<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CLARCOR INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[CLARCOR 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 Tuesday, March 23, 1999 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 vote upon an Amendment to the Company's Second
Restated Certificate of Incorporation which will increase its authorized
Common Stock from 30,000,000 to 60,000,000 shares and increase its
authorized Preferred Stock from 1,300,000 to 5,000,000 shares; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of CLARCOR Common Stock of record at the close of business on
Wednesday, February 10, 1999 are entitled to receive notice of and 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.
MARCIA S. BLAYLOCK
Secretary
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY
AND MAIL IT PROMPTLY.
Rockford, Illinois
February 18, 1999
<PAGE> 3
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
Tuesday, March 23, 1999 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 are being mailed to shareholders on February 18, 1999.
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 her 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 (1) to elect the three persons nominated for election to
the Board of Directors listed on the proxy card enclosed herewith, (2) to
approve the proposed Amendment to the Company's Second Restated Certificate of
Incorporation and, (3) in the discretion of the appointed proxies, upon such
other matters as may properly come before the meeting.
As of February 10, 1999, the Company had outstanding 23,980,125 shares of
Common Stock and each outstanding share is entitled to one vote on all matters
to be voted upon. Only holders of CLARCOR Common Stock of record at the close of
business on February 10, 1999 are 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 OF DIRECTORS
At the Annual Meeting three directors are to be elected. Proxies will be
voted for the election of Messrs. Milton R. Brown, Robert H. Jenkins, and Don A.
Wolf 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. Brown and Wolf are directors of the Company previously elected by its
shareholders whose terms in office expire this year. Mr. Jenkins has not
previously been a director of the Company. He has been nominated to fill a
vacancy on the Board of Directors created by the retirement of Mr. Dudley J.
Godfrey, Jr. from the Board of Directors effective on March 23, 1999. Mr.
Godfrey's retirement is in accordance with a Company policy which encourages
directors to resign upon reaching age 70. If elected, Messrs. Brown, Jenkins and
Wolf will hold office for a three year period ending in 2002 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> 4
INFORMATION CONCERNING NOMINEES AND DIRECTORS
<TABLE>
<CAPTION>
YEAR TERM AS
DIRECTOR DIRECTOR
NAME AGE SINCE EXPIRES
---- --- -------- ------------
<S> <C> <C> <C>
*Milton R. Brown 67 November 29, 1990 2002
Chairman, President and Chief Executive Officer, Suntec
Industries Incorporated, Rockford, Illinois, since 1984.
Suntec Industries manufactures fuel units, solenoid
valves, and safety shut off valves. Mr. Brown is a
Director of AMCORE Financial, Inc., Suntec Industries
Incorporated and Suntec Industries -- France.
*Robert H. Jenkins 55 2002
Chairman, President and Chief Executive Officer,
Sundstrand Corporation, Rockford, Illinois, since 1997.
Mr. Jenkins served as President and Chief Executive
Officer, Sundstrand Corporation from 1995 to 1997.
Sundstrand Corporation is an aerospace and industrial
company. From 1990 to 1995 he served as Executive Vice
President of Illinois Tool Works Inc., Glenview, Illinois,
a manufacturer of construction and industrial products. He
is a Director of AK Steel Holding Corporation, Solutia,
Inc. and Cordant Technologies, Inc.
*Don A. Wolf 69 March 28, 1987 2002
Retired President and Chief Executive Officer, Do-It Best
Corp. (formerly Hardware Wholesalers, Inc.), Fort Wayne,
Indiana. Do-It Best Corp. is a national wholesaler of
hardware, plumbing supplies, electrical apparatuses, and
construction products. Mr. Wolf is a Director of Group
Dekko.
Carl J. Dargene 68 April 1, 1989 2001
Chairman, AMCORE Financial, Inc., Rockford, Illinois since
January 1996. Mr. Dargene served as President and Chief
Executive Officer, AMCORE Financial, Inc. from 1986 to
1996 and he was elected Chairman in May 1995. AMCORE
Financial, Inc. is a bank holding company. Mr. Dargene is
a Director of AMCORE Financial, Inc. and Woodward Governor
Company.
Lawrence E. Gloyd 66 March 31, 1984 2001
Chairman and Chief Executive Officer, CLARCOR Inc. since
June 1995. Mr. Gloyd was elected President and Chief
Executive Officer in March 1988 and Chairman, President
and Chief Executive Officer in March 1991. Mr. Gloyd is a
Director of AMCORE Financial, Inc., Thomas Industries,
Inc. and Woodward Governor Company.
Norman E. Johnson 50 June 26, 1996 2001
President and Chief Operating Officer, CLARCOR Inc. since
June 1995. Mr. Johnson was elected President-Baldwin
Filters, Inc. in 1990, Vice President-CLARCOR in 1992, and
Group Vice President-Filtration Products in 1993. Mr.
Johnson is a Director of AMCORE Bank, Rockford N.A.
J. Marc Adam 60 March 23, 1991 2000
Vice President Marketing, 3M, St. Paul, Minnesota since
1995. He was elected Group Vice President, Consumer
Products Group in May 1986, Group Vice President, Consumer
& Advertising Markets Group in January 1991, Group Vice
President, Medical Products Group in September 1991 and
Corporate Vice President Marketing in 1995. 3M is a
diversified manufacturer. Mr. Adam is a Director of the 3M
Foundation, Schneider National Inc. and Eastern Heights
Bank.
**James L. Packard 56 June 22, 1998 2000
Chairman, President and Chief Executive Officer,
Regal-Beloit Corporation, Beloit, Wisconsin since 1986.
From 1980 to 1984 he served as President and from 1984 to
1986 he served as President and Chief Executive Officer,
Regal-Beloit Corporation. Regal-Beloit Corporation is a
manufacturer of mechanical and electrical products. Mr.
Packard is a Director of The First National Bank & Trust
Company of Beloit.
Stanton K. Smith, Jr. 68 March 21, 1970 2000
Senior Counsel, Skadden, Arps, Slate, Meagher & Flom law
firm, New York, New York, since April 1996. From 1988 to
1991 he served as President and from 1991 to March 1996 he
served as Vice Chairman, CMS Energy Corporation, Dearborn,
Michigan. CMS Energy Corporation is a utility and energy
holding company.
</TABLE>
- ------------------------------
* Nominees for election to terms expiring in 2002.
** Mr. Packard was elected to the Board for a term expiring in March 2000 to
fill a vacancy caused by Mr. Fiorenza's death in 1996.
2
<PAGE> 5
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 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 1998, the standing committees of the Board of Directors were
the Director Affairs Committee, the Audit Committee, and the Compensation &
Stock Option Committee. The Executive Committee, which did not meet during
fiscal 1998, was abolished and the Director Affairs Committee was established in
June 1998.
The Director Affairs Committee consists of three directors who are not
officers of the Company. It is the responsibility of the Director Affairs
Committee to review and make recommendations regarding management succession and
Board policies and to recommend 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 Director Affairs Committee of nominees recommended by shareholders of the
Company. The Director Affairs Committee met once during fiscal 1998. The present
members of the Director Affairs Committee are Messrs. Milton R. Brown, Carl J.
Dargene and Stanton K. Smith, Jr.
The Audit Committee consists of three 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 twice during fiscal 1998. The present members of the
Committee are Messrs. Milton R. Brown, 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 1994
Incentive Plan and grants stock awards under such Plan to certain officers and
key employees of the Company. The Committee met twice during fiscal 1998. The
present members of the Committee are Messrs. J. Marc Adam, James L. Packard and
Don A. Wolf.
MEETINGS AND FEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during fiscal 1998. 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 1998, directors who were not employees of the Company
("Non-employee Directors") received an annual retainer of $30,000 and fees of
$1,000 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 $3,250 in fiscal 1998.
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, or its
successor, 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. Messrs. Adam, Brown and Smith elected to defer the fees
payable to each of them during fiscal 1998.
3
<PAGE> 6
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, and on each fifth anniversary of
such date, 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. On the date of grant, 20% of these shares
are vested and non-forfeitable. 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 transferable by will or the laws of descent and
distribution.
Under the 1994 Incentive Plan, each Non-employee Director is automatically
granted, on the date of each annual meeting of shareholders and on the date on
which such Non-employee Director is first elected or begins to serve as a
Non-employee Director, options to purchase 3,750 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 are fully exercisable on the date of grant
and 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. As of January 1, 1999, Messrs. Adam, Brown,
Dargene, Godfrey, Smith and Wolf each have fully exercisable options for 18,750
shares and Mr. Packard has 2,825.
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. ........................................ 2,453,100(1) 10.23%
One Corporate Center
Rye, NY 10580-1434
James B. Platt, Jr. ........................................ 1,204,966(2) 5.02%
6030 Dellwood Place
Bethesda, MD 20817
</TABLE>
- ------------------------------
(1) Based upon information contained in a Schedule 13F filed as of September
1998 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 10,
1999.
4
<PAGE> 7
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table provides information concerning the shares of Common
Stock of the Company beneficially owned as of February 10, 1999 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 of the Company as a
group:
<TABLE>
<CAPTION>
SHARES PERCENT
NAME OF PERSON OR BENEFICIALLY OF
IDENTITY OF GROUP OWNED CLASS
- ----------------- ------------ -------
<S> <C> <C>
J. Marc Adam (2)............................................ 34,201 *
Milton R. Brown (2)......................................... 37,475 *
Carl J. Dargene (2)......................................... 36,188 *
Lawrence E. Gloyd (1)(3).................................... 926,332 3.86%
Dudley J. Godfrey, Jr. (2).................................. 35,175 *
Robert H. Jenkins........................................... -- *
Norman E. Johnson (1)(3).................................... 388,051 1.62%
James L. Packard (2)........................................ 9,947 *
Stanton K. Smith, Jr. (2)................................... 44,350 *
Don A. Wolf (2)............................................. 58,580 *
Bruce A. Klein (1)(3)....................................... 95,526 *
David J. Anderson (1)(3).................................... 113,235 *
William F. Knese (1)(3)..................................... 99,422 *
All directors and executive officers as a group
(17 persons) (1)(2)(3)(4)................................. 2,105,981 8.78%
</TABLE>
- ------------------------------
* Less than one percent.
(1) Includes restricted shares of Common Stock granted on a contingent basis
under the 1994 Incentive 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 and shares subject to stock
options granted pursuant to the Company's 1994 Incentive Plan. See "Election
of Directors -- Meetings and Fees of the Board of Directors."
(3) Includes all shares subject to stock options granted pursuant to the
Company's 1984 Stock Option Plan and the 1994 Incentive Plan. For
information as to the total number of shares subject to options granted to
Messrs. Gloyd, Johnson, Klein, Anderson and Knese and the options which are
exercisable by them within 60 days, see the table on page 8.
(4) Includes 1,522,355 shares subject to stock options. Options for 735,669
shares are exercisable within 60 days.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1998.
5
<PAGE> 8
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 and Chief Executive Officer of the Company, and the other four most
highly compensated executive officers of the Company for the 1998 fiscal year.
All share amounts have been adjusted for the Company's three-for-two stock split
in April 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- ----------- ----------- ALL
SECURITIES OTHER
UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY (2) BONUS (3) OPTIONS (4) PAYOUTS (5) SATION (6)
- ----------------------------------------------- ---- ---------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lawrence E. Gloyd (1).......................... 1998 $438,077 $252,466 180,000 $178,105 $29,041
Chairman and Chief Executive Officer 1997 422,481 370,213 45,000 170,539 24,868
1996 399,231 293,951 45,000 128,836 25,254
Norman E. Johnson (1).......................... 1998 305,734 169,101 120,539 94,685 10,689
President and Chief Operating Officer 1997 287,812 199,194 45,000 81,861 12,738
1996 247,615 153,615 37,500 61,861 10,776
Bruce A. Klein................................. 1998 207,208 84,047 15,000 55,805 10,868
Vice President, Finance and Chief Financial 1997 196,654 132,612 15,000 81,861 11,074
Officer 1996 170,078 98,439 15,000 -- 8,011
David J. Anderson.............................. 1998 158,019 48,056 11,250 39,455 13,414
Vice President -- Corporate Development 1997 151,117 71,225 11,250 43,640 11,352
1996 141,692 58,205 11,250 32,968 9,526
William F. Knese............................... 1998 127,769 35,496 5,250 26,382 4,896
Vice President and Treasurer 1997 122,827 56,397 5,250 27,924 4,207
1996 117,846 41,531 7,500 15,823 4,240
</TABLE>
- ------------------------------
(1) Messrs. Gloyd and Johnson each 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 pursuant
to the Company's Retirement Savings Plan adopted in 1984 and the Company's
Deferred Compensation Plan.
(3) Discretionary cash bonuses granted by the Board of Directors under the
Company's Annual Incentive Plan.
(4) Consists of options and replacement options granted under the Company's 1994
Incentive Plan to acquire shares of the Company's Common Stock. See "--
Stock Options" below.
(5) Consists solely of Performance Shares and Performance Units distributed and
paid under the Performance Share Plan at the close of the Performance Cycle
ending in the year. The amount shown is equal to the number of Performance
Shares and Performance Units paid and distributed, multiplied by the average
of the closing price of a share of the Company's Common Stock for the last
30 trading days of the last fiscal year in the Performance Cycle.
At November 30, 1998, each executive officer listed above held the following
aggregate number of Performance Shares and Performance Units and the value
thereof was as follows: Mr. Gloyd, 20,776 shares and units, $385,655; Mr.
Johnson, 12,728 shares and units, $236,264; Mr. Klein, 7,282 shares and
units, $135,172; Mr. Anderson, 4,656 shares and units, $86,427; and Mr.
Knese, 3,025 shares and units, $56,152. The values shown in the preceding
sentence are based on the closing price of CLARCOR Common Stock on November
27, 1998 ($18.5625) and assume that 100% of the shares and units are earned.
See "--Performance Share Plan." Each holder receives dividends on and is
entitled to vote the Performance Shares.
(6) 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. The amounts shown in this column for the last fiscal year derived
from the following figures for Messrs. Gloyd, Johnson, Klein, Anderson and
Knese respectively: $10,952; $6,808; $4,969; $3,950; $1,300 -- Company match
for employee stock purchase plan; $2,400; $2,400; $2,400; $2,400;
$2,400 -- Company match for 401(k) plan; $2,000; $1,481; $1,007; $1,590;
$1,196 -- Company paid split dollar insurance premiums; $4,710 (Mr.
Gloyd) -- Company paid term life insurance premium; $8,979 (Mr. Gloyd),
$2,492 (Mr. Klein) and $5,474 (Mr. Anderson) -- Company paid group insurance
premium.
6
<PAGE> 9
Each officer of the Company is elected for a term of one year which begins
at the Board of Directors meeting at which he or she 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 or her successor.
STOCK OPTIONS
The following table provides information with respect to stock options
granted during fiscal year 1998 (adjusted for the April 1998 stock split) under
the Company's 1994 Incentive Plan, as amended, to the five individuals named in
the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO
GRANTED EMPLOYEES IN EXERCISE EXPIRATION GRANT DATE
NAME (1) FISCAL YEAR PRICE (2) DATE PRESENT VALUE (3)
---- ---------- ------------ --------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
L. E. Gloyd....................... 180,000 36.5% $19.583 12/16/07 $1,045,800
N. E. Johnson..................... 90,000 18.3 19.583 12/16/07 522,900
7,977(4) 1.6 21.583 06/30/00 34,221
14,621(4) 3.0 21.583 11/28/00 62,724
7,941(4) 1.6 21.583 12/12/01 34,067
B. A. Klein....................... 15,000 3.0 19.583 12/16/07 87,150
D. J. Anderson.................... 11,250 2.3 19.583 12/16/07 65,363
W. F. Knese....................... 5,250 1.1 19.583 12/16/07 30,503
</TABLE>
- ------------------------------
(1) Consists of nonqualified options issued for a ten year term (other than as
noted in footnote (4)) with a six 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 5.90% for the December 17, 1997 grants and 5.56%
for the March 25, 1998 replacement option grants, based on the quoted
yield of Treasury Strips maturing in seven years;
(iii) dividends of $.44 per share of Common Stock; and
(iv) stock price volatility of 25.8% based upon the monthly stock closing
prices for the preceding 7 years.
(4) These grants resulted from the exercise of an option and from the payment of
the related exercise price by the optionee using shares of previously owned
Company Common Stock. Under these circumstances the 1994 Incentive Plan
permits the grant of options ("replacement options") for the number of
shares used in payment of the exercise price. The exercise price for each
replacement option is equal to the market value of the Company's Common
Stock on the date of such exercise and replacement options expire on the
same date as the original option which was exercised. The replacement option
grants do not contain the replacement feature.
7
<PAGE> 10
The following table sets forth certain information regarding stock option
exercises during fiscal 1998 and the unexercised options held by such
individuals at November 30, 1998. All amounts have been adjusted for the April
1998 stock split.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FY-END AT FY-END
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE (1)
---- ----------- -------- ------------------- --------------------
<S> <C> <C> <C> <C>
L. E. Gloyd....................... 11,250 $146,613 346,688/303,750 $2,474,226/621,491
N. E. Johnson..................... 44,587 527,088 102,202/178,125 437,680/409,257
B. A. Klein....................... -- -- 6,563/49,687 32,680/160,212
D. J. Anderson.................... -- -- 52,276/36,562 387,938/120,174
W. F. Knese....................... 10,125 110,413 50,776/19,875 399,927/70,790
</TABLE>
- ------------------------------
(1) Based on the closing price of Common Stock as reported on the New York
Stock Exchange Composite Transactions on November 27, 1998, the last
trading date prior to the Company's nonbusiness day fiscal year-end close
on Saturday, November 28, 1998.
PERFORMANCE SHARE PLAN
The Long Range Performance Award Plan (the "Performance Share Plan") is a
part of the Company's 1994 Incentive Plan, approved by the shareholders on March
31, 1994. It provides officers and key employees of the Company with the
opportunity to earn shares of Common Stock ("Performance Shares") and units
representing the market value of Common Stock ("Performance Units").
At the beginning of each 3-year Performance Cycle, executives are awarded a
number of Performance Shares and Performance Units determined by applying a
formula set by the Compensation Committee at the beginning of the Performance
Cycle. The total number of Performance Shares and Performance Units is obtained
by dividing a percentage of the base salary of the executive, ranging from 40%
for the CEO to 15% for officers at the level of vice president, by the average
closing price of a share of the Company's Common Stock over a 30-day trading
period prior to the award date. 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 to
cover income taxes due on the total award.
During the 3-year Performance Cycle, the executive receives dividends and
is entitled to vote the Performance Shares. In order for the executive to retain
all of the Performance Shares and Performance Units awarded, the Company must
attain prescribed financial targets over the Performance Cycle. If the
performance targets have been met in full, the full number of Performance Shares
and Performance Units will be earned. If certain minimum objectives are attained
(currently established at 80% of the performance target), 50% of the Performance
Shares and Performance Units will be earned. If performance over the Performance
Cycle is between the minimum and the target level, the number of Performance
Shares and Performance Units earned will be prorated. No portion of the
Performance Shares or Performance Units will be earned if performance does not
meet the 80% minimum performance target. Further information regarding the plan
and the performance targets appears on page 13 in "Report of the Compensation &
Stock Option Committee."
8
<PAGE> 11
The following table sets forth information regarding 1998 fiscal year
awards (adjusted for the April 1998 stock split) under the Performance Share
Plan:
LONG-TERM INCENTIVE PLAN
AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE NON-STOCK PRICE BASED PLANS
OR OTHER --------------------------------
NUMBER OF SHARES, UNITS PERIOD UNTIL TARGET AND
NAME OR OTHER RIGHTS PAYOUT THRESHOLD MAXIMUM
---- --------------------------- ------------ -------------- --------------
<S> <C> <C> <C> <C>
L. E. Gloyd.............. Performance Shares 5,490 3 Years 2,745 Shares 5,490 Shares
Performance Units 3,660 Cash equal to Cash equal to
value of 1,830 value of 3,660
Shares* Shares*
N. E. Johnson............ Performance Shares 3,495 3 Years 1,748 Shares 3,495 Shares
Performance Units 2,330 Cash equal to Cash equal to
value of 1,165 value of 2,330
Shares* Shares*
B. A. Klein.............. Performance Shares 1,941 3 Years 971 Shares 1,941 Shares
Performance Units 1,293 Cash equal to Cash equal to
value of 647 value of 1,293
Shares* Shares*
D. J. Anderson........... Performance Shares 1,236 3 Years 618 Shares 1,236 Shares
Performance Units 825 Cash equal to Cash equal to
value of 413 value of 825
Shares* Shares*
W. F. Knese.............. Performance Shares 802 3 Years 401 Shares 802 Shares
Performance Units 534 Cash equal to Cash equal to
value of 267 value of 534
Shares* Shares*
</TABLE>
- ------------------------------
* Based on the average closing price of Common Stock for the 30-day trading
period preceding November 30, 2000 as reported in the New York Stock Exchange
Composite Transactions.
RETIREMENT PLANS
Most employees of the Company and certain of 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
1998 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 ($30,000 in fiscal 1999) in effect each December multiplied
by .012 plus (b) any excess of such plan year compensation over age 65 covered
compensation (subject to Internal Revenue limitations applicable to all
qualified retirement plans) multiplied by .0175. The aggregate of all annual
accruals plus the benefit accrued at November 30, 1989 under prior plans shall
be the amount of annual pension.
As of November 30, 1998, Messrs. Gloyd, Johnson, Klein, Anderson and Knese
had 12, 8, 3, 8 and 19 years of service, respectively.
9
<PAGE> 12
Estimated annual retirement benefits payable under the Pension Trust at
normal retirement (age 65) for Messrs. Gloyd, Johnson, Klein, Anderson and Knese
are $34,173, $61,946, $44,057, $30,478, and $67,377, 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, which was amended and restated effective December 1, 1994. Mr.
Gloyd is the only remaining active participant. 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 benefit pursuant to the Supplemental
Retirement Plan payable at normal retirement (age 65), for Mr. Gloyd is
$424,803. Such annual retirement benefits are not subject to any reduction for
Social Security amounts. The plan allows for Mr. Gloyd to elect a lump sum
payment of the present value of his benefit at or after the time of his
retirement.
Effective December 1, 1994, the Company established two new retirement
plans for officers and senior executives of the Company. The 1994 Supplemental
Pension Plan is intended to preserve benefits lost by reason of the maximum
limitations on compensation and benefits imposed on tax qualified retirement
plans by the Internal Revenue Code of 1986. The 1994 Executive Retirement Plan
replaces the Supplemental Retirement Plan for executives other than those who
were participants in the 1983 Supplemental Retirement Plan described above. The
1994 Executive Retirement Plan is similar in concept and benefit levels to the
1983 Supplemental Retirement Plan. A minimum of 15 years of service after
attainment of the age of 40 is required to earn a full benefit of 65% of
compensation at retirement. Messrs. Johnson, Klein, Anderson and Knese are
participants in both new plans. Estimated total annual retirement benefits
pursuant to both the 1994 Supplemental Pension Plan and the 1994 Executive
Retirement Plan payable at normal retirement (age 65) for Messrs. Johnson,
Klein, Anderson and Knese are $246,697, $145,259, $85,602 and $38,746,
respectively. Such annual retirement benefits are not subject to reduction for
Social Security amounts.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Gloyd,
Johnson, Klein, Anderson and Knese. The agreements for Messrs. Gloyd and
Johnson, effective July 1, 1997, were entered into to assure the benefits of
each executive's future services to the Company through the Annual Meeting to be
held in 2000, when Mr. Gloyd will retire as Chairman and Chief Executive Officer
of the Company and it is expected that Mr. Johnson will then assume the position
of Chief Executive Officer. The employment agreements provide terms of
employment, compensation, incentive plan compensation, benefits and perquisites,
pensions, employment termination, non-competition and confidentiality, and
"change of control" provisions. The employment period for Messrs. Gloyd and
Johnson expires at the Annual Meeting in 2000, but Mr. Johnson's agreement may
be extended automatically each year thereafter by the Board. The
compensation-related provisions are generally consistent with the level of
compensation and benefits just prior to the effective date. The agreements
provided that a special stock option of 180,000 and 90,000 shares (as adjusted
for the April 1998 stock split) would be granted to Messrs. Gloyd and Johnson,
respectively, in December of 1997 if certain conditions were met. No additional
grants will be made to Mr. Gloyd during the remainder of his employment period
unless certain specific quarterly financial targets are met. The grants for
180,000 and 90,000 shares were made on December 17, 1997. The "change of
control" provisions of these agreements are consistent with those described
below.
Mr. Gloyd's agreement also provides that the present value of the lifetime
monthly benefit amounts which would be payable to Mr. Gloyd pursuant to the
Company's 1983 Supplemental Retirement Plan if he had retired at his normal
retirement date, would be placed in trust. Accordingly, such present value was
deposited in trust pursuant to a Trust Agreement dated as of December 1, 1997.
Upon Mr. Gloyd's retirement at the Annual Meeting to be held in 2000, his prior
death, his resignation
10
<PAGE> 13
for "Good Reason" (as such term is defined in the agreement) or the termination
of his employment by the Company for any reason including a change of control
(as defined below) the amounts then held in trust, plus interest, will be
distributed to Mr. Gloyd (or his heirs) in lump sum or in equal monthly or
quarterly installments over a period not to exceed 10 years selected by Mr.
Gloyd.
The agreements with Messrs. Klein, Anderson and Knese 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 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, following a change of
control, 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 purpose of the Compensation & Stock Option Committee ("Committee") is
to assure that the Chief Executive Officer and the other executive officers of
the Company ("Executive Officers") are compensated equitably, competitively and
in a manner that is consistent with the long-term best interests of the Company
and its shareholders. The Committee, which is composed entirely of independent
Non-employee Directors, is responsible for determining the annual salary, cash
11
<PAGE> 14
incentives, benefits and intermediate- and long-term incentive plan awards for
the Company's Executive Officers.
COMPENSATION PHILOSOPHY
There are certain stated principles which the Committee follows in
structuring the compensation packages for the Chief Executive Officer and the
other Executive Officers of the Company. These are:
Pay for Performance
A high percentage of total compensation is linked directly to the
performance of the Company and the executive's individual performance in
attaining the Company's objectives and supporting the Company's mission
statement. The Committee believes that this structure aligns the
executives' interests with the interests of the shareholders.
Competitiveness
Total compensation packages are designed to be comparable with those
of executives occupying comparable positions in comparable companies. The
packages are also designed to allow an opportunity to earn at a level above
median industry practices and market competitors when Company performance
exceeds the results of comparable companies. The opportunity to earn at
higher levels provides a significant challenge to the Executive Officers.
Executive Ownership
A major component of executive compensation is equity based, and as a
result, the Executive Officer's interests are more directly linked with
shareholders' interests. The Committee believes that equity-based
compensation properly balances the rewards for long-term versus short-term
results.
The Committee has established ownership guidelines for Executive
Officers and Non-employee Directors to align their interests and objectives
with the Company's shareholders. These guidelines require that Executive
Officers own shares with a value ranging from a minimum of two times annual
salary for officers at the level of corporate vice president to a minimum
of four times annual salary for the Company's Chairman and Chief Executive
Officer. In addition, the guidelines require that Non-employee Directors
own shares with a value equal to a minimum of five times annual retainer.
Management Development
The compensation packages are also designed to attract and retain
quality executives with the leadership skills and other key competencies
required to meet the Company's objectives and to enhance shareholder value.
COMPONENTS OF EXECUTIVE PAY
The components of total pay for all executives are annual salary, cash
incentives, benefits and intermediate- and long-term incentive awards. The
Committee reviews annually each component of compensation and total compensation
for the Executive Officers. The review includes a market comparison of
compensation and changes in compensation for equivalent positions in related
industrial groups and comparably-sized companies. Competitive information and
data relating to executive compensation packages is provided by independent
compensation consultants at the request of the Committee.
12
<PAGE> 15
Annual Salary
Annual salary and annual adjustments are based on the executive's
performance, experience, and reference to competitive rates for comparable
positions in related industry groups and comparably-sized companies.
Cash Incentives
Annual cash incentives are determined based upon the attainment of
financial targets by the Company and the individual performance of the
executive. If certain minimum target results are not achieved, no annual
incentive will be paid. If target levels, which the Committee considers to
be reasonably difficult to attain, are achieved, annual incentive levels
generally range from 25% to 53% of base salary, with the maximum awards
ranging from 50% to 90% of base salary if performance materially exceeds
the target objectives.
The financial targets that must be attained for cash incentive
payments include two measures, net earnings and economic value added, or as
referred to by the Company, CLARCOR Value Added ("CVA"). In basic terms,
CVA is consolidated annual after-tax operating earnings less the annual
cost of capital. Thus the size of the cash incentives varies directly with
the amount by which such after-tax earnings exceed the cost of capital. As
a result, the CVA program is designed to reward managers who increase
shareholder value by most effectively deploying the capital contributed by
the shareholders and lenders. The net earnings and CVA components place
cash incentives "at risk" since if the Company fails to achieve the target
levels, the cash incentive awards will be reduced. The Committee sets the
target levels prior to the beginning of the year.
Benefits
Employee benefits offered to the general employee population of the
Company are provided to Executive Officers as part of the total
compensation program. In addition, certain Executive Officers are provided
supplemental retirement benefits and life insurance policies.
Intermediate-Term Incentive: Performance Share Plan
Unlike the annual cash incentive plan, which provides an incentive for
a specific year's performance, the Performance Share Plan (which is
described in detail at Page 8 under "Performance Share Plan") requires a
sustained level of corporate performance over a 3-year Performance Cycle.
The Plan provides benefits that vary directly with the market price of the
Company's Common Stock over the Performance Cycle. In addition, the
Executive Officers receive dividends on and are entitled to vote his or her
Performance Shares. Both of these attributes are designed to closely align
the interests of the participating Executive Officers directly with those
of the Company's shareholders.
For the Performance Period 1996-1998 Plan participants earned 100% of
the total performance opportunity as a result of the substantial
achievement of two aggressive financial goals established by the Committee.
One half of the award was earned based upon attainment of a return on
equity greater than the average of a comparator group, and the other half
was earned based upon attainment of earnings per share growth versus
performance standards set by the Committee. The Committee selected a group
of over 30 manufacturing companies with revenues averaging over $400
million as the comparator group for measuring the Company's comparative
return on equity.
Long-Term Incentive Plan
The Company's long-term incentive plan awards nonqualified stock
options to its senior and mid-level executives. Options granted under the
Company's shareholder approved 1994 Incentive Plan have a 10-year life and
all options granted during fiscal 1998 were at the market value of the
13
<PAGE> 16
Common Stock on the date of grant. The option grants provide the executives
an opportunity to acquire an equity interest in the Company and to share in
the appreciation of the stock.
Market surveys of long-term incentives are reviewed to establish
competitive practices. Management makes recommendations to the Committee on
the size of a grant, if any, for each executive based on the individual's
ability to affect financial performance, the executive's past performance,
and expectations of the executive's future contributions. The CEO's grant
is similarly determined by the Committee and all other stock option grants
are reviewed and approved by the Committee.
Stock options granted in 1998 are not exercisable for three years
after the grant. Thereafter they become exercisable at the rate of 25% per
year and they are fully exercisable after the 6th year and through the 10th
year of the option. These restrictions on exercise, together with the
10-year life of the option, are consistent with the concept of the Plan as
providing an incentive to the executive to remain with the Company for at
least the vesting period of the option and to increase the value of the
Common Stock on a long-term basis.
SECTION 162(m) COMPLIANCE
The Committee has considered the possible impact of Section 162(m) of the
Internal Revenue Code of 1986, which generally limits to $1,000,000 (with
several exceptions) the tax deduction available for compensation paid to a
person who is an executive listed in the Summary Compensation Table and who is
employed by the Company at the end of its fiscal year. The Committee intends to
preserve to the Company the maximum opportunity for obtaining deductibility for
all amounts paid to its officers by designing and administering the Company's
plans and programs in a way that will meet the regulations in effect at the time
compensation decisions are made.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Gloyd's annual salary was increased during fiscal 1998 to be
competitive with the median base salary paid to chief executive officers of
comparably-sized corporations identified by the Committee. In addition, Mr.
Gloyd's annual cash incentive had a target level of 53% of base salary and a
maximum award of 90% if performance materially exceeded target objectives. Mr.
Gloyd was awarded an annual cash incentive in accordance with the annual cash
incentive plan and based on the Company's growth in net earnings and economic
value added, and Mr. Gloyd's performance in meeting his personal performance
objectives.
Mr. Gloyd participated in the Committee approved payout at 100% for the
1996-1998 Performance Period and received awards for the 1998-2000 Performance
Period as shown in the table on Page 9 for the Performance Share Plan.
As described earlier on Page 10, Mr. Gloyd entered into an employment
agreement with the Company effective July 1, 1997. As provided by that
agreement, in fiscal 1998 Mr. Gloyd was awarded a special stock option grant of
180,000 shares (as adjusted for the April 1998 stock split) on December 17,
1997. No additional grants will be made to Mr. Gloyd during the remainder of his
employment period unless certain specific quarterly financial targets are met.
The 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.
Compensation & Stock Option Committee
Don A. Wolf, Chairman
J. Marc Adam
James L. Packard
14
<PAGE> 17
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Dargene, Chairman and Director of AMCORE Financial, Inc. serves as a
member of the Company's Board and prior to June 1998 served as a member of the
Company's Compensation & Stock Option Committee. Mr. Gloyd, Chairman and 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.
15
<PAGE> 18
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
return on its Common Stock for a five year period (November 30, 1993 to November
30, 1998) with the cumulative total return of the S&P Composite 500 Index, the
S&P SmallCap 600 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, S&P SMALLCAP 600 INDEX AND
S&P MANUFACTURING DIVERSIFIED INDEX
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
S & P SMALL CAP 600 S & P COMPOSITE 500 S & P MANUFACTURING
CLARCOR INC. INDEX INDEX DIVERSIFIED INDEX
------------ ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Nov. 26, 93 100.00 100.00 100.00 100.00
Dec. 2, 94 100.63 96.34 100.68 102.34
Dec. 1, 95 117.91 126.16 138.05 150.03
Nov. 30, 96 123.77 153.78 175.73 210.73
Nov. 29, 97 171.02 191.52 225.84 248.47
Nov. 28, 98 164.60 178.14 282.43 282.72
</TABLE>
* Assumes that the value of the investment in the Company's Common Stock and
each index was $100 on November 26, 1993 and that all dividends were
reinvested.
The reference points on the foregoing graph are as follows:
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CLARCOR Inc. .................................. 100.63 117.91 123.77 171.02 164.60
S&P SmallCap 600 Index......................... 96.34 126.16 153.78 191.52 178.14
S&P Composite 500 Index........................ 100.68 138.05 175.73 225.84 282.43
S&P Manufacturing Diversified Index............ 102.34 150.03 210.73 248.47 282.72
</TABLE>
The 1993 beginning measuring point was the market close on November 26,
1993, the last trading day before the beginning of the Company's fifth preceding
fiscal year. The closing measuring point for 1998 was November 27, 1998 based on
the last New York Stock Exchange trading date prior to the Company's Saturday,
November 28, 1998 fiscal year-end.
16
<PAGE> 19
PROPOSED AMENDMENT TO THE SECOND
RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors unanimously recommends that the shareholders
consider and approve a proposal to amend the Second Restated Certificate of
Incorporation of the Company to increase the number of shares of Common Stock,
par value $1.00 per share, which the Company is authorized to issue from
30,000,000 to 60,000,000 shares and to increase the number of shares of
Preferred Stock, par value $1.00 per share, which the Company is authorized to
issue from 1,300,000 to 5,000,000 shares. If the proposed amendment is approved,
the first paragraph of ARTICLE FOURTH of the Second Restated Certificate of
Incorporation shall be amended to read as follows:
"FOURTH: The total number of shares of all classes of capital stock which
the corporation shall have the authority to issue is 65,000,000 shares
which shall be divided into two classes as follows:
"5,000,000 shares of Preferred Stock (Preferred Stock) of the par value
of $1.00 per share, and
"60,000,000 shares of Common Stock (Common Stock) of the par value of
$1.00 per share."
On February 10, 1999, 23,980,125 shares of Common Stock were issued and
outstanding and none of the Preferred Stock was issued and outstanding. The
proposed amendment would increase the number of authorized but unissued shares
of Common Stock from 6,019,875 to 36,019,875 shares.
The additional shares of stock authorized by the proposed amendment would
be issuable at any time in the sole discretion of the Board of Directors,
without the necessity of further approval by the shareholders except as required
by law or applicable stock exchange requirements. The terms of any shares of
Preferred Stock issued including dividend rates, conversion prices (if any),
voting rights, redemption prices and similar matters will be determined by the
Board of Directors. The holders of the Company's Common Stock and Preferred
Stock do not currently, and would not as a result of the proposed increase in
authorized shares, have preemptive rights to subscribe for any additional
capital stock of the Company.
The increase in authorized but unissued shares of Common and Preferred
Stock is designed to enable the Company to issue stock dividends (including
stock splits issued in the form of stock dividends), make grants and awards
under the Company's 1994 Incentive Plan, to raise capital and engage in
acquisitions and to use for general corporate purposes. The Company has no
present commitments, agreements or undertakings to issue shares of Common or
Preferred Stock except pursuant to outstanding grants under the Company's 1984
Stock Option Plan and 1994 Incentive Plan and the outstanding Preferred Stock
Purchase Rights associated with its outstanding Common Stock. The Company does
not have any present intention to use the additional shares for any purpose
other than these routine corporate purposes.
The increase in the authorized but unissued shares of Common and Preferred
Stock, however, could make a change in control of the Company more difficult to
achieve. The flexibility to issue additional Common and Preferred Stock can
enhance the Board's arm's-length bargaining capability on behalf of the
Company's shareholders in a take-over situation. Under some circumstances, the
authorized but unissued shares of Common Stock and the ability to designate the
rights of, and issue, Preferred Stock could be used by an incumbent board to
make a change of control of the Company more difficult. The Board has no present
intention to use the Common or Preferred Stock for such a purpose, except that
any issuances of the Common Stock proposed to be authorized are expected to be
accompanied by the Preferred Stock Purchase Rights identical to those now
outstanding. The Company is not aware of any present effort to effect a change
of control or takeover of the Company.
VOTING ON THE AMENDMENT
If a quorum is present at the Annual Meeting, approval of the proposed
amendment requires the affirmative vote of the holders 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 proposed amendment.
17
<PAGE> 20
Abstentions and broker non-votes will have the same effect as a vote against the
proposed amendment. Proxies solicited by the Board of Directors will be voted
for this proposal unless a contrary vote is specified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE
COMPANY'S SECOND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON AND PREFERRED STOCK.
MISCELLANEOUS
AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP to audit the
financial statements of the Company for the fiscal year ending November 30,
1999. PricewaterhouseCoopers LLP (or its predecessors) has served as the
Company's auditors for more than 30 years. The shareholders will not be asked to
approve this selection at the Annual Meeting. A representative of
PricewaterhouseCoopers LLP 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 2000 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 2000 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 21, 1999.
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 date of the meeting and certain other requirements are met. It is currently
expected that the 2000 Annual Meeting of Shareholders of the Company will be
held on March 28, 2000. Consequently, written notice of any such nomination or
proposal which a shareholder desires to make at the 2000 Annual Meeting must be
received by the Company no earlier than December 29, 1999 and no later than
January 28, 2000. A copy of the Company's bylaws may be obtained without charge
from the Secretary of the Company.
18
<PAGE> 21
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 $8,000, 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
MARCIA S. BLAYLOCK
Secretary
Rockford, Illinois
February 18, 1999
19
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CLARCOR Inc. PROXY/VOTING INSTRUCTION CARD
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON MARCH 23, 1999.
The undersigned hereby appoints Carl J. Dargene and Stanton K. Smith Jr., 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 Tuesday, March 23, 1999 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, 1998, 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. Milton R. Brown, Robert H.
Jenkins and Don A. Wolf and 2. the proposed amendment to the Second Restated
Certificate of Incorporation 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 DIRECTORS' RECOMMENDATIONS. IF A VOTE IS NOT
SPECIFIED, THE PROXIES NAMED ABOVE WILL VOTE FOR THE NOMINEES FOR ELECTION AS
DIRECTORS AND FOR THE AMENDMENT TO THE SECOND RESTATED CERTIFICATE OF
INCORPORATION. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN
THIS CARD.
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/X/ PLEASE MARK YOUR 5086
VOTES AS IN THIS
EXAMPLE.
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 the
amendment to the Second Restated Certificate of Incorporation.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH NOMINEES AND FOR THE AMENDMENT TO THE SECOND RESTATED CERTIFICATE OF
INCORPORATION.
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FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Proposal to amend / / / / / / 3. In their discretion, the Proxies are authorized
Directors the Second Restated to vote upon such other business as may
(See Reverse) Certificate of properly come before the meeting.
Incorporation.
For, except vote withheld from the following nominee(s):
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SIGNATURE(S) DATE
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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.
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