<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BLAIR CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 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:
* 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 20, 1999
------------------------
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
20, 1999 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 1999.
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 26, 1999
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 19, 1999
Warren, Pennsylvania
<PAGE> 3
BLAIR CORPORATION
Warren, Pennsylvania
March 19, 1999
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 20, 1999. 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 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.
As of February 26, 1999, there were 8,407,043 shares of the Company's
Common Stock outstanding. Only stockholders of record at the close of business
on February 26, 1999 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 26,
1999 will constitute a quorum.
A copy of the 1998 Annual Report of the Company, including financial
statements and a description of the Company's operations for 1998, 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 19, 1999.
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.
<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 1998 Annual Meeting of Stockholders.
<TABLE>
<CAPTION>
POSITION WITH DIRECTOR BUSINESS EXPERIENCE
NAME AGE COMPANY SINCE DURING PAST FIVE YEARS
---- --- ------- ----- ----------------------
<S> <C> <C> <C> <C>
David A. Blair(1).............. 48 Secretary and 1988 Secretary and Order Handling
Order Handling Service Director for the past
Service Director five years.
Robert W. Blair(1)............. 68 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)............. 55 Vice President 1986 Vice President (Order Handling)
(Order Handling) for the past five years.
Robert D. Crowley.............. 49 Vice President 1994 Vice President (Menswear) for the
(Menswear) past five years.
John O. Hanna.................. 67 Director 1992 Chairman of the Board, President
and Chief Executive Officer of
Northwest Bancorp, Inc., Warren,
PA, July, 1998--present;
Director, President and Chief
Executive Officer of Northwest
Bancorp, Inc., Warren, PA,
February, 1998--July, 1998;
Chairman of the Board of
Northwest Savings Bank, Warren,
PA, July, 1998--present;
Director, President and Chief
Executive Officer of Northwest
Savings Bank, Warren, PA,
January, 1977--July, 1998;
Director, Jamestown Savings Bank,
Jamestown, NY, November,
1995--present.
Gerald A. Huber................ 70 Director 1992 Director and Secretary, Warren
Foundation, Warren, PA, 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............... 57 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.............. 62 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.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
POSITION WITH DIRECTOR BUSINESS EXPERIENCE
NAME AGE COMPANY SINCE DURING PAST FIVE YEARS
---- --- ------- ----- ----------------------
<S> <C> <C> <C> <C>
Thomas P. McKeever............. 50 Vice President 1994 Vice President (Corporate Affairs
(Corporate 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............ 65 Vice President 1973 Vice President (Information
(Information Services) Services) for the past five
years.
Kent R. Sivillo................ 52 Vice President and Treasurer 1996 Vice President and 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.............. 56 Executive Vice President and 1988 Executive Vice President and
member of Executive member of Executive Committee for
Committee the past five years.
John E. Zawacki................ 50 Vice President (Womenswear) 1988 Vice President (Womenswear) for
and member of Executive the past five years; member of
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
POSITION WITH OFFICER BUSINESS EXPERIENCE
NAME AGE COMPANY SINCE DURING PAST FIVE YEARS
---- --- ------- ----- ----------------------
<S> <C> <C> <C> <C>
Timothy J. Baker............... 52 Vice President 1990 Vice President (Planning) for the
(Planning) past five years.
Patrick J. Kennedy............. 49 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................. 47 Vice President 1987 Vice President (Advertising) for
(Advertising) the past five years; Director,
Blair Holdings, Inc., September,
1993--present.
Randall A. Scalise............. 44 Vice President 1993 Vice President (Merchandise
(Merchandise Handling) Handling) for the past five
years.
James H. Smith................. 52 Vice President 1995 Vice President (Corporate
(Corporate Development and Development and Facilities),
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.............. 45 Vice President 1989 Vice President (Mailing) for the
(Mailing) past five years.
Lawrence R. Vicini............. 50 Vice President 1992 Vice President (International
(International Trade) Trade) for the past five years.
Stephen P. Wiedmaier........... 47 Vice President 1998 Vice President (Credit
(Credit Management) Management) December,
1998--present; Assistant Vice
President (Credit Management)
April, 1997--December, 1998;
Assistant Vice President (Order
Handling) September, 1994--April,
1997; Assistant Vice President
(Mailing) October, 1989--
September 1994.
</TABLE>
4
<PAGE> 7
PRINCIPAL HOLDERS OF COMMON STOCK*
(a) Security Ownership of Certain Beneficial Owners. Unless otherwise
indicated, the table below sets forth information as of February 26, 1999 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>
Gerald Huber
371 Bent Twig Rd
Warren, PA 16365................. 515,946(1) 6.14%
PNC Bank Corporation
5th Ave. & Wood Street
Pittsburgh, PA 15222............. 1,370,922(2) 16.30%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401........... 608,500(3) 7.24%
FMR Corp.
82 Devonshire Street
Boston, MA 02109................. 890,500(4) 10.59%
</TABLE>
- ---------------
* For purposes of calculating the percent of class ownership, the figure used
for the amount of outstanding Common Stock is 8,407,043, which amount
represents the figure reported as outstanding by the transfer agent as of
the record date.
(1) Such amount includes the indirect beneficial ownership of 513,046 shares of
Common Stock owned jointly with PNC Bank Corporation in their capacity as
co-executors to the estate of John Blair.
The above information was provided to the U.S. Securities and Exchange
Commission in a Schedule 13G filed on February 10, 1999 by Gerald Huber.
(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 60 separate trust,
custodial and estate accounts which are the record or beneficial owners of
the Company's Common Stock, one 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. Such
amount includes the indirect beneficial ownership of 513,046 shares of
Common Stock owned jointly with Gerald Huber in their capacity as
co-executors to the estate of John Blair.
The above information was provided to the Company by PNC Bank, N.A. in a
letter dated March 4, 1999.
(3) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 608,500 shares or 7.24%
of the Company's Common Stock as of December 31, 1998, all of which shares
are held in portfolios of four registered investment companies, for which
Dimensional Fund Advisors, Inc. serves as investment advisor, and certain
other investment vehicles, including commingled group trusts, for which
Dimensional Fund Advisors, Inc. serves as investment manager. All of the
shares are owned by the portfolios and Dimensional disclaims beneficial
ownership of all such shares.
The above information was provided to the U.S. Securities and Exchange
Commission in a Schedule 13G filed on February 11, 1999 by Dimensional Fund
Advisors, Inc.
(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
890,500 shares or 10.59% of the Common Stock outstanding of the
5
<PAGE> 8
Company as of December 31, 1998, as a result of acting as investment adviser
to various investment companies registered under Section 8 of the Investment
Company Act of 1940. The ownership of one investment company, Fidelity
Low-Priced Stock Fund (the "Fund"), amounted to 890,500 shares or 10.59% 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 890,500 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 Fund's Boards of Trustees. Fidelity carries out the
voting of the shares under written guidelines established by the Fund's
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% 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.
The above information was provided to the U.S. Securities and Exchange
Commission in a Schedule 13G filed on February 11, 1999 by FMR Corp.
(b) Security Ownership of Management. The following table sets forth, as of
February 26, 1999, 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(1) OF CLASS
---------------- ----------------------- --------
<S> <C> <C>
David A. Blair.................................... 47,262(2)(3)(4) 0.56%
Robert W. Blair................................... 286,223(3)(4) 3.40%
Steven M. Blair................................... 24,995(4) 0.30%
Robert D. Crowley................................. 18,248(4) 0.22%
John O. Hanna..................................... 5,700(4) 0.06%
Gerald A. Huber................................... 515,956(4)(5) 6.14%
Craig N. Johnson.................................. 1,000 0.01%
Murray K. McComas................................. 54,055(4) 0.64%
Thomas P. McKeever................................ 12,550 0.15%
Michael J. Samargya............................... 24,150 0.29%
Kent R. Sivillo................................... 12,650 0.15%
Blair T. Smoulder................................. 25,050(4) 0.30%
John E. Zawacki................................... 19,479(4) 0.23%
All directors and executive officers as a group
(includes 21 persons)........................... 1,131,208(2)(3)(4)(5)(6)(7) 13.46%
</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 nominee, as to which the indicated
nominees have no voting or investment power,
6
<PAGE> 9
beneficial interest in which shares is disclaimed by such nominees: Mr.
Robert W. Blair (46,333 shares) and Mr. David A. Blair (767 shares).
(4) The share totals 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).
(5) Such amount includes the indirect beneficial ownership of 513,046 shares of
Common Stock owned jointly with PNC Bank Corporation in their capacity as
co-executors to the estate of John Blair.
(6) The share totals include 2,465 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.
(7) 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 1998 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................ 1998 $500,382 $49,252 $124,833 $51,955
President and 1997 518,622 0 46,011 47,763
Chairman of the Board 1996 517,840 0 9,823 57,321
John Lasher...................... 1998 258,630 14,255 38,826 30,911
Vice President 1997 271,284 0 14,397 29,442
(Advertising) 1996 270,874 0 6,185 30,592
Michael J. Samargya.............. 1998 312,260 19,248 41,080 38,154
Vice President 1997 329,056 0 2,077 52,403
(Information Services) 1996 328,560 0 3,450 42,750
Blair T. Smoulder................ 1998 365,971 29,882 80,364 50,718
Executive Vice 1997 380,354 0 22,745 49,825
President 1996 379,780 0 5,036 54,331
John E. Zawacki.................. 1998 274,856 19,248 56,399 26,394
Vice President 1997 279,734 0 21,744 24,492
(Womenswear) 1996 279,312 0 6,439 28,754
</TABLE>
- ---------------
(1) There were no directors' fees paid to the named executive officers during
the years 1996, 1997 and 1998.
(2) On January 19, 1998, the Executive Officer Compensation Committee approved
an incentive award schedule for fiscal year 1998. Executive officers were
eligible to receive awards equal to a percentage of their salary income for
1998. The percentage depends upon the range of the Company's income before
income taxes for the year. The base payout goal is $23,500,000, such that no
incentive awards are received unless the Company's income before income
taxes equals or
7
<PAGE> 10
exceeds this threshold figure. If the Company's income before income taxes
falls higher, within a graduated range, incentive awards are increased. The
income before income taxes in 1998 was $33,842,008. The 1998 incentive
awards were paid by the Company in 1999. No Incentive compensation and no
bonuses were paid by the Company to its executive officers in 1998 for 1997
or in 1997 for 1996.
(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 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 12/31/98)
<S> <C> <C>
Murray K. McComas............................... 19,350 $137,250
John A. Lasher.................................. 6,750 48,298
Michael J. Samargya............................. 5,750 41,698
Blair T. Smoulder............................... 10,550 76,968
John E. Zawacki................................. 7,750 56,698
</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:
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>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $6,579 $6,585 $6,322
John A. Lasher.................................. 771 773 726
Michael J. Samargya............................. 3,923 3,931 3,689
Blair T. Smoulder............................... 1,903 2,979 2,844
John E. Zawacki................................. 799 740 785
</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>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $ 0 $ 0 $ 0
John A. Lasher.................................. 4,092 5,217 0
Michael J. Samargya............................. 6,204 18,984 6,328
Blair T. Smoulder............................... 14,629 14,629 14,629
John E. Zawacki................................. 0 0 0
</TABLE>
8
<PAGE> 11
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
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>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $11,160 $11,295 $11,153
John A. Lasher.................................. 10,919 12,029 11,501
Michael J. Samargya............................. 10,949 13,314 11,108
Blair T. Smoulder............................... 10,700 11,954 11,330
John E. Zawacki................................. 11,212 11,232 10,617
</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>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $5,419 $5,478 $8,503
John A. Lasher.................................. 5,369 5,431 8,430
Michael J. Samargya............................. 5,412 5,471 8,493
Blair T. Smoulder............................... 5,401 5,461 8,477
John E. Zawacki................................. 5,383 5,444 8,451
</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>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas...................... $36,986 $27,233 $14,582
John A. Lasher......................... 9,442 5,992 1,562
Michael J. Samargya.................... 16,263 10,703 3,181
Blair T. Smoulder...................... 21,698 15,159 6,698
John E. Zawacki........................ 11,360 7,015 2,793
</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. The standing Audit Committee of the Board of Directors, which
consists of David A. Blair, John O. Hanna, and Gerald A. Huber, is established
to assist the Board of Directors in fulfilling its responsibilities concerning
corporate accounting, the reporting practices of the Company and the integrity
and quality of financial reports of the Company.
The standing Nominating Committee, which consists of Robert W. Blair, John
O. Hanna, Craig N. Johnson, and Murray K. McComas, considers and recommends the
nominees for directors to stand for
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<PAGE> 12
election at the Company's Annual Meeting of Stockholders, as well as
recommending director candidates in the interim and recommending nominees for
executive officer positions.
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 Exempt 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 all other employees on the exempt payroll. 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 1998, the Board of Directors held 13 meetings. The Executive
Committee held 13 meetings, and the Employee Stock Purchase Plan Committee and
Nominating Committee each met once. The Executive Officer Compensation Committee
held 2 meetings, and the Audit Committee held 2 meetings. The Exempt
Compensation Committee met 8 times in 1998. 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.
COMPENSATION OF DIRECTORS
In 1998, 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 21, 1998 and a cash grant equal to the value of 500 shares of
the Company's Common Stock calculated as at the close of business on April 21,
1998. The aggregate value of this April 21, 1998 cash grant was $35,625. In
1998, 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 1998, 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 1998.
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<PAGE> 13
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.
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 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 both a proxy analysis 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 and 1998. 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 seventeen executive
officers of the Company (including all five of the most highly compensated
executive officers) began a base-salary reduction process in April, 1998.
Further base salary reductions will be implemented in April, 1999.
The EOC Committee's decisions with respect to bonuses for executive
officers in 1996 and 1997 were made in accordance with the executive officer
bonus schedule established and approved by the committee on December 16, 1993.
Under this plan, no executive officer received a bonus or incentive award
payment in 1997 based on 1996 results, nor in 1998 based on 1997 results.
11
<PAGE> 14
On January 19, 1998, the EOC Committee reviewed and approved an incentive
award schedule for fiscal year 1998. Under this incentive award schedule,
executive officers were eligible to receive awards equal to a percentage of
their salary income for the year. The percentage is dependent upon the range of
the Company's income before income taxes for the year. The base payout goal is
$23,500,000, such that no incentive awards are received unless the Company's
income before income taxes equals or exceeds this threshold figure. If the
company's income before income taxes falls higher, within a graduated range,
incentive awards are increased.
MEMBERS OF THE EXECUTIVE OFFICER
COMPENSATION COMMITTEE
Gerald A. Huber (Chairman)
Robert W. Blair
John O. Hanna
Craig N. Johnson
Murray K. McComas
(not a member of the committee)
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 non-management directors who are not eligible to
participate in 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.
Many factors, both objective and subjective, were considered by the ESPP
Committee before making grants in 1998, 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 1998, the ESPP Committee awarded grants under the Plan for purchase of
an aggregate of 50,400 shares of the Company's Common Stock to 100 of the
Company's employees, 15 of whom were executive officers of the Company. Awards
for all employees ranged from 250 shares to 3,000 shares,
12
<PAGE> 15
with 1,280 being the average number of shares sold to the Company's executive
officers. The purchase price for all shares sold under the Plan in 1998 was
$10.50 per share, at a time when the Company's Common Stock was trading at
$31.50 per share, or approximately 33% of the market value of the Company's
Common Stock at the date of purchase. Over the prior several years, the purchase
price for stock awarded pursuant to the Plan has usually 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 $63,000 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' award criteria were the same as those of other
executive officers. The ESPP Committee was of the view that Mr. McComas' strong
leadership of the Company warranted a grant of that size.
MEMBERS OF THE EMPLOYEE STOCK
PURCHASE PLAN COMMITTEE
Robert W. Blair (Chairman)
John O. Hanna
Gerald A. Huber
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<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 Stores Composite Index**
<TABLE>
<CAPTION>
S&P RETAIL COMPOSITE
BLAIR CORPORATION AMEX MARKET CALUE INDEX INDEX
----------------- ----------------------- --------------------
<S> <C> <C> <C>
1/1/94 100.00 100.00 100.00
1994 100.00 91.00 91.00
1995 85.00 115.00 102.00
1996 54.00 122.00 121.00
1997 50.00 143.00 174.00
1998 66.00 144.00 281.00
</TABLE>
Assumes $100 invested on January 1, 1994 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 8, 1999, was $18.125.
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, 1999, 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.
14
<PAGE> 17
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 inclusion in the
Company's proxy materials for the 2000 Annual Meeting of Stockholders in
reliance on Rule 14a-8 of the Securities Exchange Act of 1934 must be received
by David A. Blair, Secretary, Blair Corporation, 220 Hickory Street, Warren,
Pennsylvania 16366, no later than November 22, 1999. A proposal submitted by a
stockholder outside of the process of Rule 14a-8 for the 2000 Annual Meeting of
Stockholders will not be considered timely unless notice of such proposal is
received by the Company prior to February 2, 2000. The proxy to be solicited on
behalf of the Company's Board of Directors for the 2000 Annual Meeting of
Stockholders may confer discretionary authority to vote on any such proposal not
considered to have been timely received that nonetheless properly comes before
the 2000 Annual Meeting of Stockholders.
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
15
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C>
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE [X]
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION The Board recommends a vote FOR the ratification
OF THE NOMINEES LISTED IN ITEM I. of Ernst & Young LLP as auditors in Item II.
I. ELECTION OF DIRECTORS: Vote for all WITHHOLD AUTHORITY II. RATIFICATION OF ERNST & YOUNG LLP AS
Nominees: nominees listed to vote for all AUDITORS:
David A. Blair Murray K. McComas below (except nominees listed
Robert W. Blair Thomas P. McKeever as shown below below FOR AGAINST ABSTAIN
Steven M. Blair Michael J. Samargya to the contrary)
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:)
- ----------------------------------------------------
The signer hereby revokes all proxies heretofore given by the signer to vote at said meeting or any adjournments thereof.
Signature(s) _____________________________________________________________________________________ Date __________ , 1999
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
</TABLE>
<PAGE> 19
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 20, 1999 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
[ILLUSTRATION]
BLAIR CORPORATION HEADQUARTERS
220 HICKORY STREET
WARREN, PENNSYLVANIA
