plan (the "Plan") are the responsibility of the Employee Stock Purchase Plan ("ESPP") Committee. The ESPP Committee is made up of directors who have not, within one year, been granted rights to purchase shares pursuant to the Plan. Decisions of the ESPP Committee are final and binding on the Company. Awards under the Plan are designed primarily to recognize the contributions of individual key employees to the Company's performance and to align the interests of management and stockholders. For many years, the Company has endorsed the view that management and key employees of the Company should be stockholders of the Company so that they will be motivated to increase stockholder value. This policy is implemented through the award, to selected employees of the Company, of rights to purchase shares of the Company's Common Stock under the Plan. Awards ordinarily are made once each year. The ESPP Committee selects employees to receive awards under the Plan (based, in part, on recommendations of the Company's executive officers and department heads as to employees who are not executive officers), determines the number of shares subject to the award, and chooses the price at which shares will be made available for purchase under the Plan. Because the price paid to purchase the stock under the grant is below fair market value and is paid out of dividends earned on the purchased shares, the price at which the shares are sold directly affects the degree to which grants under the Plan serve as incentive compensation for future performance rather than as bonuses for past performance. Moreover, since dividends reflect corporate earnings, as earnings increase, dividends likely increase and the purchaser is more likely to be vested sooner with full ownership rights to such shares. Many factors, both objective and subjective, were considered by the ESPP Committee before making grants in 1997, including, but not limited to, the Company's financial performance, the historic responsibilities and performance of individual employees, the future potential value of the employees to the Company, prior grants to the employee, and the employee's current vested and unvested ownership of the Company's Common Stock. There is no direct correlation between regular salary and awards under the Plan. No award was specifically tied to any one measure of performance or factor, and the ESPP Committee did not assign relative weights to the factors it considered in a way that would make it possible to assign a numerical value to the weight of any factor. Full ownership of the shares ordinarily does not vest, however, until they are fully paid for out of corporate dividends. The Company's dividend level can thus affect the full vesting of the shares, and the market price of the shares in large part determines the value of the grant to an individual employee. In fiscal year 1997, the ESPP Committee awarded grants under the Plan for the purchase of an aggregate of 49,600 shares of the Company's Common Stock to 99 of the Company's employees, 14 of whom were executive officers of the Company. No executive officer participated in the Plan in 1996. Awards for all employees ranged from 250 shares to 3,000 shares, with 1,264 being the average number 12 15 of shares sold to the Company's executive officers. The purchase price for all shares sold under the Plan in 1997 was $7.50 per share, at a time when the Company's Common Stock was trading at $14.625 per share, or approximately 51% of the market value of the Company's Common Stock at the date of purchase. Over the past several years, the purchase price for stock awarded pursuant to the Plan has been approximately one-third of market value at the time of grant. Mr. McComas, the Company's Chief Executive Officer, received a grant of 3,000 shares, having a value of $21,375 by reason of the difference between the price paid and the fair market value of the stock at the time of purchase. While the ESPP Committee's decision with respect to Mr. McComas' grant was a subjective one, it was not based on any one factor or any weighing of one factor against another. Mr. McComas's award criteria were the same as those of other executive officers. The ESPP Committee was of the view that the combination of Mr. McComas's strong leadership of the Company and the need to further provide him incentive to continue his history of exemplary leadership warranted a grant of that size. MEMBERS OF THE EMPLOYEE STOCK PURCHASE PLAN COMMITTEE Robert W. Blair (Chairman) John O. Hanna Gerald A. Huber 13 16 PERFORMANCE GRAPH The following graph compares the yearly change in the cumulative total stockholder return on the Company's Common Stock with the cumulative total return of the AMEX Market Value Index and the S&P Retail Composite Index. COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* Among Blair Corporation Common Stock, AMEX Market Value Index and S&P Retail Composite Index** [CHART]
1/1/93 1993 1994 1995 1996 1997 ------ ---- ---- ---- ---- ---- Blair Corporation 100 81 80 68 43 40 AMEX Market Value Index 100 120 109 137 146 171 S&P Retail Stores Composite Index 100 96 88 98 116 167
Assumes $100 invested on January 1, 1993 in Blair Corporation Stock, AMEX Market Value Index and S&P Retail Composite Index. * Total return assumes reinvestment of dividends. ** Fiscal year ending December 31. The closing price of the Company's Common Stock on the American Stock Exchange on March 11, 1998, was $23.00. APPROVAL, ADOPTION AND RATIFICATION OF THE COMPANY'S STOCK ACCUMULATION AND DEFERRED COMPENSATION PLAN On December 17, 1997, the Company's Board of Directors adopted the Company's Stock Accumulation and Deferred Compensation Plan for Directors (the "Director's Plan"), the text of which is set forth as Exhibit A to the Proxy Statement, subject to approval by the stockholders of the Company at the 1998 Annual Meeting of the Company's stockholders. Subject to shareholder approval of the Director's Plan, the Board of Directors approved the effective date of the Director's Plan as December 17, 1997. 14 17 The purpose of the Director's Plan is to further align the interests of members of the Board of Directors of the Company who are not employees with those of the Company's stockholders generally through a grant of common stock of the Company (the "Stock") receipt of which Stock, together with other compensation for services performed as directors, may be deferred. The Director's Plan is administered by the Executive Payroll Compensation Committee of the Board of Directors or other officers or directors who are not eligible to participate in the Director's Plan. The class of persons who are eligible to participate in the Director's Plan are those members of the Company's Board of Directors who are not employees of the Company or any of its subsidiaries or affiliates. At this time, only four directors are not employees of the Company or any of its subsidiaries or affiliates and thus are eligible to participate in the Director's Plan. Under the Director's Plan, each eligible director shall be awarded an annual stock grant of not more than 1,000 shares of Stock following his election to the Board of Directors at the annual meeting of the stockholders, the amount of shares to be established each year by the Board of Directors. In addition, under the Director's Plan, a director may irrevocably elect to defer, until a specified year or the cessation of his service as a director of the Company, the receipt of all Stock granted and/or the payment of all or a specified part of all annual retainer and committee and meeting fees payable to the director for services as a director during the calendar year following his election and succeeding calendar years. Fees deferred in the form of cash shall be held in the general funds of the Company, shall be credited to an account in the name of each eligible participating director and shall receive interest quarterly at the rate of interest in effect on the immediately preceding March 31 with respect to the Interest Income Fund of the Company's Profit Sharing and Savings Plan (or at such other rate as may be specified by the Committee from time to time). The Company is not required to reserve or otherwise set aside shares of its authorized and unissued or treasury common stock for the payment of its obligation under the Director's Plan, but shall make available as and when required a sufficient number of shares of Common Stock to meet the needs of the Director's Plan. Stock granted to the eligible directors to be deferred in the form of stock units shall be allocated to each director's account based on the closing price of the Company's Common Stock as reported on the Composite Tape of the American Stock Exchange on the effective date of the Stock grant. Unless otherwise determined by the Board of Directors, the Director's Plan shall be unfunded and shall not create (or be construed to create) a trust or separate fund or funds. As described above, the stock grant is to be determined by the Company's Board of Directors. No stock has been granted under the Director's Plan, nor are any such grants now determinable. Thus, it is not possible to predict the benefits or amounts that will be received by or allocated to the eligible directors. The Board of Directors of the Company reserves the right to modify the Director's Plan from time to time, or to repeal the Director's Plan entirely, provided, however, that (1) no modification of the Director's Plan shall operate to annul an election already in effect for the current calendar year or any preceding calendar year, and (2) to the extent required under Section 16 of the Securities Exchange Act of 1934, Director's Plan provisions relating to the amount, price and timing of stock grants shall not be amended more than once every fiscal year, except that the foregoing shall not preclude any amendment necessary to conform to changes in the Internal Revenue Code or the Employee Retirement Income Security Act. The Board of Directors recommends the approval, adoption and ratification of the Company's Stock Accumulation and Deferred Compensation Plan. 15 18 APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Another purpose of the meeting is to ratify the reappointment by the Board of Directors of the firm of Ernst & Young LLP as independent certified public accountants to examine the financial statements and to perform the annual audit for the Company for the year December 31, 1998, such appointment to continue at the pleasure of the Board of Directors. A resolution calling for the ratification of the appointment of Ernst & Young LLP will be presented at the Annual Meeting. Representatives of Ernst & Young LLP will be present at the Annual Meeting to make a statement if they desire to do so and to respond to appropriate questions. The Board of Directors recommends ratification of the appointment of Ernst & Young LLP. OTHER MATTERS Management does not know of any matters to be brought before the meeting other than the matters that are set forth in the Notice of the Annual Meeting of Stockholders that accompanies this Proxy Statement and are described herein. In the event that any such matters do come properly before the meeting, it is intended that the persons named in the form of proxy solicited by the Board of Directors will vote all proxies in accordance with their best judgment. RECEIPT OF STOCKHOLDER PROPOSALS Any stockholder proposals which are to be presented for action at the 1999 Annual Meeting of Stockholders must be received by David A. Blair, Secretary, Blair Corporation, 220 Hickory Street, Warren, Pennsylvania 16366, no later than November 19, 1998. EXPENSE OF SOLICITATION OF PROXIES The cost of soliciting proxies by means of this Proxy Statement will be borne by the Company. The Company may make arrangements with brokerage houses and other custodians, nominees, and fiduciaries to forward proxies and proxy solicitation material to the beneficial owners of the Company's Common Stock and may reimburse them for their expenses in doing so. DAVID A. BLAIR Secretary 16 19 EXHIBIT A BLAIR STOCK ACCUMULATION AND DEFERRED COMPENSATION PLAN FOR DIRECTORS 1. PURPOSE OF THE PLAN The purpose of the Blair Stock Accumulation and Deferred Compensation Plan for Directors (the "Plan") is (1) to further the identity of interests of members of the Board of Directors of Blair Corporation (the "Company") with those of the Company's stockholders generally through the grant of common stock of the Company (the "Stock") and (2) to permit Directors to defer the payment of all or a specified part of their compensation, including any grant of Stock by the Company, for services performed as Directors. 2. ELIGIBILITY Members of the Board of Directors of the Company who are not employees of the Company or any of its subsidiaries or affiliates shall be eligible to receive grants of Stock under the Plan. Members of the Board of Directors of the Company who are not employees of the Company or any of its subsidiaries or affiliates shall be eligible under this Plan to defer compensation for services performed as Directors. 3. ADMINISTRATION AND AMENDMENT The Plan shall be administered by the Executive Payroll Compensation Committee of the Board of Directors or such other officers or Directors of the Company not eligible under Article 2 hereof for participation in the Plan who are selected by the Board of Directors (the "Committee"). The decision of the Committee with respect to any questions arising as to the administration, construction or interpretation of this Plan, including the severability of any and all of the provisions thereof, shall be final, conclusive and binding. The Board of Directors of the Company reserves the right to modify the Plan from time to time, or to repeal the Plan entirely, provided, however, that (1) no modification of the Plan shall operate to annul an election already in effect for the current calendar year or any preceding calendar year; and (2) to the extent required under Section 16 of the Securities Exchange Act of 1934 ("Exchange Act"), Plan provisions relating to the amount, price and timing of stock grants and options shall not be amended more than once every fiscal year, except that the foregoing shall not preclude any amendment necessary to conform to changes in the Internal Revenue Code or the Employee Retirement Income Security Act. The Committee is authorized, subject to the provisions of the Plan, from time to time to establish such rules and regulations as it deems appropriate for the proper administration of the Plan, and to make such determinations and take such steps in connection therewith as it deems necessary or advisable. 4. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT/CHANGE IN LAW It is the Company's intent that the Plan comply in all respects with Rule 16b-3 of the Exchange Act, or its successor, and any regulations promulgated thereunder. If any provision of this Plan is found not to be in compliance with such rule and regulations, the provision shall be deemed null and void, and the remaining provisions of the Plan shall continue in full force and effect. All transactions under this Plan shall be executed in accordance with the requirements of Section 16 of the Exchange Act and regulations promulgated thereunder. The Board of Directors may, in its sole discretion, at any time modify the terms and conditions of this Plan in response to and consistent with any changes in applicable law, rule or regulation. A-1 20 5. ANNUAL STOCK GRANT Effective with the 1998 Annual Meeting and annually thereafter, each Director eligible under Article 2 hereof shall be awarded an annual grant of not more than one thousand (1,000) shares of Stock following his/her election to the Board of Directors at the Annual Meeting of Stockholders, the number of shares to be established each year by the Board of Directors. A Director elected to the Board at a time other than at the Annual Meeting shall receive a grant of Stock on the date such person becomes an eligible Director equal to the number of shares determined by the Board of Directors as the annual grant for that year prorated for the number of whole or partial months of service during such year when such person serves as a Director. 6. ELECTION TO DEFER On or before December 31 of any year, commencing with 1997, a Director may irrevocably elect to defer, until a specified year or the cessation of his service as a Director of the Company, the receipt of all Stock granted under Article 5 hereof and/or the payment of all or a specified part of all annual retainer and committee and meeting fees payable to the Director for services as a Director during the calendar year following the election and succeeding calendar years , provided, however, that Stock may only be deferred in full (and not in part) with respect to any annual grant of Stock pursuant to Article 5 hereof. When such an election is filed, the Director shall designate in his election as to the particular year or years the amount of fees and/or Stock to be deferred and to be credited pursuant to Article 7 hereof. Any person who shall become a Director during any calendar year, and who was not a Director of the Company on the preceding December 31, may elect, within thirty days after election to the Board, to defer in the same manner the receipt of all Stock granted under Article 5 of this Plan and/or the payment of all or a specified part of fees not yet earned for the remainder of that calendar year and for succeeding calendar years. Elections shall be made by written notice delivered to the Secretary of the Company. 7. DIRECTORS' ACCOUNTS Fees deferred in the form of cash shall be held in the general funds of the Company and shall be credited to an account in the name of each eligible participating Director. On the first business day of each quarter, interest shall be credited to each account calculated on the basis of the cash balance in each account on the last business day of the preceding quarter at the rate of interest in effect on the immediately preceding March 31 with respect to the Company's Profit Sharing and Saving Plan's Interest Income Fund (or at such other rate as may be specified by the Committee from time to time). Stock granted under Article 5 to be deferred in the form of stock units shall be allocated to each Director's account based on the closing price of the Company's common stock as reported on the Composite Tape of the American Stock Exchange ("Stock Price") on the effective date of the Stock grant. The Company shall not be required to reserve or otherwise set aside shares of its authorized and unissued or treasury common stock for the payment of its obligations hereunder, but shall make available as and when required a sufficient number of shares of common stock to meet the needs of the Plan. Unless otherwise determined by the Board of Directors, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company or any participant or other individual. To the extent any individual holds any rights by virtue of a grant awarded under the Plan, such rights (unless otherwise determined by the Board) shall be no greater than the rights of an unsecured general creditor of the Company. An amount equal to any cash dividends (or the fair market value of dividends paid in property other than dividends payable in common stock of the Company) payable on the number of shares represented by the number of stock units in each Director's account will be allocated to each Director's account, in cash, on the dividend payment date. Any stock dividends payable on such number of shares will be allocated in the form of stock units. If adjustments are made to outstanding shares of common stock as a result of split-ups, recapitalizations, mergers, consolidations and the like, an appropriate adjustment will also be made in the number of stock units in a Director's account. Stock units shall not entitle any person to rights of a stockholder unless and until shares of Company common stock have been issued to that person with respect to stock units as provided in Article 8. A-2 21 8. PAYMENT FROM DIRECTORS' ACCOUNTS The aggregate amount of Stock granted under Article 5 which has been deferred and deferred fees, together with interest and dividend equivalents accrued thereon, shall be paid in the year specified by the Director or, unless otherwise specified, in the year after a Director ceases to be a Director of the Company. Amounts deferred shall be paid in a lump sum or, if the Director elects, in substantially equal annual installments over a period not to exceed five (5) years as specified by the Director. The delivery election must be made by written notice delivered to the Secretary of the Company prior to the deferral date specified by the Director or the date he ceases to be a Director, as the case may be, and the first installment (or lump sum payment ) shall be paid promptly at the beginning of the following calendar year. Subsequent installments shall be paid promptly at the beginning of each succeeding calendar year until the entire amount credited to the Director's account shall have been paid. In the event that installments are designated in the delivery election, the cash amount remaining in the Director's account shall continue to bear interest in accordance with the provisions of Article 7 hereof. Amounts credited to a Director's account in cash shall be paid in cash and amounts credited in stock units shall be paid in one share of common stock of the Company for each stock unit, except that a cash payment will be made with any final installment for any fraction of a stock unit remaining in the Director's account. Such fractional share will be valued at the closing Stock Price on the date of settlement. 9. PAYMENT IN EVENT OF DEATH A Director may file with the Secretary of the Company a written designation of a beneficiary for his or her account under the Plan on such form as may be prescribed by the Committee, and may, from time to time, amend or revoke such designation. If a Director should die before all deferred amounts credited to the Director's account have been distributed, the balance of any deferred Stock and fees and interest and dividend equivalents then in the Director's account shall be paid promptly to the Director's designated beneficiary. If the Director did not designate a beneficiary, or in the event that the beneficiary designated by the Director shall have predeceased the Director, the balance in the Director's account shall be paid promptly to the Director's estate. 10. TERMINATION OF ELECTION A Director may terminate his/her election to defer payment of fees in cash or stock units by written notice delivered to the Secretary of the Company. Termination shall become effective as of the end of the calendar year in which notice of termination is given with respect to fees payable for services as a Director during subsequent calendar years. Amounts credited to the account of a Director prior to the effective date of termination shall not be affected thereby and shall be paid only in accordance with Articles 7 and 8 hereof. 11. NONASSIGNABILITY During the Director's lifetime, the right to any deferred Stock or fees including interest and dividend equivalents thereon shall not be transferable or assignable. 12. SUCCESSORS AND ASSIGNS The Plan shall be binding on all successors and assigns of a participant, including, without limitation, the estate of such participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the participant's creditors. 13. GOVERNING LAW The validity and construction of the Plan shall be governed by the laws of the State of Delaware. A-3 22 14. EFFECTIVE DATE This Plan shall become effective as of December 17, 1997, provided it is approved by stockholders at the Company's 1998 Annual Meeting, and shall continue in full force and effect until terminated by the Board of Directors. A-4 23 Please mark your votes as [ X ] indicated in this example
The Board recommends a vote FOR the election of the nominees listed in Item I. Vote for all nominees listed WITHHOLD AUTHORITY below (except as shown to vote for all below to the contrary) nominees listed below I. ELECTION OF DIRECTORS: Nominees: David A. Blair Murray K. McComas Robert W. Blair Thomas P. McKeever Steven M. Blair Michael J. Samargya Robert D. Crowley Kent R. Sivillo John O. Hanna Blair T. Smoulder Gerald A. Huber John E. Zawacki Craig N. Johnson (Instructions: To withhold authority to vote for any INDIVIDUAL NOMINEES write the nominee's name on the line provided below:)
- - ---------------------------------------------------- The Board recommends a vote FOR the approval, adoption and ratification of the Company's Stock Accumulation and Deferred Compensation Plan in Item II. FOR AGAINST ABSTAIN II. APPROVAL, ADOPTION AND RATIFICATION [ ] [ ] [ ] OF THE COMPANY'S STOCK ACCUMULATION AND DEFERRED COMPENSATION PLAN: The Board recommends a vote FOR the ratification of Ernst & Young LLP as auditors in Item III. FOR AGAINST ABSTAIN III. RATIFICATION OF ERNST & YOUNG LLP [ ] [ ] [ ] AS AUDITORS:
The signer hereby revokes all proxies heretofore given by the signer to vote at said meeting or any adjournments thereof. Signature(s) ______________________________________________ Date _______________ , 1998 NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, trustee, administrator or guardian, please give full title as such. FOLD AND DETACH HERE BLAIR(R) WARREN, PENNSYLVANIA 16366 QUALITY AND VALUE SINCE 1910 PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BLAIR CORPORATION The undersigned hereby appoints Murray K. McComas, David A. Blair, and Kent R. Sivillo, and each of them with power of substitution in each, as proxies to represent the undersigned at the annual meeting of the stockholders of Blair Corporation, to be held at the Knights of Columbus Building, 219 Second Avenue, Warren, Pennsylvania on Tuesday, April 21, 1998 at 11:00 A.M. and at any adjournments thereof, to vote the same number of shares and as fully as the undersigned would be entitled to vote if then personally present in the manner directed by the undersigned. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES IN ITEM I, FOR THE APPROVAL, ADOPTION AND RATIFICATION OF THE COMPANY'S STOCK ACCUMULATION AND DEFERRED COMPENSATION PLAN IN ITEM II, AND FOR THE RATIFICATION OF AUDITORS IN ITEM III; AND THE PROXIES ARE AUTHORIZED, IN ACCORDANCE WITH THEIR JUDGMENT, TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF. FOLD AND DETACH HERE BLAIR CORPORATION HEADQUARTERS 220 Hickory Street Warren, Pennsylvania -----END PRIVACY-ENHANCED MESSAGE-----