<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 21, 1998
------------------------
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
21, 1998 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 approve, adopt and ratify the Company's Stock Accumulation and
Deferred Compensation Plan for non-employee directors of the Company.
3. To ratify the appointment of Ernst & Young LLP as independent public
accountants of the Company for the year 1998.
4. 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 27, 1998
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 20, 1998
Warren, Pennsylvania
<PAGE> 3
BLAIR CORPORATION
Warren, Pennsylvania
March 20, 1998
PROXY STATEMENT
This Proxy Statement solicits proxies on behalf of the Board of Directors
of Blair Corporation (the "Company") for use at the Annual Meeting of
Stockholders of the Company, to be held on Tuesday, April 21, 1998 at the
Knights of Columbus Building, 219 Second Avenue, Warren, Pennsylvania. 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 by filing a written notice of
revocation with the Secretary of the Company, by delivering to the Company a
duly executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
The shares represented by proxies received by the Company's Board of
Directors 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.
As of February 27, 1998, there were 8,987,343 shares of the Company's
Common Stock outstanding, which amount represents the figure reported as
outstanding by the Company's transfer agent as of the record date (9,007,366
shares) reduced by 20,023 shares repurchased by the Company prior to the record
date but not reflected on the books of the transfer agent. Such shares are
considered to be Treasury Stock as of February 27, 1998, and therefore, cannot
be voted. Only stockholders of record at the close of business on February 27,
1998 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 27, 1998 is
necessary to constitute a quorum.
A copy of the 1997 Annual Report of the Company, including financial
statements and a description of its operations for 1997, 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 20, 1998.
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 the Board of Directors. Directors will be
elected by a plurality of the votes cast at the Annual Meeting.
<PAGE> 4
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 were elected as directors at the
Company's 1997 Annual Meeting of Stockholders.
<TABLE>
<CAPTION>
BUSINESS
POSITION WITH DIRECTOR EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
David A. Blair(1).............. 47 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)............. 67 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)............. 54 Vice President 1986 Vice President (Order Handling)
(Order Handling) for the past five years.
Robert D. Crowley.............. 48 Vice President (Menswear) 1994 Vice President (Menswear) for the
past five years.
John O. Hanna.................. 66 Director 1992 Director, President and Chief
Executive Officer, Northwest
Savings Bank, Warren, PA,
January, 1977--present; Director,
President and Chief Executive
Officer of Northwest Bancorp,
Inc., Warren, PA, February,
1998--present; Director,
Jamestown Savings Bank,
Jamestown, NY, November,
1995--present.
Gerald A. Huber................ 69 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............... 56 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.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION> BUSINESS
POSITION WITH DIRECTOR EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
Murray K. McComas.............. 61 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............. 49 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;
Director, Blair Holdings, Inc.,
September, 1996--present.
Michael J. Samargya............ 64 Vice President 1973 Vice President (Information
(Information Services) Services) for the past five
years.
Kent R. Sivillo................ 51 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;
Director, Blair Holdings, Inc.,
September, 1993--present;
President, Blair Holdings, Inc.,
September, 1996--present; Vice
President and Treasurer, Blair
Holdings, Inc., September,
1993--September, 1996.
Blair T. Smoulder.............. 55 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................ 49 Vice President 1988 Vice President (Womenswear) for
(Womenswear) and member the past five years; member of
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.
3
<PAGE> 6
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............... 51 Vice President 1990 Vice President (Planning) for the
(Planning) past five years.
Patrick J. Kennedy............. 48 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................. 46 Vice President 1987 Vice President (Advertising) for
(Advertising) the past five years; Director,
Blair Holdings, Inc., September,
1993--present.
Randall A. Scalise............. 43 Vice President 1993 Vice President (Merchandise
(Merchandise Handling) Handling), January 20,
1993--present; Assistant Vice
President (Merchandise Handling),
April, 1991--January, 1993.
James H. Smith................. 51 Vice President (Corporate 1995 Vice President (Corporate
Development and Facilities) Development and Facilities),
April, 1997--present; Vice
President (Building and
Property), January 18,
1995--April, 1997; Assistant Vice
President (Building and
Property), April 17,
1990--January 17, 1995.
William A. Tucker.............. 44 Vice President (Mailing) 1989 Vice President (Mailing) for the
past five years.
Lawrence R. Vicini............. 49 Vice President 1992 Vice President (International
(International Trade) Trade) for the past five years.
</TABLE>
PRINCIPAL HOLDERS OF COMMON STOCK*
(a) Security Ownership of Certain Beneficial Owners. Unless otherwise
indicated, the table below sets forth information as of February 27, 1998 with
respect to each person and institution known to the
4
<PAGE> 7
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) 13.63%
PNC Bank Corporation
5th Ave. & Wood Street
Pittsburgh, PA 15222.......... 1,041,605(2) 11.59%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401........ 608,500(3) 6.77%
FMR Corp.
82 Devonshire Street
Boston, MA 02109.............. 662,700(4) 7.37%
</TABLE>
- - ---------
* For purposes of calculating the percent of class ownership, the figure used
for the amount of outstanding Common Stock is 8,987,343, which amount
represents the figure reported as outstanding by the transfer agent as of
the record date (9,007,366 shares) reduced by 20,023 shares repurchased by
the Company prior to the record date but not reflected on the books of the
transfer agent.
(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 75 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. This
information was provided to the Company by PNC Bank in a letter dated March
5, 1998.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 608,500 shares of the
Company's Common Stock as of December 31, 1997, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
<TABLE>
<S> <C> <C> <C>
Sole Voting Power = 420,000 shares**
Shared Voting Power = 0
Sole Dispositive Power = 608,500
Shared Dispositive Power = 0
</TABLE>
** Persons who are officers of Dimensional Fund Advisors Inc. also serve as
officers of DFA Investment Dimensions Group Inc. (the "Fund") and The
DFA Investment Trust Company (the "Trust"), each an open-end management
investment company registered under the Investment Company Act of 1940.
In their capacity as officers of the Fund and the Trust, these persons
vote 55,800 additional shares which are owned by the Fund and 132,700
shares which are owned by the Trust (both included in Sole Dispositive
Power above).
This information was provided to the Company by Dimensional Fund Advisors
Inc. in a transmittal dated March 11, 1998.
5
<PAGE> 8
(4) Fidelity Management & Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR Corp. and an investment adviser registered under Section
203 of the Investment Advisors Act of 1940, is the beneficial owner of
662,700 shares or 7.37% of the Common Stock outstanding of the Company as a
result of acting as investment adviser to various investment companies
registered under Section 8 of the Investment Company Act of 1940. One of
these investment companies, Fidelity Low-Priced Stock Fund (the "Fund"),
owns 662,700 shares or 7.37% of the Common Stock outstanding of the Company.
The Fund has its principal business office at 82 Devonshire Street, Boston,
Massachusetts 02109.
Edward C. Johnson 3d, Chairman of FMR Corp., and FMR Corp., through its
control of Fidelity, each has sole power to dispose of the 662,700 shares
owned by the Fund. Neither FMR Corp. nor Edward C. Johnson 3d has the power
to vote or direct the voting of the shares owned directly by the Fund, which
power resides with the Funds' Board of Trustees. Fidelity carries out the
voting of the shares under written guidelines established by the Funds'
Board of Trustees.
Members of the Edward C. Johnson 3d family and trusts for their benefit are
the predominant owners of Class B shares of common stock of FMR Corp.,
representing approximately 49% of the voting power of FMR Corp. Mr. Johnson
3d owns 12.0% and Abigail P. Johnson, Director of FMR Corp, owns 24.5% of
the aggregate outstanding voting stock of FMR Corp. The Johnson family group
and all other Class B shareholders have entered into a shareholders' voting
agreement under which all Class B shares will be voted in accordance with
the majority vote of Class B shares. Accordingly, through their ownership of
voting common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the Investment Company
Act of 1940, to form a controlling group with respect to FMR Corp.
This information was provided to the U.S. Securities and Exchange Commission
in a Schedule 13G filed on February 14, 1998 by FMR Corp. and in a letter to
the Company dated March 3, 1998.
(b) Security Ownership of Management. The following table sets forth, as of
February 27, 1998, 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
NAME OF AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
---------------- -------------------- --------
<S> <C> <C>
David A. Blair.......................... 49,328(2)(3) 0.55%
Robert W. Blair......................... 286,557(3) 3.19%
Steven M. Blair......................... 23,995(3) 0.27%
Robert D. Crowley....................... 17,248(3) 0.19%
John O. Hanna........................... 5,200(3) 0.06%
Gerald A. Huber......................... 2,410(3) 0.03%
Craig N. Johnson........................ 500 0%
Murray K. McComas....................... 50,755(3) 0.56%
Thomas P. McKeever...................... 11,050 0.12%
Michael J. Samargya..................... 23,150 0.26%
Kent R. Sivillo......................... 11,150 0.12%
Blair T. Smoulder....................... 23,050(3) 0.26%
John E. Zawacki......................... 17,979(3) 0.20%
All directors and executive officers as
a group (includes 20 persons)......... 589,587(2)(3)(4) 6.56%
</TABLE>
- - ---------
(1) Unless otherwise indicated, each person has sole voting and investment power
with respect to the shares beneficially owned.
(2) Such share totals include, with respect to Mr. David A. Blair, 39,500 shares
held in a revocable trust established by Mr. David A. Blair and administered
by a commercial bank.
(3) The share totals include the following shares of stock held by a bank as
trustee for the benefit of the indicated nominees, 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
6
<PAGE> 9
shares) and Mr. David A. Blair (2,833 shares). The share totals in the table
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 is disclaimed by such nominees: Mr. David A. Blair (2,995 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 (1,200 shares), Mr.
Gerald A. Huber (10 shares), Mr. Murray K. McComas (980 shares), Mr. Blair
T. Smoulder (8,900 shares) and Mr. John E. Zawacki (11,629 shares). In
addition, the share totals 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.
(4) 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 1997 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..................... 1997 $518,622 $ 0 $ 46,011 $47,763
President and 1996 517,840 0 9,823 57,321
Chairman of the Board 1995 507,316 15,220 166,744 68,781
John Lasher........................... 1997 271,284 0 14,397 29,442
Vice President 1996 270,874 0 6,185 30,592
(Advertising) 1995 265,358 7,823 52,551 28,026
Michael J. Samargya................... 1997 329,056 0 2,077 52,403
Vice President 1996 328,560 0 3,450 42,750
(Information Services) 1995 321,884 9,657 55,867 48,603
Blair T. Smoulder..................... 1997 380,354 0 22,745 49,825
Executive Vice 1996 379,780 0 5,036 54,331
President 1995 372,056 11,162 81,392 48,606
John E. Zawacki....................... 1997 279,734 0 21,744 24,492
Vice President 1996 279,312 0 6,439 28,754
(Womenswear) 1995 273,632 8,209 51,228 34,627
</TABLE>
(1) There were no directors' fees paid to the named executive officers during
the years 1995, 1996 and 1997.
(2) For fiscal years 1995, 1996 and 1997, the Company's executive officers
earned bonuses in accordance with the bonus schedule approved by the
Executive Officer Compensation Committee on December 16, 1993 as set forth
herein in the "Report of the Executive Officer Compensation Committee". The
applicable bonus percentage was 3% of 1995 salary income earned, 0% of 1996
salary income earned and 0% of 1997 salary income earned. The 1995 bonuses
were paid by the Company in February, 1996, and no bonuses were paid by the
Company in 1997 with respect to 1996 or in 1998 with respect to 1997.
(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
7
<PAGE> 10
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 at the end of the Company's last
fiscal year for each of the named executive officers were:
<TABLE>
<CAPTION>
NUMBER OF SHARES DOLLAR VALUE
---------------- -------------
(ON 12/31/97)
<S> <C> <C>
Murray K. McComas........................... 16,350 $192,398
John A. Lasher.............................. 5,750 67,385
Michael J. Samargya......................... 4,750 50,435
Blair T. Smoulder........................... 8,550 100,136
John E. Zawacki............................. 6,250 75,860
</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. Shares are subject to
repurchase by the Company, if the participant's employment with the Company
terminates for reasons other than death, retirement or disability, upon
payment to the participant of an amount equal to the dividends paid with
respect to the shares and the amount (if any) prepaid by the participant
for the shares. 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>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $ 3,757 $ 3,757 $ 3,757
John A. Lasher.................................. 439 771 773
Michael J. Samargya............................. 3,822 3,923 3,931
Blair T. Smoulder............................... 1,855 1,902 2,621
John E. Zawacki................................. 780 799 800
</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>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... 0 0 0
John A. Lasher.................................. 0 $ 4,092 $ 5,217
Michael J. Samargya............................. $ 6,023 6,204 18,984
Blair T. Smoulder............................... 0 14,629 14,629
John E. Zawacki................................. 0 0 0
</TABLE>
C. The Company's Profit Sharing and Savings Plan--The Company's Profit
Sharing and Savings Plan has two components, a savings component and a
profit sharing component. Under the savings component, 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
8
<PAGE> 11
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>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $ 9,384 $11,160 $11,295
John A. Lasher.................................. 4,772 10,919 12,029
Michael J. Samargya............................. 9,366 10,949 13,314
Blair T. Smoulder............................... 9,369 10,700 11,954
John E. Zawacki................................. 9,381 11,212 11,232
</TABLE>
Under the profit sharing component of the Company's Profit Sharing and
Savings 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>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $ 9,401 $ 5,419 $ 5,478
John A. Lasher.................................. 9,315 5,369 5,431
Michael J. Samargya............................. 9,389 5,412 5,471
Blair T. Smoulder............................... 9,370 5,401 5,461
John E. Zawacki................................. 9,340 5,383 5,444
</TABLE>
D. 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 Company's Profit Sharing and Savings Plan due to limitations
imposed by tax law:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $46,239 $36,986 $27,233
John A. Lasher.................................. 13,499 9,442 5,992
Michael J. Samargya............................. 20,003 16,263 10,703
Blair T. Smoulder............................... 28,011 21,658 15,159
John E. Zawacki................................. 15,126 11,360 7,015
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Executive Committee of the Board of Directors,
consisting of Murray K. McComas, Thomas P. McKeever, Blair T. Smoulder, and John
E. Zawacki, 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, Craig N. Johnson, and
Murray K. McComas. The Executive Officer Compensation Committee, currently
consisting of Robert W. Blair, John O. Hanna, Gerald A. Huber, and Craig N.
Johnson, 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, Thomas P. McKeever, Blair T. Smoulder, 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 1997, the Board of Directors held nine meetings. The Executive
Committee held nineteen meetings, and the Employee Stock Purchase Plan Committee
met once. The Executive Officer Compensation Committee held three meetings, and
the Audit Committee held two meetings. The Executive Payroll Compensation
Committee met seven times in 1997. Each nominee for election to the
9
<PAGE> 12
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 1997, non-management members of the Board of Directors each received an
annual retainer of a stock grant of 500 shares of the Company's Common Stock for
transfer on April 15, 1997 and a cash grant equal to the value of 500 shares of
the Company's Common Stock calculated as of the close of business on April 15,
1997. The aggregate value of this April 15, 1997 cash grant was $22,125. In
1997, non-management members also received compensation in the amount of $750
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, Gerald A. Huber, and Craig N. Johnson. The Employee Stock
Purchase Plan Committee consists of Robert W. Blair, John O. Hanna, and Gerald
A. Huber. Mr. Hanna, Mr. Huber and Mr. Johnson are non-management 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 and Mr. Blair T. Smoulder,
Executive Vice President, at the request of the Executive Officer Compensation
Committee.
COMPENSATION COMMITTEE REPORTS ON
EXECUTIVE OFFICER COMPENSATION
For fiscal year 1997, 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
submitted by these committees addressing the Company's compensation policies
with respect to executive officers for fiscal year 1997.
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 policymaking 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.
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.
10
<PAGE> 13
Murray K. McComas, the Chairman and President of the Company, participated
in the evaluation and discussion of appropriate salary levels for all executive
officers other than himself and the Company's Executive Vice President, Mr.
Blair T. Smoulder. Mr. McComas did not participate in the discussion when the
EOC Committee evaluated him and determined his salary level and the salary level
of Mr. Smoulder.
On June 11, 1997, the EOC Committee approved a new schedule for the
establishment of base salaries for the Company's executive officers which places
a greater emphasis on incentive or at-risk compensation. This new base salary
schedule is consistent with the recommendations of the Corporation's Salary
Review Task Force Committee and Towers Perrin, compensation consultants, which
conducted a review of compensation for the Company's exempt employees, inclusive
of all executive officers. The compensation review, which included a comparative
analysis of the Company's salary plan with the compensation plans of companies
of comparable size or business focus, revealed that, although the Company's plan
was generally competitive with the compensation plans of peer companies, the
Company's total compensation was much more heavily weighted towards base salary,
rather than bonuses or other incentive-based awards, particularly at the
executive officer level.
Due in part to those conclusions, the EOC Committee adopted on June 11,
1997 a new schedule for base salary increases under which a job grade is
assigned to each executive officer depending on his responsibilities.
Compensation ranges were established for these levels through a review process
that included an analysis of both proxy statements and compensation surveys of
related position responsibilities among similar industries, as well as the
regional market, provided by Towers Perrin. Individual salaries were determined
by the person's job grade, experience and individual performance. None of the
Company's five most highly compensated executive officers received a base salary
increase with respect to 1997. In view of the former imbalance in the Company's
salary plan, the new salary schedule requires that all executive officers
exceeding the "Base Salary Range" have their salaries reduced to fall within the
range of their respective job levels over a 3-year period from 1998-2000.
Accordingly, Mr. McComas advised the committee that in 1997 annual salary
adjustments for executive officers would range from 0% (for those currently
exceeding the range) to 10% for those who had recently received significant
promotions or increases in responsibility. All salary increases proposed were
within the range of the new salary structure. Nine of the sixteen executive
officers of the Company (including all five of the most highly compensated
executive officers) begin a base-salary reduction process in April, 1998.
The EOC Committee's decisions with respect to bonuses for executive
officers in 1997 were made in accordance with the executive officer bonus
schedule established and approved by the Committee on December 16, 1993. On
December 31, 1996, the EOC Committee reviewed and approved the bonus schedule
for fiscal year 1997. 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 net income for
the year. The base payout goal is $25,000,000, such that no bonuses are received
unless the Company's after-tax net income equals or exceeds this figure. If the
Company's after-tax net income falls within a higher range, the executive
officers receive a larger bonus.
In fiscal year 1996, the Company had net income of $14,726,221, and, as a
result, the Company's executive officers did not earn or receive bonuses with
respect to 1996.
The EOC Committee decided to maintain the same payout goal and award levels
for executive officer bonuses in fiscal year 1997 as in fiscal year 1996.
Because the Company had net income of $13,253,928 in fiscal year 1997, the
Company's executive officers also did not earn or receive bonuses with respect
to 1997.
11
<PAGE> 14
In 1996, the Company retained Towers Perrin to conduct a comprehensive
salary and compensation study for all exempt employees, including executive
officers. As a further part of their above-referenced compensation study, Towers
Perrin has provided to the Company options and recommendations for enhanced
incentive pay opportunities for the Company's executive officers that are more
consistent with industry practice. The Board of Directors intends to implement
new incentive bonus arrangements in 1998 utilizing such options and
recommendations.
MEMBERS OF THE EXECUTIVE OFFICER
COMPENSATION COMMITTEE
Gerald A. Huber (Chairman)
Robert W. Blair
John O. Hanna
Craig N. Johnson
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. 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 1997, including, but not limited to, the
Company's financial performance, the historic responsibilities and performance
of individual employees, the future potential value of the employees to the
Company, 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 1997, the ESPP Committee awarded grants under the Plan for
the purchase of an aggregate of 49,600 shares of the Company's Common Stock to
99 of the Company's employees, 14 of whom were executive officers of the
Company. No executive officer participated in the Plan in 1996. Awards for all
employees ranged from 250 shares to 3,000 shares, with 1,264 being the average
number
12
<PAGE> 15
of shares sold to the Company's executive officers. The purchase price for all
shares sold under the Plan in 1997 was $7.50 per share, at a time when the
Company's Common Stock was trading at $14.625 per share, or approximately 51% of
the market value of the Company's Common Stock at the date of purchase. 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.
Mr. McComas, the Company's Chief Executive Officer, received a grant of
3,000 shares, having a value of $21,375 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, it was not based on any one factor or any weighing of one factor
against another. Mr. McComas's award criteria were the same as those of other
executive officers. The ESPP Committee was of the view that the combination of
Mr. McComas's strong leadership of the Company and the need to further provide
him incentive to continue his history of exemplary leadership warranted a grant
of that size.
MEMBERS OF THE EMPLOYEE STOCK
PURCHASE PLAN COMMITTEE
Robert W. Blair (Chairman)
John O. Hanna
Gerald A. Huber
13
<PAGE> 16
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**
[CHART]
<TABLE>
<CAPTION>
1/1/93 1993 1994 1995 1996 1997
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Blair Corporation 100 81 80 68 43 40
AMEX Market Value Index 100 120 109 137 146 171
S&P Retail Stores Composite Index 100 96 88 98 116 167
</TABLE>
Assumes $100 invested on January 1, 1993 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, 1998, was $23.00.
APPROVAL, ADOPTION AND RATIFICATION OF THE COMPANY'S
STOCK ACCUMULATION AND DEFERRED COMPENSATION PLAN
On December 17, 1997, the Company's Board of Directors adopted the
Company's Stock Accumulation and Deferred Compensation Plan for Directors (the
"Director's Plan"), the text of which is set forth as Exhibit A to the Proxy
Statement, subject to approval by the stockholders of the Company at the 1998
Annual Meeting of the Company's stockholders. Subject to shareholder approval of
the Director's Plan, the Board of Directors approved the effective date of the
Director's Plan as December 17, 1997.
14
<PAGE> 17
The purpose of the Director's Plan is to further align the interests of
members of the Board of Directors of the Company who are not employees with
those of the Company's stockholders generally through a grant of common stock of
the Company (the "Stock") receipt of which Stock, together with other
compensation for services performed as directors, may be deferred. The
Director's Plan is administered by the Executive Payroll Compensation Committee
of the Board of Directors or other officers or directors who are not eligible to
participate in the Director's Plan.
The class of persons who are eligible to participate in the Director's Plan
are those members of the Company's Board of Directors who are not employees of
the Company or any of its subsidiaries or affiliates. At this time, only four
directors are not employees of the Company or any of its subsidiaries or
affiliates and thus are eligible to participate in the Director's Plan.
Under the Director's Plan, each eligible director shall be awarded an
annual stock grant of not more than 1,000 shares of Stock following his election
to the Board of Directors at the annual meeting of the stockholders, the amount
of shares to be established each year by the Board of Directors. In addition,
under the Director's Plan, a director may irrevocably elect to defer, until a
specified year or the cessation of his service as a director of the Company, the
receipt of all Stock granted and/or the payment of all or a specified part of
all annual retainer and committee and meeting fees payable to the director for
services as a director during the calendar year following his election and
succeeding calendar years.
Fees deferred in the form of cash shall be held in the general funds of the
Company, shall be credited to an account in the name of each eligible
participating director and shall receive interest quarterly at the rate of
interest in effect on the immediately preceding March 31 with respect to the
Interest Income Fund of the Company's Profit Sharing and Savings Plan (or at
such other rate as may be specified by the Committee from time to time).
The Company is not required to reserve or otherwise set aside shares of its
authorized and unissued or treasury common stock for the payment of its
obligation under the Director's Plan, but shall make available as and when
required a sufficient number of shares of Common Stock to meet the needs of the
Director's Plan. Stock granted to the eligible directors to be deferred in the
form of stock units shall be allocated to each director's account based on the
closing price of the Company's Common Stock as reported on the Composite Tape of
the American Stock Exchange on the effective date of the Stock grant. Unless
otherwise determined by the Board of Directors, the Director's Plan shall be
unfunded and shall not create (or be construed to create) a trust or separate
fund or funds.
As described above, the stock grant is to be determined by the Company's
Board of Directors. No stock has been granted under the Director's Plan, nor are
any such grants now determinable. Thus, it is not possible to predict the
benefits or amounts that will be received by or allocated to the eligible
directors.
The Board of Directors of the Company reserves the right to modify the
Director's Plan from time to time, or to repeal the Director's Plan entirely,
provided, however, that (1) no modification of the Director's Plan shall operate
to annul an election already in effect for the current calendar year or any
preceding calendar year, and (2) to the extent required under Section 16 of the
Securities Exchange Act of 1934, Director's Plan provisions relating to the
amount, price and timing of stock grants shall not be amended more than once
every fiscal year, except that the foregoing shall not preclude any amendment
necessary to conform to changes in the Internal Revenue Code or the Employee
Retirement Income Security Act.
The Board of Directors recommends the approval, adoption and ratification
of the Company's Stock Accumulation and Deferred Compensation Plan.
15
<PAGE> 18
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, 1998, 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.
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 the Board of
Directors 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 1999
Annual Meeting of Stockholders must be received by David A. Blair, Secretary,
Blair Corporation, 220 Hickory Street, Warren, Pennsylvania 16366, no later than
November 19, 1998.
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
16
<PAGE> 19
EXHIBIT A
BLAIR STOCK ACCUMULATION AND DEFERRED
COMPENSATION PLAN FOR DIRECTORS
1. PURPOSE OF THE PLAN
The purpose of the Blair Stock Accumulation and Deferred Compensation Plan
for Directors (the "Plan") is (1) to further the identity of interests of
members of the Board of Directors of Blair Corporation (the "Company") with
those of the Company's stockholders generally through the grant of common stock
of the Company (the "Stock") and (2) to permit Directors to defer the payment of
all or a specified part of their compensation, including any grant of Stock by
the Company, for services performed as Directors.
2. ELIGIBILITY
Members of the Board of Directors of the Company who are not employees of
the Company or any of its subsidiaries or affiliates shall be eligible to
receive grants of Stock under the Plan. Members of the Board of Directors of the
Company who are not employees of the Company or any of its subsidiaries or
affiliates shall be eligible under this Plan to defer compensation for services
performed as Directors.
3. ADMINISTRATION AND AMENDMENT
The Plan shall be administered by the Executive Payroll Compensation
Committee of the Board of Directors or such other officers or Directors of the
Company not eligible under Article 2 hereof for participation in the Plan who
are selected by the Board of Directors (the "Committee"). The decision of the
Committee with respect to any questions arising as to the administration,
construction or interpretation of this Plan, including the severability of any
and all of the provisions thereof, shall be final, conclusive and binding. The
Board of Directors of the Company reserves the right to modify the Plan from
time to time, or to repeal the Plan entirely, provided, however, that (1) no
modification of the Plan shall operate to annul an election already in effect
for the current calendar year or any preceding calendar year; and (2) to the
extent required under Section 16 of the Securities Exchange Act of 1934
("Exchange Act"), Plan provisions relating to the amount, price and timing of
stock grants and options shall not be amended more than once every fiscal year,
except that the foregoing shall not preclude any amendment necessary to conform
to changes in the Internal Revenue Code or the Employee Retirement Income
Security Act.
The Committee is authorized, subject to the provisions of the Plan, from
time to time to establish such rules and regulations as it deems appropriate for
the proper administration of the Plan, and to make such determinations and take
such steps in connection therewith as it deems necessary or advisable.
4. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT/CHANGE IN LAW
It is the Company's intent that the Plan comply in all respects with Rule
16b-3 of the Exchange Act, or its successor, and any regulations promulgated
thereunder. If any provision of this Plan is found not to be in compliance with
such rule and regulations, the provision shall be deemed null and void, and the
remaining provisions of the Plan shall continue in full force and effect. All
transactions under this Plan shall be executed in accordance with the
requirements of Section 16 of the Exchange Act and regulations promulgated
thereunder.
The Board of Directors may, in its sole discretion, at any time modify the
terms and conditions of this Plan in response to and consistent with any changes
in applicable law, rule or regulation.
A-1
<PAGE> 20
5. ANNUAL STOCK GRANT
Effective with the 1998 Annual Meeting and annually thereafter, each
Director eligible under Article 2 hereof shall be awarded an annual grant of not
more than one thousand (1,000) shares of Stock following his/her election to the
Board of Directors at the Annual Meeting of Stockholders, the number of shares
to be established each year by the Board of Directors. A Director elected to the
Board at a time other than at the Annual Meeting shall receive a grant of Stock
on the date such person becomes an eligible Director equal to the number of
shares determined by the Board of Directors as the annual grant for that year
prorated for the number of whole or partial months of service during such year
when such person serves as a Director.
6. ELECTION TO DEFER
On or before December 31 of any year, commencing with 1997, a Director may
irrevocably elect to defer, until a specified year or the cessation of his
service as a Director of the Company, the receipt of all Stock granted under
Article 5 hereof and/or the payment of all or a specified part of all annual
retainer and committee and meeting fees payable to the Director for services as
a Director during the calendar year following the election and succeeding
calendar years , provided, however, that Stock may only be deferred in full (and
not in part) with respect to any annual grant of Stock pursuant to Article 5
hereof. When such an election is filed, the Director shall designate in his
election as to the particular year or years the amount of fees and/or Stock to
be deferred and to be credited pursuant to Article 7 hereof. Any person who
shall become a Director during any calendar year, and who was not a Director of
the Company on the preceding December 31, may elect, within thirty days after
election to the Board, to defer in the same manner the receipt of all Stock
granted under Article 5 of this Plan and/or the payment of all or a specified
part of fees not yet earned for the remainder of that calendar year and for
succeeding calendar years. Elections shall be made by written notice delivered
to the Secretary of the Company.
7. DIRECTORS' ACCOUNTS
Fees deferred in the form of cash shall be held in the general funds of the
Company and shall be credited to an account in the name of each eligible
participating Director. On the first business day of each quarter, interest
shall be credited to each account calculated on the basis of the cash balance in
each account on the last business day of the preceding quarter at the rate of
interest in effect on the immediately preceding March 31 with respect to the
Company's Profit Sharing and Saving Plan's Interest Income Fund (or at such
other rate as may be specified by the Committee from time to time). Stock
granted under Article 5 to be deferred in the form of stock units shall be
allocated to each Director's account based on the closing price of the Company's
common stock as reported on the Composite Tape of the American Stock Exchange
("Stock Price") on the effective date of the Stock grant. The Company shall not
be required to reserve or otherwise set aside shares of its authorized and
unissued or treasury common stock for the payment of its obligations hereunder,
but shall make available as and when required a sufficient number of shares of
common stock to meet the needs of the Plan. Unless otherwise determined by the
Board of Directors, the Plan shall be unfunded and shall not create (or be
construed to create) a trust or a separate fund or funds. The Plan shall not
establish any fiduciary relationship between the Company or any participant or
other individual. To the extent any individual holds any rights by virtue of a
grant awarded under the Plan, such rights (unless otherwise determined by the
Board) shall be no greater than the rights of an unsecured general creditor of
the Company. An amount equal to any cash dividends (or the fair market value of
dividends paid in property other than dividends payable in common stock of the
Company) payable on the number of shares represented by the number of stock
units in each Director's account will be allocated to each Director's account,
in cash, on the dividend payment date. Any stock dividends payable on such
number of shares will be allocated in the form of stock units. If adjustments
are made to outstanding shares of common stock as a result of split-ups,
recapitalizations, mergers, consolidations and the like, an appropriate
adjustment will also be made in the number of stock units in a Director's
account. Stock units shall not entitle any person to rights of a stockholder
unless and until shares of Company common stock have been issued to that person
with respect to stock units as provided in Article 8.
A-2
<PAGE> 21
8. PAYMENT FROM DIRECTORS' ACCOUNTS
The aggregate amount of Stock granted under Article 5 which has been
deferred and deferred fees, together with interest and dividend equivalents
accrued thereon, shall be paid in the year specified by the Director or, unless
otherwise specified, in the year after a Director ceases to be a Director of the
Company. Amounts deferred shall be paid in a lump sum or, if the Director
elects, in substantially equal annual installments over a period not to exceed
five (5) years as specified by the Director. The delivery election must be made
by written notice delivered to the Secretary of the Company prior to the
deferral date specified by the Director or the date he ceases to be a Director,
as the case may be, and the first installment (or lump sum payment ) shall be
paid promptly at the beginning of the following calendar year. Subsequent
installments shall be paid promptly at the beginning of each succeeding calendar
year until the entire amount credited to the Director's account shall have been
paid. In the event that installments are designated in the delivery election,
the cash amount remaining in the Director's account shall continue to bear
interest in accordance with the provisions of Article 7 hereof. Amounts credited
to a Director's account in cash shall be paid in cash and amounts credited in
stock units shall be paid in one share of common stock of the Company for each
stock unit, except that a cash payment will be made with any final installment
for any fraction of a stock unit remaining in the Director's account. Such
fractional share will be valued at the closing Stock Price on the date of
settlement.
9. PAYMENT IN EVENT OF DEATH
A Director may file with the Secretary of the Company a written designation
of a beneficiary for his or her account under the Plan on such form as may be
prescribed by the Committee, and may, from time to time, amend or revoke such
designation. If a Director should die before all deferred amounts credited to
the Director's account have been distributed, the balance of any deferred Stock
and fees and interest and dividend equivalents then in the Director's account
shall be paid promptly to the Director's designated beneficiary. If the Director
did not designate a beneficiary, or in the event that the beneficiary designated
by the Director shall have predeceased the Director, the balance in the
Director's account shall be paid promptly to the Director's estate.
10. TERMINATION OF ELECTION
A Director may terminate his/her election to defer payment of fees in cash
or stock units by written notice delivered to the Secretary of the Company.
Termination shall become effective as of the end of the calendar year in which
notice of termination is given with respect to fees payable for services as a
Director during subsequent calendar years. Amounts credited to the account of a
Director prior to the effective date of termination shall not be affected
thereby and shall be paid only in accordance with Articles 7 and 8 hereof.
11. NONASSIGNABILITY
During the Director's lifetime, the right to any deferred Stock or fees
including interest and dividend equivalents thereon shall not be transferable or
assignable.
12. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of a participant,
including, without limitation, the estate of such participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the participant's creditors.
13. GOVERNING LAW
The validity and construction of the Plan shall be governed by the laws of
the State of Delaware.
A-3
<PAGE> 22
14. EFFECTIVE DATE
This Plan shall become effective as of December 17, 1997, provided it is
approved by stockholders at the Company's 1998 Annual Meeting, and shall
continue in full force and effect until terminated by the Board of Directors.
A-4
<PAGE> 23
Please mark
your votes as [ X ]
indicated in
this example
<TABLE>
<CAPTION>
The Board recommends a vote FOR the election of the nominees listed in Item I.
Vote for all nominees listed WITHHOLD AUTHORITY
below (except as shown to vote for all
below to the contrary) nominees listed below
<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
(Instructions: To withhold authority to vote for any
INDIVIDUAL NOMINEES write the nominee's name on the
line provided below:)
</TABLE>
<TABLE>
- - ----------------------------------------------------
The Board recommends a vote FOR the approval, adoption and ratification of
the Company's Stock Accumulation and Deferred Compensation Plan in Item II.
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
II. APPROVAL, ADOPTION AND RATIFICATION [ ] [ ] [ ]
OF THE COMPANY'S STOCK ACCUMULATION
AND DEFERRED COMPENSATION PLAN:
The Board recommends a vote FOR the ratification of
Ernst & Young LLP as auditors in Item III.
FOR AGAINST ABSTAIN
III. 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 _______________ , 1998
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 21, 1998 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, FOR THE APPROVAL, ADOPTION AND RATIFICATION OF THE
COMPANY'S STOCK ACCUMULATION AND DEFERRED COMPENSATION PLAN IN ITEM II, AND FOR
THE RATIFICATION OF AUDITORS IN ITEM III; 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
