<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:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
Crawford & Company
- --------------------------------------------------------------------------------
(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
(CRAWFORD(R) LOGO)
March 20, 1998
Dear Shareholder:
You are cordially invited to attend the Company's 1998 Annual Meeting of
Shareholders which will be held on Thursday, April 23, 1998, beginning at 2:00
p.m. at the Company's headquarters, 5620 Glenridge Drive, N. E., Atlanta,
Georgia.
The official Notice of Annual Meeting of Shareholders, Proxy Statement and
form of Proxy are included with this letter and contain information about the
meeting and the various matters on which the shareholders will act.
As is our custom, a brief report will be made at this meeting on the
Company's 1997 activities and the outlook for 1998. I hope you will be able to
attend the meeting. Whether or not you plan to attend, it is important that you
sign and return your Proxy promptly, as your vote is important to the Company.
On behalf of our Board of Directors, officers, and employees, I wish to
thank you for your continued interest in and support of Crawford & Company.
Sincerely,
/s/ D. A. SMITH
D. A. Smith,
Chairman, President
and Chief Executive Officer
<PAGE> 3
CRAWFORD & COMPANY
P.O. BOX 5047
ATLANTA, GEORGIA 30302
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 23, 1998
---------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Crawford
& Company (the "Company") will be held in the Home Office Building of the
Company, 5620 Glenridge Drive, N.E., Atlanta, Georgia, on Thursday, April 23,
1998, at 2:00 p.m., local time, for the following purposes:
1. To elect eight (8) Directors to serve until the next Annual Meeting
of Shareholders and until their successors are elected and qualified;
2. To approve the appointment of Arthur Andersen LLP as auditors for
the Company for the 1998 fiscal year; and
3. To transact any and all other such business as may properly come
before the meeting or any adjournment thereof.
Information relating to the above matters is set forth in the accompanying
Proxy Statement dated March 20, 1998. Only shareholders of record of Class B
Common Stock of the Company as of the close of business on March 2, 1998 will be
entitled to vote at the meeting and any adjournment thereof.
By Order of The Board of Directors
/s/ JUDD F. OSTEN
-------------------------------------
JUDD F. OSTEN, Secretary
Atlanta, Georgia
March 20, 1998
IT IS IMPORTANT THAT YOUR SHARES OF CLASS B COMMON STOCK BE REPRESENTED AT
THE MEETING WHETHER OR NOT YOU ARE PERSONALLY ABLE TO BE PRESENT. ACCORDINGLY,
IF YOU DO NOT PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ACCOMPANYING POSTAGE PREPAID ENVELOPE.
PROXIES ARE NOT BEING SOLICITED WITH RESPECT TO THE SHARES OF CLASS A
COMMON STOCK OF THE COMPANY.
<PAGE> 4
CRAWFORD & COMPANY
P.O. BOX 5047
ATLANTA, GEORGIA 30302
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 23, 1998
This Proxy Statement and the accompanying Proxy are being mailed to
shareholders of Class B Common Stock of Crawford & Company (the "Company") in
connection with the solicitation of proxies by the Board of Directors of the
Company from holders of Class B Common Stock for use at the Annual Meeting of
Shareholders to be held in the Home Office Building of the Company, 5620
Glenridge Drive, N.E., Atlanta, Georgia, on Thursday, April 23, 1998 at 2:00
p.m., local time, and any adjournment thereof. When the Proxy is properly
executed and returned, the shares of Class B Common Stock it represents will be
voted at the meeting and any adjournment thereof as directed by the shareholder
executing the Proxy unless it is revoked. If no directions are given on the
Proxy with respect to election of Directors, the shares represented by the Proxy
will be voted for the below listed nominees, and for the approval of the
appointment of Arthur Andersen LLP to serve as auditors of the Company in 1998.
Any shareholder giving a Proxy has the power to revoke it at any time before it
is voted by the execution of another Proxy bearing a later date or by written
notification to the Secretary of the Company. Shareholders who are present at
the Annual Meeting may revoke their Proxy and vote in person if they so desire.
Only shareholders of record of Class B Common Stock of the Company as of
the close of business on March 2, 1998 (the "Record Date") will be entitled to
vote at the Annual Meeting. As of that date, the Company had outstanding
25,461,070 shares of Class B Common Stock, each share being entitled to one
vote. A majority of the issued and outstanding shares of Class B Common Stock
entitled to vote at the Annual Meeting will constitute a quorum for the
transaction of business at such meeting. The Annual Report of the Company for
the fiscal year ended December 31, 1997 is enclosed herewith. This Proxy
Statement and the accompanying Proxy are being first mailed to Class B Common
Stock shareholders on or about March 20, 1998.
Additionally, for information only, this Proxy Statement is being mailed to
shareholders of Class A Common Stock of the Company as of the Record Date.
Shares of Class A Common Stock are not entitled to vote at the Annual Meeting of
Shareholders. Accordingly, no proxy is being requested and no proxy should be
sent with respect to such shares.
ELECTION OF DIRECTORS
NOMINEES AND VOTING
The By-Laws of the Company provide that the number of Directors which shall
constitute the full Board of Directors shall be eight and the shareholders shall
elect the Directors at each Annual Meeting. The Board of Directors has nominated
the eight persons listed below as Directors, to hold office until the next
Annual Meeting and until their successors are elected and qualified. Each
nominee is a member of the present Board of Directors and was elected by the
shareholders at the last Annual Meeting on April 22, 1997. If, at the time of
the Annual Meeting, any of the nominees should be unable to serve, the persons
named in the Proxy will vote for substitute nominees selected by the Board of
Directors. The Company has no reason to believe that any of the nominees will
not be available for election as a Director.
<PAGE> 5
NOMINEE INFORMATION
The following table gives certain information as to each person nominated
by the Board of Directors for election as a Director:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AGE AND DIRECTORSHIPS SINCE
---- --- -------------------- --------
<S> <C> <C> <C>
Dennis A. Smith 48 Chairman of the Board, President and Chief Executive 1994
Officer of the Company
J. Hicks Lanier 57 Chairman of the Board of Oxford Industries, Inc., a 1976
manufacturer of apparel products; Director of
SunTrust Banks of Georgia, Inc.; Shaw Industries,
Inc. and Genuine Parts Company
Charles Flather 64 Managing partner of Middlegreen Associates, Boston, 1978
Massachusetts, an investment management company;
Director of Asia Strategic Growth Fund, Inc.
Linda K. Crawford 55 Private investor. 1980
Jesse C. Crawford 49 President of Crawford Communications, Inc., a 1986
full-service provider of teleproduction services
including audio/video production and post
production, multimedia title design, satellite
services, animation, and special effects.
Larry L. Prince 59 Chairman of the Board, Chief Executive Officer and 1987
Director of Genuine Parts Company, a service
organization engaged in automotive and industrial
parts and office products distribution; Director of
Equifax, Inc., SunTrust Banks of Georgia, Inc., John
H. Harland Co., Southern Mills and UAP, Inc.
(Canada).
John A. Williams 55 Chairman of the Board of Post Properties, Inc., a real 1996
estate management and development company; Director
of NationsBank Corporation
E. Jenner Wood, III 46 Executive Vice President -- Trust and Investment 1997
Services, SunTrust Banks, Inc.; Director of Oxford
Industries, Inc. and Cotton States Life Insurance
Co.
</TABLE>
Mr. Smith has held his present position since January 1, 1996 and for more
than five years prior thereto held other executive officer positions with the
Company. Mr. Wood has held his present position since October, 1993 and prior
thereto held the position of Executive Vice President -- Trust and Investment
Management for SunTrust Bank, Atlanta. The principal occupation or employment of
each of the other nominees during the past five years has been as indicated in
the above table.
Linda K. Crawford is the widow of Jesse C. Crawford's brother.
SPECIAL COMMITTEES AND ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The Board of Directors has three standing committees. The Executive
Committee consists of Jesse C. Crawford as Chairman, and Forrest L. Minix,
Dennis A. Smith, Larry L. Prince, and E. Jenner Wood, III as members. The Audit
Committee consists of Charles Flather as Chairman, and J. Hicks Lanier, Larry L.
Prince and John A. Williams as members. The Senior Compensation and Stock Option
Committee consists of J. Hicks Lanier as Chairman, with E. Jenner Wood, III,
Linda K. Crawford and Charles Flather as members. The Board of Directors does
not have a standing nominating committee.
The Executive Committee may exercise all the authority of the Board of
Directors between its meetings with respect to all matters not specifically
reserved by law to the Board of Directors. The Executive Committee held six
meetings during 1997.
2
<PAGE> 6
The Audit Committee makes recommendations concerning the engagement or
discharge of the Company's independent auditors, reviews with the independent
auditors the audit plan and results of the audit engagement, reviews the scope
and results of the Company's internal auditing procedures and the adequacy of
its accounting controls, approves professional services provided by the
independent auditors, reviews the independence of the independent auditors, and
considers the range of the independent auditor's audit and non-audit fees. The
Audit Committee held two meetings during 1997.
The Senior Compensation and Stock Option Committee formulates and approves
salaries, grants of stock options and other compensation to the Chairman of the
Board and, upon recommendation by the Chairman of the Board, salaries, grants of
options and other compensation for all other Officers of the Company. The Senior
Compensation and Stock Option Committee held three meetings during 1997.
During 1997, the Board of Directors held four meetings. Each of the
Company's Directors attended at least seventy-five percent (75%) of the
aggregate number of meetings of the Board of Directors and committees thereof of
which such Director was a member.
COMPENSATION
Each Director of the Company received a quarterly fee of $5,000, and $1,000
for each Board of Directors and Committee meeting attended during 1997. In
addition, pursuant to the terms of the 1997 Non-Employee Director Stock Option
Plan approved by the shareholders at the 1997 Annual Meeting, each Director
(other than Mr. Smith) elected at that meeting received an option for 15,000
shares of the Company's Class A Common Stock at a price of $13.875 per share,
the Fair Market Value of the Class A Common Stock on that date. The options are
non-transferable; are exercisable at any time after grant; and lapse on the date
the holder is no longer a director, if that occurs on or before the fifth
anniversary of the grant date, or otherwise on the tenth anniversary of the
grant date.
SHAREHOLDER VOTE
Each share of Class B Common Stock is entitled to cast an affirmative vote
for up to eight (8) Director nominees. Cumulative voting is not permitted. The
eight nominees for Director who receive the highest number of votes cast, in
person or by proxy, at the Annual Meeting will be elected Directors. Negative
votes or abstentions, including broker non-votes, will not be counted.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ITS NOMINEES FOR
DIRECTORS.
3
<PAGE> 7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information for the fiscal
years ended December 31, 1997, 1996, and 1995, concerning compensation paid to
or accrued by the Company for those persons who were, at December 31, 1997, (i)
the Chief Executive Officer, or (ii) the other four most highly compensated
Executive Officers of the Company (hereinafter collectively referred to as the
Named Executive Officers):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------------
ANNUAL COMPENSATION AWARDS
----------------------------- ------------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SAR (#)(1) COMPENSATION ($)(2)
--------------------------- ---- ---------- --------- ------------------ -------------------
<S> <C> <C> <C> <C> <C>
D. A. Smith..................... 1997 $483,145 $300,000 397,500 $ 1,434
Chairman, President and Chief 1996 388,419 250,000 339,000 1,328
Executive Officer 1995 352,332 100,000 14,000 1,196
A. L. Meyers, Jr................ 1997 268,754 120,000 109,000 72,281(3)
President 1996 253,336 101,688 106,000 68,901
Claims Management Services 1995 187,500 6,400 4,000 68,786
J. R. Bryant.................... 1997 218,750 100,000 109,000 1,434
Executive Vice 1996 175,000 70,000 56,000 1,329
President 1995 160,417 12,900 5,000 1,016
Business Development
D. R. Chapman................... 1997 269,545 120,000 109,000 2,502
Executive Vice 1996 254,243 113,100 86,000 2,397
President 1995 240,708 21,607 12,000 2,282
Finance
J. F. Osten..................... 1997 225,411 80,000 59,000 2,502
Senior Vice President 1996 210,084 93,224 46,000 1,827
General Counsel and 1995 194,796 16,408 7,500 1,598
Secretary
</TABLE>
- ---------------
(1) Represents shares of the Company's Class A Common Stock.
(2) "All Other Compensation" for 1997 consists of contributions for the account
of each of the Named Executive Officers to the Company's Savings and
Investment Plan of $720, and the balance for each of the Named Executive
Officers, except Mr. Meyers, represents premium payments made by the
Company on term life insurance policies for such individual's benefit.
(3) In addition to the contribution to the Company's Savings and Investment
Plan, represents $1,810 premium payment on term life insurance, and $69,751
paid under the Company's Retirement Plan in connection with Mr. Meyer's
previous retirement from the Company in 1994.
4
<PAGE> 8
STOCK OPTION EXERCISES AND YEAR-END VALUES
The following table provides information concerning the exercise of stock
options during the last fiscal year and unexercised options held as of the end
of the fiscal year with respect to the Named Executive Officers:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/
FY-END (#) SARS AT FY-END ($)
SHARES ACQUIRED --------------------- ---------------------
ON EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#)(1) REALIZED ($)(1)(2) UNEXERCISABLE(3) UNEXERCISABLE(3)
---- --------------- ------------------ --------------------- ---------------------
<S> <C> <C> <C> <C>
D. A. Smith.......... 37,620A $476,975 524,880 $3,342,048
7,500B 460,500 610,850
A. L. Meyers......... 0 0 154,200 986,050
0 119,800 125,700
J. R. Bryant......... 75,225A 479,325 13,650 114,045
225B 123,100 152,925
D. R. Chapman........ 13,850A 195,782 145,900 948,792
8,250B 131,500 222,250
J. F. Osten.......... 53,000A 429,651 30,850 215,646
0 76,400 178,375
</TABLE>
- ---------------
(1) Represents the number of shares of the Company's Class A Common Stock and
Class B Common Stock, respectively, issued upon exercise of outstanding
options during the fiscal year and the aggregate "Value Realized."
(2) "Value Realized" is a hypothetical calculation required by rules of the
Securities and Exchange Commission, representing (A) the difference between
(i) the closing price of the Stock on the New York Stock Exchange on the
date of exercise, and (ii) the per-share exercise price of the option,
multiplied by (B) the number of shares acquired. The profit or loss
ultimately realized by the Named Executive Officer will be the difference,
if any, between (i) the sale price of the shares when sold and (ii) the
exercise price.
(3) Represents the aggregate number of shares of Class A Common Stock and Class
B Common Stock covered by unexercised options at fiscal year end, and the
aggregate difference between the exercise price and market value thereof at
December 31, 1997 based on the closing price for the Class A and Class B
shares on the New York Stock Exchange on that date. The upper number relates
to options exercisable at fiscal year end and the lower number relates to
options which were not exercisable on that date.
5
<PAGE> 9
STOCK OPTION GRANTS
The following table provides information concerning the grant of stock
options under the Company's 1997 Stock Option Plan during the fiscal year ended
December 31, 1997:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------ POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES PRICE EXPIRATION -------------------------------------------
NAME GRANTED (#)(1) IN FISCAL YEAR ($/SH) DATE 0% ($) 5% ($) 10% ($)
---- -------------- -------------- -------- ---------- ------ -------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
D. A. Smith............. 22,500 1.71% $15.00 2/04/2007 $0 $ 212,252 $ 537,888
375,000 28.57 19.50 10/28/2004 0 2,976,919 6,937,493
A.L. Meyers............. 9,000 0.69 15.00 2/04/2007 0 84,901 215,155
100,000 7.62 19.50 10/28/2004 0 793,845 1,849,998
J. R. Bryant............ 9,000 0.69 15.00 2/04/2007 0 84,901 215,155
100,000 7.62 19.50 10/28/2004 0 793,845 1,849,998
D. R. Chapman........... 9,000 0.69 15.00 2/04/2007 0 84,901 215,155
100,000 7.62 19.50 10/28/2004 0 793,845 1,849,998
J. F. Osten............. 9,000 0.69 15.00 2/04/2007 0 84,901 215,155
50,000 3.81 19.50 10/28/2004 0 396,923 924,999
All Shareholders........ $613.2 million(3) $1,554.0 million(3)
</TABLE>
- ---------------
(1) Options granted are with respect to the Company's Class A Common Stock and
become exercisable twenty percent (20%) each year commencing on the first
anniversary of the option grant date, except for the options with the
10/28/2004 expiration date which become exercisable at the earlier of (A)
when the average of the Class A Common Stock price for ten consecutive
trading days reaches $27.30 per share or (B) October 28, 2003.
(2) The "Annual Rates of Stock Price Appreciation" set forth in the table are
mandated by the rules of the Securities and Exchange Commission. The Company
gives no assurance that these or any other rates of appreciation can or will
be achieved over the option terms. However, any rates of appreciation that
are achieved will benefit all holders of the Company's Common Stock.
(3) Represents the increase in the aggregate market value of the Company's
outstanding Class A and Class B Common Stock at December 31, 1997, assuming
a 5% and 10% annual rate of appreciation in the respective stock prices over
the ensuing ten (10) years.
6
<PAGE> 10
PENSION PLANS
The following table indicates estimated annual retirement benefits on a
straight line annuity basis payable following retirement at age 65 to
participants at the specified compensation and period of service classifications
under the Company's defined benefit pension plans:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40 45
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$125,000........................... $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 87,500 $100,000 $112,500
150,000........................... 45,000 60,000 75,000 90,000 105,000 120,000 135,000
175,000........................... 52,500 70,000 87,500 105,000 122,500 140,000 157,500
200,000........................... 60,000 80,000 100,000 120,000 140,000 160,000 180,000
225,000........................... 67,500 90,000 112,500 135,000 157,500 180,000 202,500
250,000........................... 75,000 100,000 125,000 150,000 175,000 200,000 225,000
300,000........................... 90,000 120,000 150,000 180,000 210,000 240,000 270,000
400,000........................... 120,000 160,000 200,000 240,000 280,000 320,000 360,000
500,000........................... 150,000 200,000 250,000 300,000 350,000 400,000 450,000
600,000........................... 180,000 240,000 300,000 360,000 420,000 480,000 540,000
700,000........................... 210,000 280,000 350,000 420,000 490,000 560,000 630,000
800,000........................... 240,000 320,000 400,000 480,000 560,000 640,000 720,000
</TABLE>
The Company maintains a non-contributory Retirement Plan for the benefit of
substantially all of the domestic employees of the Company. The Retirement Plan
provides for annual retirement benefits at Normal Retirement Age (65) equal to
2% of the participant's total compensation (as defined in the Retirement Plan)
for all credited years of service under the Plan. The benefits are not affected
by Social Security benefits payable to the participant; however, they are
actuarially reduced for retirements before the Normal Retirement Age or if the
retiree selects benefits other than an individual life-time annuity.
Additionally, the Company maintains an unfunded Supplemental Executive
Retirement Plan for certain Executive Officers to provide benefits that would
otherwise be payable under the Retirement Plan but for limitations placed on
covered compensation and benefits under the Internal Revenue Code. Credited
years of service under the Retirement Plan for Messrs. Smith, Meyers, Bryant,
Chapman, and Osten are 25, 37, 23, 17 and 7, respectively.
7
<PAGE> 11
REPORT OF THE SENIOR COMPENSATION AND STOCK OPTION
COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the Senior
Compensation and Stock Option Committee (the "Committee") of the Board of
Directors, composed of the Directors whose names are listed below this report.
The fundamental philosophy of the Committee is to insure that the compensation
programs of the Company will attract and retain key executives critical to its
long-term success through the establishment of a performance-oriented
environment that rewards the achievement of strategic management goals, with the
attendant enhancement of shareholder value.
There are three elements in the Company's executive compensation program,
all related to individual and Company performance.
- Base Salary Compensation
- Annual Incentive Compensation
- Long-term Incentive Compensation
BASE SALARY COMPENSATION
The Company has established a comprehensive Wage and Salary Administration
Policy applicable to the Company and its domestic subsidiaries. This Policy
includes a program for grading each position, including those of the domestic
Executive Officers of the Company, to insure internal equity. Additionally, the
Policy sets forth grade levels and salary ranges for those grade levels, and
provides for annual merit increases tied to individual job performance as
measured through annual performance reviews. Based on published national
surveys, the Company annually establishes merit increase budgets as a percent of
current salaries and any increases in salary ranges for the next fiscal year.
Generally, the Company is at the midpoint of projected merit salary increases
and salary range adjustments as reflected in the national surveys, with some
adjustment up or down depending on prior year pre-tax earnings and revenues of
the Company. Consistent with the overall merit increase percentage, the Company
establishes guidelines for individual salary adjustments based on the
individual's performance rating.
The Committee reevaluates and sets the salary of the Chief Executive
Officer on an annual basis. In establishing the base salary for the Chief
Executive Officer, the Committee looks primarily at the pre-tax earnings of the
Company in the preceding fiscal year as compared to the prior fiscal year. It
also takes into account unusual circumstances which may have impacted that
performance which were not within the control of the Company or its Executive
Officers, the increases in the base salaries of other employees of the Company,
and the Committee's assessment of the personal performance of the Chief
Executive Officer during the preceding year. The Committee set Mr. Smith's
annual base salary at $450,000 for 1997.
ANNUAL INCENTIVE COMPENSATION
Under the Company's 1996 Incentive Compensation Plan, which covers all
domestic key employees of the Company (other than the Chief Executive Officer),
at the beginning of each fiscal year the Committee establishes pre-tax earnings
and revenues thresholds, as well as targeted pre-tax earnings. A bonus pool is
created for sales and marketing key employees based principally on increases in
revenues above the threshold amount, while the bonus pool for other participants
is based primarily on growth in pre-tax earnings from the threshold amount up to
the targeted pre-tax earnings. The bonus pool is allocated by the Chief
Executive Officer to the business units and staff departments based on his
assessment of performance of the business unit and staff participants, and to
each individual participant by the business unit or staff manager based on the
individual's personal performance. The Chief Executive Officer establishes the
bonuses for his direct reports.
The Committee sets a bonus for the Chief Executive Officer, based primarily
on pre-tax earnings and the bonuses paid under the 1996 Incentive Compensation
Plan, as a percentage of salary, to the other domestic Executive Officers of the
Company. Historically, the Chief Executive Officer's bonus, as a percentage of
his
8
<PAGE> 12
base salary, has been higher than the average paid to the other Executive
Officers, expressed as a percentage of their base salaries. For 1997, the
Committee awarded a bonus of $300,000 to Mr. Smith.
LONG-TERM INCENTIVE COMPENSATION
Under the Company's 1997 Key Employee Stock Option Plan, officers and other
key employees of the Company are granted options by the Committee to purchase
shares of the Company's Class A Common Stock. The exercise price for all options
granted is set at the market price of the Company's Class A Common Stock on the
date of the option grant and, to the extent permissible under the relevant
provisions of the Internal Revenue Code, the options granted under the Plan are
generally statutory "Incentive Stock Options". The Committee typically reviews
and acts upon the recommendations of the Chief Executive Officer for the grant
of options, on a discretionary basis, annually to the Company's other officers
and key employees. The number of shares of the Company's Class A Common Stock
covered by such options is generally based upon the grade level of the officer
or other key employee's position, with adjustments for extraordinary
performance, but without regard to the individual's stock ownership or the
number of options previously granted.
In addition to the annual grant of options discussed above, the Committee
granted non-qualified options in August 1996 to the Chief Executive Officer, the
Executive Officers, and six (6) other officers and key employees of the Company.
The options granted at that time covered 1,095,000 shares of the Company's Class
A Common Stock (adjusted for the March 1997 three-for-two stock split). Those
options provided for vesting at the earlier of (i) the date the ten day average
share price of the Company's Class A Common Stock increased forty percent (40%)
above the price on the date of grant, if that occurred within three years of the
date of grant, or (ii) six years after the grant date. These options vested on
August 5, 1997, when the ten day average of the Class A Common Stock price had
increased by more than forty percent (40%) over the grant date price.
In view of the vesting of the August 1996 options, the Committee considered
it appropriate to consider the grant of additional options, on similar terms. On
October 28, 1997, the Committee granted non-qualified options to the Chief
Executive Officer and eight (8) other key officers covering a total of 905,000
shares, of which the Chief Executive Officer was granted an option for 375,000
shares. These options, like the August 1996 options, will vest at the time the
price of the Class A Common Stock increases by forty percent (40%) over the
price on the grant date, if that occurs within three years of the grant date,
or, alternatively on the sixth anniversary of the grant date. The Committee has
not established a time table for consideration of the grant of further options
outside the annual grant of options to the Company's officers and other key
employees; however, it would anticipate reviewing that issue at the time the
October 28, 1997 options vest.
J. HICKS LANIER LINDA K. CRAWFORD
E. JENNER WOOD, III CHARLES FLATHER
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Virginia C. Crawford served as a member of the Senior Compensation and
Stock Option Committee of the Board of Directors for a portion of the past
fiscal year and was a Vice President of the Company.
9
<PAGE> 13
STOCK OWNERSHIP INFORMATION
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of February 16, 1998, as to
shares of Class A and Class B Common Stock beneficially owned by each current
Director or nominee for election as a Director, each of the Named Executive
Officers, and all current Directors and Executive Officers as a group. As of
February 16, 1998, 23,992,261 shares of Class A Common Stock and 25,457,608
shares of Class B Common Stock were outstanding.
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE OF TOTAL SHARES
BENEFICIAL OWNERSHIP(1) OUTSTANDING(2)
------------------------ ------------------
NAME CLASS A CLASS B CLASS A CLASS B
---- ---------- ---------- ------- -------
<S> <C> <C> <C> <C>
Dennis A. Smith(3)............................... 584,012 25,588 2.4% --
Forrest L. Minix(4).............................. 138,072 123,072 -- --
Linda K. Crawford(4)(5).......................... 2,284,464 3,906,736 9.5 16.2%
J. Hicks Lanier(4)(6)............................ 18,037 3,037 -- --
Charles Flather(4)............................... 20,062 5,062 -- --
Jesse C. Crawford(4)(7).......................... 4,876,615 1,942,376 20.4 7.6
Larry L. Prince(4)(6)............................ 16,125 1,125 -- --
John A. Williams(4).............................. 15,000 1,500 -- --
E. Jenner Wood, III(4)(6)........................ 15,750 -- -- --
Archie Meyers, Jr.(8)............................ 8,976 497 -- --
Jim R. Bryant(9)................................. 17,113 1,725 -- --
Donald R. Chapman(10)............................ 165,997 28,429 -- --
Judd F. Osten(11)................................ 44,950 -- -- --
All Directors and Executive Officers as a Group
(17 persons)(12)............................... 8,230,539 5,915,123 34.4 23.2
</TABLE>
- ---------------
(1) Except as otherwise indicated in the following footnotes, the persons
possessed sole voting and investment power with respect to all shares set
forth opposite their names.
(2) Except where a percentage is specified, the person's ownership represents
less than 1% of the outstanding shares.
(3) Includes 544,920 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of February 16, 1998.
(4) Includes 15,000 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of February 16, 1998.
(5) See Notes (4), (5), and (6) to table set forth under "Security Ownership of
Certain Beneficial Owners" below with respect to Class B Common Stock. The
shares of Class A Common Stock shown as beneficially owned by Linda K.
Crawford include 1,231,342 shares which are held in four trusts for the
benefit of two daughters of Linda K. Crawford. Under the terms of two of
these trusts, holding an aggregate of 284,665 shares of Class A Common
Stock, Linda K. Crawford and another individual share investment power.
Under two of these trusts, holding an aggregate of 986,677 shares of Class
A Common Stock, Linda Crawford has sole voting authority but has no
investment authority. Linda K. Crawford disclaims any beneficial interest
in any of the shares of Class A Common Stock held in these trusts. Included
in the shares shown as beneficially owned by Linda K. Crawford are 975,921
shares of Class A Common Stock held in trust for her benefit. Under the
terms of this trust, Linda K. Crawford has sole voting and investment power
with respect to the shares held in the trust. In addition to the above,
Linda K. Crawford has sole voting and investment power with respect to
77,202 shares of Class A Common Stock shown as beneficially owned by her.
(6) Mr. Lanier and Mr. Prince are directors of SunTrust Bank of Georgia, Inc.,
a subsidiary of SunTrust Banks, Inc. Mr. Wood is currently Executive Vice
President -- Trust and Investment Services for
(footnotes continued on page 11)
10
<PAGE> 14
SunTrust Banks, Inc. Messrs. Lanier, Prince and Wood disclaim any
beneficial ownership in shares held by SunTrust Banks, Inc. or any of its
banking subsidiaries, which shares are not reflected in the table. See
"Information With Respect to Certain Business Relationships" and "Security
Ownership of Certain Beneficial Owners."
(7) See Note (8) to the table set forth under "Security Ownership of Certain
Beneficial Owners" below with respect to the Class B Common Stock. The
shares of Class A Common Stock shown as beneficially owned by Jesse C.
Crawford include 1,455,161 shares attributable to him as a general and
limited partner of Crawford Partners, L.P.
(8) Includes 7,800 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of February 16, 1998.
(9) Includes 16,350 shares of Class A Common Stock and 1,500 shares of Class B
Common Stock subject to options exercisable within sixty (60) days of
February 16, 1998.
(10) Includes 125,070 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of February 16, 1998.
(11) Includes 38,950 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of February 16, 1998.
(12) Includes 2,686,502 shares of Class A Common Stock and 4,389,135 shares of
Class B Common Stock as to which voting or investment power is shared;
875,410 shares of Class A Common Stock and 1,500 shares of Class B Common
Stock subject to options exercisable within sixty (60) days of February 16,
1998; and 1,231,342 shares of Class A Common Stock and 2,446,759 shares of
Class B Common Stock as to which beneficial ownership is disclaimed.
11
<PAGE> 15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information concerning each person
known to the Company to be the "beneficial owner", as such term is defined by
the rules of the Securities and Exchange Commission ("SEC"), of more than 5% of
the outstanding shares of Class B Common Stock of the Company as of February 16,
1998:
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE OF TOTAL SHARES
BENEFICIAL OWNERSHIP OUTSTANDING
NAME AND ADDRESS -------------------- ------------
<S> <C> <C>
SunTrust Banks, Inc.............................. 14,854,526(1) 61.9%
One Park Place, N.E.
Atlanta, Georgia 30303
Crawford Partners, L.P........................... 13,640,283(1) 56.7%
55 Park Place
Atlanta, Georgia 30303
Marital Trust for the Benefit of
Virginia C. Crawford........................... 9,489,543(2) 39.6%
55 Park Place
Atlanta, Georgia 30303
Wachovia Corporation............................. 3,885,126(3)(4)(5)(6) 15.3%
191 Peachtree St., N.E.
Atlanta, Georgia 30303
Linda K. Crawford................................ 3,906,736(4)(5)(6) 15.3%
1198 Longcourte Dr., N.W.
Atlanta, Georgia 30327
Frank L. Wilson, III............................. 3,474,202(7) 13.6%
230 Peachtree St., N.W.
Atlanta, Georgia 30303
Jesse C. Crawford................................ 1,942,376(8) 8.1%
Crawford Communications, Inc.
532 Armour Circle, N.E.
Atlanta, Georgia 30324
Taylor/Bass/Guylay Group
Portfolio F. Investors, L.P...................... 614,572(9)(13) 2.4%
The Bass Management Trust........................ 164,570(10)(13) 0.6%
Sid R. Bass Management Trust..................... 164,570(11)(13) 0.6%
Lee M. Bass...................................... 164,554(13) 0.6%
Wesley Guylay Capital Management................. 505,784(12)(13) 2.0%
Total.................................. 1,614,050(13) 6.3%
c/o W. Robert Cotham
201 Main Street, Suite 2000
Fort Worth, Texas 76102
</TABLE>
- ---------------
(1) The shares are held by one or more bank subsidiaries of SunTrust Banks of
Georgia, Inc., SunTrust Banks of Florida, Inc., and/or SunTrust Banks of
Tennessee, Inc., subsidiaries of SunTrust Banks, Inc. in various fiduciary
and agency capacities. SunTrust Bank, Atlanta has sole voting power with
respect to 14,849,634 of such shares. SunTrust Bank, Atlanta has sole
investment power with respect to 14,847,104 of such shares and shares
investment power with respect to 1,518 of such shares. SunTrust Bank,
Nashville, N.A. has sole voting power with respect to 3,374 of such shares,
and sole investment power with respect to 3,374 of such shares. As the
corporate parents of SunTrust Bank, Atlanta and SunTrust
(Footnotes continued on page 13)
12
<PAGE> 16
Bank, Nashville, N.A., SunTrust Banks of Georgia, Inc., SunTrust Banks of
Tennessee, Inc., and SunTrust Banks, Inc. may also be deemed to be
beneficial owners of shares held by SunTrust Bank, Atlanta and SunTrust
Bank, Nashville, N.A. SunTrust Banks of Georgia, Inc., SunTrust Bank,
Atlanta, SunTrust Bank, Nashville, N.A., SunTrust Banks of Tennessee, Inc.,
and SunTrust Banks, Inc. disclaim any beneficial interest in any such
shares. Included are all of the shares shown as beneficially owned by
Crawford & Partners, L.P.
(2) The shares shown as beneficially owned by the Marital Trust are
attributable to it by virtue of its being a limited partner and a member of
a limited liability company which is one of the general partners of
Crawford Partners, L.P.
(3) All of the shares are held for the benefit of various clients, including
shares held in trusts for the benefit of Linda K. Crawford and her
daughters. Wachovia Bank of Georgia, a banking subsidiary of Wachovia
Corporation, has shared voting power with respect to 402,925 of such
shares. Wachovia Corporation and Wachovia Bank of Georgia disclaim any
beneficial interest in any of these shares.
(4) The shares shown as beneficially owned by Linda K. Crawford and Wachovia
Corporation include 399,832 shares which are held in two trusts established
for the benefit of two children of Robert C. Crawford. Under the terms of
these trusts, Wachovia Bank of Georgia and another individual share voting
power with respect to the shares held by such trusts, and Linda K. Crawford
and another individual share investment power with respect thereto. Linda
K. Crawford disclaims any beneficial interest in any of these shares held
in trust.
(5) Included in the shares shown as beneficially owned by Linda K. Crawford and
Wachovia Corporation are 1,382,775 shares which are held in trust for the
benefit of Linda K. Crawford. Under the terms of this trust, Linda K.
Crawford has sole voting and investment power with respect to the shares
held in the trust. Wachovia Corporation and Wachovia Bank of Georgia
disclaim any beneficial interest in any of these shares. Linda K. Crawford
has sole voting and investment power with respect to 77,202 shares shown as
beneficially owned by her.
(6) The shares shown as beneficially owned by Linda K. Crawford and Wachovia
Corporation include 2,046,927 shares which are held in three trusts for the
benefit of two children of Linda K. Crawford, all of which shares are held
in trusts under which Wachovia Bank of Georgia and Frank L. Wilson, III are
co-trustees, under the terms of which trusts Linda K. Crawford has sole
voting power and Wachovia Bank of Georgia and Frank L. Wilson, III share
investment power. Linda K. Crawford disclaims any beneficial interest in
any of these shares held in Trust.
(7) The shares shown as beneficially owned by Frank L. Wilson, III are all
shares held in trusts for the benefit of Linda K. Crawford or the daughters
of Linda K. Crawford, with respect to which Frank L. Wilson, III is a
trustee. Frank L. Wilson, III disclaims any beneficial interest in any of
the shares held in these trusts.
(8) The shares shown as beneficially owned by Jesse C. Crawford are
attributable to him as a general and limited partner of Crawford Partners,
L.P.
(9) The shares held by Portfolio F Investors, L.P. may also be deemed to be
beneficially owned by each of (i) Thomas M. Taylor, in his capacity as
President and sole stockholder of (ii) Trinity Capital Management, Inc.,
which is the sole general partner of (iii) T. F. Investors, L.P., which is
the general partner of (iv) Trinity I Fund, L.P., which is the sole general
partner of Portfolio F. Investors, L.P.
(10) The shares held by The Bass Management Trust may also be deemed to be
beneficially owned by (i) Perry R. Bass in his capacity as sole trustee and
as one of two trustors of The Bass Management Trust, and (ii) Nancy L. Bass
in her capacity as one of the two trustors of The Bass Management Trust.
(11) The shares held by Sid R. Bass Management Trust may also be deemed to be
beneficially owned by Sid R. Bass in his capacity as a trustee and the sole
trustor of Sid R. Bass Management Trust.
(12) The shares held by Wesley Guylay Capital Management may also be deemed to
be beneficially owned by Wesley Richard Guylay in his capacity as the sole
general partner of Wesley Guylay Capital Management.
(13) Thomas M. Taylor, Perry R. Bass, Sid R. Bass, Lee M. Bass, Wesley Richard
Guylay and other investors, including those named above, have filed an
Amended Schedule 13D as of December 19, 1997
(Footnotes continued on page 14)
13
<PAGE> 17
with the Securities and Exchange Commission. The persons making the
Schedule 13D filing have stated that neither the fact of such filing nor
anything contained therein shall be deemed an admission that a "group"
exists within the meaning of Section 13(d)(3) of the Securities Exchange
Act of 1934. The information reflected above is based on the Amended
Schedule 13D filing provided to the Company.
INFORMATION WITH RESPECT TO CERTAIN BUSINESS RELATIONSHIPS
SunTrust Banks, Inc., through its banking subsidiaries (collectively, the
"Banks"), hold 14,854,526 shares of Class B Common Stock of the Company. See
"Stock Ownership Information -- Security Ownership of Certain Beneficial
Owners." The Banks exercise voting authority with respect to shares of Class B
Common Stock held in fiduciary capacities. The Company also maintains a normal
commercial banking relationship with the Banks. SunTrust Bank, Atlanta serves as
trustee for the Crawford & Company Retirement Plan, and the Crawford & Company
Employee Disability Income Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and greater than ten percent (10%) beneficial owners of
the Company's equity securities, to file with the Securities and Exchange
Commission and the New York Stock Exchange reports of ownership and changes in
ownership of common stock and other equity securities of the Company. Officers,
directors and greater than ten percent shareholders are required by the
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such reports furnished to the
Company or written representations that no other reports are required, the
Company believes that, during the year ending December 31, 1997, all filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with.
14
<PAGE> 18
FIVE YEAR COMPARATIVE STOCK PERFORMANCE GRAPH
The following line graph compares the cumulative return on the Company's
Class B Common Stock against the cumulative total return on (i) the Standard &
Poors Composite 500 Stock Index and (ii) the Standard & Poors
Insurance -- Property and Casualty Index for the five year period commencing
January 1, 1993 and ended December 31, 1997:
<TABLE>
<CAPTION>
Crawford & S&P Property-
Measurement Period Company (Class Casualty Insurance
(Fiscal Year Covered) B) S&P 500 Index Index
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 68.49 110.08 98.23
1994 71.23 111.53 103.04
1995 74.83 153.45 139.51
1996 109.00 188.68 169.53
1997 149.80 251.63 246.60
</TABLE>
- ---------------
This total shareholders return model assumes reinvested dividends.
Prepared by Standard & Poor's Compustat Services, a division of McGraw-Hill,
Inc.
APPOINTMENT OF INDEPENDENT AUDITORS
Arthur Andersen LLP has been selected by the Audit Committee to serve as
auditors for the Company in 1998. If approved by the Class B Common Stock
shareholders, the Company will appoint Arthur Andersen LLP as auditors of the
Company for 1998. Should the shareholders not approve the selection of Arthur
Andersen LLP, the Board of Directors of the Company will seek other auditors.
Representatives of Arthur Andersen LLP will be present at the meeting and will
be given the opportunity to make a statement, if they desire, and to respond to
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
ARTHUR ANDERSEN LLP AS THE COMPANY'S AUDITORS FOR 1998.
FORM 10-K
The Crawford & Company Annual Report on Form 10-K for 1997, filed with the
Securities and Exchange Commission, is available free of charge upon written
request to the Secretary, Crawford & Company, P.O. Box 5047, Atlanta, Georgia
30302.
15
<PAGE> 19
SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented at the 1999 Annual Meeting of the
Shareholders must be received by the Company no later than November 20, 1998 in
accordance with Rule 14a-8 under the Securities Exchange Act of 1934.
OTHER MATTERS
The minutes of the Annual Meeting of Shareholders held on April 22, 1997
will be presented at the meeting, but it is not intended that action taken under
the Proxy will constitute approval of the matters referred to in such minutes.
The Board of Directors knows of no other matters to be brought before the
meeting. If any other matters come before this meeting, however, the persons
named in the Proxy will vote such Proxy in accordance with their judgment on
such matters.
EXPENSES OF SOLICITATION
The cost of solicitation of proxies will be borne by the Company. In an
effort to have as large a representation at the Annual Meeting as possible,
special solicitation of proxies may, in certain instances, be made personally,
or by telephone, telegraph or by mail by one or more employees of the Company.
The Company may also reimburse brokers, banks, nominees or other fiduciaries for
the reasonable clerical expenses of forwarding the proxy material to their
principals, the beneficial owners of the Company's Class A or Class B Common
Stock.
March 20, 1998
16
<PAGE> 20
APPENDIX
CRAWFORD & COMPANY
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 23, 1998. THIS PROXY IS
SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned hereby appoints D. A. Smith, D. R. Chapman and J. F. Osten,
and each of them, proxies with full power of substitution, for and in the name
of the undersigned, to vote all shares of Class B Common Stock of Crawford &
Company which the undersigned would be entitled to vote if personally present at
the Annual Meeting of Shareholders of Crawford & Company to be held in the Home
Office Building of Crawford & Company, 5620 Glenridge Drive, N.E., Atlanta,
Georgia on April 23, 1998 at 2:00 P.M., and at any adjournment thereof, upon the
matters described in the accompanying Notice of Annual Meeting and Proxy
Statement and upon any other business that may properly come before the meeting
or any adjournment thereof, hereby revoking any proxy heretofore executed by the
undersigned to vote at said meeting. Said proxies are directed to vote on the
matters described in the accompanying Proxy Statement as follows, and otherwise
in their discretion:
1. Proposal to elect the eight (8) nominees listed below as Directors (except as
indicated to the contrary below).
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
vote for all nominees listed below
(except as indicated to the contrary)
NOMINEES: Smith, Lanier, Flather, L. K. Crawford, J. C. Crawford, Prince,
Williams, Wood.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the name of nominee in the space provided below)
- --------------------------------------------------------------------------------
2. Proposal to approve the appointment of Arthur Andersen LLP as auditors of the
Company for the 1998 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS DIRECTED ABOVE, OR IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE ABOVE PROPOSALS.
(Continued on Reverse Side)
The undersigned acknowledges receipt with this Proxy of a copy of the Notice of
Annual Meeting of Shareholders and the Proxy Statement dated March 20, 1998.
Dated: , 1998
-------------------
--------------------------------
--------------------------------
Signature of Shareholder
IMPORTANT: Please date this
Proxy and sign exactly as your
name or names appear hereon. If
shares are held jointly,
signatures should include both
names. Executors,
administrators, trustees,
guardians and others signing in
a representative capacity,
please give your full title. If
a corporation, please sign in
full corporate name by President
or other authorized officer. If
a partnership, please sign in
partnership name by authorized
person.
