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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 24, 1998 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
2. To consider and act upon a proposal to amend the Company's 1994
Incentive Plan; and
3. 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
Wednesday, February 11, 1998 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.
MARCIA S. BLAYLOCK
Secretary
PLEASE SIGN AND DATE THE ACCOMPANYING PROXY
AND MAIL IT PROMPTLY.
Rockford, Illinois
February 18, 1998
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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 24, 1998 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 18, 1998.
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 her 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 three persons nominated for election to the
Board of Directors listed on the proxy card enclosed herewith, to approve the
First Amendment to the Company's 1994 Incentive Plan and, in the discretion of
the appointed proxies, upon such other matters as may properly come before the
meeting.
As of February 11, 1998, the Company had outstanding 16,182,228 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 11, 1998 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
At the Annual Meeting three directors are to be elected. Proxies will be
voted for the election of Messrs. Carl J. Dargene, Lawrence E. Gloyd and Norman
E. Johnson 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 three 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. Dargene and Gloyd are directors of the Company previously elected by its
shareholders whose terms in office expire this year. Mr. Johnson was elected in
1996 by the Board to fill a vacancy on the Board. If elected, Messrs. Dargene,
Gloyd and Johnson will hold office for a three year period ending in 2001 or
until their respective successors are duly elected and qualified.
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
---- --- -------- ------------
*Carl J. Dargene 67 April 1, 1989 2001
Chairman, AMCORE Financial, Inc., Rockford, Illinois since
January 1996. 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. Mr. Dargene is
a Director of AMCORE Financial, Inc. and Woodward Governor
Company.
*Lawrence E. Gloyd 65 March 31, 1984 2001
Chairman and Chief Executive Officer, CLARCOR Inc. since
June 1995. Mr. Gloyd was elected President and Chief
Executive Officer in March 1988 and Chairman, President
and Chief Executive Officer in March 1991. Mr. Gloyd is a
Director of AMCORE Financial, Inc., Thomas Industries,
Inc., Woodward Governor Company, and G.U.D. Holdings Ltd.
*Norman E. Johnson 49 June 26, 1996 2001
President and Chief Operating Officer, CLARCOR Inc. since
June 1995. Mr. Johnson was elected President-Baldwin
Filters, Inc. in 1990, Vice President-CLARCOR in 1992, and
Group Vice President-Filtration Products in 1993.
J. Marc Adam 59 March 23, 1991 2000
Vice President Marketing, 3M, St. Paul, Minnesota since
1995. He was elected Group Vice President, Consumer
Products Group in May 1986, Group Vice President, Consumer
& Advertising Markets Group in January 1991, Group Vice
President, Medical Products Group in September 1991 and
Corporate Vice President Marketing in 1995. 3M is a
diversified manufacturer. Mr. Adam is a Director of the 3M
Foundation, Schneider National Inc. and Eastern Heights
Bank.
Stanton K. Smith, Jr. 67 March 21, 1970 2000
Senior Counsel, Skadden, Arps, Slate, Meagher & Flom 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 Energy Corporation, Dearborn,
Michigan. CMS Energy Corporation is a utility and energy
holding company.
Milton R. Brown 66 November 29, 1990 1999
Chairman, President and Chief Executive Officer, Suntec
Industries Incorporated, Rockford, Illinois, since 1984.
Suntec Industries manufactures fuel units, solenoid
valves, and safety shut off valves. Mr. Brown is a
Director of AMCORE Financial, Inc., Suntec Industries
Incorporated and Suntec Industries -- France.
Dudley J. Godfrey, Jr. 71 March 26, 1988 1999
President of the law firm of Godfrey & Kahn, S.C.,
Milwaukee, Wisconsin. Mr. Godfrey has been a member of
Godfrey & Kahn since 1957. He is a Director of Manpower,
Inc., ARM Financial Group, Inc. and other closely and
privately held companies. He is a member of the University
of Michigan Law School Board of Visitors.
Don A. Wolf 68 March 28, 1987 1999
Retired President and Chief Executive Officer, Hardware
Wholesalers, Inc., Fort Wayne, Indiana. Hardware
Wholesalers, Inc. is a wholesaler of hardware, plumbing
supplies, electrical apparatuses, and construction
products. Mr. Wolf is a Director of the Fort Wayne
National Bank.
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* Nominees for election to terms expiring in 2001.
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 1997, the standing committees of the Board of Directors were
the Executive, Audit, and Compensation & Stock Option Committees.
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The Executive Committee exercises all powers and authority of the Board of
Directors when the Board is not in session, except that the Executive Committee
may not authorize certain major corporate actions such as amendments of the
Company's Restated Certificate of Incorporation or Bylaws, mergers or the sale
of substantially all of the assets of the Company or the payment of dividends.
The primary functions of the Executive Committee include review and
recommendations with respect to mergers and acquisitions, divestitures, major
expenditures and long-range planning. The Executive Committee is also
responsible for recommending 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 Executive Committee of nominees recommended by shareholders of the Company.
The Executive Committee did not meet during fiscal 1997. The present members of
the Executive Committee are Messrs. J. Marc Adam, Carl J. Dargene, Lawrence E.
Gloyd, Dudley J. Godfrey, Jr., Stanton K. Smith, Jr., and Don A. Wolf.
The Audit Committee consists of three directors who are not officers of the
Company. 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 twice during fiscal 1997. The present members of the
Committee are Messrs. Milton R. Brown, Dudley J. Godfrey, Jr. and Stanton K.
Smith, Jr.
The Compensation & Stock Option Committee 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 four times during fiscal 1997.
The present members of the Committee are Messrs. J. Marc Adam, Carl J. Dargene,
and Don A. Wolf.
MEETINGS AND FEES OF THE BOARD OF DIRECTORS
The Board of Directors held seven meetings during fiscal 1997. 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 1997, directors who were not employees of the Company
("Non-employee Directors") received an annual retainer of $30,000 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 1997.
For several years the Company had a retirement plan for Non-employee
Directors (the "Directors Plan"). The Directors Plan provided for annual
payments equal to the retainer amount at retirement to be paid for the life of
the Non-employee Director, but not beyond the period of years equal to the
number of years served as director. During fiscal 1996, the Board of Directors
decided to terminate the Directors Plan for current and future Non-employee
Directors. As a result, the present value of the retirement benefits for each
current Non-employee Director was calculated through November 30, 1996 and
benefits will not be accrued after that date. The present value of each
Non-employee Director's benefit will be deferred and paid with interest at
retirement. The retainer amount paid to directors was increased $8,000 beginning
in fiscal 1997 as a result of the termination of the retirement plan for
Non-employee Directors.
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 The First National Bank of Chicago, 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 and Smith elected to defer the fees
payable to each of them during fiscal 1997.
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The Board has adopted a Directors' Restricted Stock Compensation Plan.
Under this Plan, in lieu of the annual retainer otherwise payable, on the date a
person first becomes a Non-employee Director, and on each fifth 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 five times the amount of the annual
retainer for Non-employee Directors. On the date of grant, 20% of these shares
are vested and non-forfeitable. An additional 20% becomes non-forfeitable in
each of the succeeding years, provided that the grantee remains a director.
Until the fifth anniversary of the grant the shares are non-transferable except
upon death such shares are transferable by will or the laws of descent and
distribution. As of January 1, 1998, Messrs. Dargene, Godfrey, Smith and Wolf
have each received grants of 9,826 shares under this Plan. Mr. Brown has
received grants of 9,536 and Mr. Adam 9,574 shares under the Plan. The
Directors' Restricted Stock Compensation Plan was incorporated into the 1994
Incentive Plan adopted by the shareholders of the Company on March 31, 1994.
Under the 1994 Incentive Plan, Non-employee Directors are automatically
granted, on the date of each annual meeting of shareholders, options to purchase
2,500 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, 1998, Messrs. Adam, Brown, Dargene, Godfrey, Smith and Wolf each have
fully exercisable options for 10,000 shares.
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, Inc. ........................................ 1,509,450(1) 9.33%
One Corporate Center
Rye, NY 10580-1434
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(1) Based upon information contained in a Schedule 13D amendment filed in June
1997 with the Securities and Exchange Commission by Gabelli Funds, Inc. on
behalf of certain Gabelli entities.
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DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table provides information concerning the shares of Common
Stock of the Company beneficially owned as of February 11, 1998 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)............................................ 20,061 *
Milton R. Brown (2)......................................... 22,219 *
Carl J. Dargene (2)......................................... 21,626 *
Lawrence E. Gloyd (1)(3).................................... 613,935 3.79%
Dudley J. Godfrey, Jr. (2).................................. 20,951 *
Norman E. Johnson (1)(3).................................... 223,419 1.38%
Stanton K. Smith, Jr. (2)................................... 26,932 *
Don A. Wolf (2)............................................. 36,041 *
Bruce A. Klein (1)(3)....................................... 51,080 *
David J. Anderson (1)(3).................................... 67,056 *
William F. Knese (1)(3)..................................... 61,622 *
All directors and executive officers as a group
(14 persons) (1)(2)(3)(4)................................. 1,274,225 7.87%
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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. See "Compensation of Executive Officers and
Other Information -- Performance Share Plan."
(2) Includes restricted shares granted on a contingent basis under the
Directors' Restricted Stock Compensation Plan and shares subject to stock
options granted 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. Gloyd, Johnson, Klein, Anderson and Knese and the options which are
exercisable by them within 60 days, see the table on page 8.
(4) Includes 928,050 shares subject to stock options. Options for 411,550 shares
are exercisable within 60 days.
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 1997.
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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 Lawrence E. Gloyd, the
Chairman and Chief Executive Officer of the Company, and the other four most
highly compensated executive officers of the Company for the 1997 fiscal year.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------- ---------- ---------- ALL
SECURITIES OTHER
UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY(3) BONUS(4) OPTIONS(5) PAYOUTS(6) SATION(7)
- ----------------------------------------------- ---- --------- -------- ---------- ---------- ---------
Lawrence E. Gloyd(1)........................... 1997 $422,481 $370,213 30,000 $170,539 $24,868
Chairman and Chief Executive Officer 1996 399,231 293,951 30,000 128,836 25,254
1995 366,058 134,381 35,000 122,534 20,547
Norman E. Johnson(1)........................... 1997 287,812 199,194 30,000 81,861 12,738
President and Chief Operating Officer 1996 247,615 153,615 25,000 61,861 10,776
1995 206,923 65,096 20,000 44,950 8,495
Bruce A. Klein(2).............................. 1997 196,654 132,612 10,000 81,861 11,074
Vice President, Finance and Chief Financial 1996 170,078 98,439 10,000 -- 8,011
Officer 1995 140,481 38,596 7,500 -- 4,077
David J. Anderson.............................. 1997 151,117 71,225 7,500 43,640 11,352
Vice President, International/Corporate 1996 141,692 58,205 7,500 32,968 9,526
Development 1995 135,865 34,729 7,500 -- 13,464
William F. Knese............................... 1997 122,827 56,397 3,500 27,924 4,207
Vice President, Treasurer 1996 117,846 41,531 5,000 15,823 4,240
1995 111,625 21,596 5,000 14,069 2,716
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(1) Messrs. Gloyd and Johnson each served as a director of the Company but
received no separate remuneration in that capacity.
(2) Mr. Klein began employment with the Company on January 3, 1995.
(3) Includes compensation deferred by the Company's executive officers pursuant
to the Company's Retirement Savings Plan, adopted in 1984.
(4) Discretionary cash bonuses granted by the Board of Directors under the
Company's Annual Incentive Plan.
(5) Consists of options granted under the Company's 1994 Incentive Plan to
acquire shares of the Company's Common Stock. See "-- Stock Options" below.
(6) 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 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 November 30, 1997, each executive officer listed above held the following
aggregate number of Performance Shares and Performance Units and the value
thereof was as follows: Mr. Gloyd, 14,781 shares and units, $437,887; Mr.
Johnson, 8,339 shares and units, $247,043; Mr. Klein, 4,901 shares and
units, $145,192; Mr. Anderson, 3,287 shares and units, $97,377; and Mr.
Knese, 2,167 shares and units, $64,197. The values shown in the preceding
sentence are based on the closing price of CLARCOR Common Stock on November
28, 1997 ($29.625) 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.
(7) The aggregate value of all perquisite and other personal benefits did not
exceed the lesser of either $50,000 or 10% of the total annual salary and
bonus reported for the named executive officer in the Summary Compensation
Table. The amounts shown in this column for the last fiscal year derived
from the following figures for Messrs. Gloyd, Johnson, Klein, Anderson and
Knese respectively: $10,558; $7,190; $4,913; $3,776; $1,300 -- Company match
for employee stock purchase plan; $4,750; $3,599; $2,607; $2,267;
$1,722 -- Company match for 401(k) plan; $1,917; $1,949; $1,041; $1,721;
$1,185 -- Company paid split dollar insurance premiums; $7,643 (Mr.
Gloyd) -- Company paid term life insurance premium; and $2,513 (Mr. Klein)
and $3,588 (Mr. Anderson) -- Company paid group insurance premium.
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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
On February 1, 1984 the Board adopted and approved the 1984 Stock Option
Plan (the "1984 Plan") which was subsequently approved by the shareholders at
the Annual Meeting held March 31, 1984, covering 800,000 shares of Common Stock.
The 1984 Plan was adjusted to reflect the 3 for 2 stock splits in the form of
stock dividends paid by the Company on January 12, 1990 and February 14, 1992.
The 1984 Plan expired December 31, 1993. On December 14, 1993 the Board adopted
and approved the 1994 Incentive Plan which was subsequently approved by the
shareholders at the Annual Meeting of Shareholders held March 31, 1994 covering
1,000,000 shares of Common Stock.
The following tabulations show information with respect to stock options
granted during fiscal year 1997 under the 1994 Incentive Plan to the five
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)
---- ---------- ------------ --------- ---------- -----------------
L. E. Gloyd....................... 30,000 16.8% $21.625 12/18/06 $183,900
N. E. Johnson..................... 30,000 16.8 21.625 12/18/06 183,900
B. A. Klein....................... 10,000 5.6 21.625 12/18/06 61,300
D. J. Anderson.................... 7,500 4.2 21.625 12/18/06 45,975
W. F. Knese....................... 3,500 2.0 21.625 12/18/06 21,455
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(1) Consists of nonqualified options issued for a ten year term 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, December 19, 1996.
(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 5.98% based on the quoted yield of Treasury Strips
maturing in seven years;
(iii) dividends of $.65 per share of Common Stock; and
(iv) stock price volatility of 26.1% based upon the monthly stock closing
prices for the preceding 7 years.
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The following table sets forth certain information regarding stock option
exercises during fiscal 1997 and the unexercised options held by such
individuals at November 30, 1997.
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 UNEXERCISABLE (1)
---- ----------- -------- ------------------- --------------------
L.E. Gloyd....................... 51,145 $403,439 197,375/123,750 $2,572,870/1,209,530
N.E. Johnson..................... -- -- 61,875/74,375 809,129/672,891
B.A. Klein....................... -- -- 0/27,500 0/241,875
D.J. Anderson.................... -- -- 29,225/22,500 391,882/208,361
W.F. Knese....................... 1,125 18,456 36,850/13,500 531,455/126,906
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(1) Based on the closing price of Common Stock as reported on the New York
Stock Exchange Composite Transactions on November 28, 1997, the last
trading date prior to the Company's nonbusiness day fiscal year-end close
on Saturday, November 29, 1997.
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 3-year Performance Cycle, executives are awarded a
number of Performance Shares and Performance Units determined by applying a
formula set by the Compensation 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 15% for officers at the level of corporate 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 page 13 in "Report of the Compensation &
Stock Option Committee."
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The following table sets forth information regarding 1997 fiscal year
awards under the Performance Share Plan:
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
---- --------------------------- ------------ -------------- --------------
L. E. Gloyd.............. Performance Shares 4,651 3 Years 2,326 Shares 4,651 Shares
Performance Units 3,100 Cash equal to Cash equal to
value of 1,550 value of 3,100
Shares* Shares*
N. E. Johnson............ Performance Shares 2,761 3 Years 1,381 Shares 2,761 Shares
Performance Units 1,841 Cash equal to Cash equal to
value of 921 value of 1,841
Shares* Shares*
B. A. Klein.............. Performance Shares 1,619 3 Years 810 Shares 1,619 Shares
Performance Units 1,080 Cash equal to Cash equal to
value of 540 value of 1,080
Shares* Shares*
D. J. Anderson........... Performance Shares 1,038 3 Years 519 Shares 1,038 Shares
Performance Units 692 Cash equal to Cash equal to
value of 346 value of 692
Shares* Shares*
W. F. Knese.............. Performance Shares 676 3 Years 338 Shares 676 Shares
Performance Units 450 Cash equal to Cash equal to
value of 225 value of 450
Shares* Shares*
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* Based on the average closing price of Common Stock for the 30-day trading
period preceding November 30, 1999 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
1997 was required.
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 ($27,000 in fiscal 1998) 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 all annual
accruals plus the benefit accrued at November 30, 1989 under prior plans shall
be the amount of annual pension.
As of November 30, 1997, Messrs. Gloyd, Johnson, Klein, Anderson and Knese
had 11, 7, 2, 7 and 18 years of service, respectively.
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Estimated annual retirement benefits payable under the Pension Trust at
normal retirement (age 65) for Messrs. Gloyd, Johnson, Klein, Anderson and Knese
are $34,173, $61,946, $44,057, $30,668 and $67,493, 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 is the only remaining active participant. The plan provides to each
participant a lifetime monthly benefit with payment commencing on such
participant's normal retirement date. This monthly benefit is an amount equal to
(a) 65% of the participant's average monthly compensation with respect to the
three consecutive fiscal years for which such participant received the highest
compensation, reduced by (b) the participant's monthly normal retirement benefit
provided by the Pension Trust and benefits earned during employment other than
by the Company. Estimated annual retirement benefit pursuant to the Supplemental
Retirement Plan payable at normal retirement (age 65), for Mr. Gloyd is
$424,803. Such annual retirement benefits are not subject to any reduction for
Social Security amounts. The plan allows for Mr. Gloyd to elect a lump sum
payment of the present value of his benefit at or after the time of his
retirement.
Effective December 1, 1994, the Company established two new retirement
plans for officers and senior executives of the Company. 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, Anderson and Knese are
participants in both new plans. 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, Anderson and Knese are $254,608, $169,966, $94,575 and $49,002,
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. Gloyd,
Johnson, Klein, Anderson and Knese. The agreements for Messrs. Gloyd and
Johnson, effective July 1, 1997, were entered into to assure the benefits of
each executive's future services to the Company through the Annual Meeting to be
held in 2000, when Mr. Gloyd will retire as Chairman and Chief Executive Officer
of the Company and it is expected that Mr. Johnson will then assume the position
of Chief Executive Officer. 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. The employment period for Messrs. Gloyd and
Johnson expires at the Annual Meeting in 2000, but Mr. Johnson's agreement may
be extended automatically each year thereafter by the Board. The
compensation-related provisions are generally consistent with the level of
compensation and benefits just prior to the effective date. The agreements
provided that a special stock option of 120,000 and 60,000 shares would be
granted to Messrs. Gloyd and Johnson, respectively, in December of 1997 if
certain conditions were met. No additional grants will be made to Mr. Gloyd
during the remainder of his employment period unless certain specific quarterly
financial targets are met. The grants for 120,000 and 60,000 shares were made on
December 17, 1997. The "change of control" provisions of these agreements are
consistent with those described below.
Mr. Gloyd's agreement also provides 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.
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Upon Mr. Gloyd's retirement at the Annual Meeting to be held in 2000, his prior
death, his resignation for "Good Reason" (as such term is defined in the
agreement) or the termination of his employment by the Company for any reason
including a change of control (as defined below) the amounts then held in trust,
plus interest, will be distributed to Mr. Gloyd (or his heirs) in lump sum or in
equal monthly or quarterly installments over a period not to exceed 10 years
selected by Mr. Gloyd.
The agreements with Messrs. Klein, Anderson and Knese 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; and (iii)
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 or a
transaction 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.
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) receive his compensation at the rate
called for by the agreement for the remaining portion of the three year
employment term plus the estimated amount of any incentive compensation he would
have been entitled to had he remained in the employ of the Company for the
remainder of the employment period and (ii) continue to be treated as an
employee for the remainder of the three year term for the purpose of the
Company's pension, stock option, medical and other employee benefit plans. The
officer may elect to be paid a lump-sum severance payment equal to the amounts
he would have received in accordance with the preceding sentence. 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 retirement. "Termination" also
includes resignation by the officer after (a) an adverse change in the nature or
scope of his authorities, duties or responsibilities, following a change of
control, as determined in good faith by the officer or (b) 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
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independent Non-employee Directors, is responsible for determining the annual
salary, cash incentives, benefits and intermediate- 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 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
own shares with a value equal to a minimum of five times annual retainer.
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- 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.
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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 45% of base salary, with the maximum awards
ranging from 50% to 90% 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 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. 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 Page 8 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 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 1995-1997 Plan participants earned 98% 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 an average return
on equity versus that of a comparator group, and the other half was earned
based upon attainment of earnings per share growth versus performance
standards set by the Committee. The Committee selected a group of over 30
manufacturing companies with revenues averaging $360 million as the
comparator group for measuring the Company's comparative return on equity.
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 1997 were at the market value of the
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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 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 1997 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 through 10th year of the
option. These restrictions on exercise, together with the 10-year life of
the option, are consistent with the concept of the Plan as providing an
incentive to the executive to remain with the Company for at least the
vesting period of the option and to increase the value of the Common Stock
on a long-term basis.
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 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. Gloyd's annual salary was increased during fiscal 1997 to be
competitive with the median base salary paid to chief executive officers of
comparably-sized corporations identified by the Committee. In addition, Mr.
Gloyd's annual cash incentive had a target level of 45% of base salary and a
maximum award of 90% if performance materially exceeded target objectives. Mr.
Gloyd was awarded an annual cash incentive in accordance with the annual cash
incentive plan and based on the Company's growth in net earnings and economic
value added, and Mr. Gloyd's performance in meeting his personal performance
objectives.
Mr. Gloyd participated in the Committee approved payout at 98% for the
1995-1997 Performance Period and received awards for the 1997-1999 Performance
Period as shown in the table on Page 9 for the Performance Share Plan.
In addition, in fiscal 1997 the Committee approved a stock option grant of
30,000 shares to Mr. Gloyd consistent with competitive practices of companies in
related industries and of comparable size. The grant also reflects the
Committee's recognition of Mr. Gloyd's leadership in meeting the Company's
financial and operating objectives, as well as its expectation for his future
contributions to the Company's strategic objectives.
As described earlier on Page 10, Mr. Gloyd entered into an employment
agreement with the Company effective July 1, 1997. As provided by that
agreement, in fiscal 1998 Mr. Gloyd was awarded a special stock option grant of
120,000 shares on December 17, 1997. No additional grants will be made to Mr.
Gloyd during the remainder of his employment period unless certain specific
quarterly financial targets are met.
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
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established for them and the Company and if they succeed in building increased
value for the Company's shareholders.
Compensation & Stock Option Committee
Don A. Wolf, Chairman
J. Marc Adam
Carl J. Dargene
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Dargene, Chairman and Director of AMCORE Financial, Inc. serves as a
member of the Company's Board and a member of the Company's Compensation & Stock
Option Committee. Mr. Gloyd, Chairman and Chief Executive Officer and Director
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 (November 30, 1992 to November
30, 1997) with the cumulative total return of the S&P Composite 500 Index and
the S&P Manufacturing Diversified Index.
TOTAL RETURN TO SHAREHOLDERS
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, S&P COMPOSITE 500 INDEX AND
S&P MANUFACTURING DIVERSIFIED INDEX
S&P
MEASUREMENT PERIOD MANUFACTURING S&P COMPOSITE
(FISCAL YEAR COVERED) CLARCOR INC. DIVERSIFIED INDEX 500 INDEX
NOV. 27, 92 100.00 100.00 100.00
NOV. 26, 93 106.79 120.40 110.33
DEC. 2, 94 107.46 123.22 111.08
DEC. 1, 95 125.91 180.64 152.31
NOV. 30, 96 132.17 253.73 193.88
NOV. 29, 97 182.64 299.17 249.16
* Assumes that the value of the investment in the Company's Common Stock and
each index was $100 on November 27, 1992 and that all dividends were
reinvested.
The reference points on the foregoing graph are as follows:
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
CLARCOR Inc. .................................. $106.79 $107.46 $125.91 $132.17 $182.64
S&P Composite 500 Index........................ 110.33 111.08 152.31 193.88 249.16
S&P Manufacturing Diversified Index............ 120.40 123.22 180.64 253.73 299.17
The 1992 beginning measuring point was the market close on November 27,
1992, the last trading day before the beginning of the Company's fifth preceding
fiscal year. The closing measuring point for 1997 was November 28, 1997 based on
the last New York Stock Exchange trading date prior to the Company's Saturday,
November 29, 1997 fiscal year-end.
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APPROVAL OF THE FIRST AMENDMENT TO THE
CLARCOR INC. 1994 INCENTIVE PLAN
The Board of Directors approved an amendment ("Amendment") to the CLARCOR
Inc. 1994 Incentive Plan (the "Plan"). The text of the proposed amendment is set
forth in Exhibit A.
Information as to the terms of the 1994 Incentive Plan and with respect to
grants, awards and option exercises which occurred during the Company's last
fiscal year and options and other awards outstanding at November 30, 1997 is
contained elsewhere in this Proxy Statement.
WHY AMEND THE PLAN?
The number of shares of Common Stock originally reserved by the Plan were
not adequate to meet the ongoing purpose of the Plan. The original Plan provided
that an aggregate of 1,000,000 shares of Common Stock would be available for
options and awards under the Plan. As of January 1, 1998, there remained only 46
shares available for future grants.
The purpose of the Plan is to align the interests of the Company's
stockholders and the recipients of awards under the Plan by increasing the
proprietary interest of such recipients in the Company's growth and success. The
Plan is also designed to advance the interests of the Company by attracting and
retaining officers and key employees, and other well-qualified persons who are
not officers or employees of the Company, for service as Directors of the
Company. The proposed Amendment furthers these goals by authorizing additional
shares of Common Stock which may be the subject of future grants under the Plan.
WHAT ARE THE CHANGES?
The Amendment provides for the following:
(1) As of January 1 of any calendar year, beginning with January 1, 1998,
up to 1.5% of the outstanding Common Stock of the Company shall be available for
grants and awards under Articles II through VII of the Plan ("Annual Limit"),
provided that prior to the beginning of any year, the Compensation & Stock
Option Committee ("Committee") of the Board may determine that the Annual Limit
for such year shall be increased by an additional 1% of the outstanding Common
Stock as of January 1 of such year; and
(2) When previously owned whole shares of Common Stock are delivered in
payment of the exercise price of an option (an "Old Option") as permitted in the
Plan, the Committee may issue a new stock option (a "Replacement Option"). A
Replacement Option would provide the grantee the right to purchase a number of
shares of Common Stock equal to the number of shares so delivered on exercise of
the Old Option at an exercise price equal to the market price of the Common
Stock on the date of exercise of the Old Option. In all other respects, the
Replacement Option will have the same terms as the Old Option, including
expiration date. To permit the Committee to grant Replacement Options without
reduction in the number of shares otherwise available under the Plan for option
grants, the Amendment provides that the number of shares available for awards
under the Plan for any year shall be increased by the number of shares delivered
in payment of the exercise price of an Old Option and decreased for all grants
of Replacement Options. The result will be that the issuance of Replacement
Options will not have any effect on the number of shares of Common Stock
available under the Plan.
The Board of Directors believes it is in the best long-term interests of
the shareholders of the Company to maintain a progressive stock-based incentive
program in order to attract and retain officers, key employees and Directors and
to encourage their greater financial investment in the Company. It is
anticipated that the amendment will provide a sufficient number of shares
available for future grants without the necessity for future shareholder votes
to increase the number of shares of Common Stock available under the Plan.
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VOTING ON THE FIRST AMENDMENT
If a quorum is present at the Annual Meeting, approval of the First
Amendment requires the affirmative vote of a majority of the shares of Common
Stock present in person or represented by proxy at the meeting and entitled to
vote with respect to the First Amendment. Proxies marked to abstain from voting
with respect to the First Amendment will have the effect of proxies voted
against the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
MISCELLANEOUS
AUDITORS
The Board of Directors has selected Coopers & Lybrand L.L.P. to audit the
financial statements of the Company for the fiscal year ending November 30,
1998. Coopers & Lybrand L.L.P. 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 Coopers & Lybrand L.L.P. 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 1999 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 1999 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 21, 1998.
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 1999 Annual Meeting of Shareholders of the Company will be
held on March 23, 1999. Consequently, written notice of any such nomination or
proposal which a shareholder desires to make at the 1999 Annual Meeting must be
received by the Company no earlier than December 23, 1998 and no later than
January 22, 1999. A copy of the Company's bylaws may be obtained without charge
from the Secretary of the Company.
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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 $8,000, 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
MARCIA S. BLAYLOCK
Secretary
Rockford, Illinois
February 18, 1998
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EXHIBIT A
FIRST AMENDMENT TO THE
CLARCOR INC. 1994 INCENTIVE PLAN
SECTION I.2 OF THE CLARCOR INC. 1994 INCENTIVE PLAN (THE "PLAN") SHALL BE
AMENDED BY THE ADDITION OF THE FOLLOWING DEFINITION:
"Replacement Option" shall mean a Non-qualified Stock Option which may
be granted by the Committee subsequent to the delivery by a grantee of
whole shares of Common Stock in payment of the exercise price of a stock
option (the "Original Option") issued to such grantee under this Plan and
which shall have the following terms: the Replacement Option shall (i)
grant an option to such grantee for the number of shares of Common Stock so
delivered by such grantee upon the exercise of the Original Option; (ii)
have an exercise price equal to the Fair Market Price of the Common Stock
on the date of exercise of the Original Option; and (iii) in all other
respects have the same terms as the Original Option, including, without
limitation, the same expiration date as the Original Option.
THE FIRST PARAGRAPH OF SECTION I.5 OF THE PLAN IS AMENDED TO READ AS
FOLLOWS:
Subject to adjustment as provided in Section IX.7 of this Plan, the
total number of shares of Common Stock available for grants and awards,
beginning on January 1, 1998, under Articles II through VII of the Plan in
any calendar year shall be 1.5% of the outstanding Common Stock as of
January 1 of such year (the "Annual Limit"), provided that prior to the
beginning of any year, the Committee may determine that the Annual Limit
for such year shall be increased by an additional 1% of the Outstanding
Common Stock as of January 1 of such year. Any unused portion of an Annual
Limit shall be carried forward and made available for awards or grants in
succeeding years. Grants and awards that may be exercised or settled solely
for or in cash shall not affect the number of shares of Common Stock
available under the Plan. Subject to adjustment as provided in Section IX.7
of the Plan, the total number of shares of Common Stock available for
grants of Incentive Stock Options in any calendar year shall be 100,000 and
any portion of such number of shares of Common Stock not subject to an
Incentive Stock Option granted in a calendar year shall be available for
grants of Incentive Stock Options in succeeding years. To the extent (i)
that an outstanding option expires or terminates unexercised or is canceled
or forfeited (other than in connection with the exercise of a Tandem SAR)
or (ii) that an outstanding Free-Standing SAR or outstanding Performance
Share, either of which may be exercised or settled (A) solely for or in
shares of Common Stock or (B) for or in shares of Common Stock or cash,
expires or terminates unexercised or is canceled or forfeited, then the
shares of Common Stock subject to such expired, unexercised, canceled or
forfeited portion of such award shall again be available under the Plan. In
addition, the total number of shares available for awards under the Plan
for any year shall be increased by the number of shares delivered in
payment of the exercise price of an option in accordance with Section
II.1.(c) during such year and decreased for shares of Common Stock subject
to Replacement Options granted in such year. The shares of Common Stock
represented by an award of Restricted Stock or Directors' Restricted Shares
shall again be available under the Plan upon forfeiture of such award as
provided in the Plan. In the event that all or a portion of a Free-Standing
SAR (or exercised portion thereof) that may be exercised or settled either
(i) solely for or in shares of Common Stock or (ii) for or in shares of
Common Stock or cash or a Tandem SAR is exercised, the number of shares of
Common Stock subject to the SAR (or exercised portion thereof) shall again
be available under the Plan, except to the extent that shares of Common
Stock were delivered (or would have been delivered but were withheld to
satisfy withholding obligations) upon exercise of the SAR. As used herein
the term "Outstanding Common Stock" shall mean all of the issued and
outstanding Common Stock excluding any Common Stock held in the Company's
treasury or owned by any Subsidiary.
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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 ON MARCH 24, 1998.
The undersigned hereby appoints J. MARC ADAM and DON A. WOLF, 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 24, 1998 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, 1997, and the Notice and Proxy Statement for the
above Annual Meeting.
The Company is aware of two matters to be voted upon at this Annual Meeting: 1.
the election of directors - the nominees are Messrs. Carl J. Dargene, Lawrence
E. Gloyd and Norman E. Johnson and 2. the proposed amendment to the 1994
Incentive Plan described in the Proxy Statement for this Annual Meeting.
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 AND FOR THE AMENDMENT TO THE 1994 INCENTIVE PLAN. 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
23
/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 and FOR the
amendment to the 1994 Incentive Plan.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH NOMINEES AND FOR THE AMENDMENT TO THE 1994 INCENTIVE PLAN.
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FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Proposal to amend / / / / / / 3. In their discretion, the Proxies are authorized
Directors the 1994 Incentive to vote upon such other business as may
(See Reverse) Plan. properly come before the meeting.
For, except vote withheld from the following nominee(s):
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SIGNATURE(S) DATE
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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