<PAGE>
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
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
|X| Definitive Proxy Statement Commission Only (as permitted by
|_| Definitive Additional Materials Rule 14a-6(e)(2)
|_| Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
EMERGING VISION, INC.
---------------------
(Name of Registrant as Specified in its Charter)
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how its was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
EMERGING VISION, INC.
1500 Hempstead Turnpike
East Meadow, New York 11554
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held May 26, 2000
The Annual Meeting of Shareholders of Emerging Vision, Inc. ("Emerging"
or the "Company") will be held at The Sky Club, 200 Park Avenue, 56th Floor, New
York, New York 10166 on Friday, the 26th day of May, 2000, at 9:00 a.m. (local
time), for the following purposes:
(1) to elect three Class 1 Directors to the Company's Board of
Directors to hold office until the 2002 Annual Meeting of
Shareholders or until each of their respective successors
shall have been duly elected and qualified;
(2) to ratify the selection of Arthur Andersen LLP, independent public
accountants, as the auditors of the Company for the 2000 fiscal
year; and
(3) to transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on April 21,
2000 as the record date for the determination of the shareholders of the Company
entitled to notice of, and to vote at, the Annual Meeting of Shareholders. Each
share of the Company's Common Stock, par value $.01 per share, is entitled to
one vote on all matters presented at the Annual Meeting; and each share of the
Company's Senior Convertible Preferred Stock, par value $.01 per share, is
entitled to 133,333 votes on all matters presented at the Annual Meeting.
ALL HOLDERS OF THE COMPANY'S COMMON STOCK AND SENIOR CONVERTIBLE
PREFERRED STOCK (WHETHER THEY EXPECT TO ATTEND THE ANNUAL MEETING OR NOT) ARE
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN PROMPTLY THE PROXY CARD ENCLOSED
WITH THIS NOTICE.
By Order of the Board of Directors
By: /s/ Joseph Silver
------------------------------
JOSEPH SILVER,
Secretary
April 28, 2000
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EMERGING VISION, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held May 26, 2000
INTRODUCTION
This Proxy Statement is being furnished to shareholders of record of
Emerging Vision, Inc. ("Emerging" or the "Company") as of April 21, 2000, in
connection with the solicitation, by the Board of Directors of Emerging, of
proxies for the 2000 Annual Meeting of Shareholders to be held at The Sky Club,
200 Park Avenue, 56th Floor, New York, New York on Friday, May 26, 2000, at 9:00
a.m. (local time), or at any and all adjournments thereof (the "Annual Meeting"
or "Meeting"), for the purposes stated in the Notice of Annual Meeting of
Shareholders to which this Proxy Statement is annexed. The approximate date of
mailing to Shareholders of the Notice of Annual Meeting, this Proxy Statement,
the enclosed form of Proxy and the Company's Annual Report for the year ended
December 31, 1999, is May 2, 2000.
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on April 21,
2000 as the record date for the determination of shareholders entitled to notice
of the Annual Meeting, and only holders of record of the Common Stock, par value
$.01 per share (the "Common Stock"), and Senior Convertible Preferred Stock, par
value $.01 per share (the "Preferred Stock" and, together with the Common Stock,
hereinafter collectively referred to as the "Capital Stock"), of the Company on
that date will be entitled to notice of, and to vote at, the Annual Meeting. As
of the record date, the Company had outstanding 25,558,564 shares of Common
Stock, each share of Common Stock being entitled to one vote on all matters
presented at the Annual Meeting, and 2.506252 shares of Preferred Stock, each
share of Preferred Stock being entitled to 133,333 votes on all matters
presented at the Annual Meeting.
The presence, in person or by proxy, of the holders of shares which
represent a majority of the votes entitled to be cast at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting. Abstentions and broker
non-votes will be counted to determine whether a quorum is present. A plurality
of the votes cast at the Meeting is required for the election of Directors. For
all other matters to be considered at the Annual Meeting, a vote of a majority
of the votes cast on the matter will be required for approval. Broker non-votes
and abstentions will not be counted for purposes of determining the number of
votes cast. The Directors and officers as a group have indicated their intention
to vote "FOR" the election, to the Board of Directors, of the individuals named
as nominees herein, and "FOR" each of the other items to be considered at the
Annual Meeting.
If the enclosed Proxy is signed and returned, it may, nevertheless, be
revoked at any time prior to the voting thereof at the pleasure of the
shareholder signing it, either by delivering written notice of revocation to the
Secretary of the Company, or by voting the shares covered thereby in person or
by another proxy dated subsequent to the date thereof.
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Shares represented by duly executed proxies in the accompanying form
will be voted in accordance with the instructions indicated on such proxies, and
if no such instructions are indicated thereon, will be voted in favor of the
nominees named below for election as Directors and for the other proposals
referred to below. In their discretion, the Proxies are authorized to consider
and vote upon such matters incident to the conduct of the Annual Meeting and
upon such other business matters or proposals as may properly come before the
Meeting that the Board of Directors of the Company did not know, within a
reasonable time prior to this solicitation, would be presented at the Meeting.
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SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
I. COMMON STOCK:
------------
The following table sets forth certain information, as of April 21,
2000, regarding the beneficial ownership of the Company's Common Stock by: (i)
each shareholder known by the Company to be the beneficial owner of more than
five percent of the outstanding shares of the Company's Common Stock; (ii) each
Director of the Company; (iii) each executive officer of the Company who is not
a Director; and (iv) all Directors and executive officers of the Company as a
group. The percentages in the "Percent of Total Voting Power" column do not give
effect to shares included in the "Beneficial Ownership" column as a result of
the ownership of options or warrants. Unless otherwise indicated, the Company
believes that the beneficial owners of the Common Stock listed below, based on
information provided by such owners, have sole investment and voting power with
respect to such shares. The address of William F. Stasior is 3570 East Calle
Porta De Acero, Tucson, Arizona 85718. The address of Suresh V. Mathews is c/o
Rare Medium, Inc., 901 Main Street, Suite 2301, Dallas, Texas 75202. The address
of each of Gregory T. Cook and Sara V. Traberman is 44 West 18th Street, New
York, New York 10011. The address of James E. Ewer is 901 Main Street, Dallas,
Texas 75202. The address of Joel Gold is c/o Berry Shino Securities, 430 Park
Avenue, Suite 610, New York, New York 10022. The address of each of Robert and
Kim Greenberg is c/o Insight Laser Centers, Inc., 725 Fifth Avenue, New York,
New York 10022. The address of all other persons listed below is 1500 Hempstead
Turnpike, East Meadow, New York 11554.
<TABLE>
<CAPTION>
Beneficial Percent of Percent of Total
Name Ownership Class Voting Power
- ---- --------- ----- ------------
<S> <C> <C> <C>
William F. Stasior (**).................. -0- (1) * *
Dr. Robert Cohen (**).................... 1,527,157 (2) 5.8% 2.7%
Dr. Alan Cohen (***)..................... 1,640,324 (3) 6.3% 3.7%
Suresh V. Mathews (**)................... -0- (4) * *
Gregory T. Cook (***).................... -0- (5) * *
Joel Gold (**)........................... 21,500 (6) * *
Sara V. Traberman (****)................. -0- (7) * *
Joseph Silver (****)..................... 233,569 (8) * *
Jerry Darnell (****)..................... 96,569 (9) * *
James E. Ewer (****)..................... -0- (10) * *
Dr. Nicholas Shashati (****)............. 10,000(11) * *
William J. Young (****).................. 30,000(12) * *
Robert Greenberg (****).................. -0- * *
All Directors and executive
officers as a group (13 persons) 3,559,119(13) 13.0% 6.4%
</TABLE>
- -----------------------------
* less than 1%
** Director
*** Director and executive officer
**** executive officer
- --------
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(1) Excludes 200,000 options which are subject to certain vesting
requirements.
(2) This number includes: (i) the right to acquire 666,667 shares of
Common Stock upon the exercise of presently exercisable,
outstanding options; and (ii) 150,000 presently exercisable
options granted to Dr. Robert Cohen, as the designee of Meadows
Management, LLC, a limited liability company owned by Drs. Robert
and Alan Cohen ("Meadows").
(3) This number includes: (i) the right to acquire 533,334 shares
of Common Stock upon the exercise of presently exercisable,
outstanding options; and (ii) 150,000 presently exercisable
outstanding options granted to Dr. Alan Cohen, as the designee
of Meadows. Excludes an additional 83,333 options which are
subject to certain vesting requirements.
(4) Excludes 200,000 options which are subject to certain vesting
requirements.
(5) Excludes 800,000 options which are subject to certain vesting
requirements.
(6) This number represents 1,500 shares of Common Stock owned by
Mr. Gold's children and the right to acquire 20,000 shares of
Common Stock upon the exercise of presently exercisable,
outstanding options.
(7) Excludes 400,000 options which are subject to certain vesting
requirements.
(8) This number represents the right to acquire 233,569 shares of
Common Stock upon the exercise of presently exercisable,
outstanding options, but excludes an additional 50,000 options
which are subject to certain vesting requirements.
(9) This number represents the right to acquire 96,569 shares of
Common Stock upon the exercise of presently exercisable,
outstanding options, but excludes an additional 100,000
options which are subject to certain vesting requirements.
(10) Excludes 200,000 options which are subject to certain vesting
requirements.
(11) This number represents the right to acquire 10,000 shares of
Common Stock upon the exercise of presently exercisable,
outstanding options, but excludes an additional 30,000 options
which are subject to certain vesting requirements.
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<PAGE>
(12) This number represents the right to acquire 30,000 shares of
Common Stock upon the exercise of presently exercisable,
outstanding options, but excludes an additional 65,000 options
which are subject to certain vesting requirements.
(13) This number includes: the right to acquire 1,890,139
shares of Common Stock upon the exercise of presently
exercisable, outstanding options. In accordance with Rule
13d-3(d)(1) under the Securities Exchange Act of 1934, as
amended, the 1,890,139 shares of Common Stock for which the
Company's Directors and executive officers, as a group, hold
currently exercisable options, have been added to the total
number of issued and outstanding shares of Common Stock solely
for the purpose of calculating the percentage of such total
number of issued and outstanding shares of Common Stock
beneficially owned by such Directors and executive officers as
a group.
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<PAGE>
II. SENIOR CONVERTIBLE PREFERRED STOCK:
Set forth below is the name, address, stock ownership and voting power
of each person or group of persons known by the Company to own beneficially more
than 5% of the outstanding shares of the Company's Senior Convertible Preferred
Stock:
Percent of
Beneficial Percent Total Voting
Name Ownership of Class Power
---- --------- -------- -----
Huberfeld/Bodner Family Foundation
152 West 57th Street
New York, NY 10019 1.77(1) 70.6% *
Rita Folger
1257 East 24th Street
Brooklyn, NY 11210 .74(2) 29.4% *
(*) Less than 1%
(1) These shares are convertible into an aggregate of 235,833 shares of
Common Stock and the holder thereof will be entitled to cast that
number of votes at the Annual Meeting.
(2) These shares are convertible into an aggregate of 98,333 shares of
Common Stock and the holder thereof will be entitled to cast that
number of votes at the Annual Meeting.
DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors consists of six Directors. The Directors of the
Company are divided into two classes, designated as Class 1 and Class 2,
respectively. Directors of each Class will be elected at the Annual Meeting of
the Shareholders of the Company held in the year in which the term of such Class
expires, and will serve thereafter for two years. All Directors serve until
their respective successors are duly elected and qualified or until an earlier
resignation, removal from office, retirement or death. Messrs. William F.
Stasior, Suresh V. Mathews and Gregory T. Cook presently serve as Class 1
Directors and are scheduled to hold office until the 2000 Annual Meeting of
Shareholders. Drs. Robert and Alan Cohen and Mr. Joel Gold presently serve as
Class 2 Directors and are scheduled to hold office until the 2001 Annual Meeting
of Shareholders.
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Item 1. ELECTION OF DIRECTORS (PROPOSAL 1)
The Board of Directors has nominated Messrs. William F. Stasior, Suresh
V. Mathews and Gregory T. Cook to serve as Class 1 Directors until the 2002
Annual Meeting of Shareholders or until their respective successors are duly
elected and qualified.
The following table lists the current Class 1 and Class 2 Directors of
the Company:
Class 1 - Term Expires in 2000
Mr. William F. Stasior (Current Director standing for election at the Annual
Meeting)
Mr. Suresh V. Mathews (Current Director standing for election at the Annual
Meeting)
Mr. Gregory T. Cook (Current Director standing for election at the Annual
Meeting)
Class 2 - Term Expires in 2001
Dr. Robert Cohen (Current Director)
Dr. Alan Cohen (Current Director)
Mr. Joel Gold (Current Director)
Shares represented by proxies returned duly executed will be voted,
unless otherwise specified, in favor of the following three nominees: William F.
Stasior, Suresh V. Mathews and Gregory T. Cook. Each nominee for Director has
consented to serve on the Board of Directors and will be elected by a plurality
of the votes cast at the Annual Meeting. If any (or all) such persons should be
unavailable or unable to serve, the persons named in the enclosed Proxy will
vote the shares covered thereby for such substitute nominee (or nominees) as the
Board of Directors may select; however, at the present time, the Board of
Directors knows of no reason why any nominee might be unable to serve.
Shareholders may withhold authority to vote for any nominee by entering the name
of such nominee in the space provided for such purpose on the enclosed Proxy
Card.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF
THE NOMINEES NAMED HEREIN.
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<PAGE>
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
The Directors and executive officers of Emerging are as follows:
Name Age Position
- ---- --- --------
William F. Stasior 59 Chairman of the Board of Directors
Alan Cohen, O.D. 49 Vice-Chairman of the Board of Directors; President
-Retail Optical Store Division
Gregory T. Cook 40 President; Chief Executive Officer; Director
Robert Cohen, O.D. 55 Director
Suresh V. Mathews 52 Director
Joel Gold 57 Director
Sara V. Traberman 40 Chief Financial Officer; Senior Vice President-
Finance
Jerry Darnell 48 Senior Vice President-Business Development
James E. Ewer 43 Senior Vice President-Operations
Joseph Silver 54 Executive Vice President-Legal Affairs; Secretary;
General Counsel
Dr. Nicholas Shashati 40 President - VisionCare of California
William J. Young 49 Vice President-Finance; Treasurer
Robert B. Greenberg 55 President and Chief Executive Officer - Insight
Laser Centers, Inc.
William F. Stasior was appointed as Chairman of the Company's Board of
Directors, effective April 10, 2000. From 1991 to 1998, Mr. Stasior served as
the Chairman and Chief Executive Officer of Booz-Allen & Hamilton, Inc., one of
the world's largest management and technology consulting firms. Mr. Stasior
currently serves on the Board of Advisors for both Northwestern University's
Kellogg Graduate School of Management and INSEAD, the leading business school in
Europe, and serves on the Board of Directors of Opnet, a software company that
specializes in enhancing network performance for the Internet and other
applications. Mr. Stasior is also a member of the Board of Directors of the
United Negro College Fund, and chairs several of its committees. He is active in
technical professional associations, and has served on various panels of the
National Research Council.
Dr. Alan Cohen has served as a Director of the Company since inception.
He also served as Chief Operating Officer of the Company from 1992 until
October, 1995, when he became Vice Chairman of the Board of Directors, and as
the Company's President, Chief Executive Officer and Chief Operating Officer
from October, 1998 through April 17, 2000, when he became President of the
Company's retail optical store division. Dr. Cohen, together with his brother,
Dr. Robert Cohen, are the owners of Meadows Management, LLC ("Meadows") which,
until April 9, 2000, rendered consulting services to the Company. From 1974 to
the present, Dr. Alan Cohen has been engaged in the
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retail and wholesale optical business. For more than 10 years, Dr. Cohen has
also been a director, principal shareholder and officer of Cohen Fashion
Optical, Inc. and its affiliates ("CFO"), which currently maintains its
principal offices in East Meadow, New York. Dr. Cohen and his brother, Dr.
Robert Cohen, also are shareholders of CFO. CFO engages in the operation and
franchising of retail optical stores similar to those operated and franchised by
the Company. Dr. Cohen is also an officer and a director of several management
and real estate companies and other businesses. Dr. Cohen graduated from the
Pennsylvania School of Optometry in 1972, where he received a Doctor of
Optometry degree.
Gregory T. Cook joined the Company's Internet division in March, 2000
as its President and Chief Executive Officer. On March 30, 2000, he was
appointed as a Director of the Company and, on April 18, 2000, became the
Company's President and Chief Executive Officer. From April, 1999 to March,
2000, Mr. Cook was Senior Vice President and Chief Administrative Officer of
Rare Medium, Inc. ("Rare Medium"), the entity retained by the Company to render
consulting services to it in connection with its e-commerce initiatives, as well
as Emerging's exclusive provider of e-commerce web services. From November, 1995
to March, 1999, Mr. Cook served as the President and Chief Executive Officer of
Raven Eye, a specialty designer/importer/distributor of high-end sunglasses and
optical frames; and from October, 1991 to October, 1995, he served as the
President and Chief Executive Officer of Foster Grant, a sunglass and optical
company. Mr. Cook, in 1983, received a BA degree in Finance and Economics from
Texas Tech University and, in 1984, received an MBA from the University of North
Texas.
Dr. Robert Cohen served as Chairman of the Board of Directors of the
Company from inception through April 7, 2000, when he resigned as Chairman. He
also served as Chief Executive Officer of the Company from inception until
October, 1995. Dr. Cohen, together with his brother, Dr. Alan Cohen, are the
owners of Meadows which, until April 9, 2000, rendered consulting services to
the Company. From 1968 to the present, Dr. Robert Cohen has been engaged in the
retail and wholesale optical business. For more than 10 years, Dr. Cohen has
also served as President and a director of CFO, which currently maintains its
principal offices in East Meadow, New York. Dr. Cohen and his brother, Dr. Alan
Cohen, also are shareholders of CFO. Dr. Cohen is also an officer and a director
of several management and real estate companies and other businesses. He is a
graduate of the Pennsylvania School of Optometry where, in 1968, he received his
Doctor of Optometry degree.
Suresh V. Mathews was appointed as a Director of the Company on March
30, 2000. Mr. Mathews, since February, 1999, has served as the President and
Chief Operating Officer of Rare Medium, and has 25 years of information
technology, systems development and telecommunications experience. From 1997
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to February 1999, Mr. Mathews was Senior Vice President and Chief Information
Officer of Quaker State Oil Company, a company engaged in the manufacturing
and distribution of petroleum products; from 1995 to 1997, as Vice President
and General Manager of PepsiCo, Inc., and as Vice President and Chief
Information Officer of its subsidiary, KSC Corp.; and from 1992 to 1995, as
Chief Information Officer of Booz-Allen & Hamilton, Inc., one of the world's
largest management and technology consulting firms. Mr. Mathews graduated
from Mankato State University in 1975, where he received his B.S. degree.
Joel L. Gold has served as a Director of Emerging since December 1995.
He is currently Executive Vice-President-Investment Banking of Berry Shino
Securities, Inc., an investment banking firm located in New York City. From
January, 1999 until December, 1999, he was an executive vice-president of
Solid Capital Markets, an investment banking firm also located in New York
City. From September 1997 to January 1999, he served as a Senior Managing
Director of Interbank Capital Group, LLC, an investment banking firm located
in New York City. From April, 1996 to September, 1997, Mr. Gold was an
Executive Vice President of LT Lawrence & Co., and from March, 1995 to April,
1996, a Managing Director of Fechtor Detwiler & Co., Inc., a representative
of the underwriters for the Company's initial public offering. Mr. Gold was a
Managing Director of Furman Selz Incorporated from January 1992 until March
1995. From April 1990 until January 1992, Mr. Gold was a Managing Director of
Bear Stearns and Co., Inc. ("Bear Stearns"). For approximately 20 years
before he became affiliated with Bear Stearns, he held various positions with
Drexel Burnham Lambert, Inc. He is currently a director of Concord Camera
Corp., a manufacturer and distributor of cameras ("Concord"); Life Medical
Sciences, a biotechnological company ("Life"); and PMCC Financial Corp.
("PMCC"), a specialty, consumer finance company. He currently serves on the
Compensation Committee of each of Concord, Life and PMCC.
Sara V. Traberman joined the Company's Internet division in March, 2000
as its Senior Vice President-Finance and Chief Financial Officer; and on April
18, 2000, became the Company's Senior Vice President-Finance and Chief Financial
Officer. From September 1999 through March 2000, Ms. Traberman was Vice
President, Senior Marketing Officer for PNC Bank's Business Credit unit. From
March 1992 through August 1999, Ms. Traberman held various positions at
Transamerica Commercial Finance Corporation, including Senior Vice President at
Transamerica Business Credit and Senior Vice President-Credit of TIFCO,
Transamerica's premium finance unit. Ms. Traberman joined Transamerica as part
of a portfolio acquisition of Citicorp Business Loans, a subsidiary of Citibank,
N.A. Ms. Traberman joined Citicorp Business Loans in 1987 and was a Vice
President-Transactor, responsible for sourcing and managing middle market
transactions. Ms. Traberman graduated from Georgetown University in 1981 with a
BS in Finance/Economics and received an MBA from Pace University in 1987.
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Jerry Darnell served as Emerging's Executive Vice President-Franchising
from July 1992 to September 1998, and as its Chief Operating Officer-Franchise
Division from September, 1998 through April 17, 2000, when he was appointed to
the position of Senior Vice President-Business Development for both the
Company's Internet and retail optical store divisions. From February 1990
through December 1991, Mr. Darnell served as Director of Franchise Development
for Physicians Weight Loss Centers, Inc., located in Akron, Ohio. From July 1989
to February 1990, he was Senior Vice President of Formu-3 International, Inc., a
company operating company owned and franchised weight loss centers, located in
Canton, Ohio. From August 1988 to July 1989, Mr. Darnell was Vice President of
Franchise Development of Medicine Shoppe International, Inc., a company in the
business of franchising retail pharmaceutical stores, located in St. Louis,
Missouri, having first been associated with that company, as a consultant, in
November 1987. Mr. Darnell is a member of the International Franchise
Association, served as Chairman of its trade show exhibit committee and has
served as a franchise consultant to many franchise organizations where he has
been a seminar leader. He has also been a keynote speaker for national sales and
business organizations.
James E. Ewer joined the Company's Internet division in March 2000 as
its Senior Vice President-Operations. From June 1999 through March 2000, Mr.
Ewer was with Decision Consultants and held a leadership role managing ERP
implementations, systems integration, business process improvements, and
e-business installations. From August 1998 through April 1999, Mr. Ewer was
responsible for strategic systems development at CellStar Corporation, a leading
supplier of satellite and terrestrial phones, tracking devices and pagers. From
December 1993 through August 1998, Mr. Ewer was Vice President-Operations at
Foster Grant where he was the architect of an optical industry supply chain
management system for the procurement and distribution of more than 40 million
units on an annual basis. Mr. Ewer graduated from Indiana University in 1997
with a BS degree and received an MBA from Southern Methodist University in 1999.
Joseph Silver has served as Executive Vice President-Legal Affairs and
Secretary of, and General Counsel to, the Company since March 1992. From May
1985 to December 1991, Mr. Silver served as General Counsel to The Trump
Organization, located in New York, New York. Mr. Silver is a member of the New
York State Bar, and received a Juris Doctorate degree from Brooklyn Law School
in 1969. Mr. Silver, together with his wife, are the principal stockholders of
RJL Optical, Inc., the franchisee of the Sterling Optical Center located in
Great Neck, New York, which is presently being managed by the Company.
Dr. Nicholas Shashati has been the Director of Professional Services of
the Company since July, 1992 and, since March 1, 1998, President of the
Company's wholly owned subsidiary, VisionCare of California ("VCC"). Dr.
Shashati earned a Doctor of Optometry degree from Pacific University of
California in 1984, and received a Bachelor of Science degree from Pacific
University and a Bachelor of Science degree in Biology from San Diego State
University. Dr. Shashati is licensed as an optometrist in the States of New
York, California, Arizona and Oregon. He is Chairperson for the Quality
Assurance Committee of the Company, as well as a Practice Management Consultant.
William J. Young: (i) from March 1998 through April 17, 2000, served as
the Company's Executive Vice President-Finance, Chief Financial Officer and
Treasurer; and (ii) on April 18, 2000, was appointed Vice President-Finance
and Treasurer. From December 1987 through March 1998, Mr. Young served in
various capacities with Sbarro, Inc., an 800 store restaurant chain, first, as
its Director of Internal Audit, thereafter, as its Controller, and, finally,
as its Director of Corporate Finance. Mr. Young has been a Certified Public
Accountant for more than ten years.
12
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Robert B. Greenberg is President and CEO of the Company's 66.67% owned
subsidiary, Insight Laser Centers, Inc. From July 1998 to June 1999, Mr.
Greenberg served as Chairman and Chief Executive Officer of, and a consultant
to, Ergovision, Inc., which is now known as "EyeCity.com", a company that
markets specialty consumer eyeglasses, sunglasses, and eyedrops over the
Internet. From August, 1994 to December 31, 1997, Mr. Greenberg was the Chief
Executive Officer of the Company. For five years prior thereto, Mr. Greenberg
served as president of Natural Cosmetic Licensing, Inc. and its predecessor,
the licensor of I-Natural Cosmetic Products. Mr. Greenberg has also served as
a director of Benihana, Inc. and its predecessor, Benihana National Corp.,
since 1983.
OPERATION OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1999, the Board of Directors
of the Company held two meetings in person, held an additional three meetings
telephonically, and acted by written consent four times. Each Director attended
at least 75% of the meetings held by the Board of Directors during the period in
which such Director served, including the meetings held by the Committees on
which such Director served.
Committees of the Board
The standing committees of the Board of Directors include the Executive
Committee, the Audit Committee, the Compensation Committee and the Independent
Committee.
The Executive Committee, whose members are Drs. Robert and Alan Cohen
and Mr. Joel Gold, is generally authorized to exercise the powers of the Board
of Directors in connection with the management of the Company; provided,
however, that the Executive Committee does not have the authority to submit to
shareholders any action that needs shareholder approval under law, fill
vacancies in the Board of Directors or in any Committee, fix the compensation of
Directors for serving on the Board of Directors or on any Committee, amend or
repeal the By-Laws of the Company or adopt new by-laws of the Company, or amend
the Company's Certificate of Incorporation. The Executive Committee was
established in December 1995, and, during the year ended December 31, 1999,
acted two times by unanimous written consent.
The Audit Committee, whose members currently are Dr. Robert Cohen, Joel
Gold and Suresh V. Mathews (and whose members, during the 1999 fiscal year, were
Joel Gold, William Young and Edward Celano) recommends the selection of the
Company's independent auditors, receives reports from such independent auditors
on any material recommendations made to management, and reviews, with
13
<PAGE>
the auditors, any material questions or problems with respect to the accounting
records, procedures or operations of the Company which have not been resolved to
their satisfaction after having been brought to the attention of management. The
Audit Committee was established in December, 1995 and met once during the year
ended December 31, 1999.
The Compensation Committee, whose members are Drs. Robert and Alan
Cohen and Mr. Joel Gold, administers the Company's 1995 Stock Incentive Plan and
recommends to the Board of Directors the salaries and bonuses of the executive
officers of the Company. The Compensation Committee was established in December,
1995 and, during the year ended December 31, 1999, acted twelve times by
unanimous written consent.
The Independent Committee, whose members are Joel Gold, Suresh V.
Mathews and Alan Cohen (and whose members, during the 1999 fiscal year, were
Joel Gold, Edward Celano and Jerry Lewis), is generally authorized to review any
transaction (or series of transactions) involving more than $10,000 in any
single instance, or more than $50,000 in the aggregate (other than compensation
matters which are determined by the Compensation Committee) between the Company
and: (i) any of its Directors, officers, principal shareholders, and/or each of
their respective affiliates; or (ii) any employee of, or consultant to, the
Company who also renders services to CFO, a retail optical company owned by
certain shareholders of the Company, whether or not for compensation (in which
event, Dr. Cohen will be required to abstain from voting). The Independent
Committee was established in December, 1995 and, during the year ended December
31, 1999, acted four times by unanimous written consent.
DIRECTOR COMPENSATION
Directors who are not employees or officers of the Company or
associated with the Company receive $750 for each Board and Committee meeting
attended in person, and $250 for each Board and Committee meeting attended
telephonically. Further, all Directors are reimbursed for certain expenses in
connection with their attendance at Board and Committee meetings.
On July 26, 1999, the Board of Directors (with Mr. Joel Gold
abstaining) authorized the grant, to each of Joel Gold, Edward Celano and Dr.
Edward Cohen, of options, each having a term of ten years, to purchase 10,000
shares, each, of the Company's Common Stock at an exercise price equal to the
composite closing price ($3.50), as quoted on the NASDAQ Stock Market (the
"Closing Price") of said Common Stock on the date of grant.
In addition to the foregoing, on July 26, 1999, the Independent and
Compensation Committees of the Board of Directors (with Dr. Robert Cohen
14
<PAGE>
abstaining) authorized the grant, to Dr. Robert Cohen, of options to purchase
250,000 shares of the Company's Common Stock; and, on April 7, 2000, agreed to
continue the payment, to Dr. Robert Cohen, of $50,000 per year, in consideration
of his agreeing to continue to serve as a member of the Company's Board of
Directors and Executive Committee.
Furthermore: (i) on February 17, 2000, the Independent and Compensation
Committees of the Board of Directors authorized the grant to each of Drs. Robert
and Alan Cohen, options to purchase 300,000 shares of the Company's Common
Stock, each of which options has a term of ten years, has an exercise price
equal to the Closing Price on the date of grant ($8.25) and vested immediately;
(ii) on February 23, 2000, the Compensation Committee authorized the grant, to
Gregory T. Cook, of options to purchase 800,000 shares of the Company's Common
Stock at exercise price equal to the Closing Price on the day immediately
preceding the date of grant ($8.0625)(see "Employment Agreements"); and (iii) on
April 7, 2000, the Board of Directors authorized the grant, to each of William
F. Stasior and Suresh V. Mathews, of options to purchase 200,000 shares of the
Company's Common Stock at an exercise price equal to the Closing Price on the
date of grant ($6.00): (x) each of which options has a term of ten years; and
(y) one-third of which will vest as of April 6, 2001, 2002 and 2003, provided
such individual is then still serving as a Director of the Company.
Other than with respect to reimbursement of expenses, Directors who are
employees or officers of the Company will not receive additional compensation
for serving as a Director.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and Directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission (the "SEC"). Executive officers, Directors and greater than
ten percent shareholders are required, by SEC regulation, to furnish the Company
with copies of all Section 16(a) forms they may file.
Based solely on a review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that, during the year ended December 31, 1999, all Section 16(a) filing
requirements applicable to its executive officers, Directors and greater than
ten percent beneficial owners were complied with, except that, in certain
instances, certain of the Company's Directors and/or executive officers may have
been late in filing each of their respective Forms 4 and/or 5.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table sets forth the compensation of
the Company's Chief Executive Officer for the three years ended December 31,
1999, and the other four most highly compensated executive officers of the
Company in the year ended December 31, 1999 (collectively, the "Named Executive
Officers").
15
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
=================================================================================================================
Long Term
Annual Compensation Compensation
------------------- Securities
Fiscal Underlying All Other
Name and Principal Position Year Salary Bonus Stock Options Compensation
- --------------------------- ------ ------ ----- ------------- ------------
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alan Cohen 1999 $250,000 -- -- $ 12,594 (4)
President-Retail Optical 1998 $ 45,192 -- 250,000 (3) $ 16,447 (4)
Store Division and Vice 1997 -- -- 216,667 (2) $ 8,050 (4)
Chairman of the Board of
Directors (1)
- -----------------------------------------------------------------------------------------------------------------
Jerry Lewis 1999 -- -- -- --
President, Chief 1998 $217,730 -- 83,333 (6) $ 17,324 (8)
Executive Officer, Chief 1997 $156,801 -- 250,000 (6) $ 34,345 (7)
Operating Officer and
Director (5)
- -----------------------------------------------------------------------------------------------------------------
Jerry Darnell 1999 $199,500 $71,000 (10) 25,000 (12) $ 16,378 (13)
Senior Vice President- 1998 $197,965 $82,257 (10) 25,000 (12) $ 20,399 (13)
Business Development(9) 1997 $159,600 $71,553 (10) 193,569 (11) $ 14,786 (13)
- -----------------------------------------------------------------------------------------------------------------
Joseph Silver 1999 $126,200 $15,000 25,000 $167,782 (14)(15)
Executive Vice 1998 $124,477 $15,000 25,000 $150,795 (14)(15)
President, Secretary and 1997 $100,800 $21,600 193,569 (11) $161,844 (14)(15)
General Counsel
- -----------------------------------------------------------------------------------------------------------------
William Young 1999 $132,308 $12,200 65,000 (17) $ 17,797 (18)
Vice President-Finance 1998 $ 93,681 $18,013 30,000 $ 13,148 (18)
and Treasurer (16) 1997 $ -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Dr. Nicholas Shashati 1999 $103,500 $ -- 30,000 (20) $ 6,000 (21)
President-VisionCare of 1998 $ 81,157 $ -- 10,000 $ 2,500 (21)
California (19) 1997 $ -- $ -- -- $
=================================================================================================================
</TABLE>
(1) Alan Cohen was appointed to the positions of President, Chief Executive
Officer and Chief Operating Officer as of October 15 1998, resigned
from each of such positions on April 17, 2000 and, on April 18, 2000,
was appointed as the President of the Company's retail optical store
division.
(2) Includes 66,667 options granted to Dr. Cohen in partial consideration
of his making certain loans to the Company, and 150,000 additional
options granted to Dr. Cohen, as a member of Meadows Management, LLC, a
limited liability company previously retained to render consulting
services to the Company.
(3) Such options vest: (i) one-third, immediately; (ii) one-third on
October 15, 1999; and (iii) one-third on the first to occur of October
15, 2000, the date that Dr. Cohen shall have resigned as the Company's
President and CEO (April 17, 2000); and (iii) the date of the
occurrence of certain other specified events.
(4) Represents automobile lease payments made on behalf of Dr. Cohen and
reimbursement of medical insurance deductions.
16
<PAGE>
(5) Mr. Lewis resigned from his position as the Company's President, Chief
Executive Officer and Chief Operating Officer, effective October 15,
1998.
(6) As a result of Mr. Lewis' resignation on October 15, 1998, 166,667 of
the 250,000 options, previously granted to him in 1997, expired.
(7) Represents legal fees advanced by the Company in connection with Mr.
Lewis' emigration to the United States, relocation expenses pertaining
thereto, life and disability insurance premiums paid by the Company,
car allowance payments made to and/or on behalf of Mr. Lewis, and
reimbursement of medical insurance deductions.
(8) Represents life and disability insurance premiums paid by the Company,
car allowance payments made to and/or on behalf of Mr. Lewis, and
reimbursement of medical insurance deductions.
(9) Mr. Darnell: (i) was appointed to the position of Chief Operating
Officer-Franchise Division on September 18, 1999; (ii) resigned such
position on April 17, 2000; and (iii) was appointed to the position of
Senior Vice President-Business Development on April 18, 2000.
(10) Represents commissions paid to Mr. Darnell.
(11) All of such options vested in November, 1999.
(12) These options will vest on the second anniversary of the date of grant.
(13) Represents car allowance payments made to Mr. Darnell, life insurance
and disability insurance premiums paid by the Company, and
reimbursement of medical insurance deductions.
(14) Includes $138,512, $123,039 and $132,600 in legal fees paid by
Sterling Vision of California, Inc. ("SVCI") in 1999, 1998 and 1997,
respectively.
(15) Includes car allowance payments made to and/or on behalf of Mr. Silver,
life insurance and disability insurance premiums paid by the Company
and reimbursement of medical insurance deductions.
(16) Mr. Young was appointed to the positions of Executive Vice President-
Finance, Chief Financial Officer and Treasurer on March 16, 1998 and
began his employment with the Company on March 30, 1998. On April 17,
2000, Mr. Young resigned as the Company's Executive Vice-President-
Finance and Chief Financial Officer and, on April 18, 2000, was
appointed to the positions of Vice President-Finance and Treasurer.
(17) These options are subject to certain vesting requirements.
(18) Includes car allowance payments made to Mr. Young, life insurance and
disability insurance premiums paid by the Company and reimbursement of
medical insurance deductions.
(19) Dr. Shashati became employed by Vision Care of California as of
January 1, 1998.
(20) These options are subject to certain vesting requirements.
(21) Represents car allowance payments made to Dr. Shashati.
17
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
During the fiscal year ended December 31, 1999, the Company's
Compensation Committee granted the following options to the Company's Chief
Executive Officer and each of the four other highest paid executive officers of
the Company (the "Named Executive Officers"):
(i) on each of January 15, 1999, April 9, 1999 and April 27, 1999, the
Company's Compensation Committee granted to Mr. Young, the Company's Treasurer
and Vice-President-Finance, an aggregate of 10,000, 10,000 and 20,000 additional
options, respectively, to purchase shares of the Company's Common Stock, each of
which options has a term of ten years, will vest on the second anniversary of
the date of grant and has an exercise price equal to the respective Closing
Prices on the date of each grant;
(ii) on December 22, 1999, the Company's Compensation Committee
additionally granted to Mr. Young an additional 25,000 options to purchase
shares of its Common Stock, each of which options has a term of ten years, have
an exercise price equal to the Closing Price on the date of the grant, and will
vest as follows: 50% on December 22, 2000; and 50% on December 22, 2001;
(iii) on December 3, 1999, the Company's Compensation Committee granted
to Joseph Silver, the Company's Secretary, Executive Vice President-Legal
Affairs and General Counsel, additional options to purchase 25,000 shares of its
Common Stock, each of which vested immediately, has a term of ten years and
provides for an exercise price equal to the Closing Price on the date of grant;
(iv) on December 22, 1999, the Company's Compensation Committee granted
to Jerry Darnell, the Company's Senior Vice President-Business Development,
additional options to purchase 25,000 shares of its Common Stock, each of which
options has a term of ten years and an exercise price equal to the Closing Price
on the date of grant. Fifty percent of such options will vest on December 22,
2000, and the balance will vest on December 22, 2001; and
(v) on each of April 9, 1999 and December 14, 1999, the Company's
Compensation Committee granted to Dr. Nicholas Shashati, the President of the
Company's wholly owned subsidiary, VisionCare of California, additional options
to purchase 10,000 and 20,000 shares, respectively, of the Company's Common
Stock, each of which options has a term of ten years, has an exercise price
equal to the Closing Price on the date of grant and will vest on the second
anniversary of the date of grant.
18
<PAGE>
The following table sets forth information concerning the options
granted during 1999 to each of the Company's Named Executive Officers.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Potential Realizable
% of Total Value of Assumed
Number of Options Annual Rates of Stock
Shares Granted to Price Appreciation for
Underlying Employees Exercise Option Term
Options in Fiscal Price Per Expiration -----------
Name Granted Year Share Date 5% 10%
- ---- ------- ---- ----- ----
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Joseph Silver 25,000 2 % $2.0000 12/3/09 $31,500 $ 79,750
- ----------------------------------------------------------------------------------------------------------------
Jerry Darnell 25,000 2 % $4.5000 12/22/09 $70,750 $179,250
- ----------------------------------------------------------------------------------------------------------------
10,000 1 % $3.0000 1/15/09 $18,900 $ 47,800
10,000 1 % $3.2500 4/9/09 $20,400 $ 51,800
William J. Young 20,000 2 % $4.1250 4/27/09 $51,900 $131,500
25,000 2 % $4.5000 12/22/09 $70,750 $179,250
- ----------------------------------------------------------------------------------------------------------------
Dr. Nicholas 10,000 1 % $3.2500 4/9/09 $20,400 $ 51,800
Shashati 20,000 2 % $6.3125 12/14/09 $79,350 $201,350
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Shares Number of Securities Value of Unexercised In-
Acquired Underlying Unexercised the-Money Options at FY-
on Value Options at FY-End (#) End ($)*
Exercise Realized
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --- --- ------------------------- -------------------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dr. Alan Cohen - - 358,334/466,667 $645,834/$312,499
Jerry Lewis - - 83,333/ -0- $ 0.00/$0.00
Joseph Silver - - 243,569/243,569 $356,115/$0.00
Jerry Darnell - - 193,569/243,569 $145,177/$148,438
William Young - - 15,000/95,000 $ 10,313/$191,563
Dr. Nicholas Shashati - - 10,000/30,000 $ 0.00/$43,750
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
---------------
* Based on the Nasdaq Stock Market composite closing price for the last
business day of the fiscal year ($6.75). The stock options granted to
the Named Executive Officers have exercise prices as follows: Dr. Alan
Cohen: 66,667 shares at $6.4375, 150,000 shares at $8.9375, and 250,000
shares at $3.00; Mr. Jerry Lewis: 83,333 shares at $8.00; Mr. Joseph
Silver: 193,569 shares at $6.00, 25,000 shares at $3.0625, and 25,000
shares at $2.00; Mr. Jerry Darnell: 193,569 shares at $6.00, 25,000
shares at $3.0625 and 25,000 shares at $4.50; Mr. William Young: 30,000
shares at $6.0625, 10,000 shares at $3.00, 10,000 shares at $3.25,
20,000 shares at $4.125 and 25,000 shares at $4.50; and Dr Nicholas
Shashati: 10,000 shares at $7.50, 10,000 shares at $3.25 and 20,000
shares at $6.3125.
19
<PAGE>
Stock Price Performance Graph
The following graph shows the annual cumulative total shareholder
return for the fiscal year ended December 31, 1999 based on an assumed
investment of $100. The Company's Common Stock began trading on the Nasdaq Stock
Market on December 20, 1995 at a price of $7.50 per share. The graph compares
the Company's performance with that of the S&P 500 Index and a peer group
consisting of Cole National Corp., National Vision Associates, Ltd., Sight
Resources Corp., and Laser Vision Centers, Inc.
COMPARISON OF FOUR YEARS CUMULATIVE TOTAL RETURN
Among Emerging Vision, Inc., S&P 500, and the Company selected Peer Group
[LINE CHART APPEARS HERE]
Date Emerging Vision Peer Group S & P Index
12/20/95 $1.0000 $1.0000 $1.0000
12/31/96 $1.1000 $0.9703 $1.2225
12/31/97 $0.7583 $1.1205 $1.6015
12/31/98 $0.5917 $1.1017 $2.0283
3/31/99 $0.4083 $1.0893 $2.1223
6/30/99 $0.5000 $1.1280 $2.2659
9/30/99 $0.3583 $0.6488 $2.1174
12/31/99 $0.9000 $0.4449 $2.4243
20
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Company has
furnished the following report on executive compensation:
Philosophy
The compensation philosophy of the Company is to develop and implement
policies that will encourage and reward outstanding performance, seek to
increase the profitability of the Company, and maximize the Company's return on
equity so as to increase shareholder value. Maintaining competitive compensation
levels in order to attract and retain executives who bring valuable experience
and skills to the Company is also an important consideration. The Company's
executive compensation programs are designed to attract and retain talented
individuals and motivate them to achieve the Company's business objectives and
performance targets, including increasing long-term stockholder value.
The Compensation Committee of the Board of Directors is comprised of
the following three Directors: Dr. Robert Cohen, Dr. Alan Cohen and Mr. Joel
Gold. Working with the Company, the Compensation Committee develops and
implements compensation plans for the Company's executive officers.
Compensation Structure
The Compensation Committee believes that it is in the best interests of
the Company and its shareholders that its executive officers be compensated in a
manner that provides such officers with a strong incentive to advance both the
short-term and long-term interests of the Company.
The annual cash compensation of most of the executive officers,
including the Chief Executive Officer, consists primarily of annual salary and
stock options. The Compensation Committee also has discretion to award bonuses
to each of the executive officers. With respect to Jerry Darnell, the executive
officer who, until April 17, 2000, was the Chief Operating Officer of the
Company's franchise division, the Compensation Committee believes that it was
(and is) important to compensate such individual with a measure that was
directly related to the performance of such individuals's areas of
responsibility. Accordingly, Mr. Darnell, in addition to his annual base salary,
was entitled to a commission with respect to the franchise activities
consummated by the Company during the year. The bases of such commissions are
not disclosed herein because the Board of Directors has determined that it is
confidential business information, the disclosure of which might have an adverse
effect on the Company.
Non-cash compensation of executive officers consists of options granted
under the Company's 1995 Stock Incentive Plan. The stock options produce value
for executives only if the Company's stock price increases over the option
exercise prices. Although there are no particular targets with respect to the
number of options granted to an executive officer, in general, the higher the
level of an executive's responsibility, the larger this stock-based component of
such person's compensation will be. In addition, in determining the size of
option awards for a particular executive officer, the Compensation
21
<PAGE>
Committee considers the amount of stock options awarded to other executive
officers in a like position.
The compensation of each executive officer (other than the Chief
Executive Officer) is based on an annual review of such officer's performance by
the Chief Executive Officer and his recommendations to the Compensation
Committee; and the compensation of the Chief Executive Officer is determined by
the Compensation Committee. In establishing and administering the variable
elements in the compensation of the Company's executive officers, the
Compensation Committee tries to recognize individual contributions, as well as
overall business results. Compensation levels are also determined based upon the
executive's responsibilities, the efficiency and effectiveness with which he/she
marshals resources and oversees the matters under his/her supervision, and the
degree to which he/she has contributed to the accomplishment of major tasks that
advance the Company's goals.
Executive Officer Compensation for 1999
During the fiscal year ended December 31, 1999, none of the Company's
executive officers (other than William Young and Robert Greenberg) was employed
pursuant to an employment agreement; however, as noted below, the term of Mr.
Young's agreement expired in March 2000 and, as of the date hereof, has not yet
been renewed. The base salary to which each executive officer was entitled for
1999 was based upon the Company's goal of attracting and retaining qualified
executives and a comparison of executive base salaries paid to executives of
other companies in the retail optical and related industries.
During the fiscal year ended December 31, 1999, the following employee
stock options were granted by the Compensation Committee to the Company's Named
Executive Officers: William Young - 65,000; Joseph Silver - 25,000; Jerry
Darnell - 25,000; and Dr. Nicholas Shashati - 30,000.
Although the Compensation Committee believes that the compensation paid
to its executive officers is comparable to compensation paid by similar
companies, it has not made any independent investigation.
The Compensation Committee feels that actions taken regarding executive
compensation are appropriate in view of each individual's, as well as the
Company's, overall performance.
Chief Executive Officer Compensation for 1999
Dr. Alan Cohen served as the Company's President, Chief Executive
Officer and Chief Operating Officer from October 15, 1998 through April 17,
2000, when he became President of the Company's retail optical store division.
The terms of Dr. Cohen's employment by the Company provide for: (i) a base
salary of $250,000 per year; (ii) 250,000 employee stock options granted to Dr.
Cohen on October 15, 1998 (a portion of which was subject to certain vesting
requirements); (iii) reimbursement of Dr. Cohen's medical insurance deductions;
and (iv) the use of an automobile.
22
<PAGE>
On March 29, 2000, the Compensation Committee, with Dr. Alan Cohen
abstaining, authorized an amendment to the Non-Qualified Stock Option Agreement
(pursuant to which the aforesaid 250,000 options were previously granted to Dr.
Cohen) to change the vesting date of the 83,333 options granted thereunder
(which then were unvested), from October 15, 2000 to the first to occur of: (i)
October 15, 2000; (ii) the date that Dr. Cohen shall have resigned as the
Company's President and Chief Executive Officer; and (iii) the date of the
occurrence of other specific events. Accordingly, as of April 17, 2000, the date
of Dr. Cohen's resignation as the Company's President and CEO, all of such
remaining options vested.
In addition to the foregoing, on April 7, 2000, the Compensation
Committee (with Dr. Alan Cohen abstaining) approved of the Company's continuing
payment, to Dr. Cohen, of the salary then being paid to him (as well as
continuing to afford him the same benefits then being afforded to him), all in
consideration of his agreeing to serve as the President of the Company's retail
optical store division.
The Committee believes that Dr. Cohen's 1999 salary was reasonable in
light of his leadership. The Committee believes that Dr. Cohen's 1999
compensation level reflected the Committee's confidence in him and the
Company's desire to retain Dr. Cohen's talents, as the President, Chief
Executive Officer and Chief Operating Officer of the Company.
Dated: April 18, 2000 Respectfully submitted:
THE COMPENSATION COMMITTEE
By: Robert Cohen
Alan Cohen
Joel Gold
Compensation Committee Interlocks and Insider Participation
Dr. Robert Cohen, Dr. Alan Cohen and Mr. Joel Gold served on the
Compensation Committee since it was formed in December, 1995. Mr. Gold was a
Managing Director of Fechtor, Detwiler & Co., Inc. ("Fechtor"), which acted as
one of the Underwriters in connection with the Company's initial public
offering which was consummated in December, 1995. In addition, in connection
with the Company's initial public offering, the Company granted to the
Underwriters warrants to purchase 220,000 shares of Common Stock at an
exercise price of $9.00 per share, which warrants are exercisable at any time
until December 26, 2000. In March, 1996, Fechtor transferred 15,000 of such
warrants to Mr. Gold, all of which were exercised by him in February, 2000.
EMPLOYMENT CONTRACTS
In March, 1998, the Company and William J. Young entered into a written
employment agreement pursuant to which Mr. Young was appointed as the Company's
Chief Financial Officer and Treasurer, which agreement expired in March 2000.
Such agreement provided for: (i) a term of two (2) years; (ii) an
23
<PAGE>
annual base salary of $125,000; (iii) an annual minimum bonus of $12,500; (iv)
options to purchase up to 30,000 shares of the Company's Common Stock (one- half
of which vested as of each of April 1, 1999 and 2000) at an exercise price equal
to the Closing Price of the Company's Common Stock on March 30, 1998; (v) a
monthly car allowance; and (v) life and disability insurance.
On July 1, 1999, Robert Greenberg entered into five year employment
agreement with the Company's 66.67% owned subsidiary, Insight, pursuant to which
Mr. Greenberg was appointed as Insight's President and Chief Executive Officer.
Under the terms of Mr. Greenberg's agreement, he is entitled to a base salary of
$100,000 per year, as well as a monthly automobile expense allowance.
On February 22, 2000, the Company and each of Gregory T. Cook, Sara V.
Traberman and James E. Ewer entered into employment agreements, each having a
term of three years.
Pursuant to Mr. Cook's agreement, he was appointed to the position of
President and CEO of the Company's Internet division at an initial annual base
salary of $200,000, increasing by at least five percent for each year of the
term thereafter. In addition, the agreement: (i) provided for the grant, to Mr.
Cook, of options to purchase 800,000 shares of the Company's Common Stock, each
at an exercise price equal to the Closing Price on the day immediately preceding
the date of his commencement of employment ($8.0625), and one-third of which
will vest as of the expiration of each year of the term thereof; and (ii)
permits Mr. Cook to terminate such employment agreement upon the occurrence of
certain specified events, whereupon the Company will be required to: (i)
immediately vest all of the options previously granted to Mr. Cook; and (ii) pay
to Mr. Cook severance pay in an amount equal to (x) all compensation which would
have otherwise become payable to him through the original expiration date of the
term of the agreement (February 22, 2003), plus (y) the sum of $2 million (the
"Base Amount"), which Base Amount is to be reduced (under certain conditions) by
the excess, if any, of the then fair market value of the options granted to Mr.
Cook, over the exercise price thereof.
Pursuant to the Company's agreement with Ms. Traberman (which is
similar in form to Mr. Cook's), she was appointed as the Senior Vice
President-Finance and Chief Financial Officer of such Internet division at an
initial annual base salary of $150,000, together with options to purchase
400,000 shares of the Company's Common Stock, each of which has the same
exercise price and vesting schedule as Mr. Cook's. In addition, such agreement
affords her the ability to terminate the same upon the occurrence of certain
specified events; provided, however, that for purposes of computing Ms.
Traberman's severance pay, the Base Amount will be $1 million.
Pursuant to the Company's agreement with Mr. Ewer (which is similar in
form to Mr. Cook's), he was appointed as the Senior Vice President-Operations of
such Internet division at an initial annual base salary of $140,000, together
with options to purchase 200,000 shares of the Company's Common Stock, each of
which has the same exercise price and vesting schedule as Mr. Cook's. In
addition, such agreement affords him the ability to terminate the same upon the
occurrence of certain specified events; provided, however, that for purposes of
computing Mr. Ewer's severance pay, the Base Amount will be $500,000.
On February 29, 2000, the Company and Joseph Silver entered into a one-
year employment agreement pursuant to which Mr. Silver was continued in his
employment as the Company's Executive Vice President-Legal Affairs, Secretary
and General Counsel. Pursuant to said agreement (the term of which may be
unilaterally extended, by the Company, for an additional one year term), Mr.
24
<PAGE>
Silver is to be paid an annual base salary equal to the salary then being paid
to him ($126,200, increasing by 5% during any renewal term thereof), together
with an annual bonus of $15,000. In addition, under the agreement, Mr. Silver
is: (i) to be provided with the use of an automobile; (ii) to receive a monthly
car allowance; and (iii) entitled to life and disability insurance in specified
limits. Furthermore, the agreement entitles the Company, subject to its
compliance with certain conditions precedent, to terminate the same, at any
time, without cause, on ninety days' prior notice to Mr. Silver and: (i) the
payment, to Mr. Silver, of severance pay equal to six (6) months' base salary
and six (6) months of the legal fees (as discussed below) otherwise payable to
Mr. Silver; and (ii) the immediate vesting of the options granted to Mr. Silver
in 2000.
Pursuant to Mr. Silver's employment agreement, he is additionally
entitled to a monthly legal fee payable by Sterling Vision of California, Inc.
("SVCI"), a wholly-owned subsidiary of the Company, pursuant to a separate legal
fee retainer agreement that was executed simultaneously with his employment
agreement and has a term coexistent therewith (the "Legal Fee Retainer
Agreement"). Pursuant to the Legal Fee Retainer Agreement, SVCI will annually
pay to Mr. Silver legal fees of $138,800 (which is equal to the legal fees then
being paid to him by SVCI).
CERTAIN TRANSACTIONS AND OTHER MATTERS
Cohen Fashion Optical
Drs. Robert and Alan Cohen are officers and directors of CFO, including
its affiliate, Real Optical, LLC. ("REAL"). CFO, which has been in existence
since 1978, owns a chain of company-operated and franchised retail optical
stores doing business under the name "Cohen's Fashion Optical." As of April 15,
2000, CFO had 71 franchised stores and 17 company-owned stores (including one
store operated by an affiliate of CFO); and REAL, which has been in existence
since 1984, had three company-owned stores. In addition, CFO also licenses to
retail optical stores the right to operate under the name "Cohen's Kids Optical"
or "Ultimate Spectacle." As of April 15, 2000, there was one Ultimate Spectacle
store located in the State of New York. CFO and REAL stores are similar to the
Company's retail optical stores. CFO has been offering franchises since 1979 and
currently has retail optical stores in the states of Connecticut, Florida, New
Hampshire, Massachusetts, New Jersey and New York. In the future, Cohen's
Fashion Optical, Cohen's Kids Optical or Ultimate Spectacle stores may be
located in additional states. As of April 15, 2000, approximately 25 CFO stores
were located in the same shopping center or mall as, or in close proximity to,
the Company's retail optical stores. It is possible that one or more additional
Cohen's Fashion Optical stores, Cohen's Kids Optical stores or Ultimate
Spectacle stores may, in the future, be located near one or more of the
Company's retail optical stores, thereby competing directly with such of the
Company's stores. In addition, the Company's stores and certain of CFO's stores
jointly participate, as providers, under certain third party benefit plans
obtained by either the Company or CFO, which arrangement is anticipated to
continue in the future.
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On April 9, 1997, the Independent Committee recommended, and the Board
of Directors (with Drs. Robert and Alan Cohen abstaining) approved, of the
Company entering into a consulting agreement with Meadows Management, LLC, a
limited liability company owned by Drs. Robert and Alan Cohen ("Meadows"). Said
agreement provided for cash compensation, for the period from inception through
December 31, 1997, computed at the rate of three hundred thousand ($300,000)
dollars per annum, and for the granting, to each of Drs. Robert and Alan Cohen,
as the designees of Meadows, of options, each having a term of five years, to
each purchase 150,000 shares of the Company's Common Stock at an exercise price
equal to the closing price of the Company's Common Stock as of the date of such
approval ($8.9375). The granting of said options was approved by the Company's
shareholders at the 1997 Annual Meeting, were issued under the Company's 1995
Stock Incentive Plan and vested as follows: one-half (50%) immediately (April 9,
1997); and an additional one-sixth (16.67%) on each of April 9, 1998, 1999 and
2000.
On May 15, 1998, CFO subleased to the Company its retail optical store
located in Albany, New York (the "Albany Store"), including its furniture,
fixtures and equipment. In May 1999, the Company sold to CFO the assets of one
of its stores located in New York City (including the lease therefor) for the
assets of the Albany Store (including the lease therefor) and such sublease was
terminated.
In March, 2000, the Company purchased the assets of the CFO store
located at Irondequoit Mall, Rochester, New York and, in connection therewith,
CFO terminated its lease for such store and the Company entered into a new lease
for such premises.
Agreements and Transactions Between the Company and the Cohen Family
During the fiscal year ended December 31, 1999, certain of CFO's
employees rendered certain real estate and construction supervisory services to
the Company in exchange for a fee paid by the Company. In addition, during the
fiscal year ended December 31, 1999, CFO purchased products fabricated from the
Company's poster reproduction system. The Company believes that the terms of
these transactions were as favorable to the Company as could have been obtained
from an unrelated party.
An entity owned by Drs. Robert, Alan and Edward Cohen is the lessee of
an office building located in East Meadow, New York. In April, 1996, the Company
relocated all of its corporate offices to this building and initially subleased
approximately 22,000 square feet (approximately 60% of the building), on a "net
lease" basis, for a term of ten years at an aggregate base rental (in addition
to a pro rata share of the building's real estate taxes and costs of operation)
of $221,796 for the first three years, which amount increases gradually over the
remainder of the term of the sublease. In February, 1998, the Company and such
entity voluntarily agreed to reduce such space by approximately 2,500 square
feet and, in connection therewith, agreed on a pro-rata reduction of such
occupancy costs. A portion of the balance of the space not utilized by the
Company is subleased to CFO by the entity which is the lessee of the entire
building. The Company believes that the Company's rent with respect to such
space is equal to the fair market rental value of
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such space. Such transaction was approved by the Independent Committee on
February 23, 1996.
In November, 1998, Broadway Partners ("Broadway"), a New York
partnership owned by certain of Dr. Robert and Alan Cohen's children, accepted
an offer to purchase, from the holder thereof, the Company's Non-Negotiable
Subordinated Convertible Debenture issued in connection with its acquisition of
substantially all of the retail optical assets of Benson Optical Co., Inc. and
its affiliates; and, in March, 2000, the Company purchased, from Broadway, such
Debentures for the sum of $550,000 based upon an independent, third party's
appraisal of the then value thereof.
On October 14, 1998, the Board of Directors authorized the Company to
borrow up to $2 million from Broadway. The loans are payable, on demand,
together with interest, calculated at the rate of twelve (12%) percent per
annum, and are secured by a first lien upon, and security interest in, the
assets of the Company's ambulatory surgery center located in Garden City, New
York. During the 1999 fiscal year, the Company paid to Broadway interest, only,
on said loan, in the aggregate amount of $147,546.
Insight Laser Centers, Inc. and Matters Relating to Robert and Kim Greenberg
Robert and Kim Greenberg are married to one another. The Greenbergs and
the Company are parties to a Stockholders' Agreement, dated as of July 1, 1999,
pertaining to certain matters related to the ownership and operation of the
Company's 66.67% owned subsidiary, Insight. The Agreement was entered into in
connection with Insight's acquisition of substantially all of the assets of a
related consulting business owned by Mr. Greenberg, as discussed below.
As of July 1, 1999, Robert Greenberg ("Robert") and Kim Greenberg
("Kim"), as the sole owners of RBG Consulting, Ltd. ("RBG"), a New York
corporation, caused RBG to contribute to the capital of Insight certain
favorable agreements previously entered into between RBG and Summit
Technologies, Inc., as well as cash, in the amount of $150,000 (less certain
agreed upon expenses previously incurred by RBG and/or Robert in connection
therewith), subject to RBG's obligations under a Promissory Note, in the
principal amount of $150,000, and an Equipment Lease for a Summit Apex Laser
System (which is currently installed in Insight's Soho, New York Center).
In exchange, each of Robert and Kim received 16.67% of the total issued
and outstanding equity interests in Insight.
As of July 1, 1999, Kim entered into an employment agreement with
Insight having a term of five (5) years, which agreement reflected an increase
in her base salary, from $70,000 per year to $100,000 per year. In addition, the
Company initially granted Kim 70,000, fully vested employee stock options, of
which 15,000 options are presently outstanding, each with an exercise price of
$5.00 per share.
In addition, as of July 1, 1999, Robert was appointed as the President
and Chief Executive Officer of Insight at an annual base salary of $100,000,
pursuant to an employment agreement having a term of five (5) years. In
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exchange therefor, Robert agreed to the cancellation of 70,000 of the options
previously granted to him by the Company.
Under the Stockholders' Agreement, the Company and the Greenbergs have
agreed to establish a Board of Directors consisting of seven members (two of
whom are always agreed to be Drs. Robert and Alan Cohen), to be elected by the
holders of a majority of the outstanding shares of Insight's Class A Common
Stock. The Agreement further provides that for so long as the Greenbergs are
employed by Insight under their respective employment agreements and are in good
sanding thereunder, the Board also shall include the Greenbergs. In addition,
the other Board members initially elected to the Board (following the Insight
transaction with the Greenbergs) were Joseph Silver, Edward Celano and Sean
Deson; and the parties also have agreed that the following persons would be
appointed as officers of Insight for so long as the Stockholders' Agreement is
in effect and those appointed to such offices are then in compliance with their
obligations under the Stockholders' Agreement (and, in the case of each of
Robert and Kim Greenberg), are in compliance under their respective employment
agreements):
President/CEO Robert Greenberg
Executive Vice President Kim Greenberg
Secretary/General Counsel Joseph Silver
Commencing April 10, 2000, the Stockholders' Agreement further provides
the Company with an option to purchase the shares of Class A Common Stock owned
by the Greenbergs at a price and on terms specified, by the Company, at the time
the option is exercised, subject to certain terms specified in the Stockholders'
Agreement. The Greenbergs have the right to make a counteroffer to purchase the
66.67% of Insight's Class A Common Stock owned by the Company, on the same terms
and conditions originally set by the Company. Any sale so consummated is subject
to upward adjustment in the event Insight consummates a public offering within
nine months after such sale, to give the seller the benefit of any increase in
stock value.
Under the Stockholders' Agreement, in the event of a termination of
employment of either of the Greenbergs for cause, the Company has the right to
purchase the shares of Class A Common Stock owned by the terminated executive at
a price to be computed in accordance with the terms of the Stockholders'
Agreement. In the event of such a termination, the terminated executive, under
his or her employment agreement, also has agreed not to compete with Insight for
a period of one year following such termination.
The Stockholders' Agreement terminates: (i) upon the written consent of
the parties; (ii) upon the dissolution, liquidation or sale of substantially all
of the assets of Insight; (iii) in the event Emerging Vision on the one hand, or
the Greenbergs on the other hand, no longer own shares of Insight; or (iv) upon
Insights' consummation of an initial public offering or one or more private
placements generating gross proceeds to Insight of not less than $10 million.
On March 23, 2000, the Company loaned Insight the principal amount of
$150,000, payable with interest, to be computed at the rate of 10% per annum.
Such indebtedness, together with the interest thereon, is due on September 23,
2000, subject to prepayment in the event Insight raises gross proceeds in excess
of $850,000 in connection with a proposed private placement of its
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Class A Common Stock. In such event, the proceeds from the offering in excess of
$850,000 will be applied first to repay this indebtedness.
Franchise Interest by Certain Members of Management and their Families
Joseph Silver, together with his wife, are the shareholders of RJL
Optical, Inc. ("RJL"), the franchisee of the Sterling Optical Center located in
Great Neck, New York. In November, 1995, RJL entered into a management agreement
whereby the Company operates such store on behalf of RJL in exchange for the
payment to it of a fee, equal to 5% of the gross revenues of the store, subject
to such store generating sufficient cash flow proceeds to pay such amount. In
addition, RJL has agreed to sell the assets of, and the franchise for, its
Sterling Optical Center at a certain established, minimum purchase price.
Transactions with Dura-Lab, Inc.
In March, 1997, the Company commenced purchasing a portion of its
ophthalmic lenses from Dura-Lab, Inc., a company owned, in part, by certain of
each of Drs. Robert and Alan Cohen's children, at prices which the Company
believes to be not more than those charged by other distributors of similar type
lenses. During the 1999 fiscal year, approximately $541,000 was paid to
Dura-Lab, Inc., by the Company, for such lenses.
Tax Indemnities
In connection with the Company's initial public offering, the Company
agreed to indemnify the shareholders of the Company immediately prior to the
Company's initial public offering for any tax liability arising from a
determination, after consummation of the initial public offering, that the
Company's reported income was understated for any period prior to the
consummation of the initial public offering; provided that such indemnity is
limited to an adjustment equal to the amount by which the Company's deferred tax
liability is reduced as a result of such determination. Additionally, if and to
the extent any shareholder, who was a shareholder immediately prior to the
Company's initial public offering, receives a tax refund as a result of a
determination, after consummation of the initial public offering, that the
Company's reported income was overstated for any period prior to the
consummation of the initial public offering, such shareholder will be required
to pay such amount to the Company.
Item 2. RATIFICATION OF APPOINTMENT OF AUDITORS (PROPOSAL NO. 2)
On March 30, 2000, the members of the Company's Audit Committee
recommended to the Board that it continue to retain Arthur Andersen, LLP
("Andersen") as the Company's principal accountants for the 2000 calendar year
subject, however, to the ratification thereof by the Company's shareholders at
the Annual Meeting.
In connection with the audit of the two fiscal years ended December 31,
1998 and 1999, the Andersen reports did not contain any adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope or accounting principles. During the two fiscal years ended
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December 31, 1998 and 1999, there were no disagreements with Andersen on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of such firm, would have caused it to make reference to the subject
matter of the disagreement as part of its report.
If the foregoing appointment of Andersen is not ratified by the
shareholders, the Board of Directors will appoint another firm of independent
public accountants whose appointment, for any period subsequent to the Annual
Meeting, will be subject to the approval of the Company's shareholders at that
Meeting.
A representative of Andersen is expected to be present at the Annual
Meeting and will have an opportunity to make a statement, should he or she so
desire, and to respond to appropriate questions.
Vote Required for Ratification of Appointment of Auditors
Ratification of the selection of Andersen, as the Company's independent
public accountants, will require the affirmative vote of the holders of a
majority of the votes cast at the Annual Meeting by the holders of shares of
Capital Stock entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP.
GENERAL
Other Matters
The Board of Directors does not know of any matters that are to be
presented at the Annual Meeting other than those stated in the Notice of Annual
Meeting and referred to in this Proxy Statement. If any other matters should
properly come before the Annual Meeting, it is intended that the proxies in the
accompanying form, will be voted as the persons named therein may determine, in
their discretion.
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 is being mailed to shareholders together with this Proxy
Statement.
Solicitation of Proxies
The cost of solicitation of proxies in the accompanying form will be
borne by the Company, including expenses in connection with preparing and
mailing this Proxy Statement. In addition to solicitation of proxies by mail,
Directors, officers and employees of the Company (who will receive no
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additional compensation therefor) may solicit the return of proxies by
telephone, telegram or personal contact. Arrangements have also been made with
brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of Common Stock
held of record by such persons, and the Company will reimburse them for the
reasonable out-of-pocket expenses incurred by them in connection therewith.
Each holder of the Company's Capital Stock who does not expect to be
present at the Annual Meeting or who plans to attend but who does not wish to
vote in person, is urged to fill in, date and sign the enclosed Proxy and return
it promptly in the enclosed return and envelope.
Shareholder Proposals
If any shareholder of the Company intends to present a proposal for
consideration at the next Annual Meeting of Shareholders and desires to have
such proposal included in the Proxy Statement and form of Proxy distributed by
the Board of Directors with respect to such meeting, such proposal must be
received at the Company's principal executive offices, 1500 Hempstead Turnpike,
East Meadow, New York 11554, Attention: Joseph Silver, not later than December
15, 2000.
By Order of the Board of Directors
By: \s\ Joseph Silver
----------------------------
JOSEPH SILVER,
Secretary
April 28, 2000
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF EMERGING VISION, INC.
ANNUAL MEETING OF SHAREHOLDERS: FRIDAY, MAY 26, 2000
The undersigned shareholder of Emerging Vision, Inc., a New York
corporation (the "Company"), hereby appoints Mr. Gregory T. Cook, Mr. William
Young and Mr. Joseph Silver, or any of them, voting singly in the absence of the
others, as his/her/its attorney(s) and proxy(ies), with full power of
substitution and revocation, to vote, as designated on the reverse side, all of
the shares of Common Stock of Emerging Vision, Inc. that the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
at The Sky Club, 200 Park Avenue, 56th Floor, New York, New York 10166, at 9:00
a.m. (local time), on Friday, May 26, 2000, or any adjournment or adjournments
thereof, in accordance with the instructions on the reverse side hereof.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
Proxy will be voted "FOR" each of the nominees listed in Proposal No. 1 and
"FOR" Proposal No. 2. The proxies are authorized to vote as they may determine,
in their discretion, upon such other business as may properly come before the
Meeting.
- --------------------------------------------------------------------------------
oFOLD AND DETACH HEREo
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Please mark |X|
your votes as
indicated in
this example
The Board of Directors recommends a vote "FOR" Items 1 and 2
Item 1 - ELECTION OF CLASS 1 DIRECTORS:
FOR WITHHELD
NOMINEES:
William F. Stasior |_| |_|
Suresh V. Mathews |_| |_|
Gregory T. Cook |_| |_|
WITHHELD FOR: (Write that nominee's name in the
space provided below):
- -----------------------------------------------
FOR AGAINST ABSTAIN
ITEM 2 - RATIFICATION OF / / / / / /
APPOINTMENT OF ARTHUR
ANDERSEN LLP
The proxies are authorized to vote as they
may determine, in their discretion, upon
such other business as may properly come
before the meeting.
Signature: Signature: Date:
--------------------- ---------------- ----------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by an
authorized officer. If a partnership, please sign in partnership name by an
authorized person.
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