<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 INC. 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 Saturday, March 25, 2000 at 11:00
A.M., Central Standard Time, for the following purposes:
1. To elect three Directors for a term of three years each; and
2. 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
Friday, February 11, 2000 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 23, 2000
<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
Saturday, March 25, 2000 at 11:00 A.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 23, 2000.
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 to elect the three persons nominated for election to the
Board of Directors listed on the proxy card enclosed herewith and, in the
discretion of the appointed proxies, upon such other matters as may properly
come before the meeting.
As of February 11, 2000, the Company had outstanding 24,255,740 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 11, 2000 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. J. Marc Adam, James L. Packard 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 and Smith are directors of the Company previously elected by its
shareholders whose terms in office expire this year. Mr. Packard was elected in
1998 by the Board to fill a vacancy on the Board. If elected, Messrs. Adam,
Packard and Smith will hold office for a three year period ending in 2003 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
---- --- -------- ------------
<C> <S> <C> <C> <C>
* J. Marc Adam 61 March 23, 1991 2003
Retired Vice President Marketing, 3M, St. Paul, Minnesota.
Mr. Adam served as Vice President Marketing from 1995 to 1999
and from 1986 to 1995 as Group Vice President, 3M. 3M is a
diversified manufacturer. Mr. Adam is a Director of Schneider
National Inc.
* James L. Packard 57 June 22, 1998 2003
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. He is
also a member of the NASDAQ Listing and Hearing Review
Council.
* Stanton K. Smith, Jr. 69 March 21, 1970 2003
Senior Counsel, Skadden, Arps, Slate, Meagher & Flom LLP 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.
Milton R. Brown 68 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 56 March 23, 1999 2002
Retired Chairman, Hamilton Sundstrand Corporation (formerly
Sundstrand Corporation), Rockford, Illinois. Mr. Jenkins
served as Chairman, President and Chief Executive Officer
from 1997 to 1999 and as President and Chief Executive
Officer, Sundstrand Corporation from 1995 to 1997. Hamilton
Sundstrand Corporation is an aerospace and industrial
company. Mr. Jenkins is a Director of AK Steel Holding
Corporation, Solutia, Inc., Cordant Technologies, Inc. and
Sentry Insurance.
** Philip R. Lochner, Jr. 56 June 17, 1999 2002
Retired Senior Vice President-Chief Administrative Officer at
Time Warner, Inc., New York, New York. Mr. Lochner served as
Senior Vice President-Chief Administrative Officer, Time
Warner, Inc., from 1991 to 1998. Time Warner, Inc. is a
diversified media company. Mr. Lochner is a Director of Apria
Healthcare Group Inc., the National Association of Corporate
Directors and the Investor Responsibility Research Center. He
also serves on the Board of Advisors of Republic NY Corp.,
Lens Fund and the National Association of Securities Dealers.
** Don A. Wolf 70 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 69 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 67 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 51 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 serves on
a Rockford market board for AMCORE Bank, N.A.
</TABLE>
- ------------------------------
* Nominees for election to terms expiring in 2003.
** Mr. Lochner was elected to the Board in June 1999 for a term expiring in
March 2002 in anticipation of a vacancy to be caused by Mr. Wolf's expected
retirement from the Board on March 25, 2000.
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 1999, the standing committees of the Board of Directors were
the Director Affairs Committee, the Audit Committee, and the Compensation &
Stock Option Committee.
The Director Affairs Committee consists of three independent non-employee
directors. 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 twice during fiscal 1999. 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 independent non-employee directors.
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 1999. The present members of the Committee are Messrs.
Milton R. Brown, Philip R. Lochner, Jr. and Stanton K. Smith, Jr.
The Compensation & Stock Option Committee, which consists of four
independent non-employee directors, 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 1999. The present members of the
Committee are Messrs. J. Marc Adam, Robert H. Jenkins, James L. Packard and Don
A. Wolf.
MEETINGS AND FEES OF THE BOARD OF DIRECTORS
The Board of Directors held eight meetings during fiscal 1999. 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 1999, directors who were not employees of the Company 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 1999.
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 Bank One Corporation, 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, Jenkins and Smith elected to defer the
fees payable to each of them during fiscal 1999.
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, 2000, Messrs. Adam, Brown,
Dargene, Smith and Wolf each have fully exercisable options for 22,500 shares,
Mr. Packard has 6,575, Mr. Jenkins has 3,750 and Mr. Lochner 2,850.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Dargene, a director of the Company, is Chairman of AMCORE Financial,
Inc. (the "Holding Company"), Rockford, Illinois. In addition, Messrs. Brown and
Gloyd, also directors of the Company, are directors of the Holding Company and
Mr. Johnson serves on a Rockford market board of AMCORE Bank, N.A. (the "Bank"),
which is an affiliate of the Holding Company. During 1999, CLARCOR had business
transactions with the Holding Company and its affiliates including the Bank's
participation with a group of banks in a multicurrency credit agreement dated
September 9, 1999. All such transactions were in the ordinary course of business
and it is anticipated that similar transactions will continue.
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. ........................................ 2,336,650(1) 9.63%
One Corporate Center
Rye, NY 10580-1434
Wanger Asset Management, L.P. .............................. 1,300,000(2) 5.36%
227 West Monroe Street
Chicago, Illinois 60606-5016
</TABLE>
- ------------------------------
(1) Based upon information contained in a Schedule 13F filed as of September
1999 with the Securities and Exchange Commission by Gabelli Funds, Inc. on
behalf of certain Gabelli entities.
(2) Based upon information contained in a Schedule 13F filed as of February 2000
with the Securities and Exchange Commission by Wanger Asset Management, L.P.
on behalf of certain Wanger entities.
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 11, 2000 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)............................................ 38,324 *
Milton R. Brown (2)......................................... 41,636 *
Carl J. Dargene (2)......................................... 39,938 *
Lawrence E. Gloyd (1)(3).................................... 979,002 4.04%
Robert H. Jenkins (2)....................................... 11,671 *
Norman E. Johnson (1)(3).................................... 503,435 2.08%
Philip R. Lochner, Jr. (2).................................. 10,931 *
James L. Packard (2)........................................ 13,697 *
Stanton K. Smith, Jr. (2)................................... 48,310 *
Don A. Wolf (2)............................................. 63,127 *
Michael J. Tilton (1)(3).................................... 51,580 *
Bruce A. Klein (1)(3)....................................... 119,858 *
David J. Anderson (1)(3).................................... 123,626 *
All directors and executive officers as a group
(17 persons) (1)(2)(3)(4)................................. 2,338,961 9.64%
</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, Tilton, Klein and Anderson and the options which are
exercisable by them within 60 days, see the table on page 8.
(4) Includes 1,725,366 shares subject to stock options of which 227,500 were
granted on December 20, 1999. Options for 825,931 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 1999.
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 fiscal year that
ended on November 27, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- ----------- ----------- ALL
SECURITIES OTHER
UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY (3) BONUS (4) OPTIONS (5) PAYOUTS (6) SATION (7)
- ----------------------------------------------- ---- ---------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lawrence E. Gloyd (1).......................... 1999 $461,923 $375,493 -- $193,669 $35,339
Chairman and Chief Executive Officer 1998 438,077 252,466 180,000 178,105 29,041
1997 422,481 370,213 45,000 170,539 24,868
Norman E. Johnson (1).......................... 1999 331,458 266,953 45,000 114,992 12,388
President and Chief Operating Officer 1998 305,734 169,101 120,539 94,685 10,689
1997 287,812 199,194 45,000 81,861 12,738
Michael J. Tilton (2).......................... 1999 221,692 170,974 15,000 -- 9,160
Executive Vice President -- 1998 97,308 41,621 15,000 -- 2,745
Engine/Mobile Filtration 1997 -- -- -- -- --
Bruce A. Klein................................. 1999 221,065 103,860 15,000 67,432 11,109
Vice President, Finance and Chief Financial 1998 207,208 84,047 15,000 55,805 10,868
Officer 1997 196,654 132,612 15,000 81,861 11,074
David J. Anderson.............................. 1999 165,769 58,913 10,000 43,228 10,437
Vice President -- Corporate Development 1998 158,019 48,056 11,250 39,455 13,414
1997 151,117 71,225 11,250 43,640 11,352
</TABLE>
- ------------------------------
(1) Messrs. Gloyd and Johnson each served as a director of the Company but
received no separate remuneration in that capacity.
(2) Mr. Tilton began employment with the Company on June 22, 1998.
(3) 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.
(4) Discretionary cash bonuses granted by the Board of Directors under the
Company's Annual Incentive Plan.
(5) 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.
(6) 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 27, 1999, 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, 19,926 shares and units, $341,233; Mr.
Johnson, 13,229 shares and units, $226,547; Mr. Tilton, 3,908 shares and
units, $66,925; Mr. Klein, 7,130 shares and units, $122,101; and Mr.
Anderson, 4,503 shares and units, $77,114. The values shown in the preceding
sentence are based on the closing price of CLARCOR Common Stock on November
26, 1999 ($17.125) 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.
(7) 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 All Other Compensation for the
last fiscal year are derived from the following figures for Messrs. Gloyd,
Johnson, Tilton, Klein and Anderson respectively: $11,548; $8,286; $5,542;
$5,525; $4,144 -- Company match for employee stock purchase plan; $2,400;
$2,400; $2,400; $2,400; $2,400 -- Company match for 401(k) plan; $2,588;
$1,702; $1,098; $1,163; $2,319 -- Company paid split dollar insurance
premiums; $10,436 (Mr. Gloyd) -- Company paid term life insurance premium;
$8,367 (Mr. Gloyd); $120 (Mr. Tilton); $2,021 (Mr. Klein) and $1,574 (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 1999 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....................... -- -- -- -- --
N. E. Johnson..................... 45,000 17.4% $18.50 12/15/08 $229,050
M. J. Tilton...................... 15,000 5.8 18.50 12/15/08 76,350
B. A. Klein....................... 15,000 5.8 18.50 12/15/08 76,350
D. J. Anderson.................... 10,000 3.9 18.50 12/15/08 50,900
</TABLE>
- ------------------------------
(1) Consists of nonqualified options issued for a ten year term 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, December 16, 1998.
(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 rate of 4.87% based on the quoted yield of Treasury Strips
maturing in seven years;
(iii) dividends of $.4425 per share of Common Stock; and
(iv) stock price volatility of 24.5% based upon the monthly stock closing
prices for the preceding 7 years.
7
<PAGE> 10
No options were exercised by any of the five individuals in the Summary
Compensation Table during fiscal 1999. The following table sets forth certain
information regarding the unexercised options held by such individuals at
November 27, 1999.
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 (1) UNEXERCISABLE (2)
---- ----------- -------- ------------------- --------------------
<S> <C> <C> <C> <C>
L. E. Gloyd........................ -- -- 401,063/249,375 $2,194,381/225,079
N. E. Johnson...................... -- -- 130,327/195,000 430,057/187,185
M. J. Tilton....................... -- -- 0/30,000 0/0
B. A. Klein........................ -- -- 16,875/54,375 56,642/76,952
D. J. Anderson..................... -- -- 60,714/38,124 342,445/54,137
</TABLE>
- ------------------------------
(1) On December 20, 1999, subsequent to the fiscal year-end, additional option
grants were awarded as follows; Mr. Gloyd 50,000, Mr. Johnson 100,000, Mr.
Tilton 15,000, Mr. Klein 17,000 and Mr. Anderson 7,500.
(2) Based on the closing price of Common Stock as reported on the New York
Stock Exchange Composite Transactions on November 26, 1999, the last
trading date prior to the Company's fiscal year-end close on Saturday,
November 27, 1999.
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 20% 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 14 in "Report of the Compensation &
Stock Option Committee."
8
<PAGE> 11
The following table sets forth information regarding 1999 fiscal year
awards 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 6,466 3 Years 3,233 Shares 6,466 Shares
Performance Units 4,310 Cash equal to Cash equal to
value of 2,155 value of 4,310
Shares* Shares*
N. E. Johnson............ Performance Shares 4,442 3 Years 2,221 Shares 4,442 Shares
Performance Units 2,962 Cash equal to Cash equal to
value of 1,481 value of 2,962
Shares* Shares*
M. J. Tilton............. Performance Shares 2,345 3 Years 1,173 Shares 2,345 Shares
Performance Units 1,563 Cash equal to Cash equal to
value of 782 value of 1,563
Shares* Shares*
B. A. Klein.............. Performance Shares 2,338 3 Years 1,169 Shares 2,338 Shares
Performance Units 1,558 Cash equal to Cash equal to
value of 779 value of 1,558
Shares* Shares*
D. J. Anderson........... Performance Shares 1,465 3 Years 733 Shares 1,465 Shares
Performance Units 977 Cash equal to Cash equal to
value of 489 value of 977
Shares* Shares*
</TABLE>
- ------------------------------
* Based on the average closing price of Common Stock for the 30-day trading
period preceding November 30, 2001 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
1999 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 ($33,000 in fiscal 2000) 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 27, 1999, Messrs. Gloyd, Johnson, Tilton, Klein and Anderson
had 13, 9, 1, 4 and 9 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, Tilton, Klein and
Anderson are $34,173, $60,581, $39,721, $43,581, and $30,110, 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 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
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, Tilton, Klein and Anderson 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,
Tilton, Klein and Anderson are $328,386, $215,512, $167,620 and $96,451,
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, Tilton, Klein and Anderson and certain other executive officers of the
Company. 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 forthcoming Annual Meeting (the "March 25, 2000 Annual
Meeting"), when Mr. Gloyd will retire as Chairman and Chief Executive Officer of
the Company and Mr. Johnson will assume the position of Chairman, President and
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
following the March 25, 2000 Annual Meeting, but Mr. Johnson's agreement is
expected to be amended to provide for his succession to the position of Chief
Executive Officer and extended until the Annual Meeting to be held in 2003.
Thereafter, Mr. Johnson's agreement will be extended automatically each year
unless terminated by the Board. 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 following the March 25, 2000 Annual Meeting, his
prior death, his resignation for "Good Reason" (as such term is defined in the
agreement) or the termination of his
10
<PAGE> 13
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 as selected by Mr.
Gloyd.
Pursuant to the 1994 Incentive Plan, upon the termination of Mr. Gloyd's
employment agreement and his retirement, stock options held by Mr. Gloyd would
have expired three years after such termination of employment (i.e. on March 25,
2003). In September 1999, the Board amended the Company's 1994 Incentive Plan so
that at retirement from the Company the holder of an option may be allowed to
exercise outstanding options for a period of time specified by the Company's
Compensation & Stock Option Committee (but not later than the 10th anniversary
of the date of grant of the option). A stock option grant for 180,000 shares to
Mr. Gloyd pursuant to his employment agreement was subsequently adjusted by the
Committee to extend the exercise date until the December 16, 2007 expiration
date of the grant.
As provided for in the employment agreements, the Compensation & Stock
Option Committee on December 20, 1999 approved additional grants of 50,000
shares to both Messrs. Gloyd and Johnson as a result of meeting certain
financial targets as defined in the agreements. Mr. Gloyd's special stock option
of 50,000 shares is exercisable for six years from his March 25, 2000 retirement
date and Mr. Johnson's special stock option expires ten years from the grant
date. Mr. Johnson also received an additional option grant for 50,000 shares at
the December 20, 1999 meeting which will expire ten years from the grant date.
Mr. Gloyd has agreed to act as a consultant to the Company after his
retirement until March 2003. In that capacity he will be entitled to receive
$50,000 per year and the Company will pay or reimburse Mr. Gloyd for certain
office, secretarial and related expenses.
Mr. Tilton's employment agreement, effective September 23, 1998, was
entered into to assure the benefits of the executive's future services to the
Company as Executive Vice President-Engine/Mobile Filtration. The employment
period will be extended automatically each year unless terminated by the Board
before April 1 of each year. The employment agreement provides terms of
employment, compensation, incentive plan compensation, benefits and perquisites,
pensions, employment termination, non-competition and confidentiality, and
"change of control" provisions. The "change of control" provisions are
consistent with those described below.
The agreements with Messrs. Klein and Anderson and certain other executive
officers 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
11
<PAGE> 14
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
incentives, benefits and intermediate-term 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
12
<PAGE> 15
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-term 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.
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 60% of base salary, with the maximum awards
ranging from 55% to 132% 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.
13
<PAGE> 16
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 1997-1999 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 currently averaging over
$700 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 1999 were at the market value of the
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 1999 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
14
<PAGE> 17
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 1999 to be
competitive with the median base salary paid to chief executive officers of
comparably-sized corporations identified by the Committee. For fiscal 1999, Mr.
Gloyd was awarded an annual cash incentive equal to 81% of his base salary 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
1997-1999 Performance Period and received awards for the 1999-2001 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 on December 17, 1997. In September 1999, Mr. Gloyd's stock option
grant of 180,000 shares was adjusted to extend the exercise date until the
December 16, 2007 expiration date of the grant. Mr. Gloyd's grant would have
previously been exercisable for three years after his retirement date of March
25, 2000. As provided for in the employment agreement, on December 20, 1999 the
Committee approved an additional special grant of 50,000 shares to Mr. Gloyd as
a result of meeting certain financial targets as defined in the employment
agreement. Mr. Gloyd's special stock option of 50,000 shares is exercisable for
six years from his March 25, 2000 retirement date.
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
Robert H. Jenkins
James L. Packard
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Dargene, Chairman and Director of AMCORE Financial, Inc. serves as a
member of the Company's Board. Mr. Dargene is not 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 (December 2, 1994 to November
27, 1999) with the cumulative total return of 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 SMALLCAP 600 INDEX AND
S&P MANUFACTURING DIVERSIFIED INDEX
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
S & P SMALL CAP 600 S & P MANUFACTURING
CLARCOR INC. INDEX DIVERSIFIED INDEX
------------ ------------------- -------------------
<S> <C> <C> <C>
Dec. 2, 94 100.00 100.00 100.00
Dec. 1, 95 117.17 130.96 146.60
Nov. 30, 96 122.99 159.63 205.91
Nov. 29, 97 169.95 198.81 242.78
Nov. 28, 98 163.57 184.91 276.24
Nov 27, 99 154.54 204.43 348.60
</TABLE>
* Assumes that the value of the investment in the Company's Common Stock and
each index was $100 on December 2, 1994 and that all dividends were
reinvested.
The reference points on the foregoing graph are as follows:
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
CLARCOR Inc. ....................................... 117.17 122.99 169.95 163.57 154.54
S&P SmallCap 600 Index.............................. 130.96 159.63 198.81 184.91 204.43
S&P Manufacturing Diversified Index................. 146.60 205.91 242.78 276.24 348.60
</TABLE>
The 1994 beginning measuring point was the market close on December 2,
1994, the last trading day before the beginning of the Company's fifth preceding
fiscal year. The closing measuring point for 1999 was November 26, 1999 based on
the last New York Stock Exchange trading date prior to the Company's Saturday,
November 27, 1999 fiscal year-end.
16
<PAGE> 19
MISCELLANEOUS
AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP to audit the
financial statements of the Company for the fiscal year ending December 2, 2000.
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 2001 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 2001 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 26, 2000.
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 2001 Annual Meeting of Shareholders of the Company will be
held on March 27, 2001. Consequently, written notice of any such nomination or
proposal which a shareholder desires to make at the 2001 Annual Meeting must be
received by the Company no earlier than December 27, 2000 and no later than
January 26, 2001. 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 $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 23, 2000
17
<PAGE> 20
CLARCOR Inc. PROXY/VOTING INSTRUCTION CARD
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON MARCH 25, 2000.
The undersigned hereby appoints Milton R. Brown and Robert H. Jenkins, 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 Saturday, March 25, 2000 at 11:00 A.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, 1999, and the Notice and Proxy Statement for the
above Annual Meeting.
Election of Directors - Nominees are: J. Marc Adam, James L. Packard and Stanton
K. Smith, Jr.
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. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN
THIS CARD.
------------
| SEE REVERSE |
| SIDE |
------------
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 21
<TABLE>
<S><C>
/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.
- ------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH NOMINEES.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR WITHHELD
1. Election of / / / / 2. In their discretion, the Proxies are authorized
Directors to vote upon such other business as may
(See Reverse) properly come before the meeting.
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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FOLD AND DETACH HERE
</TABLE>
