<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
BLAIR CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BLAIR CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
----------------------------------------------------
[ X ] No fee required
<PAGE> 2
BLAIR CORPORATION
Warren, Pennsylvania
------------------------
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS OF
BLAIR CORPORATION
to be held on Tuesday, April 15, 1997
------------------------
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
15, 1997 at 11:00 a.m., for the following purposes:
1. To elect thirteen 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 LLP as independent public
accountants of the Company for the year 1997.
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 21, 1997
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 14, 1997
Warren, Pennsylvania
<PAGE> 3
BLAIR CORPORATION
Warren, Pennsylvania
March 14, 1997
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 15, 1997. 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 adjournment 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
will not be counted toward establishing a quorum. Stockholders should note that
while broker non-votes and 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 21, 1997, there were 9,234,532 shares of the Company's Common
Stock outstanding. Only stockholders of record at the close of business on
February 21, 1997 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 21,
1997 will constitute a quorum.
A copy of the 1996 Annual Report of the Company, including financial
statements and a description of its operations for 1996, accompanies this Proxy
Statement, but is not incorporated in this Proxy Statement by this reference.
This Proxy Statement, Notice of Meeting and the enclosed proxy card are first
being mailed to stockholders on or about March 14, 1997.
ELECTION OF DIRECTORS
One of the purposes of the meeting is to elect thirteen 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, position with the Company, business experience
and principal occupation during the past five years, and family relationships
with other directors. All of the nominees, except for Craig N. Johnson, were
elected as directors at the Company's 1996 Annual Meeting of Stockholders. The
Company's Board of Directors elected Mr. Johnson as a director of the Company on
January 15, 1997.
<PAGE> 4
<TABLE>
<CAPTION>
BUSINESS
POSITION WITH DIRECTOR EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
David A. Blair(1) 46 Secretary and Order 1988 Secretary for the past five
Handling Service Director years; Order Handling Service
Director, June 1, 1993--present;
Customer Relations Manager, June
1, 1982--May 31, 1993.
Robert W. Blair(1) 66 Director 1962 Director, 1962--present;
Executive Vice President, January
1, 1990--December 31, 1990;
Secretary, July 16,
1963--December 31, 1990; member
of Executive Committee, April 16,
1968--December 31, 1990.
Steven M. Blair(2) 53 Vice President 1986 Vice President (Order Handling)
(Order Handling) for the past five years.
Robert D. Crowley 47 Vice President (Menswear) 1994 Vice President (Menswear) for the
past five years.
John O. Hanna 65 Director 1992 President and Chief Executive
Officer of Northwest Savings
Bank, PaSA, Warren, PA, January,
1977--present.
Gerald A. Huber 68 Director 1992 Director and Secretary, Warren
Foundation, February 1,
1987--present; Senior Vice
President and Manager, Warren
Area Trust Department, Marine
Bank, Erie, PA, July 1,
1982--June 30, 1992.
Craig N. Johnson 55 Director 1997 Managing Director and Partner,
Glenthorne Capital, Inc.,
Philadelphia, PA, February 1,
1994--present; Chief Operating
Officer and President, Maritrans,
Inc., Philadelphia, PA, February,
1990--December, 1993.
Murray K. McComas 60 President, Chairman of the 1977 President, Chairman of the Board
Board and member of and member of Executive Committee
Executive Committee for the past five years.
Thomas P. McKeever 48 Vice President (Corporate 1994 Vice President (Corporate Affairs
Affairs and Human and Human Resources), January 1,
Resources) and member of 1997--present; member of
Executive Committee Executive Committee, October 16,
1996--present; Vice President
(Employee and Public Relations),
July, 1989--December, 1996.
Michael J. Samargya 63 Vice President 1973 Vice President (Data Processing)
(Data Processing) for the past five years.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
BUSINESS
POSITION WITH DIRECTOR EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
Kent R. Sivillo 50 Vice President and 1996 Vice President and Treasurer,
Treasurer January 1, 1997--present;
Assistant Treasurer and Assistant
Vice President, April 17,
1990--December 31, 1996.
Blair T. Smoulder 54 Executive Vice President 1986 Executive Vice President and
and member of Executive member of Executive Committee for
Committee the past five years.
John E. Zawacki 48 Vice President 1988 Vice President (Womenswear) for
(Womenswear) and member of the past five years; member of
Executive Committee Executive Committee, October 16,
1996--present.
</TABLE>
- ---------
(1) Mr. David A. Blair is the nephew of Mr. Robert W. Blair.
(2) Mr. Steven M. Blair is not related to either Mr. Robert W. Blair or Mr.
David A. Blair.
The table below sets forth the name of 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
POSITION WITH OFFICER EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
Timothy J. Baker 50 Vice President 1990 Vice President (Planning) for the
(Planning) past five years.
Patrick J. Kennedy 47 Vice President 1996 Vice President (Home Products),
(Home Products) November 4, 1996--present; Senior
Vice President Marketing, Geo. W.
Park Seed Co. Inc., Greenwood,
SC, March, 1995--August, 1996;
Senior Vice President
Merchandising, Gander Mountain,
Inc., Wilmot, WI, December,
1991--February, 1995.
John A. Lasher 45 Vice President 1987 Vice President (Advertising) for
(Advertising) the past five years.
Randall A. Scalise 42 Vice President 1993 Vice President (Merchandise
(Merchandise Handling) Handling), January 20,
1993--present; Assistant Vice
President (Merchandise Handling),
April, 1991--January 19, 1993.
James H. Smith 50 Vice President 1995 Vice President (Building and
(Building and Property) Property), January 18,
1995--present; Assistant Vice
President (Building and
Property), April 17,
1990--January 17, 1995.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
EXECUTIVE BUSINESS
POSITION WITH OFFICER EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
William A. Tucker 43 Vice President (Mailing) 1989 Vice President (Mailing) for the
past five years.
Lawrence R. Vicini 48 Vice President 1992 Vice President (International
(International Trade) Trade), June 22, 1992--present;
Assistant Vice President
(International Trade), January,
1991--June 21, 1992.
</TABLE>
PRINCIPAL HOLDERS OF COMMON STOCK
(a) Security Ownership of Certain Beneficial Owners. The table below sets
forth information as of February 21, 1997 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
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
<S> <C> <C>
John L. Blair
108 East Street
Warren, PA 16365 1,225,001(1) 13.3%
PNC Bank Corporation
5th Ave. & Wood Street
Pittsburgh, PA 15222 1,255,280(2) 13.6%
</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 trustee, administrator or registered owner of 92 separate trust,
custodial and estate 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.
(b) Security Ownership of Management. The following table sets forth, as of
February 21, 1997, 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
BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------- --------- --------
<S> <C> <C>
David A. Blair 46,400(1)(2) 0.5%
Robert W. Blair 232,730(2) 2.5%
Steven M. Blair 15,495(2) 0.2%
Robert D. Crowley 6,250(2) 0.07%
John O. Hanna 2,100(2) 0.02%
Gerald A. Huber 1,900(2) 0.02%
Craig N. Johnson 0 0%
Murray K. McComas 44,925(2) 0.5%
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF
NAME OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
---------------- --------- --------
<S> <C> <C>
Thomas P. McKeever 9,550 0.1%
Michael J. Samargya 23,150 0.3%
Kent R. Sivillo 9,650 0.1%
Blair T. Smoulder 12,650(2) 0.1%
John E. Zawacki 6,750(2) 0.07%
All directors and executive officers as 470,700(1)(2)(3) 5.1%
a group (includes 20 persons)
</TABLE>
- ---------
(1) Such share totals include, with respect to Mr. David A. Blair, 42,400 shares
held in a revocable trust established by Mr. David A. Blair and administered
by a commercial bank.
(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. Robert W. Blair (46,667
shares) and Mr. David A. Blair (4,833 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 (4,445
shares), Mr. Robert W. Blair (7,160 shares), Mr. Steven M. Blair (7,500
shares) Mr. Robert D. Crowley (9,998 shares), Mr. John O. Hanna (300
shares), Mr. Gerald A. Huber (10 shares), Mr. Murray K. McComas (3,980
shares), Mr. Blair T. Smoulder (8,900 shares) and Mr. John E. Zawacki (9,629
shares). In addition, the share totals do not include 1,565 shares of Common
Stock which are held by or for the benefit of members of the immediate
families of executive officers of the Company not identified individually in
this chart, 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 7,100 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 1996 and for each of the previous two
years:
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..................... 1996 $ 517,840 $ 0 $ 9,823 $57,321
President and 1995 507,316 15,220 166,744 68,781
Chairman of the Board 1994 466,506 41,986 131,094 61,369
Michael J. Samargya................... 1996 328,560 0 3,450 42,750
Vice President 1995 321,884 9,657 55,867 48,603
(Data Processing) 1994 295,982 25,832 47,676 44,363
Giles W. Schutte...................... 1996 379,780 0 5,036 68,702
Executive Vice 1995 372,056 11,162 81,392 73,176
President and Treasurer 1994 342,128 30,674 65,591 63,812
(Retired 12/31/96)
</TABLE>
5
<PAGE> 8
<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>
Blair T. Smoulder..................... 1996 379,780 0 5,036 54,331
Executive Vice 1995 372,056 11,162 81,392 48,605
President 1994 342,128 30,443 65,642 42,545
John E. Zawacki....................... 1996 279,312 0 6,439 28,754
Vice President 1995 273,632 8,209 51,228 34,627
(Womenswear) 1994 251,426 22,628 46,348 29,797
</TABLE>
- ---------
(1) There were no directors' fees paid to the named executive officers during
the years 1994, 1995 and 1996.
(2) For fiscal years 1994, 1995 and 1996 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 1994 salary income earned, 3% of 1995 salary income
earned and 0% of 1996 salary income earned. The 1994 bonuses were paid by
the Company in 1995, the 1995 bonuses were paid by the Company in February,
1996 and no bonuses were paid by the Company with respect to 1996.
In 1994 and 1995, 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 payment for restricted stock not yet fully paid for with respect to
the named executive officer.
Aggregate restricted stock award holdings as of the Company's last fiscal
year end for each of the named executive officers were:
<TABLE>
<CAPTION>
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
Murray K. McComas............................ 13,350 $176,258
Michael J. Samargya.......................... 4,750 62,785
Giles W. Schutte............................. 7,050 93,041
Blair T. Smoulder............................ 7,050 93,041
John E. Zawacki.............................. 4,750 62,785
</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 that 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:
6
<PAGE> 9
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>
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Murray K. McComas.................................. $ 3,757 $ 3,757 $ 3,757
Michael J. Samargya................................ 3,465 3,822 3,923
Giles W. Schutte................................... 4,119 4,523 8,324
Blair T. Smoulder.................................. 1,690 1,855 1,902
John E. Zawacki.................................... 703 780 799
</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>
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Murray K. McComas............................... 0 0 0
Michael J. Samargya............................. $ 5,446 $ 6,023 $ 6,204
Giles W. Schutte................................ 18,884 21,304 21,800
Blair T. Smoulder............................... 0 0 14,629
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 year thereafter until full vesting is
achieved after seven years of service. Amounts allocated to the named
executive officers are:
<TABLE>
<CAPTION>
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Murray K. McComas................................. $ 7,440 $ 9,384 $ 11,160
Michael J. Samargya............................... 7,190 9,366 10,949
Giles W. Schutte.................................. 8,156 9,455 11,080
Blair T. Smoulder................................. 8,076 9,369 10,700
John E. Zawacki................................... 8,022 9,381 11,212
</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>
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Murray K. McComas............................... $ 15,115 $ 9,401 $ 5,419
Michael J. Samargya............................. 15,195 9,389 5,412
Giles W. Schutte................................ 13,636 9,395 5,415
Blair T. Smoulder............................... 13,795 9,370 5,401
John E. Zawacki................................. 13,914 9,340 5,383
</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
7
<PAGE> 10
otherwise paid under the Savings Plan and the Profit Sharing and
Retirement Plan due to limitations imposed by tax law:
<TABLE>
<CAPTION>
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Murray K. McComas............................... $ 35,057 $ 46,239 $ 36,986
Michael J. Samargya............................. 13,069 20,003 16,263
Giles W. Schutte................................ 19,017 28,499 22,082
Blair T. Smoulder............................... 18,984 28,011 21,698
John E. Zawacki................................. 7,158 15,126 11,360
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Audit Committee of the Board of Directors,
consisting of David A. Blair, John O. Hanna, and Gerald A. Huber, and a standing
Nominating Committee consisting of Robert W. Blair, John O. Hanna, and Murray K.
McComas. The Executive Officer Compensation Committee, currently consisting of
Robert W. Blair, Gerald A. Huber, and John O. Hanna, 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,
currently consisting of Murray K. McComas, Blair T. Smoulder, Thomas P. McKeever
and John E. Zawacki recommends policies and levels of compensation for
non-executive officers. In addition, the Employee Stock Purchase Plan Committee,
currently consisting of Robert W. Blair, John O. Hanna, and Gerald A. Huber,
administers the Company's Employee Stock Purchase Plan.
During 1996, 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 two meetings. The Executive
Payroll Committee met eight times in 1996. 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).
COMPENSATION OF DIRECTORS
In 1996, non-management members of the Board of Directors each received an
annual retainer of $4,000. In 1996, 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 each 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
The Executive Officer Compensation Committee consists of Robert W. Blair,
John O. Hanna and Gerald A. Huber. The Employee Stock Purchase Plan Committee
consists of Robert W. Blair, John O. Hanna, and Gerald A. Huber. Both Mr. Hanna
and Mr. Huber are nonemployee directors of the Company. Mr. Robert W. Blair was
a Vice President and Executive Vice President of the Company in 1989 and 1990,
respectively, but he has not served as a Company employee since that time.
Although not an appointed member of the Executive Officer Compensation
Committee, Murray K. McComas, the Company's President, participated in the
evaluation and discussion of appropriate salary levels for all executive
officers other than himself at the request of the Executive Officer Compensation
Committee.
COMPENSATION COMMITTEE REPORTS ON
EXECUTIVE OFFICER COMPENSATION
For fiscal year 1996, 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 the rules of the
Securities and Exchange Commission (the "SEC") designed to enhance disclosure of
policies with respect to executive compensation, set forth below are reports
8
<PAGE> 11
submitted by these committees addressing the Company's compensation policies
with respect to executive officers for fiscal year 1996.
Report of the Executive Officer Compensation Committee
The Executive Officer Compensation (the "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 January 11, 1996, the EOC Committee approved a 2% merit salary increase
for all officers, including Murray K. McComas, the Chairman and President of the
Company, and its two Executive Vice Presidents, Messrs. Schutte and Smoulder,
effective January 22, 1996. Mr. McComas participated in the evaluation and
discussion of appropriate salary levels for all executive officers other than
himself and the two Executive Vice-Presidents. Mr. McComas did not participate
in the discussion 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 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 executive officers.
The EOC Committee considered the Company's historical executive officer
compensation practices and actual records of compensation levels in recent
years. In addition, financial information for the first three quarters of 1995
was discussed in relation to corporate earnings, as well as initial earnings
trends in the fourth quarter of 1995. Considering the increase in the Consumer
Price Index of 2.6% for the twelve-month period ending November 1995, the
corporate earnings and the prospect of a possible change in executive
compensation following the anticipated completion of the Towers Perrin project,
the Committee determined that a 2% increase in salary was appropriate for all
executive officers.
The EOC Committee's decisions with respect to bonuses for executive
officers were made on December 16, 1993, when the EOC Committee established a
new bonus schedule for executive officers. The bonus schedule was made effective
retroactively for fiscal year 1992, and has been effective for fiscal years 1993
and 1994. On December 19, 1994, the EOC Committee reviewed and approved the
bonus schedule for fiscal year 1995. Under the bonus 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 1995, the Company had net income of $25,267,910, and, as a
result, the Company's executive officers earned bonuses in 1995 equal to 3% of
their 1995 salary income.
9
<PAGE> 12
The EOC Committee decided to maintain the award levels for the officer
bonuses in fiscal year 1996 as they were in fiscal year 1995. Because the
Company had net income of $14,726,221 in fiscal year 1996, the Company's
executive officers did not earn or receive bonuses with respect to 1996.
The bonus schedule replaces, for officers, the schedule applicable to the
Company's bonus plan for all other employees. The EOC Committee adopted the
bonus schedule after deciding that 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 above bonus schedule for officers' bonuses is triggered when the Company's
net income is at least $25 million, the bonus 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
businesses in the retail sector in the United States, both public and private,
including a number of mail order companies. 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
1993 consisted of 94% base salary and 6% bonus, 92% base salary and 8% bonus in
1994, 97% base salary and 3% bonus in 1995 and 100% base salary and 0% bonus in
1996.
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 in 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.
The Company has retained Towers Perrin to conduct a full salary and
compensation study for all executive positions, the base compensation phase of
which is expected to be completed by June of 1997. As a further part of this
study, Towers Perrin will provide to the Company by 1998 options and
recommendations for incentive pay opportunities for the Company's executive
officers that are more consistent with industry practice in relation to base
salary ranges.
MEMBERS OF THE EXECUTIVE OFFICER
COMPENSATION COMMITTEE
Gerald A. Huber (Chairman)
Robert W. Blair
John O. Hanna
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. Decisions of the ESPP
Committee are final and binding on the Company.
Awards under the Plan are designed primarily to recognize the contributions
of individual key employees to the Company's performance and to align the
interests of management and stockholders.
10
<PAGE> 13
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 1996, including, but not limited to, the
Company's financial performance, the historic 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
employee.
In fiscal year 1996, the ESPP Committee awarded grants under the Plan for
the purchase of an aggregate of 34,700 shares of the Company's Common Stock to
100 of the Company's employees, none of whom were directors or officers of the
Company. Awards for all employees ranged from 250 shares to 1000 shares, with no
shares sold to the Company's executive officers. The purchase price for all
shares sold under the Plan in 1996 was $7.50 per share, at a time when the
Company's Common Stock was trading at $23.625 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.
MEMBERS OF THE EMPLOYEE STOCK
PURCHASE PLAN COMMITTEE
Robert W. Blair (Chairman)
John O. Hanna
Gerald A. Huber
11
<PAGE> 14
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>
S&P Retail
Stores
Measurement Period Blair AMEX Market Composite
(Fiscal Year Covered) Corporation Value Index Index
<S> <C> <C> <C>
1/1/92 100 100 100
1992 127 101 118
1993 103 121 113
1994 103 110 103
1995 87 139 115
1996 55 148 136
</TABLE>
Assumes $100 invested on January 1, 1992 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 5, 1997, was $18.00.
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 LLP as independent certified public
accountants to examine the financial statements and to perform the annual audit
for the Company for the year December 31, 1997, such appointment to continue at
the pleasure of the Board of Directors.
A resolution calling for the ratification of the appointment of Ernst &
Young LLP will be presented at the Annual Meeting. Representatives of Ernst &
Young LLP 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 Ernst
& Young LLP.
12
<PAGE> 15
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 1998
Annual Meeting of Stockholders must be received by David A. Blair, Secretary,
Blair Corporation, 220 Hickory Street, Warren, Pennsylvania 16366, no later than
November 14, 1997.
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> 16
Please mark
your votes as
indicated in
this example
[ X ]
The Board recommends a vote FOR the election of the nominees listed in Item I.
<TABLE>
<CAPTION>
Vote for all nominees listed WITHHOLD AUTHORITY
(except as shown to vote for all
below to the contrary) nominees listed
<S> <C> <C>
I. ELECTION OF DIRECTORS:
Nominees: [ ] [ ]
David A. Blair Murray K. McComas
Robert W. Blair Thomas P. McKeever
Steven M. Blair Michael J. Samargya
Robert D. Crowley Kent R. Sivillo
John O. Hanna Blair T. Smoulder
Gerald A. Huber John E. Zawacki
Craig N. Johnson
</TABLE>
(Instructions: To withhold authority to vote for any
INDIVIDUAL NOMINEES write the nominee's name on the
line provided below:)
- ----------------------------------------------------
The Board recommends a vote FOR the ratification of Ernst & Young LLP as
auditors in Item II.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
II. RATIFICATION OF ERNST & YOUNG LLP [ ] [ ] [ ]
AS AUDITORS:
</TABLE>
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
Signature(s)
______________________________________________ Date _______________ , 1997
NOTE: 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.
FOLD AND DETACH HERE
BLAIR(R)
WARREN, PENNSYLVANIA 16366
QUALITY AND VALUE SINCE 1910
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF BLAIR CORPORATION
The undersigned hereby appoints Murray K. McComas, David A. Blair, and
Kent R. Sivillo, 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 15, 1997 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.
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.
FOLD AND DETACH HERE
BLAIR CORPORATION HEADQUARTERS
220 Hickory Street
Warren, Pennsylvania
