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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] 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
CLARCOR INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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CLARCOR LOGO
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of CLARCOR Inc. (the "Company") will be
held at The University of Illinois College of Medicine at Rockford, 1601
Parkview Ave., Rockford, Illinois 61107, on Tuesday, March 27, 2001 at 6:00
P.M., Central Standard Time, for the following purposes:
1. To elect three Directors for a term of three years each and one
Director for a term of two years; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of CLARCOR Common Stock of record at the close of business on
Friday, February 9, 2001 are entitled to receive notice of and to vote at the
meeting or any adjournment thereof.
Whether or not you plan to attend the meeting, you are requested to sign
and date the enclosed proxy and return it promptly in the envelope enclosed for
that purpose.
DAVID J. BOYD
Secretary
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY
AND MAIL IT PROMPTLY.
Rockford, Illinois
February 23, 2001
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CLARCOR INC.
2323 SIXTH STREET
P.O. BOX 7007
ROCKFORD, ILLINOIS 61125
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CLARCOR Inc. (the "Company") for use at the
Annual Meeting of Shareholders to be held at The University of Illinois College
of Medicine at Rockford, 1601 Parkview Ave., Rockford, Illinois 61107, on
Tuesday, March 27, 2001 at 6:00 P.M., Central Standard Time, for the purposes
set forth in the Notice of Annual Meeting. This Proxy Statement and the
accompanying proxy are being mailed to shareholders on February 23, 2001.
A shareholder who gives a proxy may revoke it at any time before it is
voted by giving written notice of the termination thereof to the Secretary of
the Company, by filing with him another proxy or by attending the Annual Meeting
and voting his or her shares in person. All valid proxies delivered pursuant to
this solicitation, if received in time and not revoked, will be voted. If no
specifications are given by the shareholder executing the proxy card, valid
proxies will be voted to elect the four persons nominated for election to the
Board of Directors listed on the proxy card enclosed herewith and, in the
discretion of the appointed proxies, upon such other matters as may properly
come before the meeting.
As of February 9, 2001, the Company had outstanding 24,462,933 shares of
Common Stock and each outstanding share is entitled to one vote on all matters
to be voted upon. Only holders of CLARCOR Common Stock of record at the close of
business on February 9, 2001 are entitled to notice of and to vote at the
meeting. A majority of the shares of Common Stock issued and outstanding and
entitled to vote at the meeting, present in person or represented by proxy, will
constitute a quorum for purposes of the Annual Meeting.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
At the Annual Meeting four directors are to be elected. Proxies will be
voted for the election of Messrs. Lawrence E. Gloyd, Norman E. Johnson, Robert
J. Burgstahler and Keith E. Wandell unless the shareholder signing such proxy
withholds authority to vote for one or more of these nominees in the manner
described on the proxy. If a quorum is present at the meeting, the four
candidates for director receiving the greatest number of votes will be elected.
Withholding authority to vote for a director nominee will not prevent such
director nominee from being elected.
Messrs. Gloyd and Johnson are directors of the Company previously elected
by its shareholders whose terms in office expire this year. Mr. Burgstahler was
elected to the Board in December 2000 in anticipation of a vacancy to be caused
by Mr. Carl Dargene's expected retirement from the Board on March 27, 2001. If
elected, Messrs. Gloyd, Johnson and Burgstahler will hold office for a
three-year period ending in 2004 or until their respective successors are duly
elected and qualified.
Mr. Keith E. Wandell has not previously been a member of the Company's
Board. If elected, Mr. Wandell will fill a vacancy on the Board caused by the
expected retirement of Mr. Stanton K. Smith, Jr. from the Board on March 27,
2001. If elected, Mr. Wandell will hold office for a two-year period ending in
2003 or until his successor is duly elected and qualified.
Mr. Dargene and Mr. Smith are retiring from the Board pursuant to a Company
policy which encourages directors to leave the Board upon reaching age 70.
In the event that any of the nominees should for some reason, presently
unknown, fail to stand for election, the persons named in the enclosed form of
proxy intend to vote for substitute nominees.
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INFORMATION CONCERNING NOMINEES AND DIRECTORS
YEAR TERM AS
DIRECTOR DIRECTOR
NAME AGE SINCE EXPIRES
---- --- -------- ------------
* Robert J. Burgstahler 56 December 18, 2000 2004
Mr. Burgstahler was elected Vice President, Finance and
Administrative Services of 3M, St. Paul, Minnesota, in
February 2000. He served as President and General Manager of
3M Canada from 1998 to 2000 and Staff Vice President Taxes of
3M from 1995 to 1998. 3M is a diversified manufacturer.
** Carl J. Dargene 70 April 1, 1989 2001
Mr. Dargene is Chairman Emeritus of AMCORE Financial, Inc.,
Rockford, Illinois. He retired as Chairman of AMCORE
Financial, Inc. in April 2000. Mr. Dargene served as
President and Chief Executive Officer, AMCORE Financial, Inc.
from 1986 to 1996 and he was elected Chairman in May 1995.
AMCORE Financial, Inc. is a bank holding company.
* Lawrence E. Gloyd 68 March 31, 1984 2004
Mr. Gloyd is Chairman Emeritus of CLARCOR Inc. He retired as
Chairman and Chief Executive Officer of CLARCOR Inc. in March
2000. Mr. Gloyd was elected President and Chief Executive
Officer in March 1988 and Chairman, President and Chief
Executive Officer in March 1991. He is a Director of AMCORE
Financial, Inc., Thomas Industries, Inc., Woodward Governor
Company and Genlyte Thomas Group LLC.
* Norman E. Johnson 52 June 26, 1996 2004
Mr. Johnson was elected Chairman, President and Chief
Executive Officer of CLARCOR Inc. in March 2000. He was
elected President and Chief Operating Officer, CLARCOR Inc.
in June 1995. Mr. Johnson was elected President-Baldwin
Filters, Inc. in 1990, Vice President-CLARCOR Inc. in 1992,
and Group Vice President-Filtration Products in 1993.
Milton R. Brown 69 November 29, 1990 2002
Mr. Brown is Chairman and Chief Executive Officer of Suntec
Industries Incorporated, Rockford, Illinois. From 1984 to
2000 he was the Chairman, President and Chief Executive
Officer of Suntec. Suntec Industries manufactures fuel units,
solenoid valves, and safety shut off valves. He is a Director
of AMCORE Financial, Inc., Suntec Industries Incorporated and
Suntec Industries -- France.
Robert H. Jenkins 57 March 23, 1999 2002
Mr. Jenkins is retired Chairman, Hamilton Sundstrand
Corporation (formerly Sundstrand Corporation), Rockford,
Illinois. He served as Chairman, President and Chief
Executive Officer from 1997 to 1999 and as President and
Chief Executive Officer, Sundstrand Corporation from 1995 to
1997. Hamilton Sundstrand Corporation is an aerospace and
industrial company. Mr. Jenkins is a Director of AK Steel
Holding Corporation, Solutia, Inc., Sentry Insurance, Pella
Corporation and Visteon Corporation.
Philip R. Lochner, Jr. 57 June 17, 1999 2002
Mr. Lochner is retired Senior Vice President-Chief
Administrative Officer at Time Warner, Inc., New York, New
York. He served as Senior Vice President-Chief Administration
Officer, Time Warner, Inc., from 1991 to 1998. Time Warner,
Inc. is a diversified media company. Mr. Lochner is a
Director of Apria Healthcare Group Inc., GTech Holdings Inc.,
and the Investor Responsibility Research Center. He also
serves on the Board of Advisors of Republic NY Corp. and the
National Association of Securities Dealers.
J. Marc Adam 62 March 23, 1991 2003
Mr. Adam is retired Vice President Marketing, 3M, St. Paul,
Minnesota. He served as Vice President Marketing from 1995 to
1999 and from 1986 to 1995 as Group Vice President, 3M. 3M is
a diversified manufacturer. Mr. Adam is a Director of
Schneider National Inc.
James L. Packard 58 June 22, 1998 2003
Mr. Packard is Chairman, President and Chief Executive
Officer, Regal-Beloit Corporation (AMEX), Beloit, Wisconsin
since 1986. From 1980 to 1984 he served as President and from
1984 to 1986 he served as President and Chief Executive
Officer, Regal-Beloit Corporation. Regal-Beloit Corporation
is a manufacturer of mechanical and electrical products. Mr.
Packard is a Director of The First National Bank & Trust
Company of Beloit and Manitowoc Company, Manitowoc,
Wisconsin. He is also a member of the NASDAQ Listing and
Hearing Review Council.
** Stanton K. Smith, Jr. 70 March 21, 1970 2003
Mr. Smith is Senior Counsel, Skadden, Arps, Slate, Meagher &
Flom LLP law firm, New York, New York, since April 1996. From
1988 to 1991 he served as President and from 1991 to March
1996 he served as Vice Chairman, CMS Corporation, Dearborn,
Michigan. CMS Energy Corporation is a utility and energy
holding company. He is a Director of Trans-Elect, Inc., a
company engaged in entering the electric transmission
business.
+ Keith E. Wandell 50 -- 2003
Mr. Wandell has been President-Automotive Systems Group,
Johnson Controls, Inc. Milwaukee, Wisconsin since 1997. He
served as Vice President and General Manager-Automotive of
Johnson Controls from 1996 to 1997 and Vice President
Operations from 1993 to 1996. Johnson Controls is a
manufacturer of automotive products, facility management and
control systems and plastic packaging.
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* Nominees for election to terms expiring in 2004.
** Mr. Dargene and Mr. Smith are expected to retire from the Board at the Annual
Meeting in accordance with Company policy.
+ Nominee for election to term expiring in 2003.
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DUTIES OF BOARD OF DIRECTORS
The Board of Directors has the responsibility to serve as the trustee for
the shareholders. It also has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. However, the
Board is not involved in day-to-day operating details. Members of the Board are
kept informed of the Company's business through discussion with the Chief
Executive Officer and other officers, by reviewing analyses and reports sent to
them each month and by participating in Board and committee meetings.
COMMITTEES OF THE BOARD OF DIRECTORS
During fiscal 2000, the standing committees of the Board of Directors were
the Director Affairs Committee, the Audit Committee, and the Compensation &
Stock Option Committee.
The Director Affairs Committee consists of three non-employee directors. It
is the responsibility of the Director Affairs Committee to review and make
recommendations regarding management succession and Board policies and to
recommend qualified individuals for nomination to fill vacancies on the Board.
The full Board may accept or reject the Committee's recommendations. No
procedures have been established for the consideration by the Director Affairs
Committee of nominees recommended by shareholders of the Company. The Director
Affairs Committee met twice during fiscal 2000. The present members of the
Director Affairs Committee are Messrs. Carl J. Dargene, Lawrence E. Gloyd and
Stanton K. Smith, Jr.
The Audit Committee consists of three independent non-employee directors.
It is the responsibility of the Audit Committee to recommend the selection of
independent auditors and to review audits, proposals and other services as
performed by the independent auditors. The Committee also reviews the activities
and findings of the internal audit staff and discusses the Company's system of
internal controls with the Company's independent auditors. The Audit Committee
met four times during fiscal 2000. The present members of the Committee are
Messrs. Milton R. Brown, Philip R. Lochner, Jr. and Stanton K. Smith, Jr.
The Compensation & Stock Option Committee, which consists of three
independent non-employee directors, determines the compensation of key officers
and employees. It reviews and administers the Company's 1994 Incentive Plan and
grants stock awards under such Plan to certain officers and key employees of the
Company. The Committee met three times during fiscal 2000. The present members
of the Committee are Messrs. J. Marc Adam, Robert H. Jenkins and James L.
Packard.
MEETINGS AND FEES OF THE BOARD OF DIRECTORS
The Board of Directors held six meetings during fiscal 2000. All of the
Company's directors attended at least 75% of the total number of meetings of the
Board of Directors and Committees of the Board of which they are members.
In fiscal 2000, directors who were not employees of the Company received an
annual retainer of $32,500 and fees of $1,000 for each meeting of the Board of
Directors and each separate Committee meeting attended and reimbursement for
travel expenses related to attendance at Board and Committee meetings.
Non-employee directors who are Chairmen of Committees received an additional
annual fee of $3,250 in fiscal 2000.
Pursuant to the Company's Deferred Compensation Plan for Directors, a
non-employee director may elect to defer receipt of the director's fees to which
he is entitled and to be paid the amounts so deferred, plus interest thereon at
the prime rate announced quarterly by Bank One Corporation, or its successor,
either when the participant ceases being a director of the Company or upon his
retirement from his principal occupation or at the time the participant reaches
a specified age. Messrs. Adam, Brown, Jenkins and Smith elected to defer all or
a portion of the fees payable to each of them during fiscal 2000.
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The Board has adopted a Directors' Restricted Stock Compensation Plan.
Under this Plan, as amended, in lieu of the annual retainer otherwise payable,
on the date a person first becomes a non-employee director, and on each
anniversary of such date, such person receives a grant of shares of the
Company's Common Stock with an aggregate fair market value equal to the amount
of the annual retainer for non-employee directors.
Under the 1994 Incentive Plan, each non-employee director is automatically
granted, on the date of each annual meeting of shareholders and on the date on
which such non-employee director is first elected or begins to serve as a
non-employee director, options to purchase 3,750 shares of Common Stock at an
option exercise price equal to the fair market value of a share of Common Stock
on the date of grant. Such options are fully exercisable on the date of grant
and expire ten years after the date of grant. Shares acquired upon exercise of
an option may not be sold or transferred during the six month period following
the date of grant of such option. As of January 1, 2001, Messrs. Adam, Brown,
Dargene and Smith each have fully exercisable options for 26,250 shares, Mr.
Packard has 10,325, Mr. Jenkins has 7,500, Mr. Lochner has 6,600, Mr. Gloyd has
3,750 and Mr. Burgstahler has 1,017.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Dargene, a director of the Company, is the retired Chairman of AMCORE
Financial, Inc. (the "Holding Company"), Rockford, Illinois. In addition,
Messrs. Brown and Gloyd, also directors of the Company, are directors of the
Holding Company. During 2000, CLARCOR had business transactions with the Holding
Company and its affiliates including AMCORE Bank's participation with a group of
banks in a multicurrency credit agreement dated September 9, 1999. All such
transactions were in the ordinary course of business and it is anticipated that
similar transactions will continue.
BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK
CERTAIN BENEFICIAL OWNERS
The following table provides information concerning each person who is
known to the Company to be the beneficial owner of more than 5% of the Company's
Common Stock:
SHARES PERCENT
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED CLASS
------------------- ------------ -------
Gabelli Funds, LLC ......................................... 2,410,450(1) 9.85%
GAMCO Investors, Inc.
One Corporate Center
Rye, NY 10580-1434
Artisan Partners Limited Partnership ....................... 1,715,008(2) 7.01%
1000 North Water Street, Suite 1770
Milwaukee, Wisconsin 53202
Wanger Asset Management, L.P. .............................. 1,470,000(3) 6.01%
227 West Monroe Street
Chicago, Illinois 60606-5016
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(1) Based upon information contained in a Schedule 13F filed as of November 13,
2000 with the Securities and Exchange Commission by GAMCO Investors, Inc. on
behalf of itself and Gabelli Funds, LLC.
(2) Based upon information contained in a Schedule 13G dated February 9, 2001
filed with the Securities and Exchange Commission by Artisan Partners
Limited Partnership.
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(3) Based upon information contained in a Schedule 13F filed as of October 11,
2000 with the Securities and Exchange Commission by Wanger Asset Management,
L.P. on behalf of certain Wanger entities.
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table provides information concerning the shares of Common
Stock of the Company beneficially owned as of February 9, 2001 by all directors
and nominees, each of the executive officers named in the Summary Compensation
Table on page 6 and by all directors and executive officers of the Company as a
group:
SHARES PERCENT
NAME OF PERSON OR BENEFICIALLY OF
IDENTITY OF GROUP OWNED CLASS
----------------- ------------ -------
J. Marc Adam (2)............................................ 42,472 *
Milton R. Brown (2)......................................... 47,628 *
Robert J. Burgstahler (2)................................... 1,469 *
Carl J. Dargene (2)......................................... 45,457 *
Lawrence E. Gloyd (1)(2)(3)................................. 851,992 3.48%
Robert H. Jenkins (2)....................................... 10,669 *
Norman E. Johnson (1)(3).................................... 565,236 2.31%
Philip R. Lochner, Jr. (2).................................. 9,853 *
James L. Packard (2)........................................ 14,811 *
Stanton K. Smith, Jr. (2)................................... 54,075 *
Bruce A. Klein (1)(3)....................................... 152,983 *
William B. Walker (1)(3).................................... 87,707 *
David J. Anderson (1)(3).................................... 129,635 *
James M. Suchomel (1)(3).................................... 17,562 *
All directors and executive officers as a group
(18 persons) (1)(2)(3)(4)................................. 2,297,496 9.39%
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* Less than one percent.
(1) Includes restricted shares of Common Stock granted on a contingent basis
under the 1994 Incentive Plan. Also includes restricted stock units granted
under the 1994 Incentive Plan. See "Compensation of Executive Officers and
Other Information -- Performance Share Plan."
(2) Includes restricted shares granted under the Directors' Restricted Stock
Compensation Plan and shares subject to stock options granted to Directors
pursuant to the Company's 1994 Incentive Plan. See "Election of
Directors -- Meetings and Fees of the Board of Directors."
(3) Includes all shares subject to stock options granted pursuant to the
Company's 1984 Stock Option Plan and the 1994 Incentive Plan. For
information as to the total number of shares subject to options granted to
Messrs. Johnson, Gloyd, Klein, Walker, Anderson and Suchomel and the options
which are exercisable by them within 60 days, see the table on page 8.
(4) Includes 1,679,917 shares subject to stock options of which 173,212 were
granted on December 17, 2000. Options for 1,051,083 shares are exercisable
within 60 days. Also includes 40,515 restricted stock units which were
granted on December 17, 2000.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each director and each officer of the Company who is subject to Section 16
of the Securities Exchange Act of 1934 (the "Act") is required by Section 16(a)
of the Act to report to the Securities and Exchange Commission, by a specified
date, his or her beneficial ownership of or transactions in the Company's equity
securities. Reports received by the Company indicate that all such officers and
directors have filed all requisite reports with the Securities and Exchange
Commission on a timely basis during 2000.
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COMPENSATION OF EXECUTIVE OFFICERS AND OTHER INFORMATION
The following Summary Compensation Table sets forth the cash compensation
and certain other components of the compensation of (a) Norman E. Johnson, the
Chairman, President and Chief Executive Officer of the Company after March 31,
2000, (b) Lawrence E. Gloyd, the Chairman and Chief Executive Officer through
March 31, 2000, and (c) the other four most highly compensated executive
officers of the Company for the fiscal year that ended on December 2, 2000.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------- ------------------------ -----------
OTHER ALL
ANNUAL RESTRICTED SECURITIES OTHER
BONUS COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY (2) (2)(3) SATION (4) AWARDS(5) OPTIONS (6) PAYOUTS (7) SATION (8)
- -------------------------------- ---- ---------- ------ ---------- ---------- ----------- ----------- ----------
Norman E. Johnson (1)........... 2000 $393,846 $380,304 $ -- $72,742 100,000 $107,071 $13,927
Chairman, President and Chief 1999 331,458 266,953 -- -- 45,000 114,992 12,388
Executive Officer 1998 305,734 169,101 -- -- 120,539 94,685 10,689
Lawrence E. Gloyd (1)........... 2000 232,692 167,129 127,278 -- 50,000 168,189 20,654
Retired Chairman and Chief 1999 461,923 375,493 -- -- -- 193,669 35,339
Executive Officer 1998 438,077 252,466 -- -- 180,000 178,105 29,041
Bruce A. Klein.................. 2000 231,962 130,660 -- 34,928 17,000 59,445 10,701
Vice President - Finance and 1999 221,065 103,860 -- -- 15,000 67,432 11,109
Chief Financial Officer 1998 207,208 84,047 -- -- 15,000 55,805 10,868
William B. Walker............... 2000 191,539 81,938 -- -- 10,000 -- 9,056
President, 1999 183,493 10,969 -- -- 7,500 -- 9,294
Environmental Filtration 1998 173,578 71,883 -- -- 7,500 -- 9,347
David J. Anderson............... 2000 170,923 75,648 -- 21,479 16,763 37,884 9,813
Vice President - Corporate 1999 165,769 58,913 -- -- 10,000 43,228 10,437
Development 1998 158,019 48,056 -- -- 11,250 39,455 13,414
James M. Suchomel (9)........... 2000 130,529 75,150 -- -- 5,000 -- 1,764
President, Process Filtration 1999 -- -- -- -- -- -- --
1998 -- -- -- -- -- -- --
- ------------------------------
(1) Mr. Johnson serves as a director of the Company but received no separate
remuneration in that capacity. Mr. Gloyd retired as the Company's Chairman
and Chief Executive Officer on March 31, 2000 and continues to serve as a
director of the Company.
(2) Includes compensation deferred by the Company's executive officers pursuant
to the Company's Retirement Savings Plan and the Company's Deferred
Compensation Plan.
(3) Discretionary cash bonuses granted by the Board of Directors under the
Company's Annual Incentive Plan.
(4) Mr. Gloyd received Other Annual Compensation including $38,108 for the value
of an automobile provided at retirement and $28,991 primarily for estate and
retirement planning services (plus a gross up for related income taxes). The
aggregate value of all other perquisite and personal benefits did not exceed
the lesser of either $50,000 or 10% of the total annual salary and bonus
reported of the other named executive officers in the Summary Compensation
Table.
(5) Represents restricted stock units (the "Units") granted on December 17, 2000
pursuant to the 1994 Incentive Plan. Units provide for the issuance of
Common Stock to the grantee over a four year period. 25% of the total number
of Units vest on each anniversary of the grant so long as the grantee
remains in the employment of the Company or one of its subsidiaries. Until
Units vest and shares of Common Stock are issued in conversion of the Units,
the grantee does not have any rights as a shareholder of the Company, but
prior to vesting the grantee will receive a cash payment equal to the
dividends paid on the Common Stock. The Units permit a grantee to defer the
issuance of Common Stock pursuant to the Units for a period of years or
until the termination of the grantee's employment by the Company. The Units
shown in the Table were issued in December 2000 in replacement of previous
grants of Performance Shares and Performance Units under the Company's
Performance Share Plan. See " -- Performance Share Plan."
(6) Consists of options and replacement options granted under the Company's 1994
Incentive Plan to acquire shares of the Company's Common Stock. See "--
Stock Options" below.
(7) Consists solely of Performance Shares and Performance Units distributed and
paid under the Performance Share Plan at the close of the Performance Cycle
ending in the year. The amount shown is equal to the number of Performance
Shares and
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Performance Units paid and distributed, multiplied by the average of the
closing price of a share of the Company's Common Stock for the last 30
trading days of the last fiscal year in the Performance Cycle.
At December 2, 2000, excluding forfeitures, each executive officer listed
above held the following aggregate number of Performance Shares and
Performance Units and the value thereof was as follows: Mr. Johnson, 7,404
shares and units, $135,123; Mr. Gloyd, 22,782 shares and units, $415,772;
Mr. Klein, 3,896 shares and units, $71,102; Mr. Walker, 5,581 shares and
units, $101,853; and Mr. Anderson, 2,442 shares and units, $44,567. The
values shown in the preceding sentence are based on the closing price of
CLARCOR Common Stock on December 1, 2000 ($18.25) and assume that 100% of
the shares and units are earned. See "--Performance Share Plan." Each holder
receives dividends on and is entitled to vote the Performance Shares.
(8) The amounts shown in this column for All Other Compensation for the last
fiscal year derived from the following figures; Messrs. Johnson, Gloyd,
Klein, Walker and Anderson respectively: $9,846; $4,327; $5,799; $4,788 and
$4,273 - Company match for employee stock purchase plan; Messrs. Johnson,
Gloyd, Klein, Walker, Anderson and Suchomel respectively: $2,550; $2,550;
$2,550; $2,550; $2,472 and $1,311 - Company match for 401(k) plan; Messrs.
Johnson, Gloyd, Klein and Anderson respectively: $1,531; $2,651; $1,110 and
$2,197 - Company paid split dollar insurance premiums; $9,485 (Mr. Gloyd) -
Company paid term life insurance premium; Messrs. Gloyd, Klein, Walker,
Anderson and Suchomel respectively: $1,641; $1,242; $1,718; $871 and $453 -
Company paid group insurance premium.
(9) Mr. Suchomel began employment with the Company on February 28, 2000.
Each officer of the Company is elected for a term of one year which begins
at the Board of Directors meeting at which he or she is elected held following
the Annual Meeting of Shareholders and ends on the date of the next Annual
Meeting of Shareholders or upon the election of his or her successor.
STOCK OPTIONS
The following table provides information with respect to stock options
granted during fiscal year 2000 under the Company's 1994 Incentive Plan, as
amended, to the six individuals named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO
GRANTED EMPLOYEES IN EXERCISE EXPIRATION GRANT DATE
NAME (1) FISCAL YEAR PRICE (2) DATE PRESENT VALUE (3)
---- ---------- ------------ --------- ---------- -----------------
N. E. Johnson.................... 100,000 26.2% $17.9375 12/19/09 $548,000
L. E. Gloyd...................... 50,000 13.1 17.9375 03/31/06 274,000
B. A. Klein...................... 17,000 4.4 17.9375 12/19/09 93,160
W. B. Walker..................... 10,000 2.6 17.9375 12/19/09 54,800
D. J. Anderson................... 7,500 2.0 17.9375 12/19/09 41,100
9,263(4) 2.4 19.3750 11/28/00 12,876
J. M. Suchomel................... 5,000 1.3 18.3750 03/23/10 28,650
- ------------------------------
(1) Consists of nonqualified options issued for a ten year term (other than as
noted in footnote (4)) with a six year vesting schedule (see "Long-Term
Incentive Plan" in the Report of the Compensation & Stock Option Committee).
(2) Closing price of Common Stock as reported on the New York Stock Exchange
Composite Transactions at date of grant.
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(3) Options are valued using Cox-Ross-Rubinstein Binomial Model, which is a
variation of the Black-Scholes Option Pricing Model using the following
assumptions:
(i) an expected option term of seven years to exercise (based on estimated
prior experience);
(ii) interest rates of 6.34% for the December 20, 1999 grants; 6.54% for
the June 23, 2000 replacement option grant; and 6.63% for the March
24, 2000 grant, based on the quoted yield of Treasury Strips maturing
in seven years;
(iii) dividends of $.4525 per share of Common Stock; and
(iv) stock price volatility of 25.0% based upon the monthly stock closing
prices for the preceding 7 years.
(4) This grant resulted from the exercise of an option and from the payment of
the related exercise price by the optionee using shares of previously owned
Company Common Stock. Under these circumstances the 1994 Incentive Plan
permits the grant of options ("replacement options") for the number of
shares used in payment of the exercise price. The exercise price for each
replacement option is equal to the market value of the Company's Common
Stock on the date of such exercise and replacement options expire on the
same date as the original option which was exercised. The replacement option
grants do not contain the replacement feature.
The following table sets forth certain information regarding option
exercises during the fiscal year and the unexercised options held by such
individuals at December 2, 2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FY-END AT FY-END
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE (1) UNEXERCISABLE (2)
---- ----------- -------- ------------------- --------------------
N. E. Johnson..................... -- -- 158,354/244,375 $669,351/$158,902
L. E. Gloyd (3)................... 74,813 $831,584 625,625/0 2,230,938/0
B. A. Klein....................... -- -- 30,938/57,312 120,629/64,684
W. B. Walker...................... -- -- 27,750/28,750 135,846/25,781
D. J. Anderson.................... 14,963 163,516 57,001/34,374 303,205/36,324
J. M. Suchomel.................... -- -- 0/5,000 0/0
- ------------------------------
(1) On December 17, 2000, subsequent to the fiscal year-end, additional option
grants were awarded as follows; Mr. Johnson 68,793, Mr. Klein 26,624, Mr.
Walker 15,000, Mr. Anderson 11,571 and Mr. Suchomel 10,000. Also subsequent
to the fiscal year-end, options were exercised as follows: Mr. Johnson
6,038, Mr. Gloyd 50,625 and Mr. Anderson 10,125.
(2) Based on the $18.25 closing price of Common Stock as reported on the New
York Stock Exchange Composite Transactions on December 1, 2000, the last
trading date prior to the Company's fiscal year-end close on Saturday,
December 2, 2000.
(3) Does not include 3,750 options granted to Mr. Gloyd as a non-employee
Director in March 2000.
PERFORMANCE SHARE PLAN
The Long Range Performance Award Plan (the "Performance Share Plan") is a
part of the Company's 1994 Incentive Plan, approved by the shareholders on March
31, 1994. It provides officers and key employees of the Company with the
opportunity to earn shares of Common Stock ("Performance Shares") and units
representing the market value of Common Stock ("Performance Units").
At the beginning of each three-year Performance Cycle, executives are
awarded a number of Performance Shares and Performance Units determined by
applying a formula set by the Compensa-
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tion Committee at the beginning of the Performance Cycle. The total number of
Performance Shares and Performance Units is obtained by dividing a percentage of
the base salary of the executive, ranging from 40% for the CEO to 20% for
officers at the level of vice president, by the average closing price of a share
of the Company's Common Stock over a 30-day trading period prior to the award
date. Awards are in the ratio of three Performance Shares to two Performance
Units, so that approximately 60% of the total value of benefits available under
the plan is in stock and 40% is payable in cash to cover income taxes due on the
total award.
During the 3-year Performance Cycle, the executive receives dividends and
is entitled to vote the Performance Shares. In order for the executive to retain
all of the Performance Shares and Performance Units awarded, the Company must
attain prescribed financial targets over the Performance Cycle. If the
performance targets have been met in full, the full number of Performance Shares
and Performance Units will be earned. If certain minimum objectives are attained
(currently established at 80% of the performance target), 50% of the Performance
Shares and Performance Units will be earned. If performance over the Performance
Cycle is between the minimum and the target level, the number of Performance
Shares and Performance Units earned will be prorated. No portion of the
Performance Shares or Performance Units will be earned if performance does not
meet the 80% minimum performance target. Further information regarding the plan
and the performance targets appears on pages 14 and 15 in "Report of the
Compensation & Stock Option Committee."
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The following table sets forth information regarding 2000 fiscal year
awards under the Performance Share Plan made in December 1999. Subsequent to the
end of fiscal 2000, on December 17, 2000, Messrs. Johnson, Klein and Anderson
forfeited the awards set forth in the table in return for grants of
non-qualified stock options and restricted stock units, as follows: Mr. Johnson,
13,793 options and 3,932 units; Mr. Klein, 6,624 options and 1,888 units; and
Mr. Anderson, 4,071 options and 1,161 units.
LONG-TERM INCENTIVE PLAN
AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE NON-STOCK PRICE BASED PLANS
OR OTHER --------------------------------
NUMBER OF SHARES, UNITS PERIOD UNTIL TARGET AND
NAME OR OTHER RIGHTS PAYOUT THRESHOLD MAXIMUM
---- --------------------------- ------------ -------------- --------------
N. E. Johnson............ Performance Shares 5,186 3 Years 2,593 Shares 5,186 Shares
Performance Units 3,458 Cash equal to Cash equal to
value of 1,729 value of 3,458
Shares* Shares*
L. E. Gloyd.............. Performance Shares 7,204 3 Years 3,602 Shares 7,204 Shares
Performance Units 4,802 Cash equal to Cash equal to
value of 2,401 value of 4,802
Shares* Shares*
B. A. Klein.............. Performance Shares 2,491 3 Years 1,246 Shares 2,491 Shares
Performance Units 1,660 Cash equal to Cash equal to
value of 830 value of 1,660
Shares* Shares*
W. B. Walker............. Performance Shares 2,053 3 Years 1,027 Shares 2,053 Shares
Performance Units 1,369 Cash equal to Cash equal to
value of 685 value of 1,369
Shares* Shares*
D. J. Anderson........... Performance Shares 1,531 3 Years 766 Shares 1,531 Shares
Performance Units 1,020 Cash equal to Cash equal to
value of 510 value of 1,020
Shares* Shares*
- ------------------------------
* Based on the average closing price of Common Stock for the 30-day trading
period preceding November 30, 2002 as reported in the New York Stock Exchange
Composite Transactions.
RETIREMENT PLANS
Most employees of the Company and certain of its subsidiaries, including
the individuals named in the Summary Compensation Table, are eligible to receive
benefits under the CLARCOR Inc. Pension Plan (the "Pension Trust"). The amount
of the Company's contribution to the Pension Trust in respect to a specified
person cannot be individually calculated. No Company contribution for fiscal
2000 was required or made.
The Pension Trust provides benefits calculated under a Social Security
step-rate formula based on career compensation. Benefits are payable for life
with a guarantee of 120 monthly payments. The formula accrues an annual benefit
each plan year equal to the sum of (a) plan year compensation up to age 65
covered compensation ($36,000 in fiscal 2001) in effect each December multiplied
by .012 plus (b) any excess of such plan year compensation over age 65 covered
compensation (subject to Internal Revenue limitations applicable to all
qualified retirement plans) multiplied by .0175. The aggregate of
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all annual accruals plus the benefit accrued at November 30, 1989 under prior
plans is the amount of annual pension.
Estimated annual retirement benefits payable under the Pension Trust at
normal retirement (age 65) for Messrs. Johnson, Gloyd, Klein, Walker and
Anderson are $62,387, $42,744, $45,282, $15,591 and $30,358, respectively. Such
annual retirement benefits are not subject to any reduction for Social Security
amounts. The estimated benefits were calculated assuming that the participants
would continue to accrue benefits at current wage levels to normal retirement.
Effective December 1, 1983, the Company established a Supplemental
Retirement Plan, which was amended and restated effective December 1, 1994. Mr.
Gloyd was the only participant in this plan in 2000. The plan provides a monthly
benefit to Mr. Gloyd equal to (a) 65% of the his average monthly compensation
with respect to the three consecutive fiscal years for which he received the
highest compensation, reduced by (b) his monthly normal retirement benefit
provided by the Pension Trust and benefits earned during employment other than
by the Company. The annual retirement benefit pursuant to the Supplemental
Retirement Plan for Mr. Gloyd is $424,803. Such annual retirement benefit is not
subject to any reduction for Social Security amounts. Mr. Gloyd elected to
receive a lump sum payment of the present value of his benefit at retirement.
See " -- Employment Agreements."
Effective December 1, 1994, the Company established two new retirement
plans for officers and senior executives of the Company: the 1994 Supplemental
Pension Plan and the 1994 Executive Retirement Plan. The 1994 Supplemental
Pension Plan is intended to preserve benefits lost by reason of the maximum
limitations on compensation and benefits imposed on tax qualified retirement
plans by the Internal Revenue Code of 1986. The 1994 Executive Retirement Plan
replaces the Supplemental Retirement Plan for executives other than those who
were participants in the 1983 Supplemental Retirement Plan described above. The
1994 Executive Retirement Plan is similar in concept and benefit levels to the
1983 Supplemental Retirement Plan. A minimum of 15 years of service after
attainment of the age of 40 is required to earn a full benefit of 65% of
compensation at retirement. Messrs. Johnson, Klein and Anderson are participants
in both of the 1994 plans. Mr. Walker is a participant in the 1994 Supplemental
Pension Plan. Mr. Suchomel began his employment with the Company in February
2000 and, consequently, does not yet qualify for either plan. Estimated total
annual retirement benefits pursuant to both the 1994 Supplemental Pension Plan
and the 1994 Executive Retirement Plan payable at normal retirement (age 65) for
Messrs. Johnson, Klein, Walker and Anderson are $440,811, $190,422, $10,422 and
$108,533, respectively. Such annual retirement benefits are not subject to
reduction for Social Security amounts.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Johnson,
Gloyd, Klein, Walker, Anderson and Suchomel and certain other executive officers
of the Company. The employment agreements provide terms of employment,
compensation, incentive plan compensation, benefits and perquisites, pensions,
employment termination, non-competition and confidentiality, and "change of
control" provisions. Under his agreement, the employment period for Mr. Gloyd
expired on March 31, 2000 upon his retirement. At that time, Mr. Johnson was
elected as Chairman, President and Chief Executive Officer of the Company. Mr.
Johnson's agreement, as amended, expires on the date of the Annual Meeting to be
held in 2003. Thereafter, Mr. Johnson's agreement will be extended automatically
each year unless terminated by the Board.
Mr. Gloyd's agreement required that the present value of the lifetime
monthly benefit amounts which would be payable to Mr. Gloyd pursuant to the
Company's 1983 Supplemental Retirement Plan if he had retired at his normal
retirement date, would be placed in trust. Accordingly, such present value was
deposited in trust pursuant to a Trust Agreement dated as of December 1, 1997.
The amounts held in trust, plus interest, were distributed to Mr. Gloyd in lump
sum during fiscal 2000.
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Pursuant to the 1994 Incentive Plan, upon the termination of Mr. Gloyd's
employment agreement and his retirement, stock options held by Mr. Gloyd would
have expired three years after such termination of employment (i.e. on March 31,
2003). In September 1999, the Board amended the Company's 1994 Incentive Plan so
that at retirement from the Company the holder of an option may be allowed to
exercise outstanding options for a period of time specified by the Company's
Compensation & Stock Option Committee (but not later than the 10th anniversary
of the date of grant of the option). A stock option grant for 180,000 shares to
Mr. Gloyd pursuant to his employment agreement was subsequently adjusted by the
Committee to extend the exercise date until the December 16, 2007 expiration
date of the grant.
As provided for in Mr. Gloyd's and Mr. Johnson's employment agreements, the
Compensation & Stock Option Committee on December 20, 1999 approved additional
grants of 50,000 shares to both Messrs. Gloyd and Johnson as a result of meeting
certain financial targets as defined in the agreements. Mr. Gloyd's special
stock option of 50,000 shares is exercisable for six years from his March 2000
retirement date and Mr. Johnson's special stock option expires ten years from
the grant date. Mr. Johnson also received an additional option grant for 50,000
shares at the December 20, 1999 meeting which will expire ten years from the
grant date.
Mr. Gloyd has agreed to act as a consultant to the Company after his
retirement until March 2003. In that capacity he will be entitled to receive
$50,000 per year and the Company will pay or reimburse Mr. Gloyd for certain
office, secretarial and related expenses.
Agreements, as amended, with Messrs. Johnson, Klein, Walker, Anderson and
Suchomel and certain other executive officers become effective on a "change of
control" of the Company, which is defined to mean (i) the acquisition by any
person, entity or group (other than from the Company) of 15% or more of the
outstanding securities of the Company which are entitled to vote generally in
the election of directors; (ii) individuals who, at the date of the employment
agreement, constitute the Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director after the date of the employment
agreements whose election or nomination was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board will be considered
as though such person was a member of the Incumbent Board; (iii) consummation of
a reorganization, merger or consolidation, in each case in respect of which the
persons who were shareholders of the Company immediately prior to such
transaction do not immediately thereafter own more than 60% of the securities
entitled to vote generally in the election of directors of the entity resulting
from such transaction and (iv) approval by the shareholders of the Company of a
liquidation or dissolution of the Company or the sale of all or substantially
all of its assets.
The agreements provide that the Company agrees to employ these officers,
and the officers agree to remain in the employ of the Company, from the date of
a change of control to the earlier to occur of the third anniversary of such
change of control or the officer's normal retirement date at a rate of
compensation at least equal to the highest monthly base salary which the officer
was paid during the 36 calendar months immediately prior to the change of
control. In addition, during that period the Company agrees to provide employee
benefits which are the greater of the benefits provided by the Company to
executives with comparable duties or the benefits to which the officer was
entitled during the 90-day period immediately prior to the date of the change of
control. In the event that employment is terminated after a change of control,
the terminated officer is entitled to (i) a lump-sum cash payment equal to three
times the sum of the officer's base salary and annual bonus, (ii) continued
health and welfare benefits and perquisites for the three year period following
termination; and (iii) a lump sum payment equal to the pension benefits the
terminated officer would have earned during the three year period after the
termination. If any of such agreements subjects the officer to excise tax under
Section 4999 of the Internal Revenue Code, the Company will pay such officer an
additional amount calculated so that after payment of all taxes, interest and
penalties, the officer retains an amount of such additional payment equal to
such excise tax. The agreements define "termination" to mean termination of
employment by the Company for reasons other than death, disability, cause or
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retirement. "Termination" also includes resignation by the officer after (a) a
material adverse reduction in the nature or scope of his authorities, duties or
responsibilities, following a change of control, as determined in good faith by
the officer; (b) a reduction in compensation or benefits after a change of
control or (c) a good faith determination by the officer that, as a result of
the change of control, he is unable to exercise the authority, power, function
and duties contemplated by the agreement.
REPORT OF THE COMPENSATION & STOCK OPTION COMMITTEE
The purpose of the Compensation & Stock Option Committee ("Committee") is
to assure that the Chief Executive Officer and the other executive officers of
the Company ("Executive Officers") are compensated equitably, competitively and
in a manner that is consistent with the long-term best interests of the Company
and its shareholders. The Committee, which is composed entirely of independent
non-employee directors, is responsible for determining the annual salary, cash
incentives, benefits and intermediate-term and long-term incentive plan awards
for the Company's Executive Officers.
COMPENSATION PHILOSOPHY
There are certain stated principles which the Committee follows in
structuring the compensation packages for the Chief Executive Officer and the
other Executive Officers of the Company. These are:
Pay for Performance
A high percentage of total compensation is linked directly to the
performance of the Company and the executive's individual performance in
attaining the Company's objectives and supporting the Company's mission
statement. The Committee believes that this structure aligns the
executives' interests with the interests of the shareholders.
Competitiveness
Total compensation packages are designed to be comparable with those
of executives occupying comparable positions in comparable companies. The
packages are also designed to allow an opportunity to earn at a level above
median industry practices and market competitors when Company performance
exceeds the results of comparable companies. The opportunity to earn at
higher levels provides a significant challenge to the Executive Officers.
Executive Ownership
A major component of executive compensation is equity based, and as a
result, the Executive Officer's interests are more directly linked with
shareholders' interests. The Committee believes that equity-based
compensation properly balances the rewards for long-term versus short-term
results.
The Committee has established ownership guidelines for Executive
Officers and non-employee directors to align their interests and objectives
with the Company's shareholders. These guidelines require that Executive
Officers, after a five-year period, own shares with a value ranging from a
minimum of two times annual salary for officers at the level of corporate
vice president to a minimum of four times annual salary for the Company's
Chairman and Chief Executive Officer. In addition, the guidelines require
that non-employee directors, after a five-year period, own shares with a
value equal to a minimum of five times the annual retainer.
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Management Development
The compensation packages are also designed to attract and retain
quality executives with the leadership skills and other key competencies
required to meet the Company's objectives and to enhance shareholder value.
COMPONENTS OF EXECUTIVE PAY
The components of total pay for all executives are annual salary, cash
incentives, benefits and intermediate-term and long-term incentive awards. The
Committee reviews annually each component of compensation and total compensation
for the Executive Officers. The review includes a market comparison of
compensation and changes in compensation for equivalent positions in related
industrial groups and comparably-sized companies. Competitive information and
data relating to executive compensation packages is provided by independent
compensation consultants at the request of the Committee.
Annual Salary
Annual salary and annual adjustments are based on the executive's
performance, experience, and reference to competitive rates for comparable
positions in related industry groups and comparably-sized companies.
Cash Incentives
Annual cash incentives are determined based upon the attainment of
financial targets by the Company and the individual performance of the
executive. If certain minimum target results are not achieved, no annual
incentive will be paid. If target levels, which the Committee considers to
be reasonably difficult to attain, are achieved, annual incentive levels
generally range from 25% to 60% of base salary, with the maximum awards
ranging from 55% to 132% of base salary if performance materially exceeds
the target objectives.
The financial targets that must be attained for cash incentive
payments include two measures, net earnings and economic value added, or as
referred to by the Company, CLARCOR Value Added ("CVA"). In basic terms,
CVA is consolidated annual after-tax operating earnings less the annual
cost of capital. Thus the size of the cash incentives varies directly with
the amount by which such after-tax earnings exceed the cost of capital. As
a result, the CVA program is designed to reward managers who increase
shareholder value by most effectively deploying the capital contributed by
the shareholders and lenders. The net earnings and CVA components place
cash incentives "at risk" since if the Company fails to achieve the target
levels, the cash incentive awards will be reduced. The Committee sets the
target levels prior to the beginning of the year.
Benefits
Employee benefits offered to the general employee population of the
Company are provided to Executive Officers as part of the total
compensation program. In addition, certain Executive Officers are provided
supplemental retirement benefits and life insurance policies.
Intermediate-Term Incentive: Performance Share Plan
Unlike the annual cash incentive plan, which provides an incentive for
a specific year's performance, the Performance Share Plan (which is
described in detail at pages 8 and 9 under "Performance Share Plan")
requires a sustained level of corporate performance over a 3-year
Performance Cycle. The Plan provides benefits that vary directly with the
market price of the Company's Common Stock over the Performance Cycle. In
addition, the Executive Officers receive dividends on and are entitled to
vote his or her Performance Shares. Both of these
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attributes are designed to closely align the interests of the participating
Executive Officers directly with those of the Company's shareholders.
For the Performance Period 1998-2000 Plan participants earned 100% of
the total performance opportunity as a result of the substantial
achievement of two aggressive financial goals established by the Committee.
One half of the award was earned based upon attainment of a return on
equity greater than the average of a comparator group, and the other half
was earned based upon attainment of earnings per share targets set by the
Committee. The Committee selected a group of over 30 manufacturing
companies with revenues currently averaging over $700 million as the
comparator group for measuring the Company's comparative return on equity.
Subsequent to the end of fiscal 2000, the Committee elected to
substitute grants of restricted stock units ("Units") for awards under the
Performance Share Plan. Specifically, the Committee granted Units for
fiscal 2001 in lieu of grants of Performance Share awards and to replace a
portion of the Performance Share grants for fiscal 2000 with Units and
additional non-qualified stock options. Performance Share grants made in
fiscal 1999 will remain outstanding and awards thereunder will be made at
the end of fiscal 2001. Units provide for the issuance of Common Stock to
the grantee over a four year period. 25% of the total number of Units vests
on each anniversary of the grant so long as the grantee remains in the
employment of the Company or one of its subsidiaries. Until Units vest and
shares of Common Stock are issued in conversion of the Units, the grantee
does not have any rights as a shareholder of the Company, but prior to
vesting the grantee will receive a cash payment equal to the dividends paid
on the Common Stock. The Units permit a grantee to defer the issuance of
Common Stock pursuant to the Units for a period of years or until the
termination of the grantee's employment by the Company. The Committee
believes that intermediate-term incentive programs based on appreciation in
the price of the Company's Common Stock are in the best interests of the
Company and its shareholders. It therefore decided to make no further
awards under the Performance Share Plan and substitute awards of Units as
intermediate-term incentives.
Long-Term Incentive Plan
The Company's long-term incentive plan awards nonqualified stock
options to its senior and mid-level executives. Options granted under the
Company's shareholder approved 1994 Incentive Plan have a 10-year life and
all options granted during fiscal 2000 were at the market value of the
Common Stock on the date of grant. The option grants provide the executives
an opportunity to acquire an equity interest in the Company and to share in
the long-term appreciation of the stock.
Market surveys of long-term incentives are reviewed to establish
competitive practices. Management makes recommendations to the Committee on
the size of a grant, if any, for each executive based on the individual's
ability to affect financial performance, the executive's past performance,
and expectations of the executive's future contributions. The CEO's grant
is similarly determined by the Committee and all other stock option grants
are reviewed and approved by the Committee.
Stock options granted in fiscal 2000 are not exercisable for three
years after the grant. Thereafter they become exercisable at the rate of
25% per year and they are fully exercisable after the 6th year and through
the 10th year of the option. The Committee has determined that subsequent
grants, including grants made in December 2000, will not be exercisable for
one year after grant, will thereafter become exercisable at the rate of 25%
per year and become fully exercisable after the 4th year through the 10th
year of the option.
SECTION 162(m) COMPLIANCE
The Committee has considered the possible impact of Section 162(m) of the
Internal Revenue Code of 1986, which generally limits to $1,000,000 (with
several exceptions) the tax deduction available for compensation paid to a
person who is an executive listed in the Summary Compensation
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Table and who is employed by the Company at the end of its fiscal year. The
Committee intends to preserve to the Company the maximum opportunity for
obtaining deductibility for all amounts paid to its officers by designing and
administering the Company's plans and programs in a way that will meet the
regulations in effect at the time compensation decisions are made.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Johnson's annual salary was increased during fiscal 2000 to be
competitive with the median base salary paid to chief executive officers of
comparably-sized corporations identified by the Committee. For fiscal 2000, Mr.
Johnson was awarded an annual cash incentive equal to 97% of his base salary in
accordance with the annual cash incentive plan and based on the Company's growth
in net earnings and economic value added, and Mr. Johnson's performance in
meeting his personal performance objectives.
Mr. Johnson participated in the Committee approved payout at 100% for the
1998-2000 Performance Period and received awards for the 2000-2002 Performance
Period as shown in the table on page 10 for the Performance Share Plan. Mr.
Johnson accepted stock options and Units in connection with the forfeiture of
these awards under the Performance Share Plan.
In addition, during fiscal 2000 Mr. Johnson was granted non-qualified stock
options for 100,000 shares of the Company's Common Stock at an exercise price of
$17.9375 per share, the closing price as reported on the New York Stock Exchange
on the date of grant.
The Committee believes that the key executive team of the Company will
receive appropriate rewards under this program of corporate incentives, but only
if they achieve the performance goals established for them and the Company and
if they succeed in building increased value for the Company's shareholders.
Compensation & Stock Option Committee
J. Marc Adam, Chairman
Robert H. Jenkins
James L. Packard
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REPORT OF THE AUDIT COMMITTEE
The Company's Board of Directors' Audit Committee is comprised of three
directors who are not officers of the Company. Under applicable rules of the New
York Stock Exchange, all current members of the Committee are independent. The
Board of Directors has adopted a written charter for the Audit Committee, which
is included as Appendix A to this Proxy Statement.
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process, including the system of
internal controls.
In this context, the Committee has met and held discussions with management
and the independent auditors. Management represented to the Committee that the
Company's consolidated financial statements were prepared in accordance with
generally accepted accounting principles, and the Committee has reviewed and
discussed the consolidated financial statements with management and the
independent auditors. The Committee discussed with the independent auditors
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committees).
In addition, the Committee has discussed with the independent auditors, the
auditor's independence from the Company and its management, including the
matters in the written disclosures required by the Independence Standards Board
Standard No. 1 (Independence Discussions With Audit Committees).
The Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Committee
meets with the internal and independent auditors, with and without management
present, to discuss the results of their examinations, the evaluations of the
Company's internal controls, and the overall quality of the Company's financial
reporting.
The Committee has been advised by the Company that the total fees and
expenses paid in fiscal 2000 to PricewaterhouseCoopers LLP, the Company's
principal accounting firm, were $620,021. Of that amount, an aggregate of
$463,971 was for audit services and $156,050 was for other services, primarily
tax and acquisition accounting. PricewaterhouseCoopers LLP was not engaged by
the Company during fiscal 2000 to perform any financial information systems and
design services.
The Committee has considered whether the provision of these non-audit
services to the Company by PricewaterhouseCoopers LLP is compatible with
maintaining that firm's independence.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in the Company's Annual Report on Form
10-K for the year ended December 2, 2000, for filing with the Securities and
Exchange Commission.
Audit Committee
Stanton K. Smith, Jr., Chairman
Milton R. Brown
Philip R. Lochner, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Dargene, retired Chairman and Director of AMCORE Financial, Inc. serves
as a member of the Company's Board. Mr. Dargene is not a member of the Company's
Compensation & Stock Option Committee. Mr. Gloyd, a Director of the Company and,
until March 2000, the Chairman and Chief Executive Officer of the Company,
serves as a member of the Board and a member of the Compensation Committee of
AMCORE Financial, Inc.
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PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
return on its Common Stock for a five year period (December 1, 1995 to December
2, 2000) with the cumulative total return of the S&P SmallCap 600 Index and the
S&P Manufacturing Diversified Index.
TOTAL RETURN TO SHAREHOLDERS
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, S&P SMALLCAP 600 INDEX AND
S&P MANUFACTURING DIVERSIFIED INDEX
[PERFORMANCE GRAPH]
* Assumes that the value of the investment in the Company's Common Stock and
each index was $100 on December 1, 1995 and that all dividends were
reinvested.
The reference points on the foregoing graph are as follows:
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
CLARCOR INC. ....................................... 104.97 99.29 95.57 90.29 98.61
S&P SMALLCAP 600 INDEX.............................. 121.89 151.81 141.20 156.10 171.27
S&P MANUFACTURING DIVERSIFIED INDEX................. 112.78 134.98 153.59 193.82 223.90
The 1995 beginning measuring point was the market close on December 1,
1995, the last New York Stock Exchange trading day before the beginning of the
Company's fifth preceding fiscal year. The closing measuring point for 2000 was
December 1, 2000 based on the last New York Stock Exchange trading date prior to
the Company's Saturday, December 2, 2000 fiscal year-end.
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MISCELLANEOUS
AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP to audit the
financial statements of the Company for the fiscal year ending December 1, 2001.
PricewaterhouseCoopers LLP (or its predecessors) has served as the Company's
auditors for more than 30 years. The shareholders will not be asked to approve
this selection at the Annual Meeting. A representative of PricewaterhouseCoopers
LLP will be present at the Annual Meeting of Shareholders and will have an
opportunity to make a statement and respond to appropriate questions.
OTHER BUSINESS
The Board of Directors has no knowledge of any matters, other than as set
forth in this Proxy Statement, upon which action is to be taken at the meeting.
In the event any such matters are brought before the meeting, the attorneys
named in the enclosed form of proxy will vote proxies received by them as they
deem best with respect to all such matters.
PROPOSALS OF SECURITY HOLDERS FOR 2002 ANNUAL MEETING OF SHAREHOLDERS
Under the rules and regulations of the Securities and Exchange Commission,
any proposal which a shareholder of the Company intends to present at the Annual
Meeting of Shareholders to be held in 2002 and which such shareholder desires to
have included in the Company's proxy materials for such meeting, must be
received by the Company on or before October 26, 2001.
The Company's bylaws provide that nomination by a shareholder of a person
for election as a director and other proposals made by such shareholders for
action by the shareholders at any meeting of shareholders may be disregarded
unless proper notice of such nomination or proposal shall have been given to the
Secretary of the Company not less than 60 days nor more than 90 days prior to
the date of the meeting and certain other requirements are met. It is currently
expected that the 2002 Annual Meeting of Shareholders of the Company will be
held on March 19, 2002. Consequently, written notice of any such nomination or
proposal which a shareholder desires to make at the 2002 Annual Meeting must be
received by the Company no earlier than December 19, 2001 and no later than
January 18, 2002. A copy of the Company's bylaws may be obtained without charge
from the Secretary of the Company.
EXPENSE OF SOLICITATION OF PROXIES
The expense of solicitation of proxies, including printing and postage,
will be paid by the Company. In addition to the use of the mail, proxies may be
solicited personally, or by telephone, by officers and regular employees of the
Company. The Company has employed D. F. King & Co., Inc. to solicit proxies for
the Annual Meeting from brokers, bank nominees and other institutional holders.
The Company has agreed to pay $8,500, plus the out-of-pocket expenses of D. F.
King & Co., Inc., for these services. The Company will reimburse brokers and
other persons holding stock in their names, or in the name of nominees, for
their expenses for sending proxy material to principals and obtaining their
proxies.
By Order of the Board of Directors
DAVID J. BOYD
Secretary
Rockford, Illinois
February 23, 2001
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APPENDIX A
March, 2000
CLARCOR INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OPERATING CHARTER
The Board of Directors of CLARCOR Inc. has appointed an Audit Committee
pursuant to authorization in Section 3.11 of Article III of the Company's
Bylaws. The objectives, composition and responsibilities of the Audit Committee
are as follows:
OBJECTIVES:
The primary objective of the Audit Committee (the "Committee") is to assist
the Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting practices, including
financial reports and other financial information provided by the Company to
shareholders, the Company's systems of internal accounting and financial
control, the annual independent audit of the Company's financial statements and
the Company's legal compliance and ethical programs.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose. The Board and the Committee
are in place to represent the Company's shareholders; accordingly, the outside
auditor is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis.
COMPOSITION:
The Committee shall consist of not less than three members, none of whom
shall be an officer or employee of the Company or any subsidiary or affiliated
company. The Board of Directors shall appoint the Chairperson and the members of
the Audit Committee. The members of the Audit Committee shall meet the
requirements of the New York Stock Exchange rules on Audit Committee policy and
composition.
RESPONSIBILITIES:
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management, including the internal audit staff as well as the outside auditor,
has more time, knowledge and more detailed information on the Company than the
Committee members do. Consequently, in carrying out its oversight
responsibilities, the Committee is not providing any expert or special assurance
as to the Company's financial statements or any professional certification as to
the outside auditor's work.
The following functions shall be the commonly recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
- - The Committee shall review with management and the outside auditor the audited
financial statements to be included in the Company's Annual Report on Form
10-K and review and consider with the outside auditor the matters required to
be discussed by Statement of Auditing Standards ("SAS") No. 61.
A-1
23
- - As a whole, or through the Committee chair, the Committee shall review with
management and the outside auditor the Company's interim financial results to
be included in the Company's quarterly reports to be filed with the Securities
and Exchange Commission and the matters to be discussed by SAS No. 61. This
review shall occur prior to the filing of Form 10-Q.
- - The Committee shall review the outside auditor's Management Letter and discuss
with management and the outside auditor the quality and adequacy of the
Company's internal controls.
- - The Committee shall:
- Request from the outside auditor annually, a formal written statement
delineating all relationships between the auditor and the Company
consistent with Independence Standards Board Standard No. 1;
- Discuss with the outside auditor any such disclosed relationships and
their impact on the outside auditor's independence;
- Recommend that the Board take appropriate action in response to the
outside auditor's report to satisfy itself of the auditor's
independence;
- Review with the outside auditor, the scope, planning and fees for each
year's annual audit; and
- Review with the Internal Audit Director, the scope and planning for
each year's internal audit activities and the findings from prior
internal audits.
- - The Committee, subject to any action that may be taken by the Board, shall
have the ultimate authority and responsibility to select or nominate subject
to Board approval, evaluate and, where appropriate, replace the outside
auditor.
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CLARCOR Inc. PROXY/VOTING INSTRUCTION CARD
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS ON MARCH 27, 2001.
The undersigned hereby appoints J. Marc Adam and James L. Packard, or any
one or more of them, acting alone if only one shall be present, or jointly if
more than one shall be present, the true and lawful attorneys of the
undersigned, with power of substitution, to vote as proxies for the undersigned
at the Annual Meeting of Shareholders of CLARCOR Inc. to be held at The
University of Illinois College of Medicine at Rockford, 1601 Parkview Ave.,
Rockford, Illinois 61107, on Tuesday, March 27, 2001 at 6:00 P.M., Central
Standard Time, and all adjournments thereof, all shares of Common Stock which
the undersigned would be entitled to vote and all as fully and with the same
effect as the undersigned could do if then personally present.
Receipt is acknowledged of the Company's Annual Report to Shareholders for the
fiscal year ended November 30, 2000, and the Notice and Proxy Statement for the
above Annual Meeting.
Election of Directors - Nominees are: Robert J. Burgstahler, Lawrence E. Gloyd,
Norman E. Johnson, and Keith E. Wandell.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES (SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. IF A VOTE IS NOT
SPECIFIED, THE PROXIES NAMED ABOVE WILL VOTE FOR THE NOMINEES FOR ELECTION AS
DIRECTORS. THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN
THIS CARD.
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| SEE REVERSE |
| SIDE |
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FOLD AND DETACH HERE
25
/X/ PLEASE MARK YOUR 5086
VOTES AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder(s). If no direction is made, this proxy
will be voted FOR the nominees for election as directors named in this proxy.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH NOMINEES.
- --------------------------------------------------------------------------------
FOR VOTE WITHHELD
1. Election of [ ] [ ]
Directors
(See Reverse)
For, except vote withheld from the following nominee(s):
- -----------------------------------------------------------
2. In their discretion, the Proxies are
authorized to vote upon such other business
as may properly come before the meeting.
SIGNATURE(S) DATE
-------------------------------------- ---------------
NOTE: Please date and sign as name appears hereon. If shares are held
jointly or by two or more persons, each shareholder named should
sign. Executors, administrators, trustees, etc. should so indicate
when signing. If the signer is a corporation, please sign full
corporate name by duly authorized officer. If a partnership,
please sign in partnership name by authorized person.
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FOLD AND DETACH HERE