<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
</TABLE>
[ ] 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
Blair Corporation
------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[ X ] No fee required.
[ ] 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:
------------------------------------------------------------
</TABLE>
<PAGE> 2
BLAIR CORPORATION
Warren, Pennsylvania
------------------------
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS OF
BLAIR CORPORATION
to be held on Tuesday, April 18, 2000
------------------------
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
18, 2000 at 11:00 a.m., for the following purposes:
1. To elect twelve directors to serve for a term of one year and until
their successors are elected and qualified;
2. To approve the Blair Corporation 2000 Omnibus Stock Plan;
3. To ratify the appointment of Ernst & Young LLP as independent public
accountants of the Company for the year 2000; and
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 25, 2000
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 17, 2000
Warren, Pennsylvania
<PAGE> 3
BLAIR CORPORATION
Warren, Pennsylvania
March 17, 2000
PROXY STATEMENT
SOLICITATION AND VOTING OF PROXIES
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 at 11:00 a.m. on Tuesday, April 18, 2000 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 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 nominees listed on the proxy card and FOR the other
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.
Other than the matters listed on the attached Notice of Annual Meeting of
Stockholders, the Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of the proxy card,
however, confers on the designated proxyholders discretionary authority to vote
the shares of Common Stock in accordance with their best judgment on such other
business, if any, that may properly come before the Annual Meeting or any
adjournments thereof.
A copy of the 1999 Annual Report of the Company, including financial
statements and a description of the Company's operations for 1999, 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 17, 2000.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual Meeting. There is
no cumulative voting for the election of directors.
The close of business on February 25, 2000 has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Annual Meeting
and at any adjournments thereof. As of the Record Date, there were 8,126,469
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 (8,156,516 shares) reduced by 30,047 shares repurchased by the Company
prior to the Record Date but not reflected on the books of the transfer agent.
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the shares of the Company's Common Stock outstanding on
February 25, 2000 will constitute a quorum. In the event there are not
sufficient votes for a quorum or to approve or ratify any proposal at the time
of
<PAGE> 4
the Annual Meeting, the Annual Meeting may be adjourned in order to permit the
further solicitation of proxies.
As to the election of directors, the proxy card being furnished by the
Board of Directors enables a stockholder to vote FOR the election of the
nominees proposed by the Board, or to WITHHOLD AUTHORITY to vote for one or more
of the nominees being proposed. Under Delaware law and the Company's bylaws,
directors are elected by a plurality of votes cast, without regard to either (i)
broker non-votes, or (ii) proxies as to which authority to vote for one or more
of the nominees being proposed is withheld.
As to the approval of the Blair Corporation 2000 Omnibus Stock Plan, the
ratification of Ernst & Young LLP as independent auditors of the Company and all
other matters that may properly come before the Annual Meeting, by checking the
appropriate box, a stockholder may: (i) vote FOR the item; (ii) vote AGAINST the
item; or (iii) ABSTAIN from voting on such item. Under the Company's bylaws,
unless otherwise required by law, all such matters shall be determined by a
plurality of the votes cast without regard to either (a) broker non-votes, or
(b) proxies marked ABSTAIN as to that matter.
Proxies solicited hereby will be returned to the proxy solicitors or the
Company's transfer agent, and will be tabulated by inspectors of election
designated by the Company, who will not be employed by, or be a director of, the
Company or any of its affiliates. After the final adjournment of the Annual
Meeting, the proxies will be returned to the Company for safekeeping.
PRINCIPAL HOLDERS OF COMMON STOCK*
(a) Security Ownership of Certain Beneficial Owners. The table below sets
forth information as of February 25, 2000 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>
PNC Bank Corporation
5th Ave. & Wood Street
Pittsburgh, PA 15222...................... 1,474,402(1) 18.1%
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401.................... 628,600(2) 7.7%
FMR Corp.
82 Devonshire Street
Boston, MA 02109.......................... 791,100(3) 9.7%
Joseph L. Harrosh
40900 Grimmer Blvd
Fremont, CA 94538......................... 820,500(4) 10.1%
</TABLE>
- ---------------
* For purposes of calculating the percent of class ownership, the figure used
for the amount of outstanding Common Stock is 8,126,469, which amount
represents the figure reported as outstanding by the transfer agent as of
the Record Date (8,156,516 shares) reduced by 30,047 shares repurchased by
the Company prior to the Record Date but not reflected on the books of the
transfer agent.
(1) 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 66 separate trust,
custodial and estate accounts which are the record or beneficial owners of
the Company's Common Stock. PNC Bank, N.A. disclaims beneficial ownership of
these shares.
2
<PAGE> 5
The above information was provided to the Company by PNC Advisors in a
letter dated
March 1, 2000.
(2) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 628,600 shares or 7.66%
of the Company's Common Stock as of December 31, 1999, 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 comingled 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 3, 2000 by Dimensional Fund
Advisors, Inc.
(3) 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
791,100 shares or 9.635% of the Common Stock outstanding of the Company as
of December 31, 1999, 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 791,100 shares or 9.635% of the Common
Stock outstanding of the Company as of December 31, 1999. 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 791,100 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 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, a 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, 2000 by FMR Corp.
(4) This information was provided to the U.S. Securities and Exchange Commission
in a Schedule 13G filed on January 5, 2000 by Joseph L. Harrosh.
(b) Security Ownership of Management. The following table sets forth, as of
February 25, 2000, certain information with respect to the Company's Common
Stock owned beneficially by each director
3
<PAGE> 6
and nominee for election as a director, 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.............................. 47,214(2)(3)(4) *
Robert W. Blair............................. 285,986(3)(4) 3.5%
Steven M. Blair............................. 26,495(4) *
Robert D. Crowley........................... 19,848(4) *
John O. Hanna............................... 7,200(4) *
Gerald A. Huber............................. 28,591(4)(5) *
Craig N. Johnson............................ 1,500 *
John A. Lasher.............................. 14,765(4) *
Murray K. McComas........................... 58,775(4) *
Thomas P. McKeever.......................... 15,550 *
Kent R. Sivillo............................. 15,150 *
Blair T. Smoulder........................... 29,050(4) *
John E. Zawacki............................. 23,629(4) *
All directors and executive officers as a
group (includes 23 persons)............... 670,055(2)(3)(4)(5)(6)(7) 8.2%
</TABLE>
- ---------------
* Does not exceed 1%
(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, beneficial interest in which
shares is disclaimed by such nominees: Mr. Robert W. Blair (46,096 shares)
and Mr. David A. Blair (719 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 and
executive officers, as to which the indicated nominees and executive
officers have no voting or investment power, beneficial interest in which is
disclaimed by such nominees and executive officers: 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 (10,998 shares), Mr. John O. Hanna
(1,200 shares), Mr. Gerald A. Huber (10 shares), Mr. John A. Lasher (390
shares), Mr. Murray K. McComas (980 shares), Mr. Blair T. Smoulder (8,900
shares) and Mr. John E. Zawacki (11,279 shares).
(5) Such amount includes the indirect beneficial ownership of 25,181 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 7, 2000 by Gerald Huber.
(6) The share totals include 2,075 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 7,600 shares of Common Stock
jointly owned by the directors and executive officers with their spouses.
4
<PAGE> 7
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
One of the purposes of the meeting is to elect twelve directors to serve
until the next Annual Meeting of Stockholders and until their successors have
been elected and qualified. The persons named in the proxy intend to vote the
proxy for the election as directors of the nominees named below. If, however,
any nominee is unwilling or unable to serve as a director, which is not now
expected, the persons named in the proxy reserve the right to vote for such
other person as may be nominated by management. Directors will be elected by a
plurality of the votes cast at the Annual Meeting.
The table below sets forth the name of each nominee for election as a
director and the nominee's age, position with the Company, business experience
and principal occupation during the past five years, and family relationships
with other directors. All of the nominees were elected as directors at the
Company's 1999 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).............. 49 Secretary and Order 1988 Secretary and Order Handling
Handling Service Director Service Director for the past
five years.
Robert W. Blair(1)............. 69 Director 1962 Director, 1962 - present;
and member of Executive Vice President, January
Executive Committee 1, 1990 - December 31, 1990;
Secretary, July 16, 1963 -
December 31, 1990; member of
Executive Committee, April 16,
1968 - December 31, 1990 and from
January 18, 2000 - present.
Steven M. Blair(2)............. 56 Vice President 1986 Vice President (Order Handling)
(Order Handling) for the past five years.
Robert D. Crowley.............. 50 Vice President 1994 Vice President (Menswear)for the
(Menswear) past five years.
John O. Hanna.................. 68 Director 1992 Member of Executive Committee
and member of from January 18, 2000 - present.
Executive Committee 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 Northwest Savings
Bank, Warren, PA, July, 1998 -
present; Director, President and
Chief Executive Officer of
Northwest Savings Bank, Warren,
PA, March, 1960 - July, 1998;
Director, Jamestown Savings Bank,
Jamestown, NY, November, 1995 -
present.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
POSITION WITH DIRECTOR BUSINESS EXPERIENCE
NAME AGE COMPANY SINCE DURING PAST FIVE YEARS
---- --- ------- ----- ----------------------
<S> <C> <C> <C> <C>
Gerald A. Huber................ 71 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............... 58 Director 1997 Member of Executive Committee
and member of from January 18, 2000 - present.
Executive Committee 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.............. 63 Chairman of the Board 1977 Chairman of the Board and member
and member of of Executive Committee for the
Executive Committee past five years. President from
October 21, 1987 - December 16,
1999.
Thomas P. McKeever............. 51 Vice President 1994 Vice President (Corporate Affairs
(Corporate Affairs and Human and Human Resources), January 1,
Resources) 1997 - present; member of
Executive Committee, October 16,
1996 - January 17, 2000; Vice
President (Employee and Public
Relations), July, 1989 -
December, 1996; Director, Blair
Holdings, Inc., September, 1996 -
present.
Kent R. Sivillo................ 53 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.............. 57 Executive Vice 1986 Executive Vice President for the
President past five years; member of
Executive Committee, January 1,
1990 - January 17, 2000.
John E. Zawacki................ 51 President, Chief 1988 President and Chief Executive
Executive Officer Officer from December 17, 1999 to
and member of present; Vice President
Executive Committee (Womenswear) from January 1, 1988
-December 16, 1999; member of
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.
6
<PAGE> 9
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>
BUSINESS
POSITION WITH EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
Timothy J. Baker............... 53 Vice President 1990 Vice President (Planning) for the
(Planning) past five years.
Mark J. Espin.................. 44 Vice President 1999 Vice President (Womenswear),
(Womenswear) December 17, 1999 - present;
Assistant Vice President
(Womenswear) January 1, 1991 -
December 16, 1999.
Patrick J. Kennedy............. 50 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................. 48 Vice President 1987 Vice President (Advertising) for
(Advertising) the past five years; Director,
Blair Holdings, Inc., September,
1993 - present.
Michael A. Rowe................ 45 Vice President 2000 Vice President (Information
(Information Services) Services), January 1, 2000 -
present; Assistant Vice President
(Information Services) July, 1998
-December, 1999; Senior Director
(Information Services) April,
1997 - July, 1998; Senior
Director of Information Services,
Finest Supermarkets, Maple
Heights, OH, August, 1995 -
April, 1997; Director,
Information Services, K-Mart
Apparel, North Bergen, NJ, April,
1989 - August, 1995.
Randall A. Scalise............. 45 Vice President 1993 Vice President (Merchandise
(Merchandise Handling) Handling) for the past five
years.
Lewis Shapiro.................. 54 Vice President 2000 Vice President (Crossing Pointe),
(Crossing Pointe) January 1, 2000 to present;
Assistant Vice President and
Senior Director (Womenswear),
June, 1999 - December, 1999;
Executive Director Retail,
Military Channel, Louisville, KY,
October, 1998 - May, 1999; Vice
President and General Manager,
America's Health Network,
Orlando, FL, June, 1994 -
September, 1998.
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
BUSINESS
POSITION WITH EXPERIENCE DURING
NAME AGE COMPANY SINCE PAST FIVE YEARS
---- --- ------- ----- ---------------
<S> <C> <C> <C> <C>
James H. Smith................. 53 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.............. 46 Vice President 1989 Vice President (Mailing) for the
(Mailing) past five years.
Lawrence R. Vicini............. 51 Vice President 1992 Vice President (International
(International Trade) Trade)for the past five years.
Stephen P. Wiedmaier........... 48 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.
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 (the "Exchange
Act") requires the Company's officers (as defined in regulations promulgated by
the Securities and Exchange Commission ("SEC") thereunder) and directors, and
persons who own more than ten percent (10%) of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than ten percent (10%)
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on a review of copies of such reports of ownership furnished
to the Company, or written representations that no forms were necessary, the
Company believes that during the past fiscal year it complied with all filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners, with the exception of Mr. John O. Hanna, who, due to an
oversight, did not report one transaction on a timely basis.
8
<PAGE> 11
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 1999 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................ 1999 $477,862 $11,314 $ 81,365 $60,402
President (until 12/16/99) and 1998 500,382 49,252 124,833 51,955
Chairman of the Board 1997 518,622 0 46,011 47,763
John A. Lasher................... 1999 242,328 4,474 26,088 26,538
Vice President 1998 258,630 14,255 38,826 30,911
(Advertising) 1997 271,284 0 14,397 29,442
Michael J. Samargya.............. 1999 290,392 5,571 1,960 39,959
Vice President 1998 312,260 19,248 41,080 38,154
(Information Services) 1997 329,056 0 2,077 52,403
(Retired on 12/31/99)
Blair T. Smoulder................ 1999 347,553 7,537 52,393 53,643
Executive Vice 1998 365,971 29,882 80,364 50,718
President 1997 380,354 0 22,745 49,825
John E. Zawacki.................. 1999 271,840 6,796 39,088 28,980
President and CEO 1998 274,856 19,248 56,399 26,394
(since 12/17/99); 1997 279,734 0 21,744 24,492
Vice President (Womenswear)
(until 12/16/99)
</TABLE>
- ---------------
(1) There were no directors' fees paid to the named executive officers during
the years 1997, 1998 and 1999.
(2) On February 18, 1999, the Executive Officer Compensation Committee approved
an incentive award schedule for fiscal year 1999. Executive officers were
eligible to receive awards equal to a percentage of their salary income for
1999. The percentage depends upon the range of the Company's income before
income taxes for the year. The base payout goal is $24 million 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. The income before income taxes in 1999 was $24,164,689. The
1999 incentive awards were paid by the Company in 2000. Incentive
compensation was paid by the Company to its executive officers in 1999 for
1998. No incentive compensation or bonuses were paid by the Company to its
executive officers in 1998 for 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 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.
9
<PAGE> 12
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 12/31/99)
<S> <C> <C>
Murray K. McComas............................... 22,350 $144,240
John A. Lasher.................................. 7,750 50,448
Michael J. Samargya............................. 5,750 38,248
Blair T. Smoulder............................... 12,550 83,039
John E. Zawacki................................. 9,250 61,348
</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>
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $6,585 $6,322 $4,726
John A. Lasher.................................. 773 726 512
Michael J. Samargya............................. 3,931 3,689 4,749
Blair T. Smoulder............................... 2,979 2,844 2,125
John E. Zawacki................................. 740 785 862
</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>
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $ 0 $ 0 $ 9,494
John A. Lasher.................................. 5,217 0 1,954
Michael J. Samargya............................. 18,984 6,328 5,886
Blair T. Smoulder............................... 14,629 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
10
<PAGE> 13
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>
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $11,295 $11,153 $ 9,452
John A. Lasher.................................. 12,029 11,501 12,140
Michael J. Samargya............................. 13,314 11,108 11,540
Blair T. Smoulder............................... 11,954 11,330 13,918
John E. Zawacki................................. 11,232 10,617 13,630
</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>
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas............................... $5,478 $8,503 $5,778
John A. Lasher.................................. 5,431 8,430 5,728
Michael J. Samargya............................. 5,471 8,493 5,771
Blair T. Smoulder............................... 5,461 8,477 5,760
John E. Zawacki................................. 5,444 8,451 5,742
</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>
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Murray K. McComas...................... $27,233 $14,582 $13,993
John A. Lasher......................... 5,992 1,562 1,456
Michael J. Samargya.................... 10,703 3,181 4,555
Blair T. Smoulder...................... 15,159 6,698 7,039
John E. Zawacki........................ 7,015 2,793 3,170
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Executive Committee of the Board of Directors.
Up until January 17, 2000, the Executive Committee of the Board of Directors
consisted of Murray K. McComas, Thomas P. McKeever, Blair T. Smoulder, and John
E. Zawacki. As of January 18, 2000, the Executive Committee of the Board of
Directors consists of Murray K. McComas, Robert W. Blair, John O. Hanna, Craig
N. Johnson 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.
Prior to January 18, 2000, the Company had a standing Nominating Committee,
which consisted of Robert W. Blair, John O. Hanna, Craig N. Johnson, and Murray
K. McComas. The Nominating Committee had been responsible for considering and
recommending the nominees for directors to stand for 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
standing
11
<PAGE> 14
Executive Committee of the Board of Directors assumed all of the duties of the
Nominating Committee as of January 18, 2000.
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 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 1999, the Board of Directors held 8 meetings. The Executive
Committee held 14 meetings, and the Employee Stock Purchase Plan Committee and
Nominating Committee each met 3 times. The Executive Officer Compensation
Committee held 3 meetings, and the Audit Committee held 3 meetings. 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 1999, 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 20, 1999 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 20,
1999. The aggregate value of this April 20, 1999 cash grant was $26,344. In
1999, 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
former President and current Chairman of the Board, participated in the
evaluation and discussion of appropriate salary levels for all executive
officers other than himself and Blair T. Smoulder, Executive Vice President,
Thomas P. McKeever, Vice President (Corporate Affairs and Human Resources), and
John E. Zawacki, former Vice President (Womenswear) and new President and Chief
Executive Officer, at the request of the Executive Officer Compensation
Committee.
COMPENSATION COMMITTEE REPORTS ON
EXECUTIVE OFFICER COMPENSATION
For fiscal year 1999, 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 1999.
12
<PAGE> 15
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 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 up until
December 16, 1999, participated in the evaluation and discussion of appropriate
salary levels for all executive officers other than himself and Blair T.
Smoulder, Executive Vice President, Thomas P. McKeever, Vice President
(Corporate Affairs and Human Resources) and John E. Zawacki, former Vice
President (Womenswear) and new President and Chief Executive Officer of the
Company.
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 Company's Salary Review
Task Force 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, 1998 or 1999. 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 were implemented in April, 1999 and will be
concluded with salary reductions to their respective ranges in April, 2000.
On January 19, 1998 and February 18, 1999, the EOC Committee reviewed and
approved the incentive award schedules for fiscal year 1998 and 1999,
respectively. 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 goals were $23,500,000 for 1998 and
$24,000,000 for 1999. No incentive awards are received unless the Company's
income before income taxes equals or exceeds this threshold
13
<PAGE> 16
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 1999, 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.
Awards in 1999 for participating employees ranged from 250 shares to 5,000
shares, with 1,547 being the average number of shares sold to the Company's
executive officers. The purchase price for all shares sold under the Plan in
1999 was $6.50 per share, at a time when the Company's Common Stock was trading
at $19.88 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.
14
<PAGE> 17
Mr. McComas, the Company's Chief Executive Officer up until December 16,
1999, received a grant of 3,000 shares, having a value of $40,125 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
15
<PAGE> 18
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 two industry indexes. The two industry
indexes are the S&P Retail Stores Composite Index (the "old industry index"),
the index used in the performance graph of the proxy statement for the April 20,
1999 annual meeting of stockholders, and an industry peer group index selected
by the Company ("Peer Group Index"). The Peer Group Index consists of Coldwater
Creek, Inc., Concepts Direct, Inc., dELiA*s, Inc., Hanover Direct, Inc., J Jill
Group, Inc., Lands' End, Inc., Lillian Vernon Corp., Real Goods Trading Corp.,
Sharper Image Corp., Spiegel, Inc. and Williams-Sonoma, Incorporated. The change
from the old industry index to the Peer Group Index reflects what the Company
believes is an index that is more representative of the Company's industry.
Companies selected for the Peer Group Index market their products through
alternative channels, such as the mail and e-commerce, much like Blair, while
the old industry index focuses more on storefront retailers.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
Among Blair Corporation Common Stock, AMEX Market Value Index
Peer Group Index and S&P Retail Stores Composite Index**
<TABLE>
<CAPTION>
AMEX MARKET VALUE S&P RETAIL STORES
BLAIR CORPORATION INDEX PEER GROUP INDEX*** COMPOSITE INDEX
----------------- ----------------- ------------------- -----------------
<S> <C> <C> <C> <C>
1/1/95 100 100 100 100
1995 85 126 71 112
1996 54 135 101 132
1997 50 158 123 191
1998 66 159 142 308
1999 43 202 158 373
</TABLE>
Assumes $100 invested on January 1, 1995 in Blair Corporation Stock, AMEX Market
Value Index, Peer Group Index and S&P Retail Composite Index.
* Total return assumes reinvestment of dividends.
** Fiscal year ending December 31.
*** Coldwater Creek, Inc. and dELiA*s, Inc. were not public companies for the
full five years 1/1/95 through 12/31/99. Coldwater Creek, Inc. was included in
the Peer Group Index 1998 and 1999, and dELiA*s, Inc. 1997 through 1999,
respectively.
The closing price of the Company's Common Stock on the American Stock
Exchange on March 3, 2000, was $17.75.
16
<PAGE> 19
PROPOSAL 2. APPROVAL OF THE BLAIR CORPORATION
2000 OMNIBUS STOCK PLAN
The Board of Directors has adopted, subject to shareholder approval at the
Annual Meeting, the Company's 2000 Omnibus Stock Plan (the "Omnibus Plan"). The
Omnibus Plan is a new comprehensive benefit plan that gives the Company the
ability to offer a variety of equity based incentives and awards to persons who
are key to the Company's growth, development and financial success. The Board of
Directors believes that the adoption of the Omnibus Plan will assist the Company
in attracting and retaining qualified personnel, advisors and directors.
The following is a summary of the material terms of the Omnibus Plan. The
full text of the Omnibus Plan is set forth in Exhibit "A" of this Proxy
Statement, which is incorporated herein by this reference.
GENERAL
The Omnibus Plan permits the grant of awards to officers, directors,
employees and consultants of the Company or of any of the Company's affiliates
(each, a "Participant"). The Omnibus Plan provides for the grant of incentive
stock options qualifying under Section 422 of the Internal Revenue Code of 1986,
as amended, (the "Code") ("Incentive Stock Options"), non-qualified stock
options, restricted or unrestricted stock awards, awards denominated in
stock-equivalent units ("Phantom Stock"), performance awards, stock appreciation
rights ("SARs") or any combination of the foregoing (collectively, the
"Awards"). Employees, officers, directors and consultants of the Company or its
affiliates are all eligible participants for all Awards, except that Incentive
Stock Options only may be granted to employees.
The Omnibus Plan will be administered by the Executive Officer Compensation
Committee of the Board of Directors, or by such other committee designated by
the Board of Directors (the "Committee"). The Committee construes and interprets
the Omnibus Plan, determines the terms and conditions of the Awards granted
under the Omnibus Plan, including the individuals who are to be granted Awards,
the type of Awards to be granted, the number of shares subject to an Award and
the vesting and duration of Awards, subject to any restrictions contained in the
Omnibus Plan. Awards may be granted individually or in tandem with other types
of Awards.
A maximum of 750,000 shares of Common Stock will be reserved and available
for Awards under the Omnibus Plan. Adoption of the Omnibus Plan will permit the
Company to issue up to 750,000 shares of Common Stock, which would constitute
approximately 9% of the total shares of Common Stock outstanding assuming all
such shares were issued and no other shares of Common Stock were issued. The
Company believes that, while the potential future issuance of shares under the
Omnibus Plan will be dilutive to present and future shareholders, the issuance
of Awards under the Omnibus Plan for compensatory purposes will have the effect
of motivating management and others to perform, which in turn should be
reflected through the increase in value of the Company's Common Stock and any
increase will offset, to some degree, the dilution to be experienced by current
and future shareholders.
AWARDS
OPTIONS. The Committee may grant to eligible Participants Awards of
Incentive Stock Options or nonqualified stock options; provided, however, that
Awards of Incentive Stock Options shall be limited to employees of the Company
or of any parent or subsidiary of the Company. The exercise price of Incentive
Stock Options granted under the Omnibus Plan must be at least equal to the fair
market value of the Common Stock of the Company on the date of grant; however,
if at the time the Incentive Stock Option is granted to the Participant, such
Participant owns Common Stock representing more than 10% of the total combined
voting securities of the Company (10% owner), the exercise price may not be less
than 110% of the fair market value of the Common Stock on the date of grant.
Nonqualified stock options may be granted under the Omnibus Plan with an
exercise price not less than the fair market value of the Common Stock on the
date of grant. Incentive Stock Options granted under the Omnibus Plan may be
exercised at such times as the Committee determines, but in no event shall an
Incentive
17
<PAGE> 20
Stock Option be exercisable more than ten years from the date of grant (or five
years from the date of grant for a 10% owner). It is the current intention of
the Company that no options granted pursuant to the Omnibus Plan shall be
repriced, except in the context of a stock dividend, split-up, recapitalization,
merger, consolidation, business combination or exchange of shares or the like
which event affects similarly all of the Company's outstanding shares of Common
Stock.
STOCK APPRECIATION RIGHTS. The Omnibus Plan provides for the award of SARs
to eligible Participants. A SAR is an incentive Award that permits the holder to
receive, subject to the provisions of the Omnibus Plan and the Grant Agreement
evidencing such Award, a payment having an aggregate value equal to the product
of (i) the excess of (A) the fair market value on the date of exercise of one
share of Common Stock over (B) the base price per share specified in the Grant
Agreement, times (ii) the number of shares specified by the SAR, or portion
thereof, which is exercised. Payment by the Company of the amount receivable
upon any exercise of a SAR may be made by the delivery of Common Stock or cash,
or any combination of Common Stock and cash, as determined in the sole
discretion of the Committee.
STOCK AWARDS. The Omnibus Plan provides for grants of restricted or
unrestricted stock awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as the Committee may
determine.
PHANTOM STOCK. Phantom Stock units granted to a participant shall be
credited to a bookkeeping reserve account solely for accounting purposes and
shall not require a segregation of any of the Company's assets. Except as
otherwise provided in the applicable Grant Agreement, a grantee of Phantom Stock
shall not have the rights of a stockholder with respect to any shares of Common
Stock represented by a Phantom Stock unit solely as a result of the grant of a
Phantom Stock unit to the grantee.
PERFORMANCE AWARDS. A Performance Award is an incentive Award whereby the
Company commits to make a distribution depending on the attainment of one or
more performance goals established by the Committee. Performance goals
established by the Committee may be based on the Company's or an Affiliate's
operating income or one or more other business criteria selected by the
Committee that apply to an individual or group of individuals, a business unit,
or the Company or an Affiliate as a whole, over such performance period as the
Committee may designate.
AMENDMENT
The Omnibus Plan may be amended, modified or terminated by the Board of
Directors, but no such action may impair the rights of a participant under a
previously granted Award without the consent of such participant.
ADJUSTMENTS; BUSINESS COMBINATIONS
In the event of changes in the Common Stock of the Company by reason of any
stock dividend, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares or the like, the Committee shall, in its
discretion, make appropriate adjustments to the maximum number and kind of
shares reserved for issuance or with respect to which Awards may be granted
under the Omnibus Plan and to the number, kind and price of shares covered by
outstanding Awards, and shall, in its discretion and without the consent of
holders of Awards, make any other adjustments in outstanding Awards, including
but not limited to reducing the number of shares subject to Awards or providing
or mandating alternative settlement methods such as settlement of the Awards in
cash or in shares of Common Stock or other securities of the Company or of any
other entity, or in any other matters which relate to Awards as the Committee
shall, in its sole discretion, determine to be necessary or appropriate.
Notwithstanding anything in the Omnibus Plan to the contrary and without
the consent of holders of Awards, the Committee, in its sole discretion, may
make any modifications to any Awards, including
18
<PAGE> 21
but not limited to cancellation, forfeiture, surrender or other termination of
the Awards in whole or in part regardless of the vested status of the Award, in
order to facilitate any business combination that is authorized by the Board of
Directors to comply with requirements for treatment as a pooling of interests
transaction for accounting purposes under generally accepted accounting
principles.
SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS
Awards may be granted under the Omnibus Plan from time to time in
substitution for Awards held by employees or directors of entities who become or
are about to become employees or directors of the Company or an Affiliate as the
result of a merger or consolidation of the employing entity with the Company or
an Affiliate, or the acquisition by the Company or an Affiliate of the assets or
stock of the employing entity.
NONTRANSFERABILITY
Except as otherwise determined by the Committee, and in any event in the
case of an Incentive Stock Option or a Stock Appreciation Right granted with
respect to an Incentive Stock Option, no Award granted under the Omnibus Plan
shall be transferable by a grantee otherwise than by will or the laws of descent
and distribution.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences of an employee's participation in the
Omnibus Plan are complex and subject to change. The following discussion is only
a summary of the general rules applicable to the Omnibus Plan. Employees should
consult their own tax advisors since a taxpayer's particular situation may be
such that some variation of the rules described below will apply.
Incentive Stock Options. If an option granted under the Omnibus Plan is
treated as an incentive stock option, the optionee will not recognize any income
upon either the grant or the exercise of the option, and the Company will not be
allowed a deduction for federal tax purposes. Upon a sale of the shares obtained
through exercise of the option, the tax treatment to the optionee and the
Company will depend primarily upon whether the optionee has met certain holding
period requirements at the time he or she sells the shares. In addition, as
discussed below, the exercise of an incentive stock option may subject the
optionee to alternative minimum tax liability. If an optionee exercises an
incentive stock option and either holds the shares received for at least two
years following the date of such option grant or, alternatively, holds the
shares for at least one year following the date the shares are transferred to
him or her, any gain realized upon the disposition will be characterized as
long-term capital gain. In such cases, the Company will not be entitled to a
federal tax deduction relating to the option grant, exercise and subsequent sale
by the optionee of the shares. If the optionee disposes of the shares either
within two years after the date the option is granted or within one year after
the transfer of the shares to him or her, such disposition will be treated as a
"disqualifying disposition" and an amount equal to the lesser of (1) the fair
market value of the shares on the date of exercise minus the purchase price, or
(2) the amount realized on the disposition minus the purchase price, will be
taxed as ordinary income to the optionee in the taxable year in which the
disposition occurs. (However, in the case of gifts, sales to related parties,
and certain other transactions, the full difference between the fair market
value of the stock and the purchase price will be treated as compensation
income). The excess, if any, of the amount realized upon disposition over the
fair market value at the time of the exercise of the option will be treated as
long-term capital gain if the shares have been held for more than one year
following the exercise of the option. In the event of a disqualifying
disposition, the Company may withhold income taxes from the optionee's
compensation with respect to the ordinary income realized by the optionee as a
result of the disqualifying disposition. The exercise of an incentive stock
option may subject an optionee to alternative minimum tax liability because the
excess of the fair market value of the shares at the time an incentive stock
option is exercised over the purchase price of the shares is included in income
for purposes of the alternative minimum tax even though it is not included in
taxable income for purposes of determining the regular tax liability of an
employee. Consequently, an optionee may be obligated to pay
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<PAGE> 22
alternative minimum tax in the year he or she exercises an incentive stock
option. In general, there will be no federal income tax deductions allowed to
the Company upon the grant, exercise, or termination of an incentive stock
option. However, in the event an optionee sells or disposes of stock received on
the exercise of an incentive stock option in a disqualifying disposition, the
Company will be entitled to a deduction for federal income tax purposes in an
amount equal to the ordinary income, if any, recognized by the optionee upon
disposition of the shares, provided that the deduction is not otherwise
disallowed under the Code.
Nonqualified Stock Options. Nonqualified stock options granted under the
Omnibus Plan do not qualify as "incentive stock options" and will not qualify
for any special tax benefits to the optionee. An optionee generally will not
recognize any taxable income at the time he or she is granted a nonqualified
option. However, upon its exercise, the optionee will recognize ordinary income
for federal tax purposes measured by the excess of the then fair market value of
the shares over the exercise price. The income realized by the optionee will be
subject to income and other employee withholding taxes. The optionee's basis for
determination of gain or loss upon the subsequent disposition of shares acquired
upon the exercise of a nonqualified stock option will be the amount paid for
such shares plus any ordinary income recognized as a result of the exercise of
such option. Upon disposition of any shares acquired pursuant to the exercise of
a nonqualified stock option, the difference between the sale price and the
optionee's basis in the shares will be treated as a capital gain or loss and
generally will be characterized as long-term capital gain or loss if the shares
have been held for more than one year at their disposition. In general, there
will be no federal income tax deduction allowed to the Company upon the grant or
termination of a nonqualified stock option or a sale or disposition of the
shares acquired upon the exercise of a nonqualified stock option. However, upon
the exercise of a nonqualified stock option, the Company will be entitled to a
deduction for federal income tax purposes equal to the amount of ordinary income
that an optionee is required to recognize as a result of the exercise, provided
that the deduction is not otherwise disallowed under the Code.
SARs. SARs are taxed to recipients and are deductible by the Company in
substantially the same manner as nonqualified stock options. A recipient
generally will not recognize any taxable income at the time he or she is granted
a SAR. However, upon its exercise, the recipient will recognize ordinary income
for federal tax purposes measured by the excess of (i) the then fair market
value on the date of exercise of one share of Common Stock over (ii) the price
per share specified in the Award Agreement, multiplied by (iii) the number of
shares awarded. Upon exercise, the Company will be entitled to a deduction for
federal income tax purposes equal to the amount of ordinary income that a
recipient is required to recognize as a result of the exercise, provided that
the deduction is not otherwise disallowed under the Code.
Stock Awards. The Omnibus Plan provides for grants of restricted and
unrestricted stock awards. Unrestricted stock awards give rise to ordinary
income based on the fair market value of the stock received by the recipient as
of the date of receipt. The Company generally is entitled to a deduction equal
to the amount of ordinary income recognized by the recipient, provided that the
deduction is not otherwise disallowed under the Code. Restricted stock awards
that are subject to a substantial risk of forfeiture generally give rise to
ordinary income equal to the excess of the fair market value of the stock over
the purchase price only at the time the risk of forfeiture lapses (unless the
recipient elects to accelerate recognition as of the date of grant). The Company
generally is entitled to a deduction equal to the amount of ordinary income
recognized by the recipient upon lapse of the risk of forfeiture, provided that
the deduction is not otherwise disallowed under the Code.
Phantom Stock. Phantom Stock awards generally are includible as ordinary
income by a recipient at the time of payment rather than when amounts are
credited to a book reserve account in the name of the recipient. The Company
generally is entitled to a deduction equal to the amount of ordinary income
recognized by the recipient upon payment, provided that the deduction is not
otherwise disallowed under the Code.
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<PAGE> 23
Performance Awards. Performance awards generally are includible as ordinary
income by a recipient at the time of payment. The Company generally is entitled
to a deduction equal to the amount of ordinary income recognized by the
recipient upon payment, provided that the deduction is not otherwise disallowed
under the Code
The Board of Directors recommends approval of the Blair Corporation 2000
Omnibus Stock Plan.
PROPOSAL 3. 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, 2000, 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 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 2001 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, 2000. A proposal submitted by a
stockholder outside of the process of Rule 14a-8 for the 2001 Annual Meeting of
Stockholders will not be considered timely unless notice of such proposal is
received by the Company prior to February 2, 2001. The proxy to be solicited on
behalf of the Company for the 2001 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 2001 Annual Meeting
of Stockholders.
EXPENSE OF SOLICITATION OF PROXIES
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Georgeson
Shareholder Communications, Inc., a proxy solicitation firm, will assist the
Company in soliciting proxies for the Annual Meeting and will be paid a fee of
$6,000, plus out-of-pocket expenses. Proxies may also be solicited personally or
by telephone by directors, officers and other employees of the Company without
additional compensation therefor. The Company will also request persons, firms
and companies holding shares in their names, or in the name of their nominees,
which are beneficially owned by others, to send proxy material to and obtain
proxies from such beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
DAVID A. BLAIR
Secretary
March 17, 2000
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<PAGE> 24
EXHIBIT A
BLAIR CORPORATION
2000 OMNIBUS STOCK PLAN
1. PURPOSE AND TYPES OF AWARDS
Blair Corporation (the "Company") hereby establishes the Blair Corporation
2000 Omnibus Stock Plan (the "Plan"). The purpose of the Plan is to promote the
long-term growth and profitability of the Company by (i) providing key people
with incentives to improve stockholder value and to contribute to the growth and
financial success of the Company and (ii) enabling the Company to attract,
retain and reward the best-available persons.
The Plan permits the granting of stock options (including incentive stock
options qualifying under Section 422 of the Internal Revenue Code of 1986, as
amended, and nonqualified stock options), stock appreciation rights, restricted
or unrestricted stock awards, phantom stock, performance awards, or any
combination of the foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Affiliate" shall mean any entity, whether now or hereafter existing,
which controls, is controlled by, or is under common control with, the Company
(including, but not limited to, joint ventures, limited liability companies, and
partnerships). For this purpose, "control" shall mean ownership of 50% or more
of the total combined voting power or value of all classes of stock or interests
of the entity.
(b) "Award" shall mean any stock option, stock appreciation right, stock
award, phantom stock award, or performance award granted under this Plan.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.
(e) "Common Stock" shall mean shares of common stock of the Company,
without par value.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" of a share of the Company's Common Stock for any
purpose on a particular date shall be determined in a manner such as the
Administrator shall in good faith determine to be appropriate; provided that in
the event the Common Stock shall become registered under Section 12 of the
Exchange Act, then thereafter the Fair Market Value of the Company's Common
Stock for any purpose on a particular date shall mean the last reported sale
price per share of Common Stock, regular way, on such date or, in case no such
sale takes place on such date, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on a national securities exchange or included for quotation on the
Nasdaq National Market, or if the Common Stock is not so listed or admitted to
trading or included for quotation, the last quoted price, or if the Common Stock
is not so quoted, the average of the high bid and low asked prices, regular way,
in the over-the-counter market as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or if such system is no
longer in use, the principal other automated quotations system that may then be
in use or if the Common Stock is not quoted by any such organization, the
average of the closing bid and asked prices, regular way, as furnished by a
professional market maker making a market in the Common Stock as selected in
good faith by the Administrator or by such other source or sources as shall be
selected in good faith by the Administrator. If, as the case may be, the
relevant date
<PAGE> 25
is not a trading day, the determination shall be made as of the next preceding
trading day. As used herein, the term "trading day" shall mean a day on which
public trading of securities occurs and is reported in the principal
consolidated reporting system referred to above, or if the Common Stock is not
listed or admitted to trading on a national securities exchange or included for
quotation on the Nasdaq National Market, any business day.
(h) "Grant Agreement" shall mean a written document memorializing the terms
and conditions of an Award granted pursuant to the Plan and shall incorporate
such terms of the Plan as the Administrator or the Board shall deem appropriate.
(i) "Parent" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in Code
section 424(e), or any successor thereto.
(j) "Subsidiary" and "subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424 of the Code, or
any successor provision thereto.
3. ADMINISTRATION
(a) Administration of the Plan. The Plan shall be administered by the Board
or by such committee or committees as may be appointed by the Board from time to
time (the Board, committee or committees hereinafter referred to as the
"Administrator").
(b) Powers of the Administrator. The Administrator shall have all the
powers vested in it by the terms of the Plan, such powers to include authority,
in its sole and absolute discretion, to grant Awards under the Plan, prescribe
Grant Agreements evidencing such Awards and establish programs for granting
Awards.
The Administrator shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to (i) determine the eligible persons to whom,
and the time or times at which Awards shall be granted, (ii) determine the types
of Awards to be granted, (iii) determine the number of shares to be covered by
or used for reference purposes for each Award, (iv) impose such terms,
limitations, restrictions and conditions upon any such Award as the
Administrator shall deem appropriate, (v) accelerate or otherwise change the
time in which an Award may be exercised or becomes payable and to waive or
accelerate the lapse, in whole or in part, of any restriction or condition with
respect to the vesting or exercisability of an Award following termination of
any grantee's employment and (vi) establish objectives and conditions, if any,
for earning Awards and determining whether Awards will be paid after the end of
a performance period.
The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
(c) Non-Uniform Determinations. The Administrator's determinations under
the Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the Grant Agreements evidencing such Awards) need not be uniform
and may be made by the Administrator selectively among persons who receive, or
are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.
(d) Limited Liability. To the maximum extent permitted by law, no member of
the Administrator shall be liable for any action taken or decision made in good
faith relating to the Plan or any Award thereunder.
(e) Indemnification. To the maximum extent permitted by law and by the
Company's charter and by-laws, the members of the Administrator shall be
indemnified by the Company in respect of all their activities under the Plan.
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<PAGE> 26
(f) Effect of Administrator's Decision. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator's
sole and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its stockholders, any participants in the Plan
and any other employee of the Company, and their respective successors in
interest.
4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS
Subject to adjustments as provided in Section 7(d) of the Plan, the shares
of Common stock that may be issued with respect to Awards granted under the Plan
shall not exceed an aggregate of 750,000 shares of Common Stock. The Company
shall reserve such number of shares for Awards under the Plan, subject to
adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of
an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated surrendered or canceled as
to any shares, or if any shares of Common Stock are surrendered to the Company
in connection with any Award (whether or not such surrendered shares were
acquired pursuant to any Award), the shares subject to such Award and the
surrendered shares shall thereafter be available for further Awards under the
Plan; provided, however, that any such shares that are surrendered to the
Company in connection with any Award or that are otherwise forfeited after
issuance shall not be available for purchase pursuant to incentive stock options
intended to qualify under Code section 422.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers,
directors, and consultants of the Company, or of any Affiliate of the Company as
may be selected by the Administrator from time to time.
6. AWARDS
The Administrator, in its sole discretion, establishes the terms of all
Awards granted under the Plan. Awards may be granted individually or in tandem
with other types of Awards. Each Award is subject to the terms and conditions
provided in the Grant Agreement relating to such Award.
(a) Stock Options. The Administrator may from time to time grant to
eligible participants Awards of incentive stock options as that term is defined
in Code section 422 or nonqualified stock options; provided, however, that
Awards of incentive stock options shall be limited to employees of the Company
or of any Parent or Subsidiary of the Company. Options intended to qualify as
incentive stock options under Code section 422 and nonqualified options must
have an exercise price at least equal to Fair Market Value on the date of grant.
No stock option shall be an incentive stock option unless so designated by the
Administrator at the time of grant or in the Grant Agreement evidencing such
stock option.
(b) Stock Appreciation Rights. The Administrator may from time to time
grant to eligible participants Awards of Stock Appreciation Rights ("SAR"). A
SAR entitles the grantee to receive, subject to the provisions of the Plan and
the Grant Agreement, a payment having an aggregate value equal to the product of
(i) the excess of (A) the Fair Market Value on the exercise date of one share of
Common Stock over (B) the base price per share specified in the Grant Agreement,
times (ii) the number of shares specified by the SAR, or portion thereof, which
is exercised. Payment by the Company of the amount receivable upon any exercise
of a SAR may be made by the delivery of Common Stock or cash, or any combination
of Common Stock and cash, as determined in the sole discretion of the
Administrator. If upon settlement of the exercise of a SAR a grantee is to
receive a portion of such payment in shares of Common Stock, the number of
shares shall be determined by dividing such portion by the Fair Market Value of
a share of Common Stock on the exercise date. No fractional shares shall be used
for such payment and the Administrator shall determine whether cash shall be
given in lieu of such fractional shares or whether such fractional shares shall
be eliminated.
3
<PAGE> 27
(c) Stock Awards. The Administrator may from time to time grant restricted
or unrestricted stock Awards to eligible participants in such amounts on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as it shall determine. A
stock Award may be paid in Common Stock, in cash, or in a combination of Common
Stock and cash, as determined in the sole discretion of the Administrator.
(d) Phantom Stock. The Administrator may from time to time grant Awards to
eligible participants denominated in stock-equivalent units ("phantom stock") in
such amounts and on such terms and conditions as it shall determine. Phantom
stock units granted to a participant shall be credited to a bookkeeping reserve
account solely for accounting purposes and shall not require a segregation of
any of the Company's assets. An Award of phantom stock may be settled in Common
Stock, in cash, or in a combination of Common Stock and cash, as determined in
the sole discretion of the Administrator. Except as otherwise provided in the
applicable Grant Agreement, the grantee shall not have the rights of a
stockholder with respect to any shares of Common Stock represented by a phantom
stock unit solely as a result of the grant of a phantom stock unit to the
grantee.
(e) Performance Awards. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one or more
performance goals established by the Administrator. Performance awards may be
paid by the delivery of Common Stock or cash, or any combination of Common Stock
and cash, as determined in the sole discretion of the Administrator. Performance
goals established by the Administrator may be based on the Company's or an
Affiliate's operating income or one or more other business criteria selected by
the Administrator that apply to an individual or group of individuals, a
business unit, or the Company or an Affiliate as a whole, over such performance
period as the Administrator may designate.
7. MISCELLANEOUS
(a) Withholding of Taxes. Grantees and holders of Awards shall pay to the
Company or its Affiliate, or make provision satisfactory to the Administrator
for payment of, any taxes required to be withheld in respect of Awards under the
Plan no later than the date of the event creating the tax liability. The Company
or its Affiliate may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the grantee or holder
of an Award. In the event that payment to the Company or its Affiliate of such
tax obligations is made in shares of Common Stock, such shares shall be valued
at Fair Market Value on the applicable date for such purposes
(b) Loans. The Company or its Affiliate may make or guarantee loans to
grantees to assist grantees in exercising Awards and satisfying any withholding
tax obligations.
(c) Transferability. Except as otherwise determined by the Administrator,
and in any event in the case of an incentive stock option or a stock
appreciation right granted with respect to an incentive stock option, no Award
granted under the Plan shall be transferable by a grantee otherwise than by will
or the laws of descent and distribution. Unless otherwise determined by the
Administrator in accordance with the provisions of the immediately preceding
sentence, an Award may be exercised during the lifetime of the grantee, only by
the grantee or, during the period the grantee is under a legal disability, by
the grantee's guardian or legal representative.
(d) Adjustments; Business Combinations. In the event of changes in the
Common Stock of the Company by reason of any stock dividend, split-up,
recapitalization, merger, consolidation, business combination or exchange of
shares and the like, the Administrator shall, in its discretion, make
appropriate adjustments to the maximum number and kind of shares reserved for
issuance or with respect to which Awards may be granted under the Plan as
provided in Section 4 of the Plan and to the number, kind and price of shares
covered by outstanding Awards, and shall, in its discretion and without the
consent of holders of Awards, make any other adjustments in outstanding Awards,
including but not limited to reducing the number of shares subject to Awards or
providing or mandating alternative settlement methods such as settlement of the
Awards in cash or in shares of Common Stock or other
4
<PAGE> 28
securities of the Company or of any other entity, or in any other matters which
relate to Awards as the Administrator shall, in its sole discretion, determine
to be necessary or appropriate.
Notwithstanding anything in the Plan to the contrary and without the
consent of holders of Awards, the Administrator, in its sole discretion, may
make any modifications to any Awards, including but not limited to cancellation,
forfeiture, surrender or other termination of the Awards in whole or in part
regardless of the vested status of the Award, in order to facilitate any
business combination that is authorized by the Board to comply with requirements
for treatment as a pooling of interests transaction for accounting purposes
under generally accepted accounting principles.
The Administrator is authorized to make, in its discretion and without the
consent of holders of Awards, adjustments in the terms and conditions of, and
the criteria included in, Awards in recognition of unusual or nonrecurring
events affecting the Company, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
(e) Substitution of Awards in Mergers and Acquisitions. Awards may be
granted under the Plan from time to time in substitution for Awards held by
employees or directors of entities who become or are about to become employees
or directors of the Company or an Affiliate as the result of a merger or
consolidation of the employing entity with the Company or an Affiliate, or the
acquisition by the Company or an Affiliate of the assets or stock of the
employing entity. The terms and conditions of any substitute Awards so granted
may vary from the terms and conditions set forth herein to the extent that the
Administrator deems appropriate at the time of grant to conform the substitute
Awards to the provisions of the awards for which they are substituted.
(f) Stock Restriction Agreement. As a condition precedent to the grant of
any Award under the Plan or the exercise pursuant to such an Award or to the
delivery of certificates for shares issued pursuant to any Award, the
Administrator may require the grantee or the grantee's successor or permitted
transferee, as the case may be, to become a party to a stock restriction
agreement of the Company, in such form as the Administrator may determine from
time to time.
(g) Termination, Amendment and Modification of the Plan. The Board may
terminate, amend or modify the Plan or any portion thereof at any time. The
termination or any modification or amendment of the Plan shall not, without the
consent of an Award grantee, affect his or her rights under an Award previously
granted to him or her. With the consent of the grantees affected (if so required
hereby), the Board of Directors may amend outstanding Grant Agreements in a
manner not inconsistent with the Plan.
(h) Non-Guarantee of Employment or Service. Nothing in the Plan or in any
Grant Agreement thereunder shall confer any right on an individual to continue
in the service of the Company or shall interfere in any way with the right of
the Company to terminate such service at any time.
(i) Compliance with Securities Laws; Listing and Registration. Common Stock
shall not be issued with respect to an Award granted under the Plan unless the
exercise of such Award and the issuance and delivery of stock certificates for
such Common Stock pursuant thereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933 and the Exchange
Act, the rules and regulations promulgated thereunder, and the requirements of
any national securities exchange or any listing or quotation system established
by the National Association of Securities Dealers, Inc. ("Nasdaq System") upon
which the Common Stock may then be listed or quoted, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance to the extent such approval is sought by the Committee. The Company
may require that a grantee, as a condition to exercise of an Award, and as a
condition to the delivery of any share certificate, provide to the Company, at
the time of each such exercise and each such delivery, a written representation
that the shares of Common Stock being acquired shall be acquired by the grantee
solely for investment and will not be sold or transferred without registration
or the availability of an exemption from registration under the
5
<PAGE> 29
Securities Act and applicable state securities laws. The stock certificates for
any shares of Common Stock issued pursuant to this Plan may bear a legend
restricting transferability of the shares of Common Stock unless such shares are
registered or an exemption from registration is available under the Securities
Act and applicable state securities laws.
(j) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a grantee or any other person. To the
extent that any grantee or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.
(k) Governing Law. The validity, construction and effect of the Plan, of
Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant Agreements, and the rights of any and all persons having
or claiming to have any interest therein or thereunder, shall be determined
exclusively in accordance with applicable federal laws and the laws of the State
of Delaware, without regard to its conflict of laws principles.
(l) Effective Date, Termination Date. The Plan is effective as of the date
on which the Plan was adopted by the Board, subject to approval of the
stockholders within twelve months before or after such date. No Award shall be
granted under the Plan after the close of business on the day immediately
preceding the tenth anniversary of the effective date of the Plan. Subject to
other applicable provisions of the Plan, all Awards made under the Plan prior to
such termination of the Plan shall remain in effect until such Awards have been
satisfied or terminated in accordance with the Plan and the terms of such
Awards.
6
<PAGE> 30
[BLAIR CORPORATION LOGO]
DETACH CARD
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF BLAIR
CORPORATION
[BLAIR CORPORATION LOGO]
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 18, 2000 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.
The Board recommends a vote FOR the election of the nominees
listed in Item 1.
1. THE ELECTION OF DIRECTORS
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as shown below to the contrary) to vote for all
nominees listed below
David A. Blair, Robert W. Blair, Steven M. Blair, Robert
D. Crowley, John O. Hanna, Gerald A. Huber, Craig N.
Johnson, Murray K. McComas, Thomas P. McKeever, Kent R.
Sivillo, Blair T. Smoulder, John E. Zawacki
(Instructions: to withhold authority to vote for any
individual nominee, strike a line through that nominee's
name.)
The Board recommends a vote FOR the approval of the Blair
Corporation 2000 Omnibus Stock Plan in Item 2.
2. APPROVAL OF THE BLAIR CORPORATION 2000 OMNIBUS STOCK PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board recommends a vote FOR the ratification of Ernst &
Young LLP as auditors in Item 3.
3. RATIFICATION OF ERNST & YOUNG LLP AS AUDITORS:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed, on the reverse side)
P
R
O
X
Y
<PAGE> 31
[Blair Building Picture]
BLAIR CORPORATION HEADQUARTERS
220 Hickory Street
Warren, Pennsylvania
DETACH CARD
- --------------------------------------------------------------------------------
Proxy No. (Continued from reverse side) Shares
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 1, FOR THE
APPROVAL OF THE BLAIR CORPORATION 2000 OMNIBUS STOCK PLAN IN
ITEM 2, AND FOR THE RATIFICATION OF AUDITORS IN ITEM 3; 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.
DATE: ___________, 2000
--------------------------
--------------------------
(Sign here)
INSTRUCTIONS: The signer
hereby revokes all proxies
heretofore given by the
signer to vote at said
meeting or any
adjournments thereof.
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.
PLEASE SIGN, DATE, AND RETURN YOUR PROXY
PROMPTLY IN THE
ENCLOSED ENVELOPE TO NATIONAL CITY BANK,
P.O. BOX 92301,
CLEVELAND, OHIO 44197-1200.
