<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:
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<PAGE> 2
(CRAWFORD(R) LOGO)
March 24, 2000
Dear Shareholder:
You are cordially invited to attend the Company's 2000 Annual Meeting of
Shareholders which will be held on Tuesday, April 25, 2000, 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 1999 activities and the outlook for 2000. We 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, we wish to
thank you for your continued interest in and support of Crawford & Company.
Sincerely,
/s/ Archie Meyers, Jr.
Archie Meyers, Jr.,
Chairman and
Chief Executive Officer
/s/ Grover L. Davis
Grover L. Davis,
President and
Chief Operating Officer
<PAGE> 3
CRAWFORD & COMPANY
P.O. BOX 5047
ATLANTA, GEORGIA 30302
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2000
---------------------
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 Tuesday, April 25,
2000, at 2:00 p.m., local time, for the following purposes:
1. To elect ten (10) Directors to serve until the next Annual Meeting
of Shareholders and until their successors are elected and qualified;
2. To approve an amendment to the 1997 Key Employee Stock Option Plan
to increase the number of shares of Class A Common Stock of the Company
available for grant of options;
3. To approve the appointment of Arthur Andersen LLP as independent
auditors for the Company for the 2000 fiscal year; and
4. 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 24, 2000. Only shareholders of record of Class B
Common Stock of the Company as of the close of business on March 2, 2000 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 24, 2000
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 25, 2000
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 Tuesday, April 25, 2000 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, for the amendment to the 1997 Key
Employee Stock Option Plan, and for the approval of the appointment of Arthur
Andersen LLP to serve as independent auditors of the Company in 2000. 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, 2000 (the "Record Date") will be entitled to
vote at the Annual Meeting. As of that date, the Company had outstanding
24,712,172 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, 1999 is enclosed herewith. This Proxy
Statement and the accompanying Proxy are being first mailed to Class B Common
Stock shareholders on or about March 24, 2000.
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 ten and the shareholders shall
elect the Directors at each Annual Meeting. The Board of Directors has nominated
the ten 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, except for Mr. Davis, was elected
by the shareholders at the last Annual Meeting on April 27, 1999. 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>
Forrest L. Minix 72 Retired Chairman and Chief Executive Officer of the 1973
Company.
J. Hicks Lanier 59 Chairman of the Board of Oxford Industries, Inc., a 1976
manufacturer of apparel products; Director of Shaw
Industries, Inc. and Genuine Parts Company.
Charles Flather 66 Managing partner of Middlegreen Associates, Boston, 1978
Massachusetts, an investment management company;
Director of Asia Strategic Growth Fund, Inc.
Linda K. Crawford 57 Private investor. 1980
Jesse C. Crawford 51 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 61 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, Inc., John H. Harland
Co., and Southern Mills.
John A. Williams 57 Chairman of the Board, Chief Executive Officer, and 1996
Director of Post Properties, Inc., a real estate
management and development company.
E. Jenner Wood, III 48 Executive Vice President -- trust, investment and 1997
private client services, SunTrust Banks, Inc.;
Director of Oxford Industries, Inc. and Cotton
States Life Insurance Co.
Archie Meyers, Jr. 62 Chairman and Chief Executive Officer of the Company 1998
Grover L. Davis 48 President and Chief Operating Officer of the Company 1999
</TABLE>
Mr. Minix was Chairman and Chief Executive Officer of the Company for more
than five years before his retirement on January 1, 1996 and served as a
Director until the 1998 Annual Meeting when he did not stand for re-election. He
was elected as a Director by the Board of Directors on September 29, 1998 and
additionally appointed Chairman and Chief Executive Officer. He retired on July
27, 1999. Mr. Meyers was elected a Director by the Board of Directors on
September 29, 1998 and was additionally appointed President and Chief Operating
Officer of the Company at that time. On Mr. Minix's retirement on July 27, 1999,
he was appointed Chairman and Chief Executive Officer. Mr. Meyers previously
served as President -- Claims Management Services for the Company from August,
1995 to March 31, 1998; as a consultant and operations supervisor for the
Company from 1994 to August 1995; and Manager of the Company's Washington, D.C.
branch office from 1977. Mr. Davis was appointed President and Chief Operating
Officer of the Company and elected a Director on July 27, 1999. For more than
five years prior to that appointment, Mr. Davis served in management positions
with the Company, most recently as Senior Vice President, Claims Services from
November 1, 1998 until his appointment as President and Chief Operating Officer.
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.
2
<PAGE> 6
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,
Archie Meyers, Jr., 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 four
meetings during 1999.
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 1999.
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
stock options and other compensation for all other Officers of the Company. The
Senior Compensation and Stock Option Committee held three meetings during 1999.
During 1999, the Board of Directors held five 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, except for Mr. Williams who missed one meeting
of the Board of Directors and one Audit Committee meeting held on the same day.
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 1999. In
addition, pursuant to the terms of the 1997 Non-Employee Director Stock Option
Plan, each non-employee Director elected at the 1999 Annual Meeting received an
option for 3,000 shares of the Company's Class A Common Stock at a price of
$11.25 per share, the Fair Market Value of the Class A Common Stock on that
date. The options are non-transferable; are exercisable at any time after grant;
and lapse on the date the holder is no longer a director, if that occurs on or
before the fifth anniversary of the grant date, or otherwise on the tenth
anniversary of the grant date.
SHAREHOLDER VOTE
Each share of Class B Common Stock is entitled to cast an affirmative vote
for up to ten (10) Director nominees. Cumulative voting is not permitted. The
ten nominees for Director who receive the highest number of votes cast, in
person or by proxy, at the Annual Meeting will be elected Directors. Negative
votes or abstentions, including broker non-votes, will not be counted.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ITS NOMINEES FOR
DIRECTORS.
3
<PAGE> 7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information for the fiscal
years ended December 31, 1999, 1998, and 1997, concerning compensation paid to
or accrued by the Company for (A) those persons who were, at December 31, 1999,
(i) the Chief Executive Officer, or (ii) the other four most highly compensated
Executive Officers of the Company; (B) one other person who served as Chief
Executive Officer of the Company during 1999; and (C) one former Executive
Officer of the Company who, but for the fact that as of December 31, 1999 he was
not an Executive Officer of the Company, would have been among the four most
highly compensated Executive Officers of the Company (hereinafter collectively
referred to as the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION AWARDS
------------------------------------------------ ---------------------
OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS/SAR(#)(2)(3) COMPENSATION($)(4)
- --------------------------- ---- --------- -------- ------------------ --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Archie Meyers, Jr. .............. 1999 $557,371 $ 78,413 $27,417 240,000 $ 74,286
Chairman and 1998 189,750 50,000 14,941 310,000 74,090
Chief Executive Officer 1997 268,754 120,000 0 109,000 69,006
G. L. Davis...................... 1999 247,667 30,973 0 105,000 1,018
President and 1998 155,837 4,134 0 102,000 780
Chief Operating Officer 1997 124,083 8,806 0 4,500 1,236
J. F. Giblin..................... 1999 246,300 25,298 0 60,000 890
Executive Vice President 1998 209,200 25,944 0 60,000 865
Chief Financial Officer 1997 165,333 91,000 0 54,500 1,020
Victoria Holland................. 1999 201,669 20,481 0 5,000 1,248
Executive Vice President 1998 164,583 20,411 0 102,000 1,465
Healthcare Management 1997 153,750 33,825 0 4,500 1,620
J. F. Osten...................... 1999 245,893 24,731 0 5,000 1,688
Executive Vice President 1998 231,539 28,715 0 58,000 2,149
General Counsel and Secretary 1997 225,411 80,000 0 59,000 2,502
F. L. Minix...................... 1999 419,312 53,550 36,750 0 217,034
Former Chairman and 1998 168,041 65,000 28,982 300,000 210,861
Chief Executive Officer 1997 N/A N/A N/A N/A N/A
R. S. Elder...................... 1999 168,216 0 0 10,000 344,006
Former Group Managing Director 1998 390,473 0 0 108,000 35,318
Crawford-THG Limited 1997 205,433 81,900 0 7,500 19,350
</TABLE>
- ---------------
(1) Represents amounts reimbursed for payment of taxes during 1999.
(2) Represents shares of the Company's Class A Common Stock.
(3) Restated for three-for-two stock split in March of 1997.
(4) Represents the following amounts for 1999: (i) Mr. Meyers: $73,256 in
retirement benefits, and $1,030 premium payment on term life insurance; (ii)
Mr. Davis: $700 Company contribution to the Company's Savings and Investment
Plan, and $318 premium payment on term life insurance; (iii) Mr. Giblin:
$700 Company contribution to the Company's Savings and Investment Plan, and
$190 premium payment on term life insurance; (iv) Ms. Holland: $700 Company
contribution to the Company's Savings and Investment Plan, and $548 premium
payment on term life insurance; (v) Mr. Osten: $700 Company contribution to
Company's Savings and Investment Plan, and $988 premium payment on term life
insurance; (vi) Mr. Minix: $215,106 in retirement benefits, and $1,928
premium on term life insurance; and (vii) Mr. Elder: $322,136 in severance
benefits, and $21,870 contribution by Crawford-THG, an indirectly
wholly-owned subsidiary of the Company, to a defined contribution retirement
plan.
4
<PAGE> 8
STOCK OPTION EXERCISES AND YEAR-END VALUES
The following table provides information concerning the exercise of stock
options during the last fiscal year and unexercised options held as of the end
of the fiscal year with respect to the Named Executive Officers:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/
FY-END (#) SARS AT FY-END ($)
--------------------- ---------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE(1) UNEXERCISABLE(1)
---- --------------- ------------------ --------------------- ---------------------
<S> <C> <C> <C> <C>
Archie Meyers, Jr.... None $ 0 0 $ 0
540,000 0
G. L. Davis.......... None 0 3,850 1,657
211,250 1,507
V. Holland........... None 0 15,700 13,047
111,550 1,457
J. F. Giblin......... None 0 62,150 8,989
173,100 2,201
J. F. Osten.......... None 0 41,100 7,899
122,650 4,521
F. L. Minix None 0 0 0
300,000 0
R. S. Elder.......... None 0 0 0
0 0
</TABLE>
- ---------------
(1) 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, 1999 based on the closing price for the Class A and Class B
shares on the New York Stock Exchange on that date, for those options that
have an exercise price below the December 31, 1999 market value. 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, 1999:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION
NAME GRANTED (#)(1) IN FISCAL YEAR ($/SH) DATE
---- --------------------- -------------------- ----------- ----------
<S> <C> <C> <C> <C>
Archie Meyers,
Jr................ 40,000 3.22% 12.50 2/2/09
200,000 16.10 12.75 7/27/06
G. L. Davis.......... 5,000 0.40 12.50 2/2/09
100,000 8.05 12.75 7/27/06
V. Holland........... 5,000 0.40 12.50 2/2/09
J. F. Giblin......... 10,000 0.81 12.50 2/2/09
50,000 4.03 12.50 2/2/06
J. F. Osten.......... 5,000 0.40 12.50 2/2/09
F. L. Minix.......... 0 N.A. N.A. N.A.
R. S. Elder.......... 10,000 0.81 12.50 2/2/09
All Shareholders.....
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
OPTION TERM (2)
--------------------------------------
NAME 0% ($) 5% ($) 10% ($)
---- ------ ------------ --------------
<S> <C> <C> <C>
Archie Meyers,
Jr................ 0 $ 314,448 $ 796,871
0 1,038,105 2,419,228
G. L. Davis.......... 0 39,306 99,609
0 519,053 1,209,614
V. Holland........... 0 39,306 99,609
J. F. Giblin......... 0 78,612 199,218
0 254,438 592,948
J. F. Osten.......... 0 39,306 99,609
F. L. Minix.......... 0 0 0
R. S. Elder.......... 0 78,612 199,218
All Shareholders..... $398 Million $1,009 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
7/27/06 expiration date which become exercisable at the earliest of (A) when
the average of the Class A Common Stock price for ten consecutive trading
days reaches $17.85 per share or (B) July 27, 2005.
(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, 1999, 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. Minix, Meyers, Giblin,
Davis and Osten are 45, 40, 10, 23, and 9, respectively and for Ms. Holland is
20. Mr. Elder did not participate in the Retirement Plan.
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 ensure 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. In February of 1999, the Committee
increased Mr. Minix's base salary by five percent (5%), to $630,000. Following
Mr. Minix's retirement and the election of Archie Meyers, Jr. as Chief Executive
Officer, effective July 31, 1999, the Committee set Mr. Meyer's annual base
salary at $600,000.
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, except for the President whose bonus is set by
the Committee based on the recommendation of the Chief Executive Officer.
8
<PAGE> 12
The Committee sets the 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 Executive Officers of
the Company. Historically, the Chief Executive Officer's bonus, as percentage of
his base salary, has been higher than the average paid to the other Executive
Officers, expressed as a percentage of their base salaries. For 1999, the
Committee awarded a bonus of 15.3% of their base salary (or approximately 150%
of the bonus as a percent of salary for other management personnel) to each of
Mr. Minix and Mr. Meyers, or a bonus of $53,550 and $78,413 to Mr. Minix and Mr.
Meyers, respectively.
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 special options in July, 1999 to (i) Mr. Meyers covering 200,000 shares
of the Company's Class A Common Stock and (ii) certain other Executive Officers
and senior officers of the Company covering an additional 400,000 shares of the
Company's Class A Common Stock. Those options granted to the Chief Executive
Officer and Executive Officers 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.
J. HICKS LANIER LINDA K. CRAWFORD
E. JENNER WOOD, III CHARLES FLATHER
9
<PAGE> 13
STOCK OWNERSHIP INFORMATION
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information, as of March 2, 2000, 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
March 2, 2000, 25,687,731 shares of Class A Common Stock and 24,712,172 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>
Linda K. Crawford(3)(4)............................ 2,290,465 3,906,736 8.9% 15.8%
J. Hicks Lanier(3)(5).............................. 24,037 3,037 -- --
Charles Flather(3)................................. 26,062 5,062 -- --
Jesse C. Crawford(3)(6)............................ 4,654,538 2,223,530 18.1 9.0
Larry L. Prince(3)(5).............................. 22,125 1,125 -- --
John A. Williams(3)................................ 21,000 1,500 -- --
E. Jenner Wood, III(3)(5).......................... 21,750 -- -- --
Archie Meyers, Jr.(7).............................. 22,857 100 -- --
Grover L. Davis(8)................................. 7,582 -- -- --
Forrest L. Minix................................... 127,119 123,072 -- --
John F. Giblin(9).................................. 73,029 3,000 -- --
Victoria Holland(10)............................... 16,200 -- -- --
Judd F. Osten(11).................................. 57,850 -- -- --
Ronald S. Elder.................................... -- -- -- --
All Directors and Executive Officers as a Group
(20 persons)(12)................................. 7,424,064 6,267,198 28.9 25.4
--------- --------- ---- ----
</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 21,000 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of March 2, 2000.
(4) See Notes (2), (3), and (4) 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 244,665 shares of Class A Common
Stock, Linda K. Crawford and another individual share investment power.
Under the terms of the other two 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.
(5) Mr. Prince is a director of SunTrust Banks, Inc. Mr. Wood is currently
Executive Vice President -- trust, investment and principle client services
for SunTrust Banks, Inc. Messrs. Prince and Wood disclaim any beneficial
ownership in shares held by SunTrust Banks, Inc. or any of its banking
(footnotes continued on page 11)
10
<PAGE> 14
subsidiaries, which shares are not reflected in the table. See "Information
With Respect to Certain Business Relationships" and "Security Ownership of
Certain Beneficial Owners."
(6) See Note (7) 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 1,212,083 shares attributable to him as a general and
limited partner of Crawford Partners, L.P.
(7) Includes 8,000 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of March 2, 2000.
(8) Includes 7,350 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of March 2, 2000.
(9) Includes 68,850 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of March 2, 2000.
(10) Includes 16,200 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of March 2, 2000.
(11) Includes 49,550 shares of Class A Common Stock subject to options
exercisable within sixty (60) days of March 2, 2000.
(12) Includes 244,665 shares of Class A Common Stock and 2,446,759 shares of
Class B Common Stock as to which voting or investment power is shared;
352,773 shares of Class A Common Stock subject to options exercisable
within sixty (60) days of March 2, 2000; 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.
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 March 2,
2000:
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE OF TOTAL SHARES
NAME AND ADDRESS BENEFICIAL OWNERSHIP OUTSTANDING
- ---------------- -------------------- ------------
<S> <C> <C>
SunTrust Bank.................................... 14,928,177(1) 60.4%
One Park Place, N.E.
Atlanta, Georgia 30303
Estate of Virginia C. Crawford................... 8,401,207 34.0%
c/o SunTrust Bank
55 Park Place
Atlanta, Georgia 30303
Linda K. Crawford................................ 3,906,736(2)(3)(4) 15.8%
1198 Longcourte Dr., N.W.
Atlanta, Georgia 30327
Wachovia Corporation............................. 3,896,481(2)(3)(4)(5) 15.8%
191 Peachtree St., N.E.
Atlanta, Georgia 30303
Frank L. Wilson, III............................. 3,474,202(6) 14.1%
230 Peachtree St., N.W.
Atlanta, Georgia 30303
Crawford Partners, L.P........................... 2,414,636(1) 9.8%
55 Park Place
Atlanta, Georgia 30303
</TABLE>
11
<PAGE> 15
<TABLE>
<CAPTION>
PERCENT OF
AMOUNT AND NATURE OF TOTAL SHARES
NAME AND ADDRESS BENEFICIAL OWNERSHIP OUTSTANDING
- ---------------- -------------------- ------------
<S> <C> <C>
Jesse C. Crawford................................ 2,223,530(7) 9.0%
Crawford Communications, Inc.
535 Plasamour Dr., N.E.
Atlanta, Georgia 30324
</TABLE>
- ---------------
(1) The shares are held by one or more bank subsidiaries of SunTrust Bank in
various fiduciary and agency capacities. SunTrust Bank has sole voting
power with respect to 6,327,941 of such shares. SunTrust Bank has sole
investment power with respect to 6,435,941 of such shares and shares
investment power with respect to 8,490,663 of such shares. SunTrust Bank
disclaims 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 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.
(3) 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.
(4) 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.
(5) 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.
(6) 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.
(7) The shares shown as beneficially owned by Jesse C. Crawford include 341,430
shares attributable to him as a general and limited partner of Crawford
Partners, L.P.
INFORMATION WITH RESPECT TO CERTAIN BUSINESS RELATIONSHIPS
SunTrust Bank through its banking subsidiaries (collectively, the "Banks"),
hold 14,928,177 shares of Class B Common Stock of the Company as of March 2,
2000. 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 serves as
trustee for the Crawford & Company Retirement Plan, and the Crawford & Company
Employee Disability Income Plan.
12
<PAGE> 16
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, 1999, all filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with.
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, 1995 and ended December 31, 1999:
<TABLE>
<CAPTION>
MEASUREMENT PERIOD CRAWFORD & COMPANY S&P PROPERTY-CASUALTY
(FISCAL YEAR END) (CLASS B) S&P 500 INDEX INSURANCE INDEX
- ------------------ ------------------ ------------- ---------------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 105.06 137.58 135.40
1996 153.05 169.17 164.52
1997 210.31 225.60 239.33
1998 163.56 290.08 222.69
1999 150.82 351.12 166.00
</TABLE>
- ---------------
This total shareholders' return model assumes reinvested dividends.
Prepared by Standard & Poor's Compustat Services, a division of McGraw-Hill,
Inc.
13
<PAGE> 17
PROPOSAL TO APPROVE AMENDMENT TO THE 1997 KEY EMPLOYEE
STOCK OPTION PLAN
General. On April 22, 1997, the shareholders approved the 1997 Key
Employee Stock Option Plan (the "Employee Plan") which (adjusted for the March
11, 1997 three-for-two stock split) allowed for the grant to key employees of
the Company options to purchase up to an aggregate of 3,750,000 shares of the
Company's Class A Common Stock. As of March 2, 2000, there remains available for
grant under the Employee Plan a total of approximately 475,000 shares of Class A
Common Stock. To continue to attract and retain key employees and tie their
compensation to increases in shareholder value, the Board of Directors on
February 1, 2000, amended the Employee Plan to authorize an additional 2,500,000
shares of Class A Common Stock for issuance under the Employee Plan. A copy of
the Employee Plan, as amended and restated for the March 1997 three-for-two
stock split, is attached as Appendix A hereto.
Options. The Employee Plan provides for the granting to key employees of
the Company and any subsidiary both options intended to satisfy the requirements
of Section 422 of the Internal Revenue Code of 1986 ("Incentive Stock Options")
and options not intended to satisfy those requirements ("Non-Qualified
Options").
Administration. The Employee Plan is administered by the Senior
Compensation and Stock Option Committee (the "Committee") of the Company's Board
of Directors. Only those directors who are "non-employee directors" within the
meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934 and
"outside directors" within the meaning of Section 162(m) of the Internal Revenue
Code of 1986 are eligible for Committee membership. The Committee has the power
to interpret the Employee Plan and to take such other action in the
administration and operation of the Employee Plan as the Committee deems
equitable under the circumstances, which actions are binding on the Company, on
each affected key employee, and on each other person directly or indirectly
affected by such action.
Participants. Any full-time, salaried employee of the Company or any
subsidiary of the Company (within the meaning of Section 425(f) of the Code)
who, in the judgment of the Committee acting in its absolute discretion, is key
to the success of the Company or such subsidiary ("key employee") may
participate in the Employee Plan. The Company estimates that approximately 180
employees of the Company and its subsidiaries are eligible to participate in the
Employee Plan. The Committee may grant options under the Employee Plan to such
key employees as the Committee may determine, except no individual key employee
may receive options under the Employee Plan covering in the aggregate more than
1,500,000 shares of Class A Common Stock.
Exercise Price. The exercise price of options granted under the Employee
Plan is determined by the Committee, but such price may not be less than the
fair market value of the Class A Common Stock on the date the option is granted.
As defined in the Employee Plan, the "fair market value" of a share of Class A
Common Stock on the date an option is granted will be determined by reference to
the closing price of a share of such stock on the NYSE as accurately reported
for such date in The Wall Street Journal. Options granted under the Employee
Plan provide for payment of the exercise price in cash, Class A Common Stock or
a combination of cash and Class A Common Stock. The Company will receive no
payment upon the granting of options pursuant to the Employee Plan.
Exercise Period. Each option granted under the Employee Plan is
exercisable in whole or in part as set forth in the particular Option Agreement
under which such option is granted, but in no event (i) before the date on which
such option is granted, or (ii) after (A) the date such option is exercised in
full, or (B) the date which is the tenth anniversary of the date such option is
granted, subject to earlier termination of the option in the event of the sale
or merger of the Company. See "Sale or Merger of the Company", below.
Additionally, all outstanding options under the Employee Plan are subject to
shareholder approval of the Employee Plan on or before February 4, 1998 and such
options will expire if that approval is not timely obtained.
Limitation on Grant of Incentive Stock Options. To the extent that the
aggregate fair market value of the shares subject to Incentive Stock Options
granted after 1986 (determined as of the date such Incentive Stock Options were
granted) which first become exercisable in any calendar year exceeds $100,000,
such
14
<PAGE> 18
options will be treated as Non-Qualified Options. The fair market value of the
shares subject to any other option (determined as of the date such option was
granted) which is intended to satisfy the requirement of Section 422 of the Code
and which is granted to such key employee under a plan maintained by the
Company, a subsidiary, or a parent corporation shall be treated (for purposes of
this $100,000 limitation) as if granted under the Employee Plan.
Non-Transferability. Options granted under the Employee Plan may not be
transferred by a key employee and, during the key employee's lifetime, may be
exercised only by the key employee.
Adjustment of Shares. The Employee Plan provides for adjustments by the
Committee in an equitable manner of the number of shares of Class A Common Stock
available for grant of options under the Employee Plan, the number of shares of
Class A Common Stock covered by options granted under the Employee Plan, and the
exercise price to reflect any change in the capitalization of the Company,
including, but not limited to, changes such as stock splits or stock dividends,
mergers, consolidations or other reorganizations.
Sale or Merger of the Company. If the Company agrees to sell substantially
all of its assets, or agrees to any merger, consolidation, reorganization,
division or other corporate transaction in which Class A Common Stock is
converted into another security or into the right to receive securities or other
property and such agreement does not provide for the assumption or substitution
of the options granted under the Employee Plan, each outstanding option shall
terminate thirty (30) days after notice by the Committee to the optionee of the
pendency of such event.
Term of the Employee Plan. No option shall be granted under the Employee
Plan on or after February 4, 2007.
Amendment to the Employee Plan. The Employee Plan may be amended by the
Board of Directors from time to time to the extent that the Board of Directors
deems necessary or appropriate; however, no amendment may be made without
approval of the shareholders of the Company (i) to increase the number of shares
reserved under the Employee Plan, (ii) to change the class of employees eligible
for options under the Employee Plan, (iii) if shareholder approval of such
amendment is required for continued compliance with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or (iv) if
shareholder approval is required by any other applicable laws or regulations or
by the rules of the NYSE. The Board of Directors may also suspend the granting
of options under the Employee Plan at any time and may terminate the Employee
Plan at any time; provided, however, the Board of Directors may only modify,
amend or cancel any options theretofore granted if the optionee consents in
writing to such modification, amendment or cancellation or there is a
dissolution or liquidation of the Company or a transaction as described under
the heading "Sale or Merger of the Company" above.
Federal Income Tax Consequences. A description of the federal income tax
consequences of participation in the Employee Plan under present law is set
forth below. This description is only a general summary based on current federal
income tax laws, regulations (including certain proposed regulations), and
judicial and administrative interpretations thereof. The federal income tax laws
and regulations are frequently amended, and such amendments may or may not be
retroactive with respect to transactions described herein.
General. The grant of an option to a key employee is not a taxable event.
The exercise of an option may result in taxable ordinary income to the key
employee, the amount of such income being equal to the "Spread," defined as the
excess of (i) the fair market value of shares acquired upon exercise of the
option, over (ii) the exercise price for such shares. Upon sale of those shares,
the key employee will recognize a capital gain or loss measured by the
difference between (i) the net amount realized upon disposition and (ii) the
"Tax Basis" in the shares. The Tax Basis in shares acquired upon exercise of any
option differs depending on whether the option exercise price is paid in cash or
in stock. With a cash exercise, the Tax Basis of the acquired shares will be
equal to (i) the cash paid increased by (ii) any amount included in the key
employee's gross income as compensation by virtue of the exercise of the option.
If shares of stock are exchanged in full or partial payment of the exercise
price, the Tax Basis of the number of shares acquired equal to the number
exchanged shall be (i) the Tax Basis of those exchanged shares, increased by
(ii) any amount included in the key employee's gross income as compensation with
respect to those shares by virtue of
15
<PAGE> 19
the exercise of the option. The shares acquired as part of the exchange which
are in excess of the number surrendered have a Tax Basis of zero, increased by
any amount included in the key employee's gross income as compensation with
respect to those shares by virtue of the exercise of the option.
Exercise of an Incentive Stock Option. The exercise of an Incentive Stock
Option and the related transfer of Class A common Stock are covered by special
tax provisions under which the key employee does not recognize any taxable
ordinary income. However, the Spread on the date of exercise generally will
constitute a tax preference item adjustment for the purposes of computing the
key employee's alternate minimum tax in the year in which the option is
exercised. As a result, notwithstanding that the key employee will not recognize
income for regular tax purposes upon exercise of an Incentive Stock Option, his
or her federal income tax liability may be increased under the alternative
minimum tax rules. The portion of such alternative minimum tax liability, if
any, attributable to the Spread may result in a credit against the key
employee's regular tax liability in later years.
Early Disposition of Incentive Stock Option Shares. If the Class A Common
Stock transferred pursuant to the exercise of an Incentive Stock Option is
disposed of within (i) two years from the date of the grant of the option or
(ii) one year from the date the shares were transferred upon exercise of the
option (the "Holding Periods"), the key employee generally will recognize
ordinary income at the time of the disposition equal to the Spread on the
exercise date. If the sale price of the shares is less than the market value on
the date of exercise, the amount of ordinary income to be recognized may be
reduced. The balance, if any, of the key employee's gain over the amount treated
as ordinary income on such an early disposition will be short- or long-term gain
depending upon whether the holding period applicable to long-term capital assets
is satisfied. If an early disposition occurs in the same tax year as the
exercise, the Spread will not constitute a tax preference item adjustment (as
described above).
Qualifying Disposition of Incentive Stock Option Shares. Following
satisfaction of the Holding Periods, the sale or other taxable disposition of
Class A Common Stock acquired upon the exercise of an Incentive Stock Option
generally will result in long-term capital gain or loss treatment with respect
to the difference between (i) the amount realized on the disposition and (ii)
the Tax Basis of the shares sold.
Exercise of Non-Qualified Option and Sale of Shares. As a result of the
exercise of a Non-Qualified Option, the optionee will recognize ordinary income
in an amount equal to the Spread. Depending upon the period the shares are held
after exercise, the sale or other taxable disposition of Class A Common Stock
acquired upon the exercise of a Non-Qualified Option will result in a short- or
long-term capital gain or loss equal to the difference between (i) the amount
realized on the disposition and (ii) the Tax Basis of the shares sold.
Approval of Amendment to the Employee Plan. The proposed amendment to the
Employee Plan must be approved by the favorable vote of a majority of the shares
of Class B Common Stock present and voting at the Annual Meeting. Proxies
solicited by the Board of Directors will be voted in favor of this proposal,
unless the shareholders specify in their proxies a contrary choice. Abstentions,
including broker non-votes, will not be counted.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
THE AMENDMENT TO THE 1997 KEY EMPLOYEE STOCK OPTION PLAN.
APPOINTMENT OF INDEPENDENT AUDITORS
Arthur Andersen LLP has been selected by the Audit Committee to serve as
independent auditors for the Company in 2000. If approved by the Class B Common
Stock shareholders, the Company will appoint Arthur Andersen LLP as independent
auditors of the Company for 2000. 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.
16
<PAGE> 20
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF
ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 2000.
FORM 10-K
The Crawford & Company Annual Report on Form 10-K for 1999, 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.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be presented at the 2001 Annual Meeting of the
Shareholders must be received by the Company no later than November 27, 2000 for
inclusion in the proxy statement for that meeting in accordance with Rule 14a-8
under the Securities Exchange Act of 1934. Pursuant to Rule 14a-4 under the
Securities Exchange Act of 1934 and the By-laws of the Company, the Board of
Directors may exercise discretionary voting authority at the 2001 Annual Meeting
under proxies it solicits to vote on a proposal made by a shareholder that the
shareholder does not seek to include in the Company's proxy statement pursuant
to Rule 14a-8, unless the Company is notified about the proposal prior to
November 27, 2000 and the shareholder satisfies the other requirements of Rule
14a-4(c).
OTHER MATTERS
The minutes of the Annual Meeting of Shareholders held on April 27, 1999
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, electronic mail 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 24, 2000
17
<PAGE> 21
APPENDIX A
CRAWFORD & COMPANY
1997 KEY EMPLOYEE STOCK OPTION PLAN
(RESTATED FOR FEBRUARY 1, 2000 AMENDMENT AND
MARCH 11, 1997 THREE-FOR-TWO STOCK SPLIT)
Section 1. Plan Established. Crawford & Company, a Georgia corporation,
hereby adopts as of the 4th day of February, 1997, this 1997 Key Employee Stock
Option Plan, pursuant to which certain of the Key Employees of the Company and
Subsidiary Corporations, to be selected and determined as hereinafter set forth,
may be granted Options to purchase shares of the Class A Common Stock of the
Company; provided that no Option granted under the Plan will be exercisable
until shareholder approval of the Plan has been obtained and provided further
that the Plan and any Options granted under it will terminate if shareholder
approval is not received for the Plan within twelve (12) months after the date
first written above.
Section 2. Purpose of Plan. The purpose of the Plan is to strengthen the
Company and those corporations which are or later become Subsidiary
Corporations, by providing to specific Key Employees added incentives for high
levels of performance and to encourage stock ownership in the Company. The Plan
seeks to accomplish these goals by providing a means whereby these Key Employees
may be given an opportunity to purchase, by way of option, shares of Stock of
the Company.
Section 3. Definitions:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Senior Compensation and Stock Option
Committee of the Board, or such other or successor committee as the Board
may, from time to time, establish.
(d) "Company" means Crawford & Company, a Georgia corporation, and any
successor to such corporation.
(e) "Incentive Stock Option" means an Option intended to meet all the
requirements of Section 422 of the Code and the regulations thereunder.
(f) "Fair Market Value" means (1) the closing price for a share of
Stock on the New York Stock Exchange (or if Stock is no longer traded on
the New York Stock Exchange, on the exchange or quotation system which
reports or quotes the closing price for a share of Stock) as accurately
reported for any date (or, if no shares of Stock are traded on such date,
for the immediately preceding date on which shares of Stock were traded) in
The Wall Street Journal (or if The Wall Street Journal no longer reports
such price, in a newspaper or trade journal selected by the Committee) or
(2) if no such price quotation is available, the price which the Committee,
acting in good faith, determines through any reasonable valuation method
that a share of Stock might change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or to sell and
both having reasonable knowledge of the relevant facts.
(g) "Key Employee" means full-time, salaried employees of the Company
or a Subsidiary Corporation, as selected by the Committee.
(h) "Non-Qualified Stock Option" means any Option, other than an
Incentive Stock Option.
(i) "Option" means any option awarded under this Plan.
(j) "Optionee" means any Key Employee awarded an Option.
(k) "Plan" means this Crawford & Company 1997 Key Employee Stock
Option Plan, as amended from time to time.
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(l) "Stock" means the Class A Common Stock of the Company.
(m) "Subsidiary Corporation" means any corporation which is a
subsidiary corporation (within the meaning of Section 425(f) of the Code)
of the Company.
Section 4. Eligibility. Key Employees, who have been selected as provided
in Section 5, will be eligible to receive Options; provided, however, that Key
Employees owning more than 10% of the total combined voting power of all classes
of stock of the Company or any Subsidiary Corporation will be eligible to
receive Incentive Stock Options only if: (i) the option price is at least 110%
of the Fair Market Value (at the time the option is granted) of the shares
issued under the Option; and (ii) the Incentive Stock Option may not be
exercised after the expiration of five (5) years from the date the Incentive
Stock Option is granted.
Section 5. Administration and Grant of Options. The Plan will be
administered by the Committee consisting of two or more directors appointed by
the Board who are "non-employee directors" (within the meaning of Rule 16b-3 of
the Securities Exchange Act of 1934) and "outside directors" (within the meaning
of Section 162(m) of the Code). Subject to the express provisions of the Plan,
the Committee will have complete authority to determine those Key Employees to
whom, the time or times, and the price at which Options may be granted, the
option periods, the number of shares subject to each Option, and whether an
Option will be granted as an Incentive Stock Option or a Non-Qualified Stock
Option. Subject to the express provisions of the Plan, the Committee will also
have complete authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations consistent with the Plan and relating to it, to determine
the terms and provisions of each option agreement (which need not be the same),
to determine the rights and obligations of Optionees under the Plan, and to make
all other determinations necessary or advisable in the administration of the
Plan.
Section 6. Shares Subject to the Plan. The maximum aggregate number of
shares in respect to which Options may be granted is 6,250,000 shares of Stock.
The aggregate number of shares which may be subject to Options granted to any
one Key Employee under the Plan shall not exceed 1,500,000. The maximum
aggregate number of shares which may be granted under the Plan or to any one Key
Employee is subject, however, to increase or decrease pursuant to the provisions
of Section 13. More than one Option may be granted to the same Key Employee. If
any Option will terminate for any reason without having been exercised in full,
the shares applicable to the unexercised portion of the Option will become
available for other Options under this Plan, unless the Plan is then terminated.
The Plan will continue for a period of ten (10) years from the date upon which
it is adopted; provided however, that the Board may terminate the Plan at any
time within its absolute discretion. No such termination, other than as provided
for in Sections 1 and 14, will in any way affect any Option then outstanding.
Section 7. Number of Shares. Subject to the express provision of the
Plan, the Committee will determine the number of shares to be covered by any
Option granted to an Optionee provided, however, that the aggregate Fair Market
Value (determined as of the time the Option is granted) of the Stock for which
any Key Employee may exercise Incentive Stock Options in any calendar year
(under any plans of the Company or any Subsidiary Corporation) will not exceed
$100,000.
Section 8. Option Price. The option price of the shares under each Option
shall be set by the Committee at the time of grant and, subject to Section 4,
such option price will not be less than the Fair Market Value of the shares on
the date of the grant of the Option.
Section 9. Exercise of Options
(a) Subject to the provisions of Sections 1 and 14, each Option will
become exercisable at such times and in such installments as the Committee
will provide in the terms of the option agreement; provided, however, that
the Committee may, on terms and conditions as it may determine to be
appropriate, accelerate the time at which such Option or any portion
thereof may be exercised.
(b) The Option will be exercised by the Optionee's giving written
notice to the Company's Corporate Secretary specifying (i) the number of
full shares to be purchased and (ii) the method of
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payment, in accordance with Section 10. Where an Option is being exercised
at any time only in part, not less than fifty (50) shares will be covered
by any such partial exercise.
Section 10. Payment of the Option Price and Taxes.
(a) Full payment of the option price for the number of shares
specified in the notice of exercise delivered pursuant to Section 9 shall
accompany such notice of exercise. Additionally, in the case of the
exercise of a Non-Qualified Option, the Optionee shall deliver to the
Company, or make arrangements satisfactory to the Company, for the payment
of any withholding or other taxes which are required to be paid by or
collected on behalf of the Optionee by reason of the exercise.
(b) The option price and required withholding or other taxes may be
paid (i) in cash or certified check; (ii) by delivery to the Company of
shares of Stock with a Fair Market Value on the exercise date equal to the
option price and any required withholding or other taxes; or (iii) by any
combination of (i) or (ii).
Section 11. Termination of the Option. Each Option will specify a date
upon which the Option will terminate if it has not then been exercised in full.
The termination date will, in each instance, be fixed by the Committee, but in
no event will an Option permit the exercise thereof after the earlier of
termination of the Option as described in Sections 1 or 14 hereof or ten (10)
years from date of grant.
Section 12. Non-Transferable. No Option will be assignable or
transferable except by will or by laws of descent and distribution. Any other
attempted assignment or transfer, or any attempted pledge, hypothecation or
other disposition of, or levy of any execution, attachment or similar process
upon any Option will be null and void and without effect. During the lifetime of
an Optionee, the Option will be exercisable only by the Optionee.
Section 13. Change in Capitalization. If the outstanding shares of Stock
are increased, decreased, or changed into, or exchanged for a different number
or kind of shares or securities of the Company, without receipt of consideration
by the Company, through reorganization, merger, recapitalization,
reclassification, stock split, stock dividend, stock consolidation, or
otherwise, an appropriate and proportionate adjustment will be made in the
number and kind of shares as to which Options may be granted. A corresponding
adjustment changing the number or kind of shares and the exercise price per
share allocated to unexercised Options, or portions thereof, which will have
been granted prior to any such change will likewise be made. Any such
adjustment, however, in an outstanding Option will be made without change in the
total price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the number of shares and price for each share
subject to the Option. Adjustments under this Section will be made by the Board
or the Committee, whose determination as to what adjustments will be made, and
to the extent thereof, will be final and conclusive. No fractional shares of
Stock will be issued under the Plan on account of any such adjustment.
Section 14. Mergers or Consolidations. Not less than thirty (30) days
prior to the dissolution or liquidation of the Company or a reorganization,
merger or consolidation of the Company with one or more corporations as a result
of which the Company will not be the surviving or resulting corporation, or a
sale of substantially all of the assets of the Company to another person, or a
reverse merger in which the Company is the surviving corporation but the shares
of the Stock outstanding immediately preceding the merger are converted by
virtue of the merger to other property (a "Terminating Event"), the Board or the
Committee will notify each Optionee of the pendency of the Terminating Event.
Upon delivery of the notice, any Option granted prior to the Terminating Event
will be exercisable in full. Upon the date thirty (30) days after delivery of
the notice, any Option or portion thereof not exercised will terminate, and upon
the effective date of the Terminating Event, the Plan will terminate, unless
provision is made in connection with the Terminating Event for assumption of
Options previously granted, or substitution for such Options of new options
offering stock of a successor employer corporation, or a parent or subsidiary
corporation thereof, solely at the option of the successor corporation or parent
or subsidiary corporation, with appropriate adjustments as to the number and
kind of shares and prices.
Section 15. Disposition of Shares. Any Optionee who acquires Stock
pursuant to an Option will, so long as he or she remains an employee of the
Company or Subsidiary Corporation, be obligated to advise the
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Company in the case of each sale or other disposition of any Stock so acquired,
such advice to be given to the Company immediately upon the occurrence of any
such sale or other disposition.
Section 16. Option Agreement. Each Option granted will be evidenced by a
written stock option agreement executed by the Company, and will contain each of
the provisions and agreements herein specifically required to be contained
therein, and in addition it may contain other terms and conditions as the
Committee may deem desirable and which are not inconsistent with the Plan.
Section 17. Qualification of Plan. It is intended that each Incentive
Stock Option to be issued under this Plan will qualify as and be subject to
exercise only to the extent that it does qualify as an "incentive stock option"
as defined in Section 422 of the Code. The Board may make any amendment to the
Plan which, in the opinion of the counsel of the Company, will be required to
obtain or maintain such conformity.
Section 18. Amendment of Plan. The Board may make changes in the Plan,
and with consent of the Optionee, in the terms and conditions of his or her
Option, as it will deem advisable, but may not, without the approval of the
shareholders of the Company: (a) increase the maximum number of shares of Stock
subject to the Plan (except as may be done pursuant to Section 13); (b) decrease
the minimum option price requirement contained in Section 8 (except as may be
done pursuant to Section 13); (c) extend the term of the Plan or the term of any
Option beyond 10 years; (d) decrease the option price applicable to any Option
granted under the Plan (except as may be done pursuant to Section 13); (e)
withdraw the administration of the Plan from the Committee; (f) permit any
member of the Committee to be eligible to hold or receive Options under the
Plan; or (g) alter any outstanding Option agreement to the detriment of the
Optionee, without the consent of the Optionee (except as may be done pursuant to
Section 13).
Section 19. Type of Option Granted. Both Incentive Stock Options and
Non-Qualified Stock Options may be granted under the Plan. The Committee, at its
sole discretion, will determine whether an Option granted under the Plan to a
Key Employee will be an Incentive Stock Option or a Non-Qualified Stock Option.
The Committee may make such determination in any manner that it chooses,
including but not limited, to, an option-by-option or employee-by-employee
basis. The Committee will, at the time of grant, clearly designate the intended
nature of any Option granted, whether as an Incentive Stock Option or Non-
Qualified Stock Option.
Section 20. Applicable Law; Severability; Interpretation. The Plan will
be construed, administered, and governed in all respects in accordance with the
laws of the State of Georgia; provided, however, that if any provision is
susceptible to more than one interpretation, it will be interpreted in a manner
consistent with the Plan being an incentive stock option plan under Section 422
of the Code. If any provision of the Plan will be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions of the
Plan will continue to be fully effective. For purposes of this Plan, references
to the masculine shall include the feminine, reference to the singular shall
include the plural, and references to the plural shall include the singular.
Section 21. Shares Reserved. The Company will at all times during the
term of the Plan reserve and keep available the number of shares of Stock as
will be sufficient to satisfy the requirements of the Plan, and will pay all
fees and expenses necessarily incurred by the Company in connection therewith.
Section 22. No Shareholder Rights. No Optionee shall have any rights as a
shareholder of the Company as a result of the grant of an Option to him or her
under this Plan or his or her exercise of such Option pending the actual
delivery of Stock subject to such Option to such Optionee.
Section 23. No Contract of Employment. The grant of an Option under this
Plan shall not constitute a contract of employment and shall not confer on an
Optionee any rights in connection with the termination of his or her employment
in addition to those rights, if any, expressly set forth in the option agreement
which evidences his or her Option.
Section 24. Titles. Titles are provided in this Plan for convenience only
and are not to serve as a basis for interpretation or construction of the Plan.
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On this 1st day of February, 2000, I hereby certify that the foregoing
Plan, restated for the March 11, 1997 three-for-two stock split, was duly
amended by the Board on this date.
/s/ JUDD F. OSTEN
--------------------------------------
Judd F. Osten
Corporate Secretary
(Corporate Seal)
On this day of , 2000, I hereby certify that the foregoing
restated and amended Plan was duly approved by the shareholders on
, 2000.
--------------------------------------
Judd F. Osten
Corporate Secretary
(Corporate Seal)
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CRAWFORD & COMPANY
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 25, 2000. THIS PROXY IS
SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned hereby appoints Archie Meyers, Jr., J.F. Giblin 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 25, 2000 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 ten (10) 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: Minix, Lanier, Flather, L. K. Crawford, J. C. Crawford, Prince,
Williams, Wood, Meyers, Davis.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the name of nominee in the space provided below)
- --------------------------------------------------------------------------------
2. Proposal to approve an amendment to the 1997 Key Employee Stock Option Plan
to increase the number of shares of Class A Common Stock of the Company
available for grant of options.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the appointment of Arthur Andersen LLP as the independent
auditors of the Company for the 2000 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 24, 2000.
Dated: -------------------, 2000
--------------------------------
--------------------------------
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.
