<PAGE> 1
BLAIR CORPORATION
Warren, Pennsylvania
------------------------
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS OF
BLAIR CORPORATION
to be held on Tuesday, April 19, 1994
------------------------
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders of Blair
Corporation (the "Company"), a Delaware corporation, will be held in the Knights
of Columbus Building, 219 Second Avenue, Warren, Pennsylvania, on Tuesday, April
19, 1994 at 11:00 a.m., for the following purposes:
1. To elect eleven Directors to serve for a term of one year and until
their successors are elected and qualified.
2. To ratify the appointment of Ernst & Young as independent public
accountants of the Company for the year 1994.
3. To transact such other business as may lawfully come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on February 25, 1994
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting, or any postponements or adjournments thereof.
To assure that your shares are represented at the meeting, please date,
sign and return the enclosed proxy. A postage-paid, self-addressed envelope is
enclosed for your convenience in returning the proxy. If you decide to attend
the meeting, you may revoke the proxy at any time before it is voted.
DAVID A. BLAIR
Secretary
Dated: March 18, 1994
Warren, Pennsylvania
<PAGE> 2
BLAIR CORPORATION
Warren, Pennsylvania
March 18, 1994
PROXY STATEMENT
This Proxy Statement solicits proxies on behalf of the management of Blair
Corporation (the "Company") for use at the Annual Meeting of Stockholders of the
Company, to be held on Tuesday, April 19, 1994. The Company's principal
executive offices are located at 220 Hickory Street, Warren, Pennsylvania 16366.
Under Delaware law, any person giving a proxy pursuant to this solicitation
may revoke it at any time before it is voted.
The shares represented by proxies received by the Company's management will
be voted at the meeting, or at any adjournments thereof, in accordance with the
specifications made therein. If no specification is made on a proxy card, it
will be voted FOR the matters specified on the proxy card. All proxies not
voted, including broker non-votes, will not be counted toward establishing a
quorum. Shareholders should note that while votes for ABSTAIN will count toward
establishing a quorum, passage of any proposal considered at the Annual Meeting
will occur only if a sufficient number of votes are cast FOR the proposal.
Accordingly, votes to ABSTAIN and votes AGAINST will have the same effect in
determining whether the proposal is approved.
On February 25, 1994, there were 9,231,032 shares of the Company's Common
Stock outstanding. Only stockholders of record at the close of business on
February 25, 1994 will be entitled to notice of and to vote at the meeting and
any adjournments thereof, with each share being entitled to one vote. The
presence at the Annual Meeting, in person or by proxy, of the holders of a
majority of the shares of the Company's Common Stock outstanding on February 25,
1994 will constitute a quorum.
A copy of the 1993 Annual Report of the Company, including financial
statements and a description of its operations for 1993, accompanies this Proxy
Statement, but is not incorporated in this Proxy Statement by this reference.
ELECTION OF DIRECTORS
One of the purposes of the meeting is to elect 11 directors to serve until
the next Annual Meeting of Stockholders and until their successors have been
elected and qualified. The persons named in the proxy intend to vote the proxy
for the election as directors of the nominees named below. If, however, any
nominee is unwilling or unable to serve as a director, which is not now
expected, the persons named in the proxy reserve the right to vote for such
other person as may be nominated by management. Directors will be elected by a
plurality of the votes cast at the Annual Meeting.
The table below sets forth the name of each nominee for election as a
director and the nominee's age, positions with the Company, business experience
and principal occupation during the past five years, and family relationships
with other directors.
<TABLE>
<CAPTION>
BUSINESS
POSITIONS WITH DIRECTOR EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- -------- ----- ---------------
<S> <C> <C> <C> <C>
David A. Blair(2)........ 43 Secretary and Order 1988 Secretary, January 1, 1991--
Handling Service present; Assistant Secretary,
Director January 1, 1988 through
December 31, 1990; Customer
Relations Manager, June 1,
1982 through May 31, 1993;
Order Handling Service
Director, June 1,
1993--present.
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
BUSINESS
POSITIONS WITH DIRECTOR EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
John L. Blair(1)......... 73 Director 1949 Former President, Chairman of
the Board, and member of
Executive Committee.
Robert W. Blair(1)....... 63 Director 1962 Executive Vice President,
January 1, 1990 through
December 31, 1990; Vice
President for the previous
year; Secretary, July 16,
1963 through December 31,
1990; member of Executive
Committee, April 16, 1968
through December 31, 1990.
Steven M. Blair(3)....... 50 Vice President 1986 Vice President (Order
(Order Handling) Handling) for the past five
years.
John O. Hanna............ 62 Director 1992 President and Chief Executive
Officer of Northwest Savings
Bank, PaSA, Warren, Pa, since
January, 1977.
Gerald A. Huber.......... 65 Director 1992 Senior Vice President and
Manager, Warren Area Trust
Department, Marine Bank,
Erie, Pa, July 1, 1982,
through June 30, 1992.
Murray K. McComas........ 57 President, Chairman of 1977 President and Chairman of the
the Board and member Board effective October 21,
of Executive Committee 1987; member of Executive
Committee, April 20, 1987--
present; Director of Marine
Bank, a wholly-owned
subsidiary of PNC Bank
Corporation, since February,
1989.
Michael J. Samargya...... 60 Vice President 1973 Vice President (Data
(Data Processing) Processing) for the past five
years.
Giles W. Schutte......... 62 Executive Vice 1972 Executive Vice President,
President, January 1, 1991--present;
Treasurer and member member of Executive
of Executive Committee Committee, January 1, 1990--
present; Vice President,
January 1, 1974 through
December 31, 1990; Treasurer
for the past five years.
Blair T. Smoulder........ 51 Executive 1986 Executive Vice President and
Vice President member of Executive
and member of Committee, January 1, 1990--
Executive Committee present; Vice President
(Planning) for the previous
year.
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
BUSINESS
POSITIONS WITH DIRECTOR EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
John E. Zawacki.......... 45 Vice President 1988 Vice President (Women's
(Women's Merchandise) Merchandise) for the past
five years.
</TABLE>
- ---------
(1) Mr. John L. Blair is a cousin of Mr. Robert W. Blair
(2) Mr. David A. Blair is the nephew of Mr. Robert W. Blair.
(3) Mr. Steven M. Blair is not related to any of Mr. John L. Blair, Mr. Robert W
Blair or Mr. David A. Blair.
The table below sets forth for each executive officer of the Company not
listed above, his name, age, position with the Company, present principal
occupation and business experience during the past five years.
<TABLE>
<CAPTION>
EXECUTIVE BUSINESS
POSITIONS WITH OFFICER EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
Timothy J. Baker......... 47 Vice President 1990 Vice President (Planning),
(Planning) January, 1990--present;
Assistant Vice President
(Planning) for the previous
year.
Robert D. Crowley........ 44 Vice President 1981 Vice President (Men's
(Men's Merchandise) Merchandise) for the past
five years.
C. Wayne Kipple.......... 51 Vice President 1980 Vice President (Home Furnish-
(Home Furnishings) ings) for the past five
years.
John A. Lasher........... 42 Vice President 1987 Vice President (Advertising)
(Advertising) for the past five years.
Thomas P. McKeever....... 45 Vice President 1989 Vice President (Employee and
(Employee and Public Relations) July,
Public Relations) 1989-- present; Assistant
Vice President (Employee and
Public Relations), April,
1987 through July, 1989.
Randall A. Scalise....... 39 Vice President 1993 Vice President (Merchandise
(Merchandise Handling) Handling), January 20,
1993--present; Assistant Vice
President (Merchandise Han-
dling), April, 1991--January,
1993; Assistant Vice
President (Women's
Merchandise), March, 1988
through March, 1991.
William A. Tucker........ 40 Vice President 1989 Vice President (Mailing),
(Mailing) October, 1989--present;
Assistant Vice President
(Mailing), July, 1989 through
October, 1989; Mailing
Department Manager for the
previous year.
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
EXECUTIVE BUSINESS
POSITIONS WITH OFFICER EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
Lawrence R. Vicini....... 45 Vice President 1992 Vice President (International
(International Trade) Trade), June 22,
1992--present; Assistant Vice
President (International
Trade), January, 1991-- June,
1992; Assistant Vice Presi-
dent (Men's Merchandise),
March, 1989 through January,
1991; Buyer (Men's Merchan-
dise), July, 1973 through
March, 1989.
Richard E. Zimmerman..... 53 Vice President 1986 Vice President (Personnel)
(Personnel) for the past five years.
</TABLE>
PRINCIPAL HOLDERS OF COMMON STOCK
(a) Security Ownership of Certain Beneficial Owners. The table below sets
forth information as of February 25, 1994 with respect to each person and
institution known to the Company's management to be the beneficial owner of more
than five percent of the outstanding shares of the Company's Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
-------------- ------------------- --------------------- --------
<S> <C> <C> <C>
Common Stock............... John L. Blair
108 East Street
Warren, PA 16365 1,225,001(1) 13.3%
Common Stock............... PNC Bank Corporation
5th Ave. & Wood St.
Pittsburgh, PA 15222 1,686,406(2) 18.3%
Common Stock............... Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, PA 15258 493,000(3) 5.3%
</TABLE>
- ---------
(1) Such amount includes (i) 153,309 shares of Common Stock held in a trust of
which Mr. John L. Blair is a co-trustee with a commercial bank; and (ii)
58,646 shares of Common Stock held in two trusts, each of 29,323 shares, of
which Mr. John L. Blair is a co-trustee with a commercial bank, for the
benefit of each of Mr. Blair's children. Such amount does not include
110,252 shares of Common Stock, owned of record by Mr. John L. Blair's wife,
as to which Mr. John L. Blair disclaims beneficial ownership.
(2) All of these shares are held by PNC Bank, N.A., in a safekeeping agency
account with the Depository Trust Company. PNC Bank, N.A. currently serves
as the executor, trustee or administrator for 102 separate trust, estate,
guardianship and agency accounts which are the record or beneficial owners
of the Company's Common Stock, none of which is individually the record or
beneficial owner of five percent or more of the Company's outstanding Common
Stock. PNC Bank, N.A. disclaims beneficial ownership of these shares.
(3) All of these shares are held by Mellon Bank Corporation and its subsidiaries
in various fiduciary capacities for both personal and institutional accounts
which are the record or beneficial owners of the Company's Common Stock,
none of which is individually the record or beneficial owner of five percent
or more of the Company's outstanding Common Stock.
4
<PAGE> 6
(b) Security Ownership of Management. The following table sets forth as of
February 25, 1994 certain information with respect to the Company's Common Stock
owned beneficially by each director and nominee for election as a director,
which includes all of the executive officers named below under "Executive
Compensation," and by all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF
NAME OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
-------------- ---------------- --------- --------
<S> <C> <C> <C>
Common Stock............ David A. Blair 30,528(1)(2) .3%
Common Stock............ John L. Blair 1,225,001(1)(2) 13.3%
Common Stock............ Robert W. Blair 232,730(2) 2.5%
Common Stock............ Steven M. Blair 21,295 .2%
Common Stock............ John O. Hanna 1,500(2) .02%
Common Stock............ Gerald A. Huber 1,900(2) .02%
Common Stock............ Murray K. McComas 33,875(2) .4%
Common Stock............ Michael J. Samargya 30,050 .3%
Common Stock............ Giles W. Schutte 19,585(2) .2%
Common Stock............ Blair T. Smoulder 8,725(2)(3) .09%
Common Stock............ John E. Zawacki 8,500(2) .09%
Common Stock............ All directors and executive 1,688,889(1)(2)(3) 18.3%
officers as a group (includes
20 persons)
</TABLE>
- ---------
(1) Such share totals include, with respect to Mr. David A. Blair, 25,125 shares
held in a revocable trust established by Mr. David A. Blair and administered
by a commercial bank and 1,403 shares held in another trust administered by
a commercial bank for the benefit of Mr. David A. Blair. Such share totals
include, with respect to Mr. John L. Blair, (i) 153,309 shares of Common
Stock held in a trust of which Mr. John L. Blair is a co-trustee with a
commercial bank; and (ii) 58,646 shares of Common Stock held in two trusts,
each of 29,323 shares, of which Mr. John L. Blair is a co-trustee with a
commercial bank, for the benefit of Mr. Blair's children. Such amount does
not include 110,252 shares of Common Stock, owned of record by Mr. John L.
Blair's wife, as to which Mr. John L. Blair disclaims beneficial ownership.
(2) The share totals do not include the following shares of stock held by a bank
as trustee for the benefit of the indicated nominee, as to which the
indicated nominees have no voting or investment power, beneficial interest
in which shares is disclaimed by such nominees: Mr. John L. Blair (64,167
shares), Mr. Robert W. Blair (46,667 shares) and Mr. David A. Blair (833
shares). The share totals in the table also do not include the following
shares of Common Stock held by and for the benefit of members of the
immediate families of certain nominees, as to which the indicated nominees
have no voting or investment power, beneficial interest in which are
disclaimed by such nominees: Mr. David A. Blair (700 shares), Mr. John L.
Blair (110,252 shares), Mr. Robert W. Blair (7,160 shares), Mr. John O.
Hanna (300 shares), Mr. Gerald A. Huber (10 shares), Mr. Murray K. McComas
(7,480 shares), Mr. Giles W. Schutte (14,430 shares), Mr. Blair T. Smoulder
(9,300 shares), and Mr. John E. Zawacki (6,954 shares). In addition, 9,480
shares of Common Stock are held by or for the benefit of members of the
immediate families of executive officers of the Company other than the
nominees, as to which such executive officers have no voting or investment
power, beneficial interest in which is disclaimed by such executive
officers.
(3) Such share totals include an aggregate of 7,560 shares of Common Stock
jointly owned by the directors and executive officers with their spouses.
EXECUTIVE COMPENSATION
The following table summarizes the compensation awarded to, earned by, or
paid to the Company's chief executive officer, Mr. Murray K. McComas, and its
four most highly compensated executive officers other than Mr. McComas for all
services rendered to the Company during 1993:
5
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) COMPENSATION(3) COMPENSATION(4)
------------------ ---- -------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Murray K. McComas....... 1993 $445,288 $26,717 $ 133,837 $68,023
President and 1992 446,084 39,919 103,810 63,206
Chairman of the Board 1991 409,093 10,182 134,429 62,025
Michael J. Samargya..... 1993 282,504 16,950 58,745 47,599
Vice President 1992 282,470 24,951 34,610 43,630
(Data Processing) 1991 258,623 6,101 44,808 45,073
Giles W. Schutte........ 1993 326,552 19,593 85,783 69,317
Executive Vice 1992 326,605 29,175 51,483 52,715
President and Treasurer 1991 296,517 7,368 66,240 48,948
Blair T. Smoulder....... 1993 326,552 19,593 85,784 48,765
Executive Vice 1992 326,405 29,223 51,483 44,624
President 1991 296,417 7,368 66,240 41,902
John E. Zawacki......... 1993 236,660 14,200 58,176 34,554
Vice President 1992 236,453 21,110 35,316 31,871
(Women's Merchandise) 1991 213,187 5,287 47,299 30,844
</TABLE>
- ---------
(1) Includes director's fees paid to each of the named executive officers, as
follows:
<TABLE>
<CAPTION>
1991 1992 1993
------ ------ ----
<S> <C> <C> <C>
Murray K. McComas........................................ $1,800 $1,700 0
Michael J. Samargya...................................... 1,700 1,700 0
Giles W. Schutte......................................... 1,800 1,900 0
Blair T. Smoulder........................................ 1,700 1,700 0
John E. Zawacki.......................................... 1,700 1,900 0
</TABLE>
(2) For fiscal year 1991, the Company's executive officers earned bonuses in
accordance with a bonus plan under which all employees received bonuses
equal to 2.5% of their 1991 salary income, which bonuses were paid by the
Company in 1992.
For fiscal years 1992 and 1993, the Company's executive officers earned
bonuses in accordance with the schedule set forth herein in the "Report of
the Executive Officer Compensation Committee." The applicable bonus
percentage was 9% of 1992 salary income earned and 6% of 1993 salary income
earned. The 1992 bonuses were paid by the Company in 1993, and the 1993
bonuses have been paid by the Company in 1994.
In all cases, bonuses paid equal a percentage of the executive officer's
salary income earned in the preceding fiscal year, which percentage varies
depending upon the Company's annual net income during such preceding fiscal
year.
(3) This aggregate figure includes the dollar value of the difference between
the price paid by the named executive officer for stock and the fair market
value of the stock purchased on the date of purchase pursuant to the
Company's Employee Stock Purchase Plan, and the sum of amounts reimbursed
for payment of taxes on restricted stock awards and interest imputed on the
deferred
6
<PAGE> 8
payment for restricted stock not yet fully paid for with respect to the
named executive officer. Aggregate restricted stock holdings as of 12/31/93
for each of the named executive officers were:
<TABLE>
<CAPTION>
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
Murray K. McComas................... 13,500 $493,620
Michael J. Samargya................. 4,750 174,865
Giles W. Schutte.................... 6,125 228,503
Blair T. Smoulder................... 6,125 228,503
John E. Zawacki..................... 4,750 174,865
</TABLE>
Restricted stock awards are made under the Company's Employee Stock
Purchase Plan. The purchase price for shares purchased under the Plan is
paid over time out of cash dividends, when and if declared and paid by the
Company. No cash is received by the Company at the time the shares are
purchased, although the participant receives the rights to receive
dividends and vote the shares at the time. Awarded shares are subject to
repurchase by the Company, for the dividends which have been paid toward
the purchase price, if the participant's employment with the Company
terminates for reasons other than death, retirement or disability. There is
no vesting schedule, and vesting occurs when stock received under said Plan
is fully paid, which will vary with the Company's dividend policy from year
to year. Dividends will be paid on all shares of restricted stock received
pursuant to this Plan as and when dividends are declared by the Company
with respect to all of its outstanding Common Stock.
(4) Includes the Company's contributions made for the benefit and on behalf of
the named executive officer under the following:
A. Life Insurance--The dollar value of premiums for term life insurance
(having a face value in excess of $50,000) paid by the Company for the
benefit of each of the named executive officers is:
<TABLE>
<CAPTION>
1991 1992 1993
------- ------- --------
<S> <C> <C> <C>
Murray K. McComas........................ $ 2,158 $ 3,412 $ 3,534
Michael J. Samargya...................... 1,868 1,990 2,079
Giles W. Schutte......................... 2,311 3,700 3,856
Blair T. Smoulder........................ 853 1,320 1,582
John E. Zawacki.......................... 330 359 380
</TABLE>
B. The Dollar Value of All Unused Personal and Vacation Days Paid by the
Company to Each of the Named Executive Officers is:
<TABLE>
<CAPTION>
1991 1992 1993
------- ------- --------
<S> <C> <C> <C>
Murray K. McComas........................ 0 0 0
Michael J. Samargya...................... $ 4,636 $ 4,972 $ 5,284
Giles W. Schutte......................... 5,318 5,703 18,323
Blair T. Smoulder........................ 0 0 0
John E. Zawacki.......................... 0 0 0
</TABLE>
C. The Company's Savings Plan--Under the Savings Plan, which is available
to all full-time employees of the Company with one year of service, the
Company matches employees' contributions to the Plan of 1% to 5% of their
salary. The Company's contributions, and the earnings thereon, are
subject to divestiture in accordance with a vesting schedule under which
20% vests after three years of service to the Company, with an additional
20% vesting after each
7
<PAGE> 9
year thereafter until full vesting is achieved after seven years of
service. Amounts allocated to the named executive officers are:
<TABLE>
<CAPTION>
1991 1992 1993
------- ------- --------
<S> <C> <C> <C>
Murray K. McComas........................ $ 3,744 $ 4,239 $ 5,140
Michael J. Samargya...................... 3,179 4,300 5,004
Giles W. Schutte......................... 3,846 4,312 5,028
Blair T. Smoulder........................ 3,846 4,323 5,028
John E. Zawacki.......................... 4,387 4,725 4,842
</TABLE>
D. The Company's Profit Sharing and Retirement Plan--Under the Profit
Sharing and Retirement Plan, which covers all employees of the Company,
the Company contributes 10% of its "adjusted net income," as defined in
the Plan, to the Plan's trust fund. Amounts contributed by the Company to
the trust fund are allocated among participating employees based on
salary and years of service to the Company, but allocations to the
executive officers listed in this table are limited to $30,000 (adjusted
to take into account cost-of-living adjustments provided for under
Section 415(d) of the Internal Revenue Code since 1986). The amounts
allocated are invested in accordance with the instructions of the
individual Plan participants in investments approved by the Plan
trustees. Amounts allocated to the named executive officers are:
<TABLE>
<CAPTION>
1991 1992 1993
-------- -------- --------
<S> <C> <C> <C>
Murray K. McComas...................... $ 21,395 $ 21,499 $ 19,718
Michael J. Samargya.................... 21,376 21,373 19,986
Giles W. Schutte....................... 21,385 21,344 19,936
Blair T. Smoulder...................... 21,347 21,324 19,936
John E. Zawacki........................ 20,283 20,500 19,986
</TABLE>
E. Benefit Restoration Plans--The following amounts were paid as
reimbursement under the Company's benefit restoration plans to compensate
the named executive officers for benefits not otherwise paid under the
Savings Plan and the Profit Sharing and Retirement Plan due to
limitations imposed by tax law:
<TABLE>
<CAPTION>
1991 1992 1993
-------- -------- --------
<S> <C> <C> <C>
Murray K. McComas...................... $ 34,728 $ 34,056 $ 39,631
Michael J. Samargya.................... 14,014 10,995 15,246
Giles W. Schutte....................... 16,088 17,656 22,174
Blair T. Smoulder...................... 15,856 17,657 22,219
John E. Zawacki........................ 5,844 6,287 9,346
</TABLE>
COMPENSATION OF DIRECTORS
In 1993, non-management members of the Board of Directors received an
annual retainer of $3,000. In 1993, non-management members also received
compensation in the amount of $500 for each meeting of the Board of Directors
attended and $400 for each meeting attended of the Committees of the Board of
Directors. Management members of the Board of Directors are not compensated for
attending meetings of the Board of Directors or its Committees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Effective December 23, 1992, the Board of Directors of the Company
established a new standing committee with responsibility in the area of
executive officer compensation (other than awards under the Company's Employee
Stock Purchase Plan). The new committee, called the Executive Officer
Compensation Committee, consisted of Mr. Alan J. Blair, Mr. Robert W. Blair, and
Mr. Gerald A. Huber, although Mr. Alan J. Blair died on October 25, 1993.
8
<PAGE> 10
Awards under the Company's Employee Stock Purchase Plan are the
responsibility of the Employee Stock Purchase Plan Committee which consisted of
Mr. Alan J. Blair (prior to his death), Mr. John L. Blair, and Mr. Robert W.
Blair. All of the members of the Employee Stock Purchase Plan Committee are
former executive officers of the Company.
COMPENSATION COMMITTEE REPORTS ON
EXECUTIVE OFFICER COMPENSATION
For fiscal year 1993, decisions on compensation for executive officers of
the Company were made by the Executive Officer Compensation Committee and the
Employee Stock Purchase Plan Committee. In accordance with rules of the
Securities and Exchange Commission ("SEC") designed to enhance disclosure of
policies with respect to executive compensation, set forth below are reports
submitted by these committees addressing the Company's compensation policies
with respect to executive officers for fiscal year 1993.
REPORT OF THE EXECUTIVE OFFICER COMPENSATION COMMITTEE
The Executive Officer Compensation ("EOC") Committee of the Board of
Directors is responsible for salary levels and bonuses for all officers of the
Company deemed by the Board of Directors to be within the SEC's definition of
"executive officer," i.e., a company's president, any vice president in charge
of a principal business unit, division or function, or any other officer or
person who performs similar policy-making functions for the company. The minutes
of meetings of the EOC Committee at which compensation decisions are reached are
acknowledged and approved by the full Board of Directors of the Company.
On April 19, 1993, the EOC Committee approved a 3% increase in the salary
of Murray K. McComas, the Company's Chief Executive Officer, and Messrs.
Samargya, Schutte and Smoulder, and a 4% increase in the salary of Mr. Zawacki,
effective retroactively to January 24, 1993. Mr. McComas participated in the
evaluation and discussion of appropriate salary levels for all executive
officers other than himself. Mr. McComas was not present when the EOC Committee
evaluated him and determined his salary level and the salary levels of the
Company's two Executive Vice Presidents (Messrs. Schutte and Smoulder).
The EOC Committee's decisions on salary levels for executive officers
ultimately were subjective, based on consideration of a number of factors. No
one factor was determinative of the salary level of any of the five named
executive officers. Moreover, the EOC Committee did not weigh any one factor
against any other in a way that makes it possible to assign a numerical value to
the weight of any factor in the determination of the salaries of the Chief
Executive Officer and the four other named executive officers.
The EOC Committee first determined that a greater proportion of the total
compensation paid to executive officers should be tied to performance goals
through the Company's Executive Officer Bonus Plan. This resulted in the EOC
Committee's decision to minimize salary increases. The EOC Committee also
considered the Company's historical executive officer salary levels and salary
increases in the context of the independent consultant's study discussed below,
together with the 13% increase in corporate earnings for the previous fiscal
year. The EOC Committee was aware that officers of the Company other than
executive officers had received salary increases ranging from 3% to 12% for
fiscal year 1993. The Company does not contemplate a targeted "mix" of salary
and bonus, but believes that its executive officers should be incentivized
through greater bonus compensation tied to the Company's performance and lower
salary increases. The actual "mix" achieved for 1993 reflects this effort to
hold down the rate of salary increase while, at the same time, providing a
greater economic opportunity to earn bonus compensation.
The EOC Committee was also aware, as reported in the Company's 1993 Proxy
Statement, that the Company's Common Stock had outperformed the AMEX Market
Value Index in the previous fiscal year. Given this fact, the increase in the
Consumer Price Index, and the EOC Committee's satisfaction
9
<PAGE> 11
with the individual performances of the five named executive officers, the EOC
Committee determined that a 3% increase in salary was appropriate for four of
the executive officers and a 4% increase in salary was appropriate for the fifth
named executive officer.
The EOC Committee's decisions with respect to bonuses for executive
officers were made on December 16, 1993. The EOC Committee determined to
establish a new bonus schedule for executive officers, which is effective for
fiscal years 1993 and 1994, as well as retroactively for fiscal year 1992. Under
the new schedule, executive officers may receive bonuses equal to a percentage
of their salary income for the year. The percentage is dependent upon the range
of the Company's after-tax income for the year. If the Company's after-tax net
income falls within a higher range, the executive officers receive a larger
bonus. The schedule is set forth below:
<TABLE>
<CAPTION>
BONUS
RANGE OF COMPANY NET INCOME PERCENTAGE
-------------------------------------------------- ------------
<S> <C>
Less than $25 million............................. 0%
$25 million, but less than $30 million............ 3%
$30 million, but less than $35 million............ 6%
$35 million, but less than $40 million............ 9%
$40 million, but less than $45 million............ 12%
$45 million and above............................. 15%
</TABLE>
In fiscal year 1993, the Company had net income of $30,853,053, and, as a
result, the Company's executive officers earned bonuses in 1993 equal to 6% of
their 1993 salary income.
The foregoing bonus schedule replaces, for executive officers, the schedule
applicable to the Company's bonus plan for all other employees. The EOC
Committee adopted the new schedule after deciding that executive officers' total
compensation should be more closely linked to corporate performance, as
discussed above, so as more closely to align their interests with the interests
of the Company's stockholders. While the schedule for executive officers'
bonuses is triggered when the Company's net income is at least $25 million, the
schedule for all other employees' bonuses is triggered when the Company's net
income is at least $15 million.
At its December 16, 1993 meeting, the EOC Committee considered data
supporting its decision to more closely link executive officer compensation to
corporate performance. The EOC Committee considered the results of a study
conducted by a nationally-recognized independent consultant in executive
compensation. The study encompassed executive compensation practices in 93
business in the retail sector in the United States, both public and private,
including a number of mail order companies. Of the 93 businesses, 13 are among
the 33 companies included in the S&P Retail Composite Index, whose performance
is shown in the "Performance Graph" on page 14 of the Company's Proxy Statement;
none of these companies are among the companies included in the AMEX Market
Value Index, whose performance is also shown in the Performance Graph. The study
covered more than 50 executive job descriptions or positions in the businesses
surveyed.
The study showed that the total compensation for the executives in the 93
companies consisted of approximately 79% base salary and 21% bonuses. In
contrast, the Company's executive officers, in the same time period, received
97% of their compensation in base salary and 3% in bonuses. As a result of the
adjustments made by the EOC Committee to the compensation of Mr. McComas and the
other four named executive officers, their respective compensations earned in
1992 consisted of 92% base salary and 8% bonus, and their respective
compensations earned in 1993 consisted of 94% base salary and 6% bonus.
The EOC Committee determined that the independent study supported its
decision regarding total compensation levels to minimize salary increases for
the Company's executive officers and to place increased reliance on greater
potential bonus compensation for executive officers. The EOC Committee also
determined that a single bonus schedule for all executive officers was
appropriate at this time in
10
<PAGE> 12
light of such factors as teamwork, the absence at the Company of independent
business units and the general contribution of all executive officers to the
Company's performance.
MEMBERS OF THE EXECUTIVE OFFICER
COMPENSATION COMMITTEE
Gerald A. Huber (Chairman)
Robert W. Blair
REPORT OF THE EMPLOYEE STOCK PURCHASE PLAN COMMITTEE
Awards under the Company's Employee Stock Purchase Plan (the "Plan") are
the responsibility of the Employee Stock Purchase Plan ("ESPP") Committee. The
ESPP Committee is made up of directors who have not, within one year, been
granted rights to purchase shares pursuant to the Plan, in order for grants
under the Plan to satisfy SEC Rule 16b-3. Decisions of the ESPP Committee are
final and binding on the Company.
In fiscal year 1993, awards under the Plan were designed primarily to
recognize the contributions of individual executives to the Company's
performance and to align the interests of management and stockholders. For many
years, the Company has endorsed the view that management and key employees of
the Company should be stockholders of the Company so that they will be motivated
to increase stockholder value. This policy is implemented through the award to
selected employees of the Company of rights to purchase shares of the Company's
Common Stock under the Plan. Awards ordinarily are made once each year.
The ESPP Committee selects employees to receive awards under the Plan
(based, in part, on recommendations of the Company's executive officers and
department heads as to employees who are not executive officers), determines the
number of shares subject to the award, and chooses the price at which shares
will be made available for purchase under the Plan. Because the price paid to
purchase the stock under the grant is below fair market value and is paid out of
dividends earned on the purchased shares, the price at which the shares are sold
directly affects the degree to which grants under the Plan serve as incentive
compensation for future performance rather than as bonuses for past performance.
Moreover, since dividends reflect corporate earnings, as earnings increase,
dividends likely increase and the purchaser is more likely to be vested sooner
with full ownership rights to such shares.
Many factors, both objective and subjective, were considered by the ESPP
Committee before making grants in 1993, including, but not limited to, the
Company's financial performance, the responsibilities and performance of
individual employees, prior grants to the employee, and the employee's current
vested and unvested ownership of the Company's common stock. There is no direct
correlation between regular salary and awards under the Plan. No award was
specifically tied to any one measure of performance or factor, and the ESPP
Committee did not assign relative weights to the factors it considered in a way
that would make it possible to assign a numerical value to the weight of any
factor. Full ownership of the shares ordinarily does not vest, however, until
they are fully paid for out of corporate dividends. The Company's dividend level
can thus affect the full vesting of the shares, and the market price of the
shares in large part determines the value of the grant to an individual
executive.
In fiscal year 1993, the ESPP Committee awarded grants under the Plan for
the purchase of an aggregate of 44,550 shares of the Company's Common Stock to
80 of the Company's employees, 16 of whom were executive officers of the
Company. All executive officers received a grant. Awards for all employees
ranged from 250 shares to 2,250 shares, with 1,100 being the average number of
shares sold to the Company's executive officers. The purchase price for all
shares sold under the Plan in 1993 was $16 per share, at a time when the
Company's Common Stock was trading at $49 per share. Over the past several
years, the purchase price for stock awarded pursuant to the Plan has been
approximately one-third of market value at the time of grant.
11
<PAGE> 13
Mr. McComas, the Company's Chief Executive Officer, received a grant of
2,250 shares, having a value of $74,250 by reason of the difference between the
price paid and the fair market value of the stock at the time of purchase. While
the ESPP Committee's decision with respect to Mr. McComas' grant was a
subjective one not based on any one factor or any weighing of one factor against
another, the Committee was of the view that the combination of his strong
leadership of the Company, the Company's recent financial performance, and the
need to further incentivize him to continue his tradition of exemplary
leadership warranted a grant of that size.
MEMBERS OF THE EMPLOYEE STOCK
PURCHASE PLAN COMMITTEE
John L. Blair (Chairman)
Robert W. Blair
PERFORMANCE GRAPH
The following graph compares the yearly change in the cumulative total
stockholder return on the Company's Common Stock with the cumulative total
return of the Amex Market Value Index and the S&P Retail Composite Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
Among Blair Corporation Common Stock, Amex Market Value Index
and S&P Retail Composite Index**
<TABLE>
<CAPTION>
1/1/89 1989 1990 1991 1992 1933
<S> <C> <C> <C> <C> <C> <C>
Blair Corporation 100 79 101 130 166 134
AMEX Market Value Index 100 124 101 129 130 156
S&P Retail Composite Index 100 128 129 203 239 229
</TABLE>
Assumes $100 invested on January 1, 1989 in Blair Corporation Stock, Amex Market
Value Index and S&P Retail Composite Index.
* Total return assumes reinvestment of dividends.
** Fiscal year ending December 31.
The closing price of the Company's Common Stock on the American Stock
Exchange on March 11, 1994 was $44.
12
<PAGE> 14
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Another purpose of the meeting is to ratify the reappointment by the Board
of Directors of the firm of Ernst & Young as independent certified public
accountants to examine the financial statements and to perform the annual audit
for the Company for the year ending December 31, 1994, such appointment to
continue at the pleasure of the Board of Directors.
A resolution calling for the ratification of the appointment of Ernst &
Young will be presented at the Annual Meeting. Representatives of Ernst & Young
will be present at the Annual Meeting to make a statement if they desire to do
so and to respond to appropriate questions.
The Board of Directors recommends ratification of the appointment of the
Ernst & Young.
CERTAIN OTHER INFORMATION
The Company has a standing Audit Committee of the Board of Directors,
consisting of Mr. David A. Blair, Mr. John O. Hanna, and Mr. Gerald A. Huber.
The Executive Officer Compensation Committee, currently consisting of Mr. Robert
W. Blair and Mr. Gerald A. Huber, recommends policies for and levels of
executive officer compensation other than awards under the Company's Employee
Stock Purchase Plan. The Executive Payroll Compensation Committee, consisting of
Murray K. McComas, Giles W. Schutte, and Blair T. Smoulder, recommends policies
and levels of compensation for non-executive officers. In addition, the Employee
Stock Purchase Plan Committee, currently consisting of John L. Blair and Robert
W. Blair, administers the Company's Employee Stock Purchase Plan. The Company
has no standing nominating committee.
During 1993, the Board of Directors held ten meetings. The Employee Stock
Purchase Plan Committee met once. The Executive Officer Compensation Committee
held two meetings and the Audit Committee held four meetings. The Executive
Payroll Compensation Committee met twelve times in 1993. Each nominee for
election to the Board of Directors attended more than 75 percent of the total
number of meetings of the Board of Directors and the total number of meetings of
all committees of the Board on which he served (during the periods that he
served).
OTHER MATTERS
Management does not know of any matters to be brought before the meeting
other than the matters that are set forth in the Notice of the Annual Meeting of
Stockholders that accompanies this Proxy Statement and are described herein. In
the event that any such matters do come properly before the meeting, it is
intended that the persons named in the form of proxy solicited by management
will vote all proxies in accordance with their best judgment.
RECEIPT OF STOCKHOLDER PROPOSALS
Any stockholder proposals which are to be presented for action at the 1995
Annual Meeting of Stockholders must be received by David A. Blair, Secretary,
Blair Corporation, 220 Hickory Street, Warren, Pennsylvania 16366, no later than
November 15, 1994.
EXPENSE OF SOLICITATION OF PROXIES
The cost of soliciting proxies by means of this Proxy Statement will be
borne by the Company. The Company may make arrangements with brokerage houses
and other custodians, nominees, and fiduciaries to forward proxies and proxy
solicitation material to the beneficial owners of the Company's Common Stock and
may reimburse them for their expenses in doing so.
DAVID A. BLAIR
Secretary
13
<PAGE> 15
BLAIR CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE BLAIR
CORPORATION
The undersigned hereby appoints Murray K. McComas, David A. Blair, and
Giles W. Schutte, and each of them with power of substitution in each, as
proxies to represent the undersigned at the annual meeting of the stockholders
of Blair Corporation, to be held at the Knights of Columbus Building, 219 Second
Avenue, Warren, Pennsylvania on Tuesday, April 19, 1994 at 11:00 A.M. and at any
adjournments thereof, to vote the same number of shares and as fully as the
undersigned would be entitled to vote if then personally present in the manner
directed by the undersigned as follows:
THE BOARD RECOMMENDS A VOTE:
FOR THE ELECTION OF NOMINEES LISTED IN ITEM I; AND
FOR THE RATIFICATION OF AUDITORS IN ITEM II.
Continued on reverse side.
<PAGE> 16
<TABLE>
<S> <C>
- ---------
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES IN ITEM I, AND FOR THE RATIFICATION OF AUDITORS IN ITEM II; AND THE
PROXIES ARE AUTHORIZED, IN ACCORDANCE WITH THEIR JUDGMENT, TO VOTE UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS
THEREOF.
<TABLE>
<S> <C>
I. ELECTION OF DIRECTORS Nominees: David A. Blair, John L. Blair, Robert W. Blair, Steven M. Blair,
Vote FOR all WITHHOLD John O. Hanna, Gerald A. Huber, Murray K. McComas, Michael J. Samargya,
nominees listed AUTHORITY Giles W. Schutte, Blair T. Smoulder, John E. Zawacki
(except as to vote for
marked to the all nominees (INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEES WRITE THE
contrary) listed below NOMINEE'S NAME ON THE LINE PROVIDED BELOW:)
0 0 ------------------------------------------------------------------------------------
II. RATIFICATION OF ERNST & YOUNG AS AUDITORS
For Against Abstain
0 0 0
</TABLE>
The signer hereby revokes all
proxies heretofore given by the
signer to vote at said meeting or
any adjournments thereof.
Dated ______________________, 1994
__________________________________
Signature(s)
__________________________________
Please sign exactly as name
appears hereon. Joint owners
should each sign. When signing as
attorney, executor, trustee,
administrator or guardian, please
give full title as such.
