<PAGE>
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
CLARCOR Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CLARCOR Inc.
- --------------------------------------------------------------------------------
(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(i)(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:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of CLARCOR Inc. (the "Company") will be
held at The University of Illinois College of Medicine at Rockford, 1601
Parkview Ave., Rockford, Illinois 61107, on Thursday, March 31, 1994 at 6:00
P.M., Central Standard Time, for the following purposes:
1.To elect three Directors for a term of three years each;
2.To consider and act upon the adoption of the Company's 1994
Incentive Plan; and
3.To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of Common Stock of record at the close of business on Thursday,
February 17, 1994 will be entitled to vote at the meeting or any adjournment
thereof.
Whether or not you plan to attend the meeting, you are requested to sign and
date the enclosed proxy and return it promptly in the envelope enclosed for that
purpose.
MARSHALL C. ARNE
SECRETARY
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY
AND MAIL IT PROMPTLY.
Rockford, Illinois
February 24, 1994
<PAGE>
CLARCOR INC.
2323 SIXTH STREET
P.O. BOX 7007
ROCKFORD, ILLINOIS 61125
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CLARCOR Inc. (the "Company") for use at the
Annual Meeting of Shareholders to be held at The University of Illinois College
of Medicine at Rockford, 1601 Parkview Ave., Rockford, Illinois 61107, on
Thursday, March 31, 1994 at 6:00 P.M., Central Standard Time, for the purposes
set forth in the Notice of Annual Meeting. This Proxy Statement and the
accompanying proxy will be mailed to shareholders on February 24, 1994.
A shareholder who gives a proxy may revoke it at any time before it is voted
by giving written notice of the termination thereof to the Secretary of the
Company, by filing with him another proxy or by attending the Annual Meeting and
voting his or her shares in person. All valid proxies delivered pursuant to this
solicitation, if received in time and not revoked, will be voted. If no
specifications are given by the shareholder executing the proxy card, valid
proxies will be voted to elect the three persons nominated for election to the
Board of Directors listed on the proxy card enclosed herewith, to approve the
adoption of the Company's 1994 Incentive Plan and, in the discretion of the
appointed proxies, upon such other matters as may properly come before the
meeting.
As of February 17, 1994, the Company had outstanding 14,828,169 shares of
Common Stock and each outstanding share is entitled to one vote on all matters
to be voted upon. Only holders of Common Stock of record at the close of
business on February 17, 1994 will be entitled to notice of and to vote at the
meeting. A majority of the shares of Common Stock issued and outstanding and
entitled to vote at the meeting, present in person or represented by proxy, will
constitute a quorum for purposes of the Annual Meeting.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD
At the Annual Meeting three directors are to be elected. Proxies will be
voted for the election of Messrs. J. Marc Adam, Dudley J. Godfrey, Jr., and
Stanton K. Smith, Jr. unless the shareholder signing such proxy withholds
authority to vote for one or more of these nominees in the manner described on
the proxy. If a quorum is present at the meeting, the three candidates for
director receiving the greatest number of votes will be elected. Withholding
authority to vote for a director nominee will not prevent such director nominee
from being elected. Messrs. Adam, Godfrey, and Smith are directors of the
Company previously elected by its shareholders whose terms in office expire this
year. If elected, Messrs. Adam, Godfrey, and Smith will hold office for a three
year period ending in 1997 or until their respective successors are duly elected
and qualified.
In the event that any of the nominees should for some reason, presently
unknown, fail to stand for election, the persons named in the enclosed form of
proxy intend to vote for substitute nominees.
1
<PAGE>
INFORMATION CONCERNING NOMINEES AND DIRECTORS
<TABLE>
<CAPTION>
YEAR TERM AS
DIRECTOR DIRECTOR
NAME AGE SINCE EXPIRES
- --------------------- ----------- ----------------- ---------------
<S> <C> <C> <C>
*J. Marc Adam 55 March 23, 1991 1997
Group Vice President, 3M Medical Products Group, St. Paul,
Minnesota. He was elected International Vice President, Consumer
Products Group in February 1986, Group Vice President, Consumer
Products Group in May 1986, Group Vice President, Consumer &
Advertising Markets Group in January 1991 and Group Vice
President, Medical Products Group in September 1991. 3M is a
diversified manufacturer. Mr. Adam is a Director of the 3M
Foundation and the Health Industry Manufacturers Association.
*Dudley J. Godfrey,
Jr. 67 March 26, 1988 1997
President of the law firm of Godfrey & Kahn, S.C., Milwaukee,
Wisconsin. Mr. Godfrey has been a member of Godfrey & Kahn since
1957. He is a Director of Manpower, Inc. and other closely and
privately held corporations. He is a member of the University of
Michigan Law School Board of Visitors.
*Stanton K. Smith,
Jr. 63 March 21, 1970 1997
Vice Chairman, CMS Energy Corporation, Dearborn, Michigan since
December 1991. From 1988 to 1991 he served as President and from
1987 to 1988 he served as Vice Chairman. CMS Energy Corporation is
a utility and energy holding company. He is a Director of CMS
Energy Corporation, Consumers Power Company, Michigan National
Corporation and Michigan National Bank.
Milton R. Brown 62 November 29, 1990 1996
Chairman, President and Chief Executive Officer, Suntec Industries
Incorporated, Rockford, Illinois, since 1984. Suntec Industries
manufactures fuel units, solenoid valves, and hydraulic pumps. Mr.
Brown is a Director of AMCORE Financial, Inc., Elco Industries,
Inc., Suntec Industries Incorporated and Suntec Industries --
France.
Frank A. Fiorenza 60 March 31, 1990 1996
Retired President and Chief Operating Officer, Elco Industries,
Inc., Rockford, Illinois. Mr. Fiorenza was employed by Elco from
1959 to 1991. Elco Industries, Inc. is a diversified manufacturer.
Mr. Fiorenza is a Director of AMCORE Financial, Inc.
Don A. Wolf 64 March 28, 1987 1996
Retired President and Chief Executive Officer, Hardware
Wholesalers, Inc., Fort Wayne, Indiana. Hardware Wholesalers, Inc.
is a wholesaler of hardware, plumbing supplies, electrical
apparatuses, and construction products. Mr. Wolf is a Director of
the Fort Wayne National Bank.
Carl J. Dargene 63 April 1, 1989 1995
President and Chief Executive Officer, AMCORE Financial, Inc.,
Rockford, Illinois since February 1986. AMCORE Financial, Inc. is
a bank holding company. Mr. Dargene is a Director of AMCORE
Financial, Inc., Elco Industries, Inc. and Woodward Governor
Company.
Lawrence E. Gloyd 61 March 31, 1984 1995
Chairman, President and Chief Executive Officer, CLARCOR Inc. Mr.
Gloyd was elected Chairman, President and Chief Executive Officer
in March 1991. He was elected President and Chief Operating
Officer in 1986 and President and Chief Executive Officer in March
1988. Mr. Gloyd is a Director of AMCORE Financial, Inc., Thomas
Industries, Inc. and G.U.D. Holdings Ltd.
Richard A. Snell 52 March 28, 1992 1995
President and Chief Executive Officer, Tenneco Automotive since
1993. He served as Senior Vice President, Tenneco Automotive from
1987 to 1993; General Manager, Walker Manufacturing Company from
1989 to 1993; and General Manager of Tenneco Automotive Retail
from 1987 to 1989. Tenneco Automotive is a producer of ride
control and exhaust systems and non-asbestos brake friction
products.
<FN>
- --------------------------
* Nominees for election to terms expiring in 1997.
</TABLE>
DUTIES OF BOARD OF DIRECTORS
The Board of Directors has the responsibility to serve as the trustee for
the shareholders. It also has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. However, the
Board is not involved in day-to-day operating details. Members of the Board
2
<PAGE>
are kept informed of the Company's business through discussion with the Chief
Executive Officer and other officers, by reviewing analyses and reports sent to
them each month and by participating in Board and committee meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal 1993, the standing committees of the Board of Directors were
the Executive, Audit, and Compensation & Stock Option Committees.
The Executive Committee exercises all powers and authority of the Board of
Directors when the Board is not in session, except that the Executive Committee
may not authorize certain major corporate actions such as amendments of the
Company's Restated Certificate of Incorporation or By-laws, mergers or the sale
of substantially all of the assets of the Company or the payment of dividends.
The primary functions of the Executive Committee include review and
recommendations with respect to mergers and acquisitions, divestitures, major
expenditures and long-range planning. The Executive Committee is also
responsible for recommending qualified individuals for nomination to fill
vacancies on the Board. The full Board may accept or reject the Committee's
recommendations. No procedures have been established for the consideration by
the Executive Committee of nominees recommended by shareholders of the Company.
The Executive Committee did not meet during fiscal 1993. The present members of
the Executive Committee are Messrs. J. Marc Adam, Carl J. Dargene, Dudley J.
Godfrey, Jr., Lawrence E. Gloyd, Stanton K. Smith, Jr., and Don A. Wolf.
The Audit Committee consists of four directors who are not officers of the
Company. It is the responsibility of the Audit Committee to recommend the
selection of independent auditors and to review audits, proposals and other
services as performed by the independent auditors. The Committee also reviews
the activities and findings of the internal audit staff and discusses the
Company's system of internal controls with the Company's independent auditors.
The Audit Committee met two times during fiscal 1993. The present members of the
Committee are Messrs. Milton R. Brown, Frank A. Fiorenza, Dudley J. Godfrey, Jr.
and Stanton K. Smith, Jr.
The Compensation & Stock Option Committee determines the compensation of key
officers and employees. It reviews and administers the Company's 1984 Stock
Option Plan (and will administer the 1994 Incentive Plan referred to herein if
such Plan is adopted) and makes recommendations to the Board regarding the
granting of stock options to certain officers and key employees of the Company.
The Committee met three times during fiscal 1993. The present members of the
Committee are Messrs. J. Marc Adam, Carl J. Dargene, Richard A. Snell and Don A.
Wolf.
MEETINGS AND FEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during fiscal 1993. All of the
Company's directors attended at least 75% of the total number of meetings of the
Board of Directors and Committees of the Board of which they are members.
In fiscal 1993, Directors who were not employees of the Company
("Non-employee Directors") received an annual retainer of $17,500 and fees of
$850 for each meeting of the Board of Directors and each separate Committee
meeting attended and reimbursement for travel expenses related to attendance at
Board and Committee meetings. Non-employee Directors who are Chairmen of
Committees received an additional annual fee of $2,500 in fiscal 1993.
Non-employee Directors who retire from the Board with at least 10 years
service as a Director of the Company receive annually an amount equal to the
annual retainer paid to Directors at the time of his retirement. Such payments
will continue for a term equal to the number of years the retired Director
served on the Company's Board but ending, in any event, on such retiree's death.
3
<PAGE>
Pursuant to the Company's Deferred Compensation Plan for Directors, a
Non-employee Director may elect to defer receipt of the director's fees to which
he is entitled and to be paid the amounts so deferred, plus interest thereon at
the prime rate announced quarterly by The First National Bank of Chicago, either
when the participant ceases being a director of the Company or upon his
retirement from his principal occupation or at the time the participant reaches
a specified age. Mr. Smith elected to defer $12,650 of the fees payable to him
during fiscal 1993.
The Board has adopted a Directors' Restricted Stock Compensation Plan. Under
this Plan, in lieu of the annual retainer otherwise payable, on the date a
person first becomes a Non-employee Director such person receives a grant of
shares of the Company's Common Stock with an aggregate fair market value equal
to five times the amount of the annual retainer for Non-employee Directors. 20%
of these shares are vested and non-forfeitable on the date of grant. An
additional 20% becomes non-forfeitable in each of the succeeding years, provided
that the grantee remains a Director. Until the fifth anniversary of the grant
the shares are non-transferable except upon death such shares are transfer-
able by will or the laws of descent and distribution. As of January 1, 1994,
Messrs. Dargene, Fiorenza, Godfrey, Smith and Wolf have each received grants of
5,421 shares under this Plan. Mr. Brown has received a grant of 5,131, Mr. Adam
4,999 and Mr. Snell 4,070 shares under the Plan. These share amounts reflect the
3 for 2 stock split in the form of a stock dividend paid by the Company on
February 14, 1992. If the 1994 Incentive Plan is adopted, the Directors'
Restricted Stock Compensation Plan will be incorporated into the 1994 Incentive
Plan. See "Approval of 1994 Incentive Plan -- Description of the 1994 Plan."
Under the 1994 Incentive Plan, if adopted, beginning on the date of the 1994
Annual Meeting of Shareholders, Non-employee Directors will automatically be
granted, on the date of each annual meeting of shareholders, options to purchase
2,500 shares of Common Stock at an option exercise price equal to the fair
market value of a share of Common Stock on the date of grant. Such options will
be fully exercisable on the date of grant and will expire ten years after the
date of grant. Shares acquired upon exercise of an option may not be sold or
transferred during the six month period following the date of grant of such
option.
BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
CERTAIN BENEFICIAL OWNERS
The following table provides information concerning each person who is known
to the Company to be the beneficial owner of more than 5% of the Company's
Common Stock:
<TABLE>
<CAPTION>
SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED CLASS
- -------------------------------------------------------------------- ------------- ---------
<S> <C> <C>
Gabelli Funds, Inc.................................................. 1,410,700(1) 9.51%
One Corporate Center
Rye, NY 10580-1434
James B. Platt, Jr.................................................. 863,311(2) 5.82%
6030 Dellwood Place
Bethesda, MD 20817
<FN>
- ------------------------
(1) Based upon information contained in Amendment No. 4 to Schedule 13D filed
December 8, 1993 with the Securities and Exchange Commission by Gabelli
Funds, Inc. on behalf of certain Gabelli entities.
(2) Shares owned of record and beneficially by Mr. Platt as of February 17,
1994.
</TABLE>
4
<PAGE>
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table provides information concerning the shares of Common
Stock of the Company beneficially owned as of February 17, 1994 by all directors
and nominees, each of the executive officers named in the Summary Compensation
Table on page 6 and by all directors and executive officers as a group:
<TABLE>
<CAPTION>
SHARES
NAME OF PERSON OR BENEFICIALLY PERCENT OF
IDENTITY OF GROUP OWNED CLASS
- ---------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
J. Marc Adam (2)...................................................... 4,999 *
Milton R. Brown (2)................................................... 6,388 *
Carl J. Dargene (2)................................................... 7,221 *
Frank A. Fiorenza (2)................................................. 6,021 *
Lawrence E. Gloyd (1) (3)............................................. 322,846 2.18 %
Dudley J. Godfrey (2)................................................. 6,951 *
Stanton K. Smith, Jr. (2)............................................. 12,247 *
Richard E. Snell (2).................................................. 4,070 *
Don A. Wolf (2)....................................................... 17,906 *
L. Paul Harnois (1)(3)................................................ 131,191 *
Ronald A. Moreau (1)(3)............................................... 94,872 *
Norman E. Johnson (1)(3).............................................. 68,909 *
William F. Knese (1)(3)............................................... 45,776 *
All directors and executive officers as a group
(16 persons) (1) (2) (3) (4)......................................... 845,165 5.70 %
<FN>
- ------------------------
* Less than one percent.
(1) Includes restricted shares of Common Stock ("Performance Shares") granted
on a contingent basis under the 1988 Performance Share Plan. See
"Compensation of Executive Officers and Other Information -- Performance
Share Plan."
(2) Includes restricted shares granted on a contingent basis under the
Directors' Restricted Stock Compensation Plan. See "Election of Directors
-- Meetings and Fees of the Board of Directors."
(3) Includes shares subject to stock options granted pursuant to the Company's
1984 Stock Option Plan. Options granted on November 29, 1990, December 13,
1991, December 7, 1992, November 11, 1993 and December 2, 1993 vest over a
five year period. Options granted on such dates which are currently
exercisable and total options granted on such dates are 33,376 of 168,625
for Mr. Gloyd; 16,969 of 82,938 for Mr. Harnois; 16,969 of 67,938 for Mr.
Moreau; 10,313 of 53,750 for Mr. Johnson; and 6,676 of 26,725 for Mr.
Knese. See "Compensation of Executive Officers and Other Information --
Stock Options."
(4) Includes 481,426 shares subject to stock options granted on November 29,
1990, December 13, 1991, December 7, 1992, November 11, 1993 and December
2, 1993. 102,525 of such options are currently exercisable.
</TABLE>
Each director and each officer of the Company who is subject to Section 16
of the Securities Exchange Act of 1934 (the "Act") is required by Section 16(a)
of the Act to report to the Securities and Exchange Commission, by a specified
date, his or her beneficial ownership of or transactions in the Company's equity
securities. Reports received by the Company indicate that all such officers and
directors have filed all requisite reports with the Securities and Exchange
Commission on a timely basis during 1993.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND OTHER INFORMATION
The following Summary Compensation Table sets forth the cash compensation
and certain other components of the compensation of Lawrence E. Gloyd, the
Chairman, President and Chief Executive Officer of the Company and the other
four most highly compensated executive officers of the Company for the 1993
fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------
ANNUAL COMPENSATION
------------------------------------------------ AWARDS
OTHER ------------------------
ANNUAL RESTRICTED
COMPEN- STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY(2) BONUS(3) SATION(4) AWARD(S) OPTIONS(5)
- ---------------------------------------------- --- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Lawrence E. Gloyd(1) ......................... 1993 $ 328,800 $ 183,818 $ 9,487 $ 103,176 50,000
Chairman, President and Chief Executive 1992 303,842 134,907 10,699 106,917 33,750
Officer 1991 278,750 119,724 6,209 103,174 --
L. Paul Harnois .............................. 1993 196,969 82,484 8,814 47,334 15,000
Senior Vice President and Chief Financial 1992 182,277 59,149 7,653 51,274 18,000
Officer 1991 167,250 54,608 5,427 49,481 --
Ronald A. Moreau ............................. 1993 169,969 62,418 4,316 40,241 10,000
Group Vice President -- Consumer Products 1992 156,992 38,855 5,184 51,274 18,000
Group 1991 142,250 44,525 5,445 49,481 --
Norman E. Johnson ............................ 1993 162,216 58,000 6,545 37,853 10,000
Vice President, President -- Baldwin Filters, 1992 141,989 32,375 7,808 23,029 11,250
Inc. 1991 130,885 23,849 3,854 19,995 --
William F. Knese ............................. 1993 99,862 31,851 8,990 11,834 5,000
Vice President, Treasurer and Controller 1992 93,731 23,890 7,953 13,143 6,750
1991 86,866 17,633 5,860 12,703 --
<CAPTION>
PAYOUTS ALL
----------- OTHER
LTIP COMPEN-
NAME AND PRINCIPAL POSITION PAYOUTS(6) SATION(7)
- ---------------------------------------------- ----------- -----------
<S> <C> <C>
Lawrence E. Gloyd(1) ......................... $ 150,930 $ 24,425
Chairman, President and Chief Executive 89,562 25,908
Officer 114,582 25,936
L. Paul Harnois .............................. 72,385 8,951
Senior Vice President and Chief Financial 43,016 12,320
Officer 47,602 10,587
Ronald A. Moreau ............................. 72,385 7,736
Group Vice President -- Consumer Products 43,016 6,912
Group -- 5,854
Norman E. Johnson ............................ 29,250 8,087
Vice President, President -- Baldwin Filters, -- 5,907
Inc. -- 4,995
William F. Knese ............................. 18,584 2,575
Vice President, Treasurer and Controller 11,042 2,371
13,560 2,107
<FN>
- ------------------------------
(1) Mr. Gloyd also served as a director of the Company but received no
separate remuneration in that capacity.
(2) Includes compensation deferred by the Company's executive officers during
fiscal year 1993 pursuant to the Company's Retirement Savings Plan,
adopted in 1984.
(3) Includes discretionary cash bonuses granted by the Board of Directors
under the Company's Annual Incentive Plan for the 1993 fiscal year.
(4) The aggregate value of all perquisite and other personal benefits did not
exceed the lesser of either $50,000 or 10% of the total annual salary and
bonus reported for the named executive officer in the Summary Compensation
Table.
(5) Consists of options granted under the Company's 1984 Stock Option Plan to
acquire shares of the Company's Common Stock. See
"-- Stock Options" below.
(6) Includes the value of Performance Shares issued and Performance Unit cash
payouts under the Company's 1988 Long-Range Performance Share Plan. See
"-- Performance Share Plan" below.
(7) The amounts shown in this column for the last fiscal year derived from the
following figures for Messrs. Gloyd, Harnois, Moreau, Johnson, and Knese
respectively: $8,223; $1,547; $325; $4,060; $650 -- Company match for
employee stock purchase plan; $4,336; $4,338; $3,625; $1,728; $684 --
Company match for 401(k) plan; $4,500 (Mr. Gloyd) -- Company paid term
life insurance premium; $6,463; $3,066; $2,960; $1,565; $781 -- Dividends
received from the Performance Share Plan non-vested shares; and $873; $0;
$826; $734; $460 -- Company paid split dollar insurance premiums.
</TABLE>
Each officer of the Company is elected for a term of one year which begins
at the Board of Directors meeting at which he is elected held following the
Annual Meeting of Shareholders and ends on the date of the next Annual Meeting
of Shareholders or upon the election of his successor.
6
<PAGE>
STOCK OPTIONS
On February 1, 1984 the Board adopted and approved the 1984 Stock Option
Plan (the "1984 Plan") which was subsequently approved by the shareholders at
the Annual Meeting held March 31, 1984, covering 800,000 shares of Common Stock.
The 1984 Plan has been adjusted to reflect the 3 for 2 stock splits in the form
of stock dividends paid by the Company on January 12, 1990 and February 14,
1992. The 1984 Plan expired December 31, 1993.
The following tabulations show information with respect to stock options
granted during 1993 under the 1984 Plan to the five individuals named in the
Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -----------------------------------------------------------------------------------------------------
% OF TOTAL
OPTIONS OPTIONS GRANTED GRANT DATE
GRANTED TO EMPLOYEES IN EXERCISE EXPIRATION PRESENT VALUE
NAME (1) FISCAL YEAR PRICE (2) DATE (3)
- ------------------------------------------------ --------- --------------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
L. E. Gloyd..................................... 15,000 9.7% $ 18.875 11/10/03 $ 84,090
35,000 22.7 18.50 12/07/02 208,600
L. P. Harnois................................... 15,000 9.7 18.50 12/07/02 89,400
R. A. Moreau.................................... 10,000 6.5 18.50 12/07/02 59,600
N. E. Johnson................................... 10,000 6.5 18.50 12/07/02 59,600
W. F. Knese..................................... 5,000 3.2 18.50 12/07/02 29,800
<FN>
- ------------------------
(1) Consists of nonqualified options issued for a ten year term with a five
year vesting schedule (see "Long Term Incentive Plan" in the Report of the
Compensation & Stock Option Committee).
(2) Closing price of Common Stock as reported on the New York Stock Exchange
Composite Transactions at date of grant.
(3) Options are valued using Cox-Ross-Rubinstein Binomial Model, which is a
variation of the Black-Scholes Option Pricing Model using the following
assumptions:
(i) an expected option term of seven years to exercise (based on estimated
prior experience);
(ii) interest rates of 6.69% for the December 7, 1992 grants and 5.52% for
the November 11, 1993 grant, based on the then quoted yield of Treasury
Strips maturing in seven years;
(iii) dividends of $0.61 per share of Common Stock for the fiscal year ending
November 27, 1993, increasing thereafter by $0.03 per share per year;
(iv) stock price volitility of 31.48% for the December 7, 1992 grants and
30.46% for the November 11, 1993 grant, based, in each case, upon the
monthly stock closing prices for the preceeding 10 years; and
(v) the exercise price of each option is equal to the market value per
share of Common Stock on the date of grant.
</TABLE>
No options were exercised by any of the five individuals named in the
Summary Compensation Table during fiscal 1993. The following table sets forth
certain information concerning the unexercised options held by such individuals
at November 27, 1993.
7
<PAGE>
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FY-END AT FY-END
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE (1)
- --------------------------------------------------------------------- -------------------- --------------------
<S> <C> <C>
L. E. Gloyd.......................................................... 121,201/100,249 $ 841,805/269,621
L. P. Harnois........................................................ 50,719/40,969 331,035/129,458
R. A. Moreau......................................................... 34,969/35,969 214,762/124,458
N. E. Johnson........................................................ 17,813/25,937 83,579/79,533
W. F. Knese.......................................................... 18,826/15,049 122,426/50,045
<FN>
- ------------------------
(1) Based on the closing price of Common Stock as reported on the New York
Stock Exchange Composite Transactions on November 26, 1993, the last
trading date prior to the Company's non-business day fiscal year end close
on Saturday, November 27, 1993.
</TABLE>
PERFORMANCE SHARE PLAN
The 1988 Long Range Performance Share Plan (the "Performance Share Plan")
provides officers and key employees of the Company with the opportunity
("Performance Opportunity") to earn restricted shares of Common Stock
("Performance Shares") and performance units ("Performance Units").
At the beginning of a Performance Cycle, the Board of Directors determines
which officers and key employees will be offered a Performance Opportunity under
the Performance Share Plan and the number of Performance Shares and Performance
Units which will be the subject to each Performance Opportunity. Awards are in
the ratio of three Performance Shares to two Performance Units so that
approximately 60% of the total value of benefits available under the Plan is in
stock and 40% is payable in cash. The Board also determines the compounded rate
of return on assets growth for the Performance Cycle which will determine
whether the Performance Opportunity will be earned. If the performance goal is
met at the end of the Performance Cycle, the full amount of Performance Shares
and cash subject to the Performance Units will be earned. If 80% of the
performance goal is met, 50% of the Performance Opportunity will be earned, and
if 80% - 100% of the performance goal is met, the Performance Opportunity will
be prorated. If less than 80% of the performance goal is met, no portion of the
Performance Opportunity will be earned.
During the Performance Cycle, officers and key employees are permitted to
vote and receive dividends on Performance Shares subject to their Performance
Opportunities. All Performance Shares and Performance Units not awarded to the
officer or key employee at the end of the Performance Cycle are forfeited by the
officer or key employee. If the 1994 Incentive Plan is adopted, the Performance
Share Plan will be incorporated into the 1994 Incentive Plan.
8
<PAGE>
The following table sets forth information regarding 1993 fiscal year awards
under the Performance Share Plan:
LONG-TERM INCENTIVE PLAN
AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
OR OTHER NON-STOCK PRICE BASED PLANS
PERIOD ------------------------------------
NUMBER OF SHARES, UNITS UNTIL TARGET AND
NAME OR OTHER RIGHTS PAYOUT THRESHOLD MAXIMUM
- ---------------------------- -------------------------------- ----------- ----------------- -----------------
<S> <C> <C> <C> <C>
L. E. Gloyd................. Performance Shares 3,369 3 Years 1,684 Shares 3,369 Shares
Performance Units 2,246 Cash equal to Cash equal to
value of 1,123 value of 2,246
Shares* Shares*
L. P. Harnois............... Performance Shares 1,546 3 Years 773 Shares 1,546 Shares
Performance Units 1,030 Cash equal to Cash equal to
value of 515 value of 1,030
Shares* Shares*
R. A. Moreau................ Performance Shares 1,314 3 Years 657 Shares 1,314 Shares
Performance Units 876 Cash equal to Cash equal to
value of 438 value of 876
Shares* Shares*
N. E. Johnson............... Performance Shares 1,236 3 Years 618 Shares 1,236 Shares
Performance Units 824 Cash equal to Cash equal to
value of 412 value of 824
Shares* Shares*
W. F. Knese................. Performance Shares 386 3 Years 193 Shares 386 Shares
Performance Units 258 Cash equal to Cash equal to
value of 129 value of 258
Shares* Shares*
<FN>
- ------------------------
* Based on the closing price of Common Stock as reported in the New York Stock
Exchange Composite Transactions on November 30, 1995.
</TABLE>
RETIREMENT PLANS
Most employees of the Company and its subsidiaries, including the
individuals named in the Summary Compensation Table, are eligible to receive
benefits under the CLARCOR Inc. Pension Plan (the "Pension Trust"). The amount
of the Company's contribution to the Pension Trust in respect to a specified
person cannot be individually calculated. No Company contribution for fiscal
1993 was required.
The Pension Trust provides benefits calculated under a Social Security
step-rate formula based on career compensation. Benefits are payable for life
with a guarantee of 120 monthly payments. The formula accrues an annual benefit
each plan year equal to the sum of (a) plan year compensation up to age 65
covered compensation ($21,000 in fiscal 1994) in effect each December multiplied
by .012 plus (b) any excess of such plan year compensation over age 65 covered
compensation multiplied by .0175. The aggregate of all annual accruals plus the
benefit accrued at November 30, 1989 under prior plans
9
<PAGE>
shall be the amount of annual pension. For the purposes of the Pension Trust,
"compensation" is defined to include a participant's base salary plus the amount
of any discretionary cash bonuses paid in a fiscal year.
As of November 30, 1993, Messrs. Gloyd, Harnois, Moreau, Johnson and Knese
had 7, 6, 7, 3 and 14 years of service, respectively.
Estimated annual retirement benefits payable under the Pension Trust at
normal retirement (age 65) exclusive of Social Security benefits for Messrs.
Gloyd, Harnois, Moreau, Johnson and Knese $38,732, $30,579, $90,528, $84,520,
and $64,618, respectively. Such annual retirement benefits are not subject to
any reduction for Social Security amounts. The estimated benefits were
calculated assuming that the participants would continue to accrue benefits at
current wage levels to normal retirement.
Effective December 1, 1983, the Company established a supplemental
retirement plan. Messrs. Gloyd, Harnois, and Moreau are participants. The plan
provides to each participant a lifetime monthly benefit with payment commencing
on such participant's normal retirement date. This monthly benefit is an amount
equal to (a) 65% of the participant's average monthly compensation with respect
to the three consecutive fiscal years for which such participant received the
highest compensation, reduced by (b) the participant's monthly normal retirement
benefit provided by the Pension Trust and benefits earned during employment
other than by the Company. Estimated annual retirement benefits pursuant to the
Supplemental Retirement Plan payable at normal retirement (age 65), for Messrs.
Gloyd, Harnois, and Moreau are $237,296, $132,854 and $4,618, respectively. Such
annual retirement benefits are not subject to any reduction for Social Security
amounts.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Gloyd,
Harnois, Moreau, Johnson and Knese. These agreements become effective on a
"change of control" of the Company, which is defined to mean (i) the acquisition
by any person, entity or group (other than from the Company) of 15% or more of
the outstanding securities of the Company which are entitled to vote generally
in the election of directors; (ii) individuals who, at the date of the
employment agreement, constitute the Board of Directors of the Company (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director after the date of the
employment agreements whose election or nomination was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board will be
considered as though such person was a member of the Incumbent Board; and (iii)
approval by the shareholders of the Company of a liquidation or dissolution of
the Company or the sale of all or substantially all of its assets or a
transaction in respect of which the persons who were shareholders of the Company
immediately prior to such transaction do not immediately thereafter own more
than 60% of the securities entitled to vote generally in the election of
directors of the entity resulting from such transaction.
The agreements provide that the Company agrees to employ these officers, and
the officers agree to remain in the employ of the Company, from the date of a
change of control to the earlier to occur of the third anniversary of such
change of control or the officer's normal retirement date at a rate of
compensation at least equal to the highest monthly base salary which the officer
was paid during the 36 calendar months immediately prior to the change of
control. In addition, during that period the Company agrees to provide employee
benefits which are the greater of the benefits provided by the Company to
executives with comparable duties or the benefits to which the officer was
entitled during the 90-day period immediately prior to the date of the change of
control. In the event that employment is terminated after a change of control,
the terminated officer is entitled to (i) receive his
10
<PAGE>
compensation at the rate called for by the agreement for the remaining portion
of the three year employment term plus the estimated amount of any incentive
compensation he would have been entitled to had he remained in the employ of the
Company for the remainder of the employment period and (ii) continue to be
treated as an employee for the remainder of the three year term for the purpose
of the Company's pension, stock option, medical and other employee benefit
plans. The officer may elect to be paid a lump-sum severance payment equal to
the amounts he would have received in accordance with the preceding sentence. If
any of such agreements subjects the officer to excise tax under Section 4999 of
the Internal Revenue Code, the Company will pay such officer an additional
amount calculated so that after payment of all taxes, interest and penalties the
officer retains an amount of such additional payment equal to such excise tax.
The agreements define "termination" to mean termination of employment by the
Company for reasons other than death, disability, cause or retirement.
"Termination" also includes resignation by the officer after (a) an adverse
change in the nature or scope of his authorities, duties or responsibilities, as
determined in good faith by the officer or (b) a good faith determination by the
officer that, as a result of the change of control, he is unable to exercise the
authority, power, function and duties contemplated by the agreement.
REPORT OF THE COMPENSATION & STOCK OPTION COMMITTEE
The Compensation & Stock Option Committee (the "Committee") is responsible
for determining the annual salary, short-term and long-term incentive
compensation, stock awards and other compensation of the executive officers. The
following report describes the policies and rationales of the Committee in
establishing the principal components of executive compensation during 1993.
The stated goals of the Committee's compensation philosophy for the
Company's Chief Executive Officer (CEO) and other executive officers of the
Company are as follows: to support the Company's mission statement and corporate
objectives; to attract and retain quality executives; to motivate individual
performance toward the goals of the Company; to maintain a pay-for-performance
philosophy; and to reward the enhancement of shareholder value.
Consistent with this philosophy, the Committee has established a
compensation program consisting of an annual base salary at an average level
generally designed to be consistent with the amounts paid to executives
occupying comparable positions in comparable companies; and the opportunity to
earn incentive compensation tied directly to the performance of the business,
their personal performance and the rewards obtained by the shareholders. The
Committee notes that the "comparable companies" considered by the Committee were
not identical to the companies included in the Standard & Poors' Manufacturing
Diversified Index used in the Performance Graph set forth on page 14. The
Committee believes that the use of a different group of companies for this
purpose is justified because the companies with which the Company competes for
executive talent is not limited to the companies included in that Index.
The incentive compensation portion of executive compensation is comprised of
three elements: annual cash incentives, intermediate-term incentives, and
long-term incentives.
- ANNUAL CASH INCENTIVES
Annual cash incentives are payable to each executive upon the attainment
of financial targets by the Company, personal performance of the executive
and, where appropriate, attainment of financial goals of the operating unit
or units for which the executive has responsibility. If certain minimum
target results are not achieved, no annual incentive will be paid. If
targeted levels (which include objectives that are, in the judgment of the
Committee, reasonably difficult to attain) are attained, annual incentive
levels range from 45% of base salary for the CEO to 25% of
11
<PAGE>
base salary for corporate officers at the level of corporate vice president.
If corporate and executive performance materially exceed the target
objectives, a maximum annual incentive ranging from 70% of base salary in
the case of the CEO to 40% of base salary in the case of corporate vice
presidents may be paid. Of the total annual incentive available to the CEO,
55% is based on attainment of corporate-wide net income targets, 35% is
based on attainment of individual objectives (some of which are quantitative
in nature), and 10% is based on attainment of a target level of return on
corporate assets.
- INTERMEDIATE-TERM INCENTIVES; PERFORMANCE SHARE PLAN
The Company has established the Performance Share Plan as an
intermediate term incentive plan. The Performance Share Plan provides for
awards of restricted shares of Common Stock ("Performance Shares") and
performance units ("Performance Units") to the most senior officers of the
Company. Performance Shares awarded to the executive are subject to
forfeiture if the Company does not attain a prescribed compounded rate of
return on assets growth over a three-year period. If a minimum objective is
not attained, no Performance Shares will be retained. A portion of the
shares will be retained if performance over the three year period is between
the minimum and the proposed target level. During the three-year restriction
period the executive receives dividends on and is entitled to vote the
Performance Shares.
Each Performance Unit represents a cash payment in an amount equal to
the closing price of a share of Common Stock three years after the grant if
the target performance-based conditions are achieved during that period. If
the performance target is met, the cash subject to the award will be
granted. If the threshold of 80% of the performance target is met, 50% of
the cash subject to the award will be granted. If the 80% of the performance
is not met, no award will be granted.
The rationale for the Performance Share Plan is as follows: Unlike the
annual incentive plan, which provides an incentive for a specific year's
performance, benefits under the performance share plan require a sustained
level of corporate performance over a three-year period. The Plan provides
benefits in a combination of shares and cash so that executives will be
placed in the position of a shareholder relative to 60% of the benefit and
will receive sufficient cash at the time the benefit is finally determined
to cover income taxes due on the total benefit.
- LONG-TERM INCENTIVE PLAN
The Company's long-term incentive plan includes the awarding of
nonqualified stock options to its senior and mid-level executives pursuant
to its 1984 Stock Option Plan. Options granted under the plan have a 10-year
life and are exercisable at the market value of the Common Stock on the date
of grant. The benefits provided under the Company's long term plan will be
directly related to increases in the value of the Company to its
shareholders, as measured by the trading price of the Company's stock.
In determining the size of stock option awards, the Committee considered
market data as to customary option award sizes, the Company's performance
over the past three to five years, the executive's contributions to the
Company's successes over that period, and the Company's long range goals and
objectives.
Stock options most recently granted are not exercisable during the year
after they are granted. Thereafter they become exercisable at the rate of
25% per year and they are fully exercisable in the 6th through 10th year of
the option. These restrictions on exercise, together
12
<PAGE>
with the 10-year life of the option, are consistent with the concept of the
option plan as providing a reward to the executive for remaining with the
Company for at least the vesting period of the option and for increasing the
value of the Common Stock on a long-term basis.
Your Committee believes that the key executive team of the Company will
receive appropriate rewards under this program of corporate incentives, but only
if they achieve the performance goals established for them and the Company and
if they succeed in building increased value for the Company's shareholders.
In the case of the Company's Chief Executive Officer, Mr. Lawrence E. Gloyd,
for fiscal 1993 the Committee set base salary at approximately $329,000. This
salary level is equal to the average salary paid to CEO's of comparably sized
non-durable manufacturing companies, based upon survey information summarized
for the Committee by an independent compensation consultant. For 1993 Mr. Gloyd
also received cash incentives of $183,818, equal to 56% of his base salary,
based upon attainment of a corporate-wide earnings per share target for 1993.
Mr. Gloyd received payment in cash and stock of $150,930 in respect of
Performance Units and Performance Shares granted in 1990 under the Performance
Share Plan. 100% of the performance objective for the three year period was met.
Finally, during 1993 Mr. Gloyd was granted nonqualified stock options for 35,000
shares at a exercise price of $18.50 and 15,000 shares at an exercise price of
$18.875 (fair market value on the date of grant). The size of the grant was
consistent with past grants. The Committee may consider additional grants of
options to Mr. Gloyd during 1994 if the Committee considers such grants
appropriate in the light of the Company's performance.
Compensation & Stock Option Committee
Don A. Wolf
J. Marc Adam
Carl J. Dargene
Richard A. Snell
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Dargene, President, Chief Executive Officer and Director of AMCORE
Financial, Inc. serves as a member of the Company's Board and a member of the
Company's Compensation & Stock Option Committee. Mr. Gloyd, Chairman, President,
Chief Executive Officer and Director of the Company serves as a member of the
Board and a member of the Compensation Committee of AMCORE Financial, Inc.
13
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
return on its Common Stock for a five year period (November 30, 1988 to November
27, 1993) with the cumulative total return of the S&P Composite 500 Stock Index
and the S&P Manufacturing Diversified Index.
TOTAL RETURN TO SHAREHOLDERS
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, S&P COMPOSITE 500 INDEX AND
S&P MANUFACTURING DIVERSIFIED INDEX
[PERFORMANCE GRAPH FILED UNDER FORM SE]
* Assumes that the value of the investment in the Company's Common Stock and
each index was $100 on November 30, 1988 and that all dividends were reinvested.
The reference points on the foregoing graph are as follows:
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
CLARCOR Inc............................................ $ 96.51 $ 106.31 $ 154.60 $ 160.10 $ 170.98
S&P Manu-Diversified................................... 111.98 108.79 128.95 150.83 181.60
S&P 500................................................ 130.84 126.30 151.99 177.19 194.43
</TABLE>
The 1988 beginning measuring point was the market close on November 30,
1988, the last trading day before the beginning of the Company's fifth preceding
fiscal year. The closing measuring point for 1993 was November 26, 1993 for the
Company and the S & P Composite 500 Index based on the last New York Stock
Exchange trading date prior to the Company's Saturday, November 27, 1993 fiscal
year end. Due to only month end figures being available for the S & P
Manufacturing Diversified Index, November 30, 1993 was used as a close for that
index.
14
<PAGE>
APPROVAL OF 1994 INCENTIVE PLAN
GENERAL
The Board of Directors is proposing for shareholder approval the CLARCOR
Inc. 1994 Incentive Plan (the "1994 Plan"). The purposes of the 1994 Plan are
(i) to align the interests of the Company's shareholders and recipients of
awards under the 1994 Plan by increasing the proprietary interest of such
recipients in the Company's growth and success and (ii) to advance the interests
of the Company by attracting and retaining officers, other key employees and
well-qualified Non-employee Directors. Under the 1994 Plan, the Company may
grant non-qualified stock options, "incentive stock options" (within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")),
stock appreciation rights ("SARs"), restricted stock, bonus stock, long-range
performance awards and performance shares. Non-qualified options to purchase
2,500 shares of Common Stock will also be granted automatically to Non-employee
Directors on the date of each annual meeting of shareholders of the Company and,
on the date a person first becomes a Non-employee Director during the term of
the Plan and on the fifth anniversary of that date, if such person is then a
Non-employee Director and has served continuously since he or she was first
elected to the Board, such Non-employee Director will be granted restricted
stock with a value equal to five times the amount of the then current annual
cash retainer. In addition, the 1994 Plan provides for the purchase by all full
time employees of the Company and its United States subsidiaries who have
attained the age of 21 and completed three months of consecutive service of
shares of Common Stock through a monthly investment plan (the "MIP"). Eight
Non-employee Directors and approximately 2,200 employees are eligible to
participate in the 1994 Plan. Reference is made to Exhibit A to this Proxy
Statement for the complete text of the 1994 Plan which is summarized below.
A shareholder may mark the accompanying form of proxy to (i) vote for the
1994 Plan, (ii) vote against the 1994 Plan or (iii) abstain from voting with
respect to the 1994 Plan. If a quorum is present at the Annual Meeting, approval
of the 1994 Plan requires the affirmative vote of a majority of the shares of
Common Stock present in person or represented by proxy at the meeting and
entitled to vote with respect to the 1994 Plan. Proxies marked to abstain from
voting with respect to the 1994 Plan will have the legal effect of proxies voted
against the 1994 Plan. Proxies submitted by brokers for shares beneficially
owned by other persons may indicate that all or a portion of the shares
represented by such proxies are not being voted with respect to the 1994 Plan.
This is because the rules of the New York Stock Exchange do not permit a broker
to vote shares held in street name with respect to the 1994 Plan in the absence
of instructions from the beneficial owner of the shares. The shares represented
by broker proxies which are not voted with respect to the 1994 Plan will not be
considered entitled to vote with respect to the 1994 Plan and accordingly will
not affect the determination of whether the 1994 Plan is approved, although such
shares will be considered entitled to vote for other purposes and will be
counted in determining the presence of a quorum.
The Board of Directors recommends a vote FOR approval of the 1994 Plan.
DESCRIPTION OF THE 1994 PLAN
ADMINISTRATION. The 1994 Plan will be administered by the Compensation &
Stock Option Committee of the Board of Directors (the "Committee") which shall
consist of not less than three directors who are not eligible to receive
discretionary awards under the 1994 Plan.
Section 162(m) of the Code generally limits to $1 million the amount that a
publicly held corporation is allowed each year to deduct for the compensation
paid to each of the corporation's chief executive officer and the corporation's
four other most highly compensated executive officers. However, certain types of
compensation paid to such executives are not subject to the $1 million deduction
15
<PAGE>
limit. One such type is "performance-based" compensation. To qualify as
performance-based compensation, the following requirements must be satisfied:
(i) the performance goals are determined by a committee consisting solely of two
or more "outside directors", (ii) the material terms under which the
compensation is to be paid, including the performance goals, are approved by a
majority of the corporation's shareholders, and (iii) the committee certifies
that the applicable performance goals were satisfied before payment of any
performance-based compensation is made. The Compensation & Stock Option
Committee consists solely of "outside directors" as defined for purposes of
Section 162(m) of the Code. As a result, and based on certain proposed
regulations recently issued by the United States Department of the Treasury
which explain these requirements, certain compensation under the 1994 Plan, such
as that payable with respect to options and SARS, is not expected to be subject
to the $1 million deduction limit under Section 162(m) of the Code, but other
compensation, such as bonus stock, payable under the 1994 Plan is expected to be
subject to such limit.
Subject to the express provisions of the 1994 Plan, and except for options
and restricted stock granted to Non-employee Directors and for participation in
the MIP, the Committee has the authority to select eligible officers and other
key employees who will receive awards and determine all of the terms and
conditions of each award. All awards will be evidenced by a written agreement
containing such provisions not inconsistent with the 1994 Plan as the Committee
shall approve. The Committee will also have authority to prescribe rules and
regulations for administering the 1994 Plan and to decide questions of
interpretation or application of any provision of the 1994 Plan. Except with
respect to grants to executive officers of the Company, the Committee may
delegate some or all of its power and authority to administer the 1994 Plan to
the Chief Executive Officer or other executive officer of the Company.
AVAILABLE SHARES. Under the 1994 Plan, 1,000,000 shares of Common Stock are
available for awards to officers, other key employees and non-employee
directors, except that this limitation does not apply to purchases under the
MIP. The Plan provides that no more than 3% of the outstanding Common Stock as
of January 1 in any calendar year may be purchased under the 1994 Plan through
the MIP. Both limitations are subject to adjustment in the event of a stock
split, stock dividend, recapitalization, reorganization, merger or other similar
event or change in capitalization. In general, shares covered by an option, SAR
or other award that expires or terminates unexercised or is cancelled or
forfeited would again be available for awards under the 1994 Plan. The maximum
number of shares of Common Stock with respect to which options and SARs may be
granted during any calendar year to any person is 250,000.
CHANGE IN CONTROL. In the event of certain acquisitions of 15% or more of
the Common Stock, a change in the majority of the Board of Directors, or the
approval by shareholders of a reorganization, merger or consolidation (unless
the Company's shareholders receive 60% or more of the stock of the surviving
company) or the approval by shareholders of a liquidation, dissolution or sale
of all or substantially all of the Company's assets, all awards will be
"cashed-out" by the Company except, in the case of a merger or similar
transaction in which the shareholders receive publicly traded common stock, all
outstanding options and SARs will become exercisable in full, all other awards
will vest, and each option, SAR and other award will represent a right to
acquire the appropriate number of shares of common stock received in the merger
or similar transaction.
EFFECTIVE DATE, TERMINATION AND AMENDMENT. If approved by shareholders, the
1994 Plan will become effective as of December 14, 1993 and will terminate ten
years thereafter, unless terminated earlier by the Board of Directors. The Board
of Directors may amend the 1994 Plan at any time except that, without the
approval of the shareholders of the Company, no amendment may, among other
16
<PAGE>
things, (i) increase the number of shares of Common Stock available under the
1994 Plan, (ii) reduce the minimum purchase price of a share of Common Stock
subject to an option or base price of an SAR or (iii) extend the term of the
1994 Plan.
NON-QUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. The period for
the exercise of a non-qualified stock option or SAR and the option exercise
price and base price of an SAR will be determined by the Committee. The exercise
of an SAR entitles the holder thereof to receive (subject to withholding taxes)
shares of Common Stock (which may be restricted stock), cash or a combination
thereof with a value equal to the difference between the fair market value of
the Common Stock on the exercise date and the base price of the SAR.
In the event of termination of employment by reason of retirement on or
after age 65 (or prior to age 65 with the consent of the Committee), each
non-qualified stock option and SAR will become fully exercisable for a period of
no more than three years after the date of such termination of employment, but
in no event after the expiration of such option or SAR. In the event of
termination of employment by reason of death or disability, each non-qualified
stock option and SAR will become fully exercisable for a period of no more than
two years after the date of such termination, but in no event after the
expiration of such option or SAR. In the event of termination of employment for
any other reason, each non-qualified stock option and SAR will terminate on the
date of such termination of employment, provided that the Committee may extend
the period for the exercise of such option or SAR to a date not later than 90
days after such termination of employment, but in no event after the expiration
of such option or SAR. If a holder dies during the three-year period following
termination of employment by reason of retirement, during the two-year period
following termination of employment by reason of death or disability or during
the 90-day period, if any, following termination of employment for any other
reason, each non-qualified stock option or SAR will be exercisable only to the
extent that such option or SAR was exercisable on the date of the holder's
death, and may thereafter be exercised for a period of no more than two years
from the date of death, but in no event after the expiration of such option or
SAR.
INCENTIVE STOCK OPTIONS. No incentive stock option will be exercisable more
than ten years after its date of grant, unless the recipient of the incentive
stock option owns greater than ten percent of the voting power of all shares of
capital stock of the Company (a "ten percent holder"), in which case the option
must be exercised within five years after its date of grant. The option exercise
price of an incentive stock option will not be less than the fair market value
of the Common Stock on the date of grant of such option, unless the recipient of
the incentive stock option is a ten percent holder, in which case the option
exercise price will be the price required by the Code, currently 110% of fair
market value.
In the event of a termination of employment by reason of death or permanent
and total disability (as defined in Section 22(e)(3) of the Code), incentive
stock options will become fully exercisable for a period of no more than one
year after such termination, but in no event after the expiration of the
incentive stock option. In the event of a termination of employment for any
other reason, incentive stock options will be exercisable to the extent
exercisable on the date of termination for a period of three months after such
termination, but in no event after the expiration of the incentive stock option.
If the holder of an incentive stock option dies during the one-year period
following termination of employment by reason of permanent and total disability,
or during the three-month period following termination of employment for any
other reason, each incentive stock option will be exercisable only to the extent
such option was exercisable on the date of the holder's death, and may
thereafter be exercised for a period of no more than one year, but in no event
after expiration of such incentive stock option.
17
<PAGE>
NON-EMPLOYEE DIRECTOR OPTIONS. Beginning on the date of the Company's 1994
Annual Meeting of Shareholders, Non-employee Directors will automatically be
granted, on the date of each annual meeting of shareholders, non-qualified
options to purchase 2,500 shares of Common Stock at an option exercise price per
share equal to the fair market value of a share of Common Stock on the date of
grant. Such options will be fully exercisable on the date of grant and will
expire ten years after the date of grant, provided that no Common Stock acquired
upon the exercise of said options shall be sold or transferred by the person
exercising such option during the six month period following the date of grant
of such option.
If a Non-employee Director ceases to be a Director for any reason other than
death, such Director's options may be exercised for a period of three years
thereafter, but in no event after the expiration of the option. If a
Non-employee Director ceases to be a Director by reason of death, such
Director's options may be exercised for a period of two years after the date of
such Director's death, but in no event after the expiration of the option. In
the event a Non-employee Director dies during the three-year period after
ceasing to be a Director for any reason other than death, each option may be
exercised for a period of one year from the date of death, but in no event after
the expiration of the option.
BONUS STOCK AND RESTRICTED STOCK AWARDS. The 1994 Plan provides for the
grant of (i) bonus stock awards, which are vested upon grant, and (ii) stock
awards which may be subject to a restriction period ("restricted stock"). An
award of restricted stock may be subject to specified performance measures for
the applicable restriction period. Shares of restricted stock will be
non-transferable and subject to forfeiture if the holder does not remain
continuously in the employment of the Company during the restriction period or,
if the restricted stock is subject to performance measures, if such performance
measures are not attained during the restriction period; provided, however, that
termination of employment by reason of retirement on or after age 65 (or prior
to age 65 with the consent of the Committee), disability or death, will result
in the restricted stock becoming fully vested. In the event of termination of
employment for any other reason, the portion of a restricted stock award which
is then subject to a restriction period will be forfeited and cancelled by the
Company. Unless otherwise determined by the Committee, the holder of a
restricted stock award will have rights as a shareholder of the Company,
including the right to vote and receive dividends with respect to the shares of
restricted stock.
NON-EMPLOYEE DIRECTOR RESTRICTED STOCK AWARDS. On the date a person first
becomes a Non-employee Director during the term of the Plan and on the fifth
anniversary of that date, if such person is then a Non-employee Director and has
served continuously since such person was first elected to the Board, such
Non-employee Director will be granted restricted stock with a value equal to
five times the amount of the then current annual cash retainer which would have
been paid to such Non-employee Director, not including any committee meeting
fees. Each such restricted stock award will be 20% vested on the date of grant
and, thereafter, so long as the holder remains a Non-employee Director, an
additional 20% of such award will vest on each of the first four anniversaries
of the date of grant. Until the fifth anniversary of the date of grant, shares
of restricted stock will be non-transferable, except upon death and only to the
extent such shares are vested. If a Non-employee Director ceases for any reason
to be Non-employee Director, all unvested shares of restricted stock will be
forfeited. The holder of a Non-employee Director restricted stock award will
have rights as a shareholder of the Company, including the right to vote and
receive dividends with the respect to the shares of restricted stock.
LONG-RANGE PERFORMANCE AWARDS. The 1994 Plan provides for the grant of
long-range performance awards. Each long-range performance award will consist of
long-range performance units and
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shares of restricted stock. Each long-range performance unit represents a right,
contingent upon the attainment of a long-range performance goal within a
performance cycle of not less than three years, to receive an amount of cash
equal to the average of the fair market value of a share of Common Stock over
the 30 trading days immediately preceding the end of the performance cycle. The
percentage of long-range performance units and shares of restricted stock which
a participant earns will range from 50% to 100% of the long-range performance
award, depending upon the attainment of a long-range performance goal.
Long-range performance awards will be non-transferable and subject to forfeiture
if a minimum performance goal is not attained during the applicable performance
cycle. In the event of a termination of employment by reason of retirement on or
after age 65 (or prior to age 65 with the consent of the Committee), disability
or death or under circumstances determined by the Committee to be for the
Company's convenience, the holder will receive the same percentage of the
long-range performance award which is earned by other participants for such
performance cycle. In the event of termination of employment for any other
reason before the end of a performance cycle, the long-range performance award
will be forfeited and cancelled by the Company; provided, however, that the
Committee may determine to waive such forfeiture as to all or a portion of such
award if termination of employment occurs after the first year of a performance
cycle. Unless otherwise determined by the Committee, a holder of restricted
stock subject to a long-range performance award will have rights as a
shareholder of the Company, including the right to vote and receive dividends
with respect to the shares of restricted stock.
PERFORMANCE SHARE AWARDS. The 1994 Plan also provides for the grant of
performance shares. Each performance share is a right, contingent upon the
attainment of performance measures within a specified performance period, to
receive one share of Common Stock, which may be restricted stock, or the fair
market value of such performance share in cash. Prior to the settlement of a
performance share award in shares of Common Stock, the holder of such award will
have no rights as a shareholder of the Company with respect to the shares of
Common Stock subject to the award. Performance shares will be non-transferable
and subject to forfeiture if the specified performance measures are not attained
during the applicable performance period; provided, however, that termination of
employment by reason of retirement on or after age 65 (or prior to age 65 with
the consent of the Committee), disability or death, will result in the
performance share award becoming fully vested. In the event of termination of
employment for any other reason, the portion of a performance share award which
is then subject to a performance period will be forfeited and cancelled by the
Company.
MONTHLY INVESTMENT PLAN. The 1994 Plan provides for the purchase by all
full time employees of the Company and its United States subsidiaries who have
attained the age of 21 and completed three months of consecutive service ("MIP
Participants") of shares of Common Stock through the MIP. Through a broker
designated by the Company, MIP Participants may purchase Common Stock on the New
York Stock Exchange at the then current market price by authorizing a minimum
payroll deduction of $10.00 per month up to a maximum of 15% of such
participant's base salary. The Company will contribute 25% of a MIP
Participant's payroll deductions up to a maximum of 10% of such participant's
base salary. The Company will pay the administrative expenses of the MIP,
including brokers' commissions, if any, and custodian and recordkeeping fees.
Cash dividends on shares of the Company's Common Stock which are held in MIP
accounts will be reinvested in Common Stock. A MIP Participant who terminates
payroll deductions may not participate in the MIP for one year after such
termination.
PERFORMANCE GOALS. Under the 1994 Plan, the vesting or payment of
long-range performance awards, performance share awards and certain awards of
restricted stock will be subject to the satisfaction of certain performance
goals. All officers and other key employees are eligible to be selected by the
Committee to receive such awards. The performance goals applicable to a
particular
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award will be determined by the Committee at the time of grant of such award. At
present, no such awards are outstanding and, accordingly, no performance goals
have been designated by the Committee. With respect to long-range performance
awards, such performance goals may be one or more of the following: a level
specified by the Committee for (a) return on assets, (b) return on equity, (c)
return on investment, (d) growth in operating profit, (e) growth in net
earnings, (f) growth in earnings per share and (g) growth in cash flow. With
respect to performance share awards and certain awards of restricted stock, the
Committee may select any of the criteria set forth in the preceeding sentence or
may select some other performance measure. If the performance goal or goals
applicable to a particular award are satisfied, the amount of compensation would
be determined as follows: In the case of a long-range performance award, the
amount of compensation would equal (i) the number of shares of restricted stock
subject to such award multiplied by the value of a share of Common Stock at the
time the restricted stock vests and (ii) the number of long-range performance
units subject to such award multiplied by the average closing sale price of a
share of Common Stock on the New York Stock Exchange Composite Transactions with
respect to the 30 trading days immediately preceding the end of the performance
cycle applicable to such award. In the case of a performance share award, the
amount of compensation would equal the number of performance shares subject to
such award multiplied by (i) the closing sale price of a share of Common Stock
on the New York Stock Exchange Composite Transactions at the time the
performance shares vests or (ii) if such performance shares are settled in
shares of restricted stock, the value of a share of Common Stock at the time
such restricted stock vests. In the case of restricted stock awards which are
subject to one or more performance goals, the amount of compensation would equal
the number of shares of restricted stock subject to such award multiplied by the
value of share of Common Stock at the time such restricted stock vests. In the
case of long-range performance awards, in no event shall the number of shares of
restricted stock awarded as part of any long-range performance award to any
participant in any year exceed 15,000, and (b) in no event shall the amount of
cash payable to any participant in any year as the earned percentage of that
participant's long-range performance units exceed 100% of the participant's base
salary for the fiscal year of the Company ending nearest November 30, 1993 (or
in the case of a person who first becomes subject to the limitations of Section
162(m) of the Code after January 1, 1994, the annualized base salary of that
person for the first fiscal year of the Company in which he becomes subject to
that Section) increased by 5% for each fiscal year of the Company commencing
after November 30, 1993, and ending on the last day of the performance cycle
under which such award is earned.
FEDERAL INCOME TAX CONSEQUENCES. The following is a brief overview of the
U.S. federal income tax consequences generally arising with respect to awards
under the 1994 Plan.
A participant receiving a non-qualified stock option under the 1994 Plan,
including options granted to Non-employee Directors, will not recognize taxable
income upon the grant of the option, but will recognize taxable compensation at
the time of exercise in the amount of the difference between the exercise price
and the fair market value on the date of exercise of the shares acquired
pursuant to the exercise of the option. At that time, the Company will be
entitled to a deduction as compensation expense in an amount equal to the amount
taxable to the participant as income.
A participant receiving an incentive stock option will not recognize taxable
income upon the grant or exercise of the option, but will recognize income or
loss upon disposition of the shares acquired pursuant to the exercise of the
option, which may be ordinary income or capital gain (or loss), depending on the
length of time the shares have been held. The Company will not be entitled to
any deduction with respect to the grant or exercise of a participant's incentive
stock option. However, if the participant disposes of the shares acquired
pursuant to the exercise of the option before the later of two years from the
date of grant and one year from the date of exercise, the Company will be
entitled
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to a deduction as compensation expense in an amount taxable to the participant
as ordinary income and not capital gain. Such ordinary income is the amount by
which the lesser of the fair market value of the shares on the date of exercise
or on the date of disposition exceeds the exercise price of the option.
A participant who is granted SARs will not recognize any taxable income upon
the grant of the SARs. Upon exercise, the participant recognizes taxable
compensation in an amount equal to the fair market value of any shares delivered
and the amount of cash paid by the Company. This amount is deductible by the
Company as compensation expense.
A participant receiving restricted stock, including a restricted stock
award, restricted stock granted to Non-employee Directors and restricted stock
granted pursuant to a long-range performance award, will not recognize taxable
income at the time of the grant, and the Company will not be entitled to a tax
deduction at such time, unless the participant makes an election to be taxed at
the time restricted stock is granted. If such election is not made, the
participant will recognize taxable income at the time the restrictions lapse or
the stock becomes vested, in amount equal to the excess of the fair market value
of the shares at such time over the amount, if any, paid for such shares. The
amount of ordinary income recognized by a participant by making the
above-described election or upon the lapse of the restrictions or upon vesting
is deductible by the Company as compensation expense, except to the extent the
deduction limits of Section 162(m) of the Code apply. In addition, a participant
receiving dividends with respect to restricted stock for which the
above-described election has not been made and prior to the time the
restrictions lapse or vesting will recognize taxable compensation, rather then
dividend income, in an amount equal to the dividends paid and the Company will
be entitled to a corresponding deduction, except to the extent the deduction
limits of Section 162(m) of the Code apply.
A participant receiving bonus stock will recognize taxable income at the
time the bonus stock is awarded in an amount equal to the then fair market value
of such stock. This amount is deductible by the Company as compensation expense,
except to the extent the deduction limits of Section 162(m) of the Code apply.
A participant receiving performance shares and long-range performance units
will not recognize taxable income upon the grant of such shares or units, as the
case may be, and the Company will not be entitled to a tax deduction at such
time. Upon the settlement of performance shares or long-range performance units,
the participant will recognize ordinary income in an amount equal to the fair
market value of any shares delivered and any cash paid by the Company. This
amount is deductible by the Company as compensation expense, except to the
extent the deduction limits of Section 162(m) of the Code apply.
A MIP Participant will recognize income in an amount equal to the
contribution made by the Company on behalf of the MIP Participant under the MIP
at the time such contribution is made. At that time, the Company will be
entitled to a corresponding deduction as compensation expense, except to the
extent the deduction limits of Section 162(m) of the Code apply. A MIP
Participant will recognize additional income at the time shares of Common Stock
are purchased on the participant's behalf in the amount of the MIP Participant's
allocable share of the brokers' commissions paid by the Company. At the same
time, the Company will be entitled to a corresponding deduction as compensation
expense, except to the extent the deduction limits of Section 162(m) of the Code
apply.
GRANTS TO NON-EMPLOYEE DIRECTORS. The following table sets forth (i) the
number of shares of Common Stock underlying options which would be granted
automatically to Non-employee Directors
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on the date of each annual meeting of shareholders beginning with the 1994
Annual Meeting of Shareholders and (ii) the number of shares of restricted stock
which would be granted automatically on the date a person first becomes a
Non-employee Director.
1994 INCENTIVE PLAN
<TABLE>
<CAPTION>
SHARES OF
POSITION STOCK OPTIONS RESTRICTED STOCK
- ------------------------------------------------------------ --------------- -----------------
<S> <C> <C>
All Non-employee Directors
as a Group (8 persons)..................................... 2,500(1) 3,977(2)
</TABLE>
- ------------------------
(1) The option exercise price per share would be the closing sale price of the
Common Stock on the New York Stock Exchange on the date of grant. For
example, on January 10, 1994, the closing sale price of Common Stock on the
New York Stock Exchange was $22 per share. Each option would be fully
exercisable on the date of grant and would expire ten years after the date
of grant.
(2) Restricted stock would be granted with a value equal to five times the
amount of the then current annual cash retainer which would have been paid
to a Non-employee Director. Based on a market price of $22 per share and a
current annual cash retainer of $17,500, a person who first becomes a
Non-employee Director would be granted 3,977 shares of restricted stock.
Such shares of restricted stock would be 20% vested on the date of grant
and, thereafter, so long as the holder remains a Non-employee Director, an
additional 20% of such award would vest on each of the first four
anniversaries of the date of grant.
MISCELLANEOUS
AUDITORS
The Board of Directors has selected Coopers & Lybrand to audit the financial
statements of the Company for the fiscal year ending November 30, 1994. Coopers
& Lybrand has served as the Company's auditors for more than 20 years. The
shareholders will not be asked to approve this selection at the Annual Meeting.
A representative of Coopers & Lybrand will be present at the Annual Meeting of
Shareholders and will have an opportunity to make a statement and respond to
appropriate questions.
OTHER BUSINESS
The Board of Directors has no knowledge of any matters, other than as set
forth in this Proxy Statement, upon which action is to be taken at the meeting.
In the event any such matters are brought before the meeting, the attorneys
named in the enclosed form of proxy will vote proxies received by them as they
deem best with respect to all such matters.
PROPOSALS OF SECURITY HOLDERS FOR 1995 ANNUAL MEETING OF SHAREHOLDERS
Under the rules and regulations of the Securities and Exchange Commission,
any proposal which a shareholder of the Company intends to present at the Annual
Meeting of Shareholders to be held in 1995 and which such shareholder desires to
have included in the Company's proxy materials for such meeting, must be
received by the Company on or before October 27, 1994.
The Company's bylaws provide that nomination by a shareholder of a person
for election as a director and other proposals made by such shareholders for
action by the shareholders at any meeting of shareholders may be disregarded
unless proper notice of such nomination or proposal shall have been given to the
Secretary of the Company not less than 60 days nor more than 90 days prior to
the
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date of the meeting and certain other requirements are met. It is currently
expected that the 1995 Annual Meeting of Shareholders of the Company will be
held on March 30, 1995. Consequently, written notice of any such nomination or
proposal which a shareholder desires to make at the 1995 Annual Meeting must be
received by the Company no earlier than December 30, 1994 and no later than
January 29, 1995. A copy of the Company's bylaws may be obtained without charge
from the Secretary of the Company.
EXPENSE OF SOLICITATION OF PROXIES
The expense of solicitation of proxies, including printing and postage, will
be paid by the Company. In addition to the use of the mail, proxies may be
solicited personally, or by telephone, by officers and regular employees of the
Company. The Company has employed D. F. King & Co., Inc. to solicit proxies for
the Annual Meeting from brokers, bank nominees and other institutional holders.
The Company has agreed to pay $7,500, plus the out-of-pocket expenses of D. F.
King & Co., Inc., for these services. The Company will reimburse brokers and
other persons holding stock in their names, or in the name of nominees, for
their expenses for sending proxy material to principals and obtaining their
proxies.
By Order of the Board of Directors
MARSHALL C. ARNE
SECRETARY
Rockford, Illinois
February 24, 1994
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EXHIBIT A
CLARCOR INC.
PROPOSED 1994 INCENTIVE PLAN
I. INTRODUCTION
1. PURPOSES. The purposes of the 1994 Incentive Plan (the "Plan") of
CLARCOR Inc. (the "Company") and its Subsidiaries from time to time are to align
the interests of the Company's stockholders and the recipients of awards under
this Plan by increasing the proprietary interest of such recipients in the
Company's growth and success and to advance the interests of the Company by
attracting and retaining officers and key employees and well-qualified persons
who are not officers or employees of the Company for service as Directors of the
Company.
2. CERTAIN DEFINITIONS.
"ANNUAL RETAINER" shall have the meaning specified in Article VII of this
Plan.
"AGREEMENT" shall mean the written agreement evidencing an award hereunder
between the Company and the recipient of such award.
"BEGINNING STOCK PRICE" shall have the meaning specified in Article IV of
this Plan.
"BOARD" shall mean the Board of Directors of the Company.
"BONUS STOCK" shall mean shares of Common Stock which are not subject to
Performance Measures or a Restriction Period.
"BONUS STOCK AWARD" shall mean an award of Bonus Stock under this Plan.
"BROKER" shall have the meaning specified in Article VIII of this Plan.
"CHANGE IN CONTROL" shall have the meaning set forth in Section IX.8(b)
hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMITTEE" shall mean the Committee, designated by the Board, consisting of
three or more members of the Board, each of whom shall be (a) a "disinterested
person" within the meaning of Rule 16b-3 under the Exchange Act and (b) an
"outside director" under Section 162(m) of the Code.
"COMMON STOCK" shall mean the common stock, par value $1.00 per share, of
the Company.
"COMPANY" shall mean CLARCOR Inc. and, for purposes of Sections II.4,
III.2(b), III.3 and IV.3, shall mean CLARCOR Inc. and its Subsidiaries.
"CUSTODIAN" shall have the meaning specified in Article VIII of this Plan.
"DIRECTORS' OPTIONS" shall mean Non-Qualified Stock Options granted pursuant
to Article VI hereof.
"DIRECTORS' RESTRICTED SHARES" shall have the meaning set forth in Section
VII.1 hereof.
"DISABILITY" shall mean the inability of the holder of an award
substantially to perform such holder's duties and responsibilities for a
continuous period of at least six months.
"ENDING STOCK PRICE" shall have the meaning specified in Article IV of this
Plan.
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"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" shall mean the closing sale price of a share of Common
Stock on the New York Stock Exchange Composite Transactions on the date as of
which such value is being determined, or, if there shall be no sale on such
date, on the next preceding date for which a sale was reported; provided that if
Fair Market Value for any date cannot be determined as above provided, Fair
Market Value shall be determined by the Committee by whatever means or method as
the Committee, in the good faith exercise of its discretion, shall at such time
deem appropriate.
"FREE-STANDING SAR" shall mean an SAR which is not granted in tandem with,
or by reference to, an option, which entitles the holder thereof to receive,
upon exercise, shares of Common Stock, cash or a combination thereof with an
aggregate value equal to the excess of the Fair Market Value of one share of
Common Stock on the date of exercise over the base price of such SAR, multiplied
by the number of such SARs which are exercised.
"INCENTIVE STOCK OPTION" shall mean an option to purchase shares of Common
Stock that meets the requirements of Section 422 of the Code, or any successor
provision, which is intended by the Committee to constitute an Incentive Stock
Option.
"INCUMBENT BOARD" shall have the meaning set forth in Section IX.8(b)
hereof.
"LONG-RANGE PERFORMANCE AWARDS," "LONG-RANGE PERFORMANCE CYCLE," "LONG-RANGE
PERFORMANCE GOAL," "LONG-RANGE PERFORMANCE OPPORTUNITY," "LONG-RANGE PERFORMANCE
RESULTS," and "LONG-RANGE PERFORMANCE UNITS" shall have the respective meanings
set forth in Article IV of this Plan.
"NON-EMPLOYEE DIRECTOR" shall mean any Director of the Company or of any
Subsidiary who is not an officer or employee of the Company or any Subsidiary.
"NON-QUALIFIED STOCK OPTION" shall mean a stock option which is not an
Incentive Stock Option.
"MINIMUM PERFORMANCE GOAL" shall have the meaning specified in Article IV of
this Plan.
"MIP" shall have the meaning specified in Article VIII of this Plan.
"MIP PARTICIPANT" shall have the meaning specified in Article VIII of this
Plan.
"PARTICIPANTS" shall have the meaning set forth in Article IV of this Plan.
"PD AUTHORIZATION" shall have the meaning specified in Article VIII of this
Plan.
"PERFORMANCE MEASURES" shall mean the criteria and objectives, determined by
the Committee pursuant to Article III or V of this Plan, which shall be
satisfied or met during the applicable Restriction Period or Performance Period,
as the case may be, as a condition to the holder's receipt, in the case of a
Restricted Stock Award or a Performance Share Award granted pursuant to Article
III or V of this Plan, of the shares of Common Stock subject to such award, or
in the case of a Performance Share Award granted pursuant to Article V of this
Plan, of payment with respect to such award. Such criteria and objectives may
include, but are not limited to, earnings per share, return on equity, earnings
of the Company, revenues, market share or cost reduction goals, or any
combination of the foregoing and any other criteria and objectives determined by
the Committee.
"PERFORMANCE PERIOD" shall mean a period designated by the Committee
pursuant to Article V of this Plan, during which the Performance Measures
applicable to a Performance Share Award shall be measured.
A-2
<PAGE>
"PERFORMANCE SHARE" as used in Article V of this Plan shall mean a right,
contingent upon the attainment of specified Performance Measures within a
specified Performance Period, to receive one share of Common Stock, which may be
Restricted Stock, or in lieu thereof, the Fair Market Value of such Performance
Share in cash.
"PERFORMANCE SHARE AWARD" shall mean an award of Performance Shares under
Article V of this Plan.
"PERMANENT AND TOTAL DISABILITY" shall have the meaning set forth in Section
22(e)(3) of the Code or any successor thereto.
"RECORDKEEPER" shall have the meaning specified in Article VIII of this
Plan.
"RESTRICTED STOCK" (i) shall mean shares of Common Stock which are subject
to a Restriction Period and (ii) for the purposes of Article IV of this Plan,
shall have the meaning specified therein.
"RESTRICTED STOCK AWARD" shall mean an award of Restricted Stock under
Article III of this Plan.
"RESTRICTION PERIOD" shall mean a period designated by the Committee, during
which the Common Stock subject to a Restricted Stock Award may not be sold,
transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed
of, except as provided in this Plan or the Agreement relating to such award.
"SAR" shall mean a stock appreciation right.
"STOCK AWARD" shall mean a Restricted Stock Award or a Bonus Stock Award.
"SUBSIDIARIES" shall mean any corporation of which more than 50% (by number
of votes) of the Voting Stock is owned, of record and beneficially, by the
Company and/or by one or more Subsidiaries.
"TANDEM SAR" shall mean an SAR which is granted in tandem with, or by
reference to, an option (including a Non-Qualified Stock Option granted prior to
the date of grant of the SAR), which entitles the holder thereof to receive,
upon exercise of such SAR and surrender for cancellation of all or a portion of
such option, shares of Common Stock, cash or a combination thereof with an
aggregate value equal to the excess of the Fair Market Value of one share of
Common Stock on the date of exercise over the base price of such SAR, multiplied
by the number of shares of Common Stock subject to such option, or portion
thereof, which is surrendered.
"TARGET PERFORMANCE GOAL" shall have the meaning specified in Article IV of
this Plan.
"VOTING STOCK" means securities of any class or classes the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for corporate
directors (or persons performing similar functions.)
3. ADMINISTRATION. This Plan shall be administered by the Committee.
Any one or a combination of the following grants or awards may be made under
this Plan to eligible officers and other key employees of the Company and its
Subsidiaries: (i) options to purchase shares of Common Stock in the form of
Incentive Stock Options or Non-Qualified Stock Options, (ii) SARs in the form of
Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form of Restricted
Stock or Bonus Stock, (iv) Long-Range Performance Awards and (v) Performance
Share Awards. The Committee shall, subject to the terms of this Plan, select
eligible officers and other key employees for participation in this Plan and
determine the form, amount and timing of each award, and, if applicable, the
number of shares of Common Stock, the number of SARs, the number of shares
A-3
<PAGE>
of Restricted Stock and the number of Long-Range Performance Units and
Performance Shares subject to an award, the exercise price or base price
associated with the grant or award, the time and conditions of exercise or
settlement of the grant or award and all other terms and conditions of the grant
or award, including, without limitation, the form of the Agreement evidencing
the award. The Committee may, subject to the terms of this Plan, interpret this
Plan and the application thereof, establish rules and regulations for the
administration of this Plan and impose, incidental to the grant of an award,
conditions with respect to the award, competitive employment or other
activities. All such interpretations, rules and regulations shall be conclusive
and binding on all parties.
The Committee may delegate some or all of its power and authority hereunder
to the Chief Executive Officer or other executive officer of the Company as the
Committee deems appropriate; provided that the Committee may not delegate its
power and authority with regard to the selection for participation in this Plan
of an officer or other person subject to Section 16 of the Exchange Act or
decisions concerning the timing, pricing or amount of an award to such an
officer or to such other person.
No member of the Board of Directors or the Committee, and neither the Chief
Executive Officer nor other executive officer to whom the Committee delegates
any of its power and authority hereunder, shall be liable for any act, omission,
interpretation, construction or determination made in connection with this Plan
in good faith, and the members of the Board of Directors and the Committee and
the Chief Executive Officer or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys' fees) arising therefrom to the full
extent permitted by law and under any directors' and officers' liability
insurance that may be in effect from time to time.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be the acts of the Committee.
4. ELIGIBILITY. Participants under Article II through V of this Plan shall
consist of such officers or other key employees of the Company and its
Subsidiaries as the Committee in its sole discretion may select from time to
time. The Committee's selection of a person to participate in this Plan at any
time shall not require the Committee to select such person to participate in
this Plan at any other time. Non-employee Directors of the Company shall be
eligible to participate in this Plan in accordance with Articles VI and VII.
Employees of the Company and its Subsidiaries shall be eligible to participate
in this Plan to the extent provided in Section VIII.1 hereof.
5. SHARES AVAILABLE. Subject to adjustment as provided in Section IX.7 of
this Plan, an aggregate of 1,000,000 shares of Common Stock shall be available
under Articles II through VII of this Plan, reduced by the sum of the aggregate
number of shares of Common Stock (i) that are issued upon the grant of a Stock
Award, (ii) then subject to outstanding options, (iii) then subject to
outstanding Free-Standing SARs, (iv) that are issued upon a grant of Restricted
Stock under Article IV hereof, (v) then subject to outstanding Performance
Shares, (vi) that are issued upon a grant of Directors' Restricted Shares and
(vii) then subject to Directors' Options; provided, however, that awards
hereunder which may be exercised or settled solely for or in cash shall not
affect the number of shares of Common Stock available under this Plan. To the
extent (i) that an outstanding option expires or terminates unexercised or is
cancelled or forfeited (other than in connection with the exercise of a Tandem
SAR), or (ii) that an outstanding Free-Standing SAR or outstanding Performance
Share, either of which may be exercised or settled (A) solely for or in shares
of Common Stock or (B) for or in shares
A-4
<PAGE>
of Common Stock or cash, expires or terminates unexercised or is cancelled or
forfeited, then the shares of Common Stock subject to such expired, unexercised,
cancelled or forfeited portion of such award shall again be available under this
Plan. In the event, and to the extent, that the holder of Restricted Stock or
Directors' Restricted Shares shall not have a right to receive dividends with
respect to all or a portion of such Restricted Stock or Directors' Restricted
Shares, the shares of Common Stock subject to such award shall again be
available under this Plan upon forfeiture of such award. In the event that all
or a portion of a Free-Standing SAR which may be exercised or settled solely for
or in shares of Common Stock or for or in shares of Common Stock or cash or a
Tandem SAR is exercised, the number of shares of Common Stock subject to the SAR
(or exercised portion thereof) shall again be available under this Plan, except
to the extent that shares of Common Stock were delivered (or would have been
delivered but were withheld to satisfy tax withholding obligations) upon
exercise of the SAR.
Shares of Common Stock to be delivered under this Plan (except for Article
VIII hereof) shall be made available from authorized and unissued shares of
Common Stock, or authorized and issued shares of Common Stock reacquired and
held as treasury shares or otherwise or a combination thereof.
Subject to adjustment as provided in Section IX.7 of this Plan, the number
of shares of Common Stock available under Article VIII of this Plan in any
calendar year shall not exceed 3% of the outstanding Common Stock as of January
1 of such year.
II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
1. STOCK OPTIONS. The Committee may, in its discretion, grant options to
purchase shares of Common Stock to such eligible persons as may be selected by
the Committee. For the purposes of complying with Section 162(m) of the Code and
rules and regulations thereunder, the maximum number of shares of Common Stock
with respect to which Options and SARs may be granted during any calendar year
to any person shall be 250,000. Each option, or portion thereof, that is not an
Incentive Stock Option, shall be a Non-Qualified Stock Option. Each option shall
be granted within 10 years of the effective date of this Plan. To the extent
that the aggregate Fair Market Value (determined as of the date of grant) of
shares of Common Stock with respect to which options designated as Incentive
Stock Options are exercisable for the first time by a participant during any
calendar year (under this Plan or any other plan of the Company, or any parent
or Subsidiary of the Company) exceeds the amount (currently $100,000)
established by the Code, such options shall constitute Non-Qualified Stock
Options.
Options shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable:
(a) NUMBER OF SHARES AND PURCHASE PRICE. The number of shares of
Common Stock subject to an option and the purchase price per share of Common
Stock purchasable upon exercise of the option shall be determined by the
Committee; provided that, in the case of each Incentive Stock Option, such
purchase price shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date of grant of such option; and provided
further, that if an Incentive Stock Option shall be granted to any person
who, at the time such option is granted, owns capital stock of the Company
possessing more than 10 percent of the total combined voting
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power of all classes of capital stock of the Company (or of any parent or
Subsidiary of the Company) (a "ten percent holder"), such purchase price
shall be the price (currently 110% of Fair Market Value) required by the
Code in order to constitute an Incentive Stock Option.
(b) OPTION PERIOD AND EXERCISABILITY. The period for the exercise of
an option shall be determined by the Committee; provided that no Incentive
Stock Option shall be exercised later than 10 years after its date of grant;
and provided further, that if an Incentive Stock Option shall be granted to
a ten percent holder, such option shall be exercised within five years after
its date of grant. The Committee shall determine whether an option shall
become exercisable in cumulative or non-cumulative installments and in part
or in full at any time. An exercisable option, or a portion thereof, may be
exercised only with respect to whole shares of Common Stock.
(c) METHOD OF EXERCISE. An option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of
Common Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Committee's satisfaction) either
(A) in cash, (B) in previously owned whole shares of Common Stock (which the
optionee has held for at least six months prior to delivery of such shares
and for which the optionee has good title free and clear of all liens and
encumbrances) having a Fair Market Value, determined as of the date of
exercise, equal to the aggregate purchase price payable pursuant to such
option by reason of such exercise, (C) by authorizing the Company to
withhold whole shares of Common Stock which would otherwise be delivered
upon exercise of the option having a Fair Market Value determined as of the
date of exercise, equal to the aggregate purchase price payable pursuant to
such option by reason of such exercise, (D) in cash by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise, or (E) a combination of (A), (B) and (C), in each case
to the extent determined by the Committee at the time of grant of the
option, (ii) if applicable, by surrendering to the Company any Tandem SARs
which are cancelled by reason of the exercise of the option and (iii) by
executing such documents as the Company may reasonably request. The
Committee shall have sole discretion to disapprove of an election pursuant
to any of clauses (B) through (E) above. No shares of Common Stock shall be
issued until the full purchase price has been paid.
2. STOCK APPRECIATION RIGHTS. The Committee may, in its discretion, grant
SARs to such eligible persons as may be selected by the Committee. The Agreement
relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.
SARs shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable:
(a) NUMBER OF SARS AND BASE PRICE. The number of SARs subject to any
award shall be determined by the Committee. Any Tandem SAR related to an
Incentive Stock Option shall be granted at the same time such Incentive
Stock Option is granted. The base price of a Tandem SAR shall be the
purchase price per share of Common Stock of the related option. The base
price of a Free-Standing SAR shall be determined by the Committee.
(b) EXERCISE PERIOD AND EXERCISABILITY. The Agreement relating to an
award of SARs shall specify whether such award may be settled in shares of
Common Stock (including shares of Restricted Stock) or cash or a combination
thereof. The period for the exercise of an SAR shall be determined by the
Committee; provided that no Tandem SAR related to an Incentive Stock Option
shall be exercised more than 10 years after its date of grant (or five years
after its date of
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grant in the case of a ten percent holder). The Committee shall determine
whether an SAR may be exercised in cumulative or non-cumulative installments
and in part or in full at any time. An exercisable SAR, or a portion
thereof, may be exercised, in the case of a Tandem SAR, only with respect to
whole shares of Common Stock and, in the case of a Free-Standing SAR, only
with respect to a whole number of SARs. If an SAR is exercised for shares of
Restricted Stock, a certificate or certificates representing such Restricted
Stock shall be issued in accordance with Section III.2(c) and the holder of
such Restricted Stock shall have such rights of a stockholder of the Company
as determined pursuant to Section III.2(d). Prior to the exercise of an SAR
for shares of Common Stock, including Restricted Stock, the holder of such
SAR shall have no rights as a stockholder of the Company with respect to the
shares of Common Stock subject to such SAR.
(c) METHOD OF EXERCISE. A Tandem SAR may be exercised (i) by giving
written notice to the Company specifying the number of whole SARs which are
being exercised, (ii) by surrendering to the Company any options which are
cancelled by reason of the exercise of the Tandem SAR and (iii) by executing
such documents as the Company may reasonably request. A Free-Standing SAR
may be exercised (i) by giving written notice to the Company specifying the
whole number of SARs which are being exercised and (ii) by executing such
documents as the Company may reasonably request.
3. TERMINATION OF EMPLOYMENT. (a) RETIREMENT. Subject to paragraph (e)
below and unless otherwise determined by the Committee at the time of grant of
an option or SAR, as the case may be, if the employment by the Company of the
holder of an option or SAR terminates by reason of retirement on or after age 65
(or prior to such age with the consent of the Committee), each option and SAR
held by such holder shall become fully exercisable and may thereafter be
exercised by such holder (or such holder's guardian, legal representative or
similar person) for a period of three years (or such shorter period as the
Committee may specify at the time or grant) after the date of such holder's
termination of employment or until the expiration of the term of such option or
SAR, whichever period is shorter.
(b) DISABILITY AND DEATH. Subject to paragraph (e) below and unless
otherwise determined by the Committee at the time of grant of an option or
SAR, as the case may be, if the employment by the Company of the holder of
an option or SAR terminates by reason of Disability or death, each option
and SAR held by such holder shall become fully exercisable and may
thereafter be exercised by such holder (or such holder's executor,
administrator, guardian, legal representative, beneficiary or similar
person, as the case may be) for a period of two years (or such shorter
period as the Committee may specify at the time of grant) after the date of
such holder's termination of employment or until the expiration of the term
of such option or SAR, whichever period is shorter.
(c) OTHER TERMINATION. Subject to paragraph (e) below and unless
otherwise determined by the Committee at the time of grant of an option or
SAR, as the case may be, if the employment by the Company of the holder of
an option or SAR terminates for any reason other than retirement on or after
age 65 (or prior to such age with the consent of the Committee), Disability
or death, each option and SAR held by such holder shall terminate on the
date of such termination of employment; PROVIDED that the Committee may
extend the period for the exercise of such option or SAR to a date not later
than 90 days after the date of such termination of employment or until the
expiration of the term of such option or SAR, whichever period is shorter.
In the event of any such extension, such option or SAR shall be exercisable
only to the extent such option or SAR was exercisable on the date of such
holder's termination of employment.
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(d) DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Subject to paragraph
(e) below and unless otherwise determined by the Committee at the time of
grant of an option or SAR, as the case may be, if the holder of an option or
SAR dies during the respective periods specified and determined in
accordance with Section II.3(a), (b) or (c) above, each option and SAR held
by such holder shall be exercisable only to the extent that such option or
SAR, as the case may be, was exercisable on the date of the holder's death
and may thereafter be exercised by the holder's executor, administrator,
legal representative, beneficiary or similar person, as the case may be, for
a period of two years (or such shorter period as the Committee may specify
at the time of grant) after the date of death or until the expiration of the
term of such option or SAR, whichever period is shorter.
(e) TERMINATION OF EMPLOYMENT -- INCENTIVE STOCK OPTIONS. If the
employment by the Company of a holder of an Incentive Stock Option
terminates by reason of death or Permanent and Total Disability, each
Incentive Stock Option held by such holder shall become fully exercisable
and may thereafter be exercised by such holder (or such holder's executor,
administrator, legal representative, beneficiary or similar person) for a
period of one year (or such shorter period as the Committee may specify at
the time of grant) after the date of such holder's termination of employment
or until the expiration of the term of such Incentive Stock Option,
whichever period is shorter. If the employment by the Company of a holder of
an Incentive Stock Option terminates for any reason other than death or
Permanent and Total Disability, each Incentive Stock Option held by such
holder shall be exercisable only to the extent such Incentive Stock Option
was exercisable on the date of such holder's termination of employment and
may thereafter be exercised for a period of three months after the date of
such holder's termination of employment or until the expiration of the term
of the Incentive Stock Option, whichever period is shorter. If the holder of
an Incentive Stock Option dies during the one-year period following
termination of employment by reason of Permanent and Total Disability, or if
the holder of an Incentive Stock Option dies during the three-month period
following termination of employment for any reason other than death or
Permanent and Total Disability, each Incentive Stock Option held by such
holder shall be exercisable only to the extent such Incentive Stock Option
was exercisable on the date of the holder's death and may thereafter be
exercised by the holder's executor, administrator, legal representative,
beneficiary or similar person for a period of one year (or such shorter
period as the Committee may specify at the time of grant) after the date of
death or until the expiration of the term of such Incentive Stock Option,
whichever period is shorter.
III. STOCK AWARDS
1. STOCK AWARDS. The Committee may, in its discretion, grant Stock Awards
to such eligible persons as may be selected by the Committee. The Agreement
relating to a Stock Award shall specify whether the Stock Award is a Restricted
Stock Award or Bonus Stock Award.
2. TERMS OF STOCK AWARDS. Stock Awards shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem advisable.
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(a) NUMBER OF SHARES AND OTHER TERMS. The number of shares of Common
Stock subject to a Restricted Stock Award or Bonus Stock Award and the
Performance Measures, if any, and Restriction Period applicable to a
Restricted Stock Award shall be determined by the Committee.
(b) VESTING AND FORFEITURE. The Agreement relating to a Restricted
Stock Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the forfeiture
of the shares of Common Stock subject to such award (i) if specified
Performance Measures are not satisfied or met during the specified
Restriction Period or (ii) if the holder of such award does not remain
continuously in the employment of the Company during the specified
Restriction Period. Bonus Stock Awards shall not be subject to any
Performance Measures or Restriction Periods.
(c) SHARE CERTIFICATES. During the Restriction Period, a certificate
or certificates representing a Restricted Stock Award shall be registered in
the holder's name and a bear a legend, in addition to any legend which may
be required pursuant to Section IX.6, indicating that the ownership of the
shares of Common Stock represented by such certificate is subject to the
restrictions, terms and conditions of this Plan and the Agreement relating
to the Restricted Stock Award. All such certificates shall be deposited with
the Company, together with stock powers or other instruments of assignment,
each endorsed in blank, which would permit transfer to the Company of all or
a portion of the shares of Common Stock subject to the Restricted Stock
Award in the event such award is forfeited in whole or in part. Upon
termination of any applicable Restriction Period, or upon the grant of a
Bonus Stock Award, in each case subject to the Company's right to require
payment of any taxes in accordance with Section IX.5, a certificate or
certificates evidencing ownership of the requisite number of shares of
Common Stock shall be issued to the holder of such award.
(d) RIGHTS WITH RESPECT TO RESTRICTED STOCK AWARDS. Unless otherwise
determined by the Committee at the time of grant, and subject to the terms
and conditions of a Restricted Stock Award, the holder of such award shall
have all rights as a stockholder of the Company, including, but not limited
to, voting rights, the right to receive dividends and the right to
participate in any capital adjustment of the Company. A distribution with
respect to shares of Common Stock, other than a distribution in cash, shall
be deposited with the Company and shall be subject to the same restrictions
as the shares of Common Stock with respect to which such distribution was
made.
3. TERMINATION OF EMPLOYMENT. (a) RETIREMENT, DISABILITY AND
DEATH. Unless otherwise determined by the Committee at the time of grant of a
Restricted Stock Award, if the employment by the Company of the holder of such
award terminates by reason of retirement on or after age 65 (or prior to such
age with the consent of the Committee), Disability or death, all Performance
Measures applicable to such award shall be deemed, as of the date of such
termination, to have been satisfied and the Restriction Period shall thereupon
terminate.
(b) OTHER TERMINATION. Unless otherwise determined by the Committee at
the time of grant of a Restricted Stock Award, if the employment by the
Company of the holder of a Restricted Stock Award terminates for any reason
other than retirement on or after age 65 (or prior to such age with the
consent of the Committee), Disability or death, the portion of such award
which is then subject to a Restriction Period shall be forfeited, as of the
date of such termination, and such portion shall be cancelled by the
Company.
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IV. LONG-RANGE PERFORMANCE AWARDS
1. LONG-RANGE PERFORMANCE AWARDS. The Committee may, in its discretion,
grant Long-Range Performance Awards pursuant to this Article IV to such officers
or key employees of the Company ("Participants") as may be selected by the
Committee.
2. TERMS OF LONG-RANGE PERFORMANCE AWARDS. Long-Range Performance Awards
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem advisable.
(a) NUMBER OF LONG-RANGE PERFORMANCE UNITS, SHARES OF RESTRICTED STOCK,
AND LONG-RANGE PERFORMANCE GOALS. The number of Long-Range Performance
Units and the number of shares of Restricted Stock to be granted to each
Participant and the related Long-Range Performance Goals shall be determined
by the Committee.
(b) PERFORMANCE CYCLES. A new Long-Range Performance Cycle may be
established by the Committee not more frequently than once each fiscal year.
(c) GRANT OF LONG-RANGE PERFORMANCE OPPORTUNITIES. Long-Range
Performance Opportunities, if granted, shall be granted by the Committee
within thirty (30) days after the beginning of the first fiscal year of each
Performance Cycle.
(d) AWARDS. After the end of each Long-Range Performance Cycle, the
Committee shall determine the percentage of the Long-Range Performance
Opportunity earned for such Long-Range Performance Cycle in accordance with
one (1) of the following:
(i) If the Long-Range Performance Result does not achieve the
Minimum Performance Goal, no award will be made and the Long-Range
Performance Opportunity will be forfeited.
(ii) If the Long-Range Performance Result achieves the Minimum
Performance Goal, each Participant shall be deemed to have earned fifty
percent (50%) of the Long-Range Performance Opportunity granted to the
Participant.
(iii) If the Long-Range Performance Result equals or exceeds the
Target Performance Goal, each Participant shall be deemed to have earned
one hundred percent (100%) of the Long-Range Performance Opportunity
granted to the Participant.
(iv) If the Long-Range Performance Result exceeds the Minimum
Performance Goal but is less than the Target Performance Goal, each
Participant shall be deemed to have earned the percent of the Long-Range
Performance Opportunity granted to the Participant determined by reducing
one hundred percent (100%) thereof by a percentage determined by the
Committee at the time of grant of the Long-Range Performance Award.
(e) PAYMENT. By March 1 of the year following the end of each
Long-Range Performance Cycle, a Participant shall be entitled to an award of
the earned percentage, if any, of the Restricted Stock and Long-Range
Performance Units constituting the Long-Range Performance Opportunity. At
the time of such award, the Company shall issue each Participant a
certificate for Common Stock representing the earned percentage, if any, of
the Restricted Stock without restriction unless and to the extent required
by then applicable securities laws or regulations. Concurrently with any
such issuance, the Company shall pay in cash to each Participant the earned
percentage of the Long-Range Performance Units. The payment hereunder for
each
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Long-Range Performance Unit earned shall be an amount equal to the Ending
Stock Price; provided, however, that (a) in no event shall the number of
shares of Restricted Stock awarded as part of any Long-Range Performance
Award to any Participant in any year exceed 15,000, and (b) in no event
shall the amount of cash payable to any Participant in any year as the
earned percentage of that Participant's Long-Range Performance Units exceed
100% of the Participant's base salary for the fiscal year of the Company
ending nearest November 30, 1993 (or in the case of a person who first
becomes subject to the limitations of Section 162(m) of the Code after
January 1, 1994, the annualized base salary of that person for the first
fiscal year of the Company in which he becomes subject to that Section)
increased by 5% for each fiscal year of the Company commencing after
November 30, 1993, and ending on the last day of the Performance Cycle under
which such award is earned.
(f) RIGHTS DURING LONG-RANGE PERFORMANCE CYCLE. During a Long-Range
Performance Cycle and until the Long-Range Performance Result is determined,
a Participant shall have the right to vote and to receive dividends on any
Restricted Stock granted to such Participant pursuant to this Article IV. A
Participant shall not receive dividends or other payments or be entitled to
any voting rights on any Long-Range Performance Units.
(g) TERMINATION OF EMPLOYMENT.
(i) A Long-Range Performance Opportunity relating to an existing
Long-Range Performance Cycle shall be forfeited if the Participant's
employment with the Company terminates before the end of such Long-Range
Performance Cycle other than (i) for reasons stated in section (g) (ii)
below or (ii) concurrently with or following a Change in Control, and,
except as provided herein, all rights and benefits under such Long-Range
Performance Opportunity shall cease upon such termination. However, if
the termination occurs after the first year of such Long-Range
Performance Cycle and the Committee in its sole discretion determines
that it is in the best interest of the Company to waive such forfeiture,
an award of all or part of any Long-Range Performance Opportunity may be
made by the Committee.
(ii) A Long-Range Performance Opportunity relating to an existing
Long-Range Performance Cycle shall not be forfeited if the Participant's
employment with the Company terminates before the end of such Long-Range
Performance Cycle by virtue of the Participant's death, Disability,
retirement on or after age 65 (or prior to such age with the consent of
the Committee) or termination under circumstances determined by the
Committee to be for the convenience of the Company. In the event of such
termination, the Participant or his designated beneficiary shall be
awarded the same percentage, if any, of the Long-Range Performance
Opportunity which is earned by other Participants for such Long-Range
Performance Cycle in accordance with section 2(e) of this Article IV and
payment shall be made at the time payment is made to such other
Participants.
3. CERTAIN DEFINITIONS. As used in this Article IV, the following terms
shall be defined as follows:
"BEGINNING STOCK PRICE" means the average Fair Market Value of the
Common Stock computed with respect to the thirty trading days immediately
preceding the start of a Long-Range Performance Cycle.
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"ENDING STOCK PRICE" means the average Fair Market Value of the Common
Stock computed with respect to the thirty trading days immediately preceding
the end of a Long-Range Performance Cycle.
"LONG-RANGE PERFORMANCE CYCLE" means a period of not less than three (3)
consecutive fiscal years.
"LONG-RANGE PERFORMANCE GOAL" means a level to be established by the
Committee for a Performance Cycle for one or more of the following: (a)
return on the consolidated assets of the Company and its consolidated
Subsidiaries; (b) return on the consolidated equity of the Company and its
consolidated Subsidiaries; (c) return on investment; (d) growth in the
consolidated operating profit of the Company and its consolidated
Subsidiaries; (e) growth in the consolidated net earnings of the Company and
its consolidated Subsidiaries; (f) growth in earnings per share of the
Company; and (g) growth in consolidated cash flow of the Company and its
consolidated Subsidiaries.
"LONG-RANGE PERFORMANCE OPPORTUNITY" means an opportunity for a
Participant to earn a combination of cash and Common Stock for a Long-Range
Performance Cycle contingent upon the Company's attaining a Long-Range
Performance Goal for such Long-Range Performance Cycle. Each Long-Range
Performance Opportunity will consist of Long-Range Performance Units and
shares of Restricted Stock in a combination to be determined by the
Committee.
"LONG-RANGE PERFORMANCE RESULT" means the performance actually achieved
with respect to the Long-Range Performance Goal established by the Committee
for the related Long-Range Performance Cycle.
"LONG-RANGE PERFORMANCE UNIT" means a right which is granted as part of
a Long-Range Performance Opportunity without payment of cash consideration
by the Participant and which, if and to the extent a Long-Range Performance
Goal is met at the end of the Long-Range Performance Cycle, will entitle the
Participant to receive an amount of cash on an unfunded basis equal to the
Ending Stock Price subject to the limitations set forth in Section 2(e) of
this Article IV. At the beginning of a Long-Range Performance Cycle the
value of a Long-Range Performance Unit shall be equal to the Beginning Stock
Price.
"MINIMUM PERFORMANCE GOAL" means achieving at least eighty percent (80%)
of the Long-Range Performance Goal established by the Committee.
"RESTRICTED STOCK", for purposes of this Article IV, means Common Stock
which is granted as part of a Long-Range Performance Opportunity without
payment of cash consideration by the Participant but with restrictions, as
determined by the Committee, on the Participant's right to transfer or sell
the shares thereof, including the obligation to return such shares to the
Company if a Long-Range Performance Goal is not met. Such restrictions will
be removed if and to the extent a Long-Range Performance Goal is met.
"TARGET PERFORMANCE GOAL" means achieving one hundred percent (100%) of
the Long-Range Performance Goal established by the Committee.
V. OTHER PERFORMANCE BASED AWARDS
1. OTHER PERFORMANCE SHARE AWARDS. In addition to Long-Range Performance
Awards pursuant to Article IV of this Plan, the Committee may, in its
discretion, grant Performance Share Awards to such eligible persons as may be
selected by the Committee.
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2. TERMS OF PERFORMANCE SHARE AWARDS. Performance Share Awards shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable.
(a) NUMBER OF PERFORMANCE SHARES AND PERFORMANCE MEASURES. The number
of Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee. In the sole discretion of the Committee, the Committee may amend
or adjust the Performance Measures or other terms and conditions of a
Performance Share Award in recognition of unusual or nonrecurring events
affecting the Company or its financial statements or changes in law or
accounting principles.
(b) VESTING AND FORFEITURE. The Agreement relating to a Performance
Share Award shall provide, in the manner determined by the Committee in its
discretion, and subject to the provisions of this Plan, for the vesting of
such award, or portion thereof, if specified Performance Measures are
satisfied or met within the specified Performance Period, and for the
forfeiture of such award, or portion thereof, if specified Performance
Measures are not satisfied or met within the specified Performance Period.
(c) SETTLEMENT OF VESTED PERFORMANCE SHARE AWARDS. The Agreement
relating to a Performance Share Award (i) shall specify whether such award
may be settled in shares of Common Stock (including shares of Restricted
Stock) or cash, or a combination thereof, and (ii) may specify whether the
holder thereof shall be entitled to receive, on a deferred basis, dividend
equivalents, and, if determined by the Committee, interest on such dividend
equivalents, with respect to the number of shares of Common Stock subject to
such award. If a Performance Share Award is settled in shares of Restricted
Stock, a certificate or certificates representing such Restricted Stock
shall be issued in accordance with Section III.2(c) and the holder of such
Restricted Stock shall have such rights of a stockholder of the Company as
determined pursuant to Section III.2(d). Prior to the settlement of a
Performance Share Award in shares of Common Stock, including Restricted
Stock, the holder of such award shall have no rights as a stockholder of the
Company with respect to the shares of Common Stock subject to such award.
3. TERMINATION OF EMPLOYMENT. (a) RETIREMENT, DISABILITY AND
DEATH. Unless otherwise determined by the Committee at the time of grant of a
Performance Share Award, if the employment by the Company of the holder of such
award terminates by reason of retirement on or after age 65 (or prior to such
age with the consent of the Committee), Disability or death, all Performance
Measures applicable to such award shall be deemed, as of the date of such
termination, to have been satisfied and the Performance period applicable to
such award shall thereupon terminate.
(b) OTHER TERMINATION. Unless otherwise determined by the Committee at
the time of grant of a Performance Share Award, if the employment by the
Company of the holder of a Performance Share Award terminates for any reason
other than retirement on or after age 65 (or prior to such age with the
consent of the Committee), Disability or death, the portion of such award
which is then subject to a Performance Period shall be forfeited, as of the
date of such termination, and such portion shall be cancelled by the
Company.
VI. GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS
1. ELIGIBILITY. Each Non-Employee Director shall be granted options to
purchase shares of Common Stock in accordance with this Article VI. All options
granted under this Article VI shall constitute Non-Qualified Stock Options.
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2. GRANTS OF STOCK OPTIONS. Each Non-employee Director shall be granted
Non-Qualified Stock Options as follows:
(a) TIME OF GRANT. On the date of the 1994 annual meeting of
shareholders of the Company (or, if later, on the date on which a person is
first elected or begins to serve as a Non-employee Director other than by
reason of termination of employment), and, thereafter, on the date of each
annual meeting of shareholders of the Company, each Non-employee Director
who is a Non-employee Director after such meeting of shareholders shall be
granted an option to purchase 2,500 shares of Common Stock (which amount
shall be pro-rated if such Non-employee Director is first elected or begins
to serve as a Non-employee Director on a date other than the date of an
annual meeting of shareholders) at a purchase price per share equal to the
Fair Market Value of a share of Common Stock on the date of grant of such
option.
(b) OPTION PERIOD AND EXERCISABILITY. Each option granted under this
Article VI shall be exercisable in part or in full at any time after the
grant thereof provided that (i) each such option shall expire 10 years after
its date of grant or on such earlier date as is hereinafter provided and
(ii) no Common Stock acquired upon the exercise of such options shall be
sold or transferred by the person exercising such option during the six
month period following the date of grant of such option. An exercisable
option, or portion thereof, may be exercised in whole or in part only with
respect to whole shares of Common Stock. Options granted under this Article
VI shall be exercisable in accordance with Section II.1(c).
3. TERMINATION OF DIRECTORSHIP. (a) If the holder of an option granted
under this Article VI ceases to be a Director of the Company for any reason
other than death, each such option held by such holder may thereafter be
exercised by such holder (or such holder's guardian, legal representative or
similar person) for a period of three years after the date of such holder's
ceasing to be a Director or until the expiration of the term of such option,
whichever period is shorter.
(b) If the holder of an option granted under this Article VI ceases to
be a Director of the Company by reason of death, each such option held by
such holder may thereafter be exercised by such holder (or such holder's
executor, administrator, legal representative, beneficiary or similar
person) for a period of two years after the date of such holder's death or
until the expiration of the term of such option, whichever period is
shorter.
(c) If the holder of an option granted under this Article VI dies
during the three-year period following such holder's ceasing to be a
Director of the Company as provided in paragraph 3(a), each such option held
by such holder may thereafter be exercised by the holder's executor,
administrator, legal representative, beneficiary or similar person for a
period of one year after the date of death or until the expiration of the
term of such option, whichever period is shorter.
ARTICLE VII
DIRECTORS' STOCK COMPENSATION PLAN
Each individual who during the term of this Plan is elected a Non-employee
Director shall receive a grant of shares of Common Stock ("Directors' Restricted
Shares") on the following dates (a) on the date of such election and (b) on the
fifth anniversary of such election, provided that such person is a Non-Employee
Director on such date and has served as a Non-Employee Director continuously
since the date referred to in (a) above. Each grant shall have an aggregate Fair
Market Value equal to five times the amount of such director's annual retainer.
For purposes of this Article VII, "annual retainer" shall mean the regular,
annual amount of compensation which, but for the
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<PAGE>
adoption of this Article VII, would have been payable in cash to the
Non-employee Director at the time of reference, not including any committee
meeting or similar fees or any expense reimbursement. Notwithstanding anything
contained in this Article VII to the contrary, all such Directors' Restricted
Shares shall be subject to the following restrictions and conditions:
(i) Until the fifth anniversary of the date Directors' Restricted
Shares are granted hereunder to a Non-employee Director, such shares shall
not be transferrable or assignable by such Non-employee Director except upon
the death of the Non-employee Director by will or the laws of descent and
distribution and in such case only to the extent that on the date of such
Non-employee Director's death such Directors' Restricted Shares had ceased
to be forfeitable to the Company pursuant to paragraph (ii) below. The
provisions of Section III.2(c) and (d) shall apply to Directors' Restricted
Shares.
(ii) Twenty-percent (20%) of the Directors' Restricted Shares granted
to a Non-employee Director shall be non-forfeitable on the date of grant. An
additional twenty-percent (20%) of the Directors' Restricted Shares granted
to a Non-employee Director shall become non-forfeitable on each of the next
succeeding four anniversaries of the date of grant, PROVIDED, HOWEVER, that
the Non-employee Director continues to be a Non-employee Director on such
anniversary. If a Non-employee Director shall for any reason not be a
Non-employee Director on any such anniversary, all Directors' Restricted
Shares granted hereunder which have not previously become non-forfeitable
shall be forfeited to the Company, neither such Non-employee Director nor
his successors and assigns shall have any claim or any interest therein and
any such Directors' Restricted Shares awarded to such Non-employee Director
which have previously become non-forfeitable pursuant to this paragraph (ii)
shall cease being subject to the restriction contained in (i) above six
months after such person ceased to be a Non-employee Director (but not later
than the date provided in (i) above).
VIII. MONTHLY INVESTMENT PLAN
1. ELIGIBILITY. All full time employees of the Company and its United
States Subsidiaries who have attained the age of 21 and completed three months
consecutive service will be eligible to participate ("MIP Participants") in the
Monthly Investment Plan ("MIP") set forth in this Article VIII. All
determinations of period of service with the Company shall include periods of
continuous service with any United States Subsidiary or with any United States
corporation acquired by the Company or merged or consolidated with the Company,
unless the Committee shall otherwise determine.
2. PARTICIPATION. (a) An MIP Participant at his or her election may elect
to participate in the MIP by (i) filling in and signing a form of payroll
deduction authorization (the "PD Authorization") and (ii) filling in and signing
a purchase order form for the purchase, on the New York Stock Exchange, of
shares of Common Stock for the account of such MIP Participant. Enrollment shall
become effective as soon as practicable after the PD Authorization and purchase
order form are received by the Company.
(b) Each month the Company will contribute for each MIP Participant an
amount equal to 25% of such Participant's actual payroll deduction (as specified
in the PD Authorization) up to 10% of his/ her annual base salary. The maximum
payroll deduction permitted by the MIP for each MIP Participant is 15% of
his/her annual base salary. The minimum payroll deduction is $10.00 per month.
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<PAGE>
3. OPERATION OF MIP PLAN. (a) The Company shall designate a member of the
New York Stock Exchange, as broker (the "Broker"), to make purchase of shares of
the Common Stock for the accounts of MIP Participants on the New York Stock
Exchange.
(b) The Company shall designate a custodian of the MIP to hold the shares
so purchased on behalf of the MIP Participants (the "Custodian").
(c) The Company shall designate a recordkeeper for the MIP (the
"Recordkeeper"). The Recordkeeper shall maintain records of all purchases and
sales of shares by MIP Participants under the MIP.
(d) The Company shall pay the administrative charges for the MIP including
Custodian's and Recordkeeper's fees and Broker's commissions, if any, on
purchases made from amounts deducted from the pay of MIP Participants, from
amounts contributed by the Company and from reinvestment of dividends. The
Broker's commission and other charges in connection with sales, or purchases not
made by payroll deductions, Company contributions or reinvestment of dividends,
shall be payable directly to the Broker by the MIP Participant who orders the
transactions for his/her account. Commissions under the Plan will be computed in
accordance with the requirements of the New York Stock Exchange.
(e) The Company shall deduct funds from each MIP Participant's pay as
authorized by the PD Authorization and will, as promptly as practicable, forward
to the Custodian the total of the amounts so deducted for all MIP Participants
plus the Company's contributions as provided in Section VIII.2(b). A list of MIP
Participants and the amount allocable to the account of each MIP Participant
will be forwarded to the Broker and the Recordkeeper.
(f) Upon notification from the Company, the Broker will, as promptly as
practicable, purchase on the New York Stock Exchange, as many full shares of
Common Stock (or fractional interests therein) as MIP funds will permit. The
number of shares purchased will depend upon the market price of the Company's
Common Stock on the New York Stock Exchange at the time such purchases are made.
The Custodian will forward payment for purchases of shares to the Broker. Such
purchases, on the basis of the average cost, shall be allocated by the
Recordkeeper to the accounts of the MIP Participant in proportion to the amounts
withheld by the Company for such MIP Participants.
(g) No more than 3% of the outstanding Common Stock as of January 1 in any
calendar year may be purchased by MIP Participants pursuant to the MIP.
4. PAYROLL DEDUCTIONS. A PD Authorization will remain effective until
terminated by a MIP Participant, and will be stated either as a percentage of
base pay or in even multiples of $1.00. The MIP Participant shall specify
therein the amount to be withheld from his/her pay, which amount may range from
a minimum of $10.00 per month to a maximum of 15% of the participant's base
salary.
The PD Authorization may be revised or terminated at any time by the MIP
Participant's written request submitted to the Company. Commencement, revision
or termination of deductions will become effective as soon as practicable after
a MIP Participant's written request is received by the Company. If a MIP
Participant terminates his/her PD Authorization such MIP Participant may not
resume payroll deductions for the purpose of the MIP for a one-year period. In
that event, such MIP Participant may upon request receive that number of full
shares of the Common Stock then held in his/her MIP account along with a check
representing the net proceeds of the sale of any remaining fractional interest
in shares.
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<PAGE>
5. AMENDMENT OR TERMINATION. The Company reserves the right to discontinue
use of its payroll deduction facilities for the purpose of the MIP at any time
such action is deemed advisable in its judgment, and it also reserves the right
to amend or discontinue the MIP at any time. Any such amendment or termination
will not result in the forfeiture, before the effective date of amendment or
termination of the MIP, of (i) any funds deducted from the salary of any MIP
Participant or contributed by the Company on behalf of any MIP Participant, (ii)
any shares or fractional interest in shares purchased by the MIP Participant, or
(iii) any dividends or other distribution declared in respect of such shares.
6. MIP PARTICIPANT'S ACCOUNT. (a) At the time of purchase each MIP
Participant (for whose account funds have been received) shall immediately
acquire full ownership of all shares and of any fractional interest in shares
purchased for his/her account. Unless otherwise requested by the MIP
Participant, all shares will be registered in the name of the Custodian and will
remain so registered until delivery is requested. Upon payment to the Broker of
the applicable fee, the MIP Participant may request that a certificate for any
or all of his/her full shares be delivered to such MIP Participant at any time.
Although the MIP Participant may not assign or hypothecate his/her interest in
the MIP as such, upon purchase of shares under the MIP such shares may be sold,
assigned, hypothecated or otherwise dealt with as would be the case with respect
to any other shares of the Company he/she might own.
(b) The MIP Participant's account will be credited with all dividends paid
in respect of the full shares and any fractional interest in shares held in such
account. Cash dividends will be reinvested in Common Stock at the end of each
quarter.
(c) Stock dividends and/or any stock splits in respect of Common Stock held
in the MIP Participant's account will be credited to the account without charge.
Distributions of other securities and rights to subscribe will be sold and the
proceeds will be handled in the same manner as a cash dividend.
(d) The MIP Participant may instruct the Broker at any time to sell any or
all of his or her full shares and the fractional interest in shares held in
his/her account. Upon such sale the Broker shall mail the MIP Participant a
check for the proceeds, less the regular brokerage commission and any transfer
taxes, registration fee or other normal charges which are payable by the MIP
Participant. Such instruction to the Broker, or a request for delivery of
certificates, shall not affect the MIP Participant's status as a MIP Participant
unless such person also terminates his/her payroll deduction authorization.
IX. GENERAL
1. EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
shareholders of the Company for approval and, if approved, shall become
effective as of the date of approval by the Board. This Plan shall terminate 10
years after its effective date unless terminated earlier by the Board.
Termination of this Plan shall not affect the terms or conditions of any award
granted prior to termination.
Awards hereunder may be made at any time on or after the effective date, and
prior to the termination, of this Plan, provided that no award may be made later
than 10 years after the effective date of this Plan.
A-17
<PAGE>
2. AMENDMENTS. The Board of Directors may amend this Plan as it shall deem
advisable, subject to any requirement of shareholder approval imposed by
applicable law; provided that no amendment shall be made without shareholder
approval if such amendment would (a) increase the maximum number of shares of
Common Stock available under this Plan (subject to Section IX.7), (b) reduce the
minimum purchase price in the case of an option or the base price in the case of
an SAR, (c) effect any change inconsistent with Section 422 of the Code or (d)
extend the term of this Plan. No amendment may impair the rights of a holder of
an outstanding award without the consent of such holder.
3. AGREEMENT. Each award under this Plan shall be evidenced by an
Agreement setting forth the terms and conditions applicable to such award. No
award shall be valid until an Agreement is executed by the Company and the
recipient of such award and, upon execution by each party and delivery of the
Agreement to the Company, such award shall be effective as of the effective date
set forth in the Agreement.
4. NON-TRANSFERABILITY. No option, SAR, Long-Range Performance Unit or
Performance Share shall be transferable other than by will or the laws of
descent and distribution. Each option, SAR, Long-Range Performance Unit or
Performance Share may be exercised or settled during the participant's lifetime
only by the holder or the holder's guardian, legal representative or similar
person. Except as permitted by the preceding sentence, no option, SAR,
Long-Range Performance Unit or Performance Share may be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by
operation of law or otherwise) or be subject to execution, attachment or similar
process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate,
encumber or otherwise dispose of any option, SAR, Long-Range Performance Unit or
Performance Share, such award and all rights thereunder shall immediately become
null and void.
5. TAX WITHHOLDING. The Company shall have the right to require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash pursuant to an award hereunder, payment by the holder of such award of any
Federal, state, local or other taxes which may be required to be withheld or
paid in connection with such award. As determined by the Committee at the time
of grant of an award, an Agreement may provide that (i) the Company shall
withhold from the shares of Common Stock or the amount of cash otherwise
issuable or payable to a holder, the number of whole shares of Common Stock
having an aggregate Fair Market Value or the amount of cash determined as of the
date the obligation to withhold or pay taxes arises in connection with an award
(the "Tax Date") in the amount necessary to satisfy any such obligation or (ii)
the holder may satisfy any such obligation by any of the following means: (A) a
cash payment to the Company, (B) delivery to the Company of previously owned
whole shares of Common Stock (which the optionee has held for at least six
months prior to delivery of such shares and for which the holder has good title,
free and clear of all liens and encumbrances) having an aggregate Fair Market
Value, determined as of the Tax Date, equal to the amount necessary to satisfy
any such obligation, (C) authorizing the Company to withhold from the shares of
Common Stock or the amount of cash otherwise issuable or payable to the holder
pursuant to an award, the number of whole shares of Common Stock having an
aggregate Fair Market Value or the amount of cash determined as of the Tax Date,
equal to the amount necessary to satisfy any such obligation, (D) in the case of
the exercise of an option, a cash payment by a broker-dealer acceptable to the
Company to whom the optionee has submitted an irrevocable notice of exercise or
(E) any combination of (A), (B) and (C); provided, however, that the Committee
shall have sole discretion to disapprove of an election pursuant to any of
clauses (B)-(E) and that in the case of a holder who is subject to Section 16 of
the Exchange Act, the Company may require that the method of satisfying any
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<PAGE>
such obligation be in compliance with Section 16 and the rules and regulations
thereunder. An Agreement may provide for shares of Common Stock to be delivered
or withheld having an aggregate Fair Market Value in excess of the minimum
amount required to be withheld, but not in excess of the amount determined by
applying the holder's maximum marginal tax rate. Any fraction of a share of
Common Stock which would be required to satisfy such an obligation shall be
disregarded and the remaining amount due shall be paid in cash by the holder.
The Company may require that any or all obligations to satisfy or pay taxes with
respect to any award shall be satisfied or paid by the holder prior to the
issuance of shares of Common Stock or the payment of cash by the Company.
6. RESTRICTIONS ON SHARES. Each award made hereunder shall be subject to
the requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of such shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
7. ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of securities, liquidation, spin-off or other similar event or change in
capitalization, or any distribution to holders of Common Stock other than a cash
dividend, the number and class of securities available under this Plan, the
number and class of securities subject to each outstanding option and the
purchase price per security, the number and class of securities subject to each
option to be granted to Non-employee Directors pursuant to Article VI, the
number and class of securities comprising each grant of Director's Restricted
Shares, the terms of each outstanding SAR, the number and class of securities
subject to each outstanding Stock Award, and the terms of each outstanding
Long-Range Performance Award and Performance Share Award shall be appropriately
adjusted by the Committee, such adjustments to be made in the case of
outstanding options and SARs without a change in the aggregate purchase price or
base price. If any such adjustment would result in a fractional security (i)
being available under this Plan, such fractional share shall be disregarded, or
(ii) subject to a grant under this Plan, the Company shall pay the holder of
such grant, in connection with the first exercise or settlement of such grant,
in whole or in part, occurring after such adjustment, an amount in cash
determined by multiplying (i) the fraction of such security (rounded to the
nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on
the exercise or settlement date over (B) the exercise or base price, if any, of
such grant.
8. CHANGE IN CONTROL.
(a)(1) Notwithstanding any provision in this Plan or any Agreement, in the
event of a Change in Control pursuant to Section (b)(3) below in connection with
which the holders of Common Stock receive shares of common stock that are
registered under Section 12 of the Exchange Act, (i) all outstanding options and
SARs shall immediately become exercisable in full, (ii) the Restriction Period
applicable to any outstanding Restricted Stock Award shall lapse, (iii) the
Long-Range Performance Cycle or Performance Period applicable to any outstanding
Long-Range Performance Unit or Performance Share shall lapse and terminate, (iv)
the Long-Range Performance Goals and Performance Measures applicable to any
outstanding Long-Range Performance Award and to any outstanding
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<PAGE>
Restricted Stock Award (if any) or Performance Share shall be deemed to be
satisfied at the maximum level, (v) the restrictions applicable to any
outstanding Director's Restricted Shares shall lapse, and (vi) there shall be
substituted for each share of Common Stock available under this Plan, whether or
not then subject to an outstanding award, the number and class of shares into
which each outstanding share of Common Stock shall be converted pursuant to such
Change in Control. In the event of any such substitution, the purchase price per
share in the case of an option and the base price in the case of an SAR shall be
appropriately adjusted by the Committee, such adjustments to be made in the case
of outstanding options and SARs without a change in the aggregate purchase price
or base price.
(2) Notwithstanding any provision in this Plan or any Agreement, in the
event of a Change in Control pursuant to Section (b)(1) or (2) below, or in the
event of a Change in Control pursuant to Section (b)(3) below in connection with
which the holders of Common Stock receive consideration other than shares of
common stock that are registered under Section 12 of the Exchange Act, each
outstanding award under this Plan shall be surrendered to the Company by the
holder thereof, and each such award shall immediately be cancelled by the
Company, and the holder shall receive, within 10 days of the occurrence of such
Change in Control pursuant to Section (b)(1) or (2) below or within 10 days of
the approval of the shareholders of the Company contemplated by Section (b)(3)
below, a cash payment from the Company in an amount equal to (i) in the case of
an option, the number of shares of Common Stock then subject to such option,
multiplied by the excess, if any, of (A) the highest per share price offered to
shareholders of the Company in any transaction whereby the Change in Control
takes place or (B) the Fair Market Value of a share of Common Stock on the date
of occurrence of the Change in Control, if the Change in Control occurs other
than pursuant to an acquisition of shares of Common Stock, over the purchase
price per share of Common Stock subject to the option, (ii) in the case of a
Free-Standing SAR, the number of shares of Common Stock then subject to such
SAR, multiplied by the excess, if any, of (A) the highest per share price
offered to shareholders of the Company in any transaction whereby the Change in
Control takes place or (B) the Fair Market Value of a share of Common Stock on
the date of occurrence of the Change in Control, if the Change in Control occurs
other than pursuant to an acquisition of shares of Common Stock, over the base
price of the SAR, (iii) in the case of a Long-Range Performance Award,
Restricted Stock Award, Director's Restricted Stock or Performance Share Award,
the number of Long-Range Performance Units, shares of Restricted Stock, shares
of Common Stock or the number of Performance Shares, as the case may be, then
subject to such award, multiplied by (A) the highest per share price offered to
shareholders of the Company in any transaction whereby the Change in Control
takes place or (B) the Fair Market Value of a share of Common Stock on the date
of occurrence of the Change in Control, if the Change in Control occurs other
than pursuant to an acquisition of shares of Common Stock. Each Tandem SAR shall
be surrendered by the holder thereof and shall be cancelled simultaneously with
the cancellation of the related option. The Company may, but is not required to,
cooperate with any person who is subject to Section 16 of the Exchange Act to
assure that any cash payment in accordance with the foregoing to such person is
made in compliance with Section 16 and the rules and regulations thereunder.
(b) For the purpose of this Plan, a "Change in Control" shall mean:
(1) The acquisition (other than from the Company) by any person,
entity, or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 15% or more of either the then
outstanding shares of Common Stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally in
the election of
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<PAGE>
directors; provided, however, no Change in Control shall be deemed to have
occurred for any acquisition by any corporation with respect to which,
following such acquisition, more than 60% of such corporation and the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively,
of the then outstanding shares of Common Stock or the combined voting power
of the Company's then outstanding voting securities immediately prior to
such acquisition in substantially the same proportions as their ownership,
immediately prior to such acquisition, of the Company's then outstanding
Common Stock and then outstanding voting securities, as the case may be; or
(2) Individuals who, as of the date hereof, constitute the Board (as of
the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for
purposes of this Agreement, considered as though such person were a member
of the Incumbent Board; or
(3) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which persons who
were the stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than 60% of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated company's
then outstanding voting securities, or a liquidation or dissolution of the
Company or of the sale of all or substantially all of the assets of the
Company.
9. NO RIGHT OF EMPLOYMENT. Neither this Plan nor any award made hereunder
shall confer upon any person any right to continued employment by the Company or
any affiliate of the Company or affect in any manner the right of the Company or
any affiliate of the Company to terminate the employment of any person at any
time without liability hereunder.
10. RIGHTS AS SHAREHOLDER. No person shall have any right as a shareholder
of the Company with respect to any shares of Common Stock or other equity
security of the Company which is subject to an award hereunder unless and until
such person becomes a shareholder of record with respect to such shares of
Common Stock or equity security.
11. APPROVAL OF PLAN. This Plan and all awards made hereunder shall be
null and void if the adoption of this Plan is not approved by the shareholders
of the Company.
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<PAGE>
/X/ PLEASE MARK YOUR VOTES |
AS IN THIS EXAMPLE. | 5086
|_____
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction
is made, this proxy will be voted FOR the nominees for election as
directors named in this proxy and FOR adoption of the 1994 Incentive
Plan.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR such nominees and FOR adoption of the 1994 Incentive Plan.
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Proposal to adopt 3. In their discretion, the
Directors / / / / 1994 Incentive Plan. / / / / / / Proxies are authorized to vote
(See Reverse) upon such other business as may
properly come before the
meeting.
For, except vote withheld from the following nominee(s):
- -----------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Please date and sign as name
appears hereon. If shares are
held jointly or by two or more
persons, each shareholder
named should sign. Executors,
administrators, trustees, etc.
should so indicate when signing.
If the signer is a corporation,
please sign full corporate name
by duly authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
------------------------------------
1994
------------------------------------
SIGNATURE(S) DATE
- -------------------------------------------------------------------------------
<PAGE>
CLARCOR Inc. PROXY/VOTING INSTRUCTION CARD
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON MARCH 31, 1994.
The undersigned hereby appoints MILTON R. BROWN and FRANK A. FIORENZA, or any
one or more of them, acting alone if only one shall be present, or jointly if
more than one shall be present, the true and lawful attorneys of the
undersigned, with power of substitution, to vote as proxies for the undersigned
at the Annual Meeting of Shareholders of CLARCOR Inc. to be held at The
University of Illinois College of Medicine at Rockford, 1601 Parkview Ave.,
Rockford, Illinois 61107, on Thursday, March 31, 1994 at 6:00 P.M., Central
Standard Time, and all adjournments thereof, all shares of Common Stock which
the undersigned would be entitled to vote and all as fully and with the same
effect as the undersigned could do if then personally present.
Receipt is acknowledged of the Company's Annual Report to Shareholders for the
fiscal year ended November 30, 1993, and the Notice and Proxy Statement for the
above Annual Meeting.
The Company is aware of two matters to be voted upon at this Annual Meeting:
1. the election of directors - the nominees are Messrs. J. Marc Adam, Dudley J.
Godfrey, Jr. and Stanton K. Smith, Jr.; and 2. the proposed 1994 Incentive Plan
described in the Proxy Statement for this Annual Meeting.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTOR'S RECOMMENDATIONS. IF A CHOICE IS NOT SPECIFIED, THE
PROXIES NAMED ABOVE WILL VOTE FOR THE NOMINEES FOR ELECTION AS DIRECTORS AND FOR
THE ADOPTION OF THE 1994 INCENTIVE PLAN. THE PROXIES CANNOT VOTE YOUR SHARES
UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
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