<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Bacou USA, Inc.
(Name of Registrant as Specified In Its Charter)
Bacou USA, Inc.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
BACOU USA, INC.
10 THURBER BOULEVARD
SMITHFIELD, RHODE ISLAND 02917
NOTICE OF ANNUAL MEETING
MAY 15, 2000
To the Stockholders of
Bacou USA, Inc.
We are hereby notifying you that Bacou USA, Inc. will be holding its Annual
Meeting of Stockholders at The Westin Hotel, One West Exchange Street,
Providence, Rhode Island, on Monday, May 15, 2000 at 9:00 AM, Eastern Daylight
Time, for the following purposes:
(1) To elect members of the company's board of directors for the
ensuing year, and until their successors are duly elected and qualified.
(2) To ratify the selection of KPMG LLP as independent auditors to
audit our books and accounts for the fiscal year ending December 31, 2000.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
By Order of the Board of Directors,
LOGO
WINFIELD W. MAJOR
Secretary
March 29, 2000
Mailed at Boston, Massachusetts
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT AS PROMPTLY
AS POSSIBLE. IF YOU ATTEND THE MEETING AND VOTE IN PERSON, THE PROXY WILL NOT BE
USED.
<PAGE> 3
BACOU USA, INC.
10 THURBER BOULEVARD
SMITHFIELD, RHODE ISLAND 02917
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 15, 2000
INTRODUCTION
We are furnishing you with this Proxy Statement in connection with the
solicitation of proxies to be used at the Annual Meeting of Stockholders
("Annual Meeting") of Bacou USA, Inc. ("Bacou", "Bacou USA", "we", "us", "our")
to be held on May 15, 2000 and at any adjournment of the Annual Meeting, for the
purposes set forth in the accompanying notice of the meeting. All holders of our
Common Stock of record at the close of business on March 20, 2000 will be
entitled to vote at this meeting. The stock transfer books have not been closed.
SOLICITATION OF PROXIES
We are soliciting proxies in the form enclosed on behalf of the Board of
Directors. We will vote any such signed proxy, if received in time for the
voting and not revoked, at the Annual Meeting according to your directions. We
will vote any proxy that fails to specify a choice on any matter to be acted
upon for the election of each nominee for director and in favor of each other
proposal to be acted upon. If you submitted a signed proxy in the form enclosed,
you will have the power to revoke it at any time before we exercise it by filing
a later proxy with us, by attending the Annual Meeting and voting in person, or
by notifying us of the revocation in writing addressed to the President of Bacou
USA, Inc. at 10 Thurber Boulevard, Smithfield, Rhode Island 02917.
We will begin mailing the Proxy Statement and accompanying proxy card to
our stockholders on March 29, 2000.
We will pay for all expenses of preparing, assembling, printing and mailing
the material used in the solicitation of proxies by the Board. In addition to
the solicitation of proxies by use of the mails, officers and regular Bacou
employees may solicit proxies on behalf of the Board by telephone, telegram or
personal interview, and we will bear the expenses of such efforts. We also may
make arrangements with brokerage houses and other custodians, nominees and
fiduciaries to forward soliciting materials to the beneficial owners of stock
held of record by such persons at our expense.
VOTING RIGHTS
As of March 20, 2000, we had 17,629,865 shares of our Common Stock, $0.001
par value ("Common Stock"), issued and outstanding. Each share of Common Stock
that you own entitles you to one vote on each matter to be voted upon at the
Annual Meeting. All holders of Common Stock vote together as one class. We will
count abstentions and broker non-votes in determining whether a quorum is
present. If you withhold a vote with regard to the election of directors, such
vote will be excluded entirely from the calculation and will have no effect. You
may abstain on all proposals other than the election of directors and you will
be counted as present for purposes of the item on which the abstention is noted.
An abstention on the ratification of accountants will have the same legal effect
as a vote against such matter. Brokers holding shares in street name have the
authority to vote on certain matters when they have not received instructions
from the beneficial owners. Brokers that do not receive instructions are
permitted to vote on the outcome of the election of directors and the
ratification of accountants and, as a result, broker non-votes will have no
effect on the outcome of these matters.
<PAGE> 4
We will have a quorum for the transaction of business at the Annual Meeting
if the holders of a majority of the issued and outstanding shares of Common
Stock entitled to vote are present in person or represented by proxy. If we do
not have a quorum, we may postpone the Annual Meeting from time to time until
stockholders holding the requisite number of shares of Common Stock are present
or represented by proxy.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 18, 2000 (unless otherwise
noted), certain information concerning the ownership of shares of Common Stock
by (i) each person or group that we know owns beneficially more than five
percent of the issued and outstanding shares of Common Stock, (ii) each director
and nominee for director, (iii) each named executive officer described in
"Executive Compensation" below, and (iv) all directors and executive officers as
a group. Except as otherwise indicated, each person named has sole investment
and voting power with respect to his or its shares of Common Stock shown.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES PERCENT OF CLASS
- ---- ---------------- ----------------
<S> <C> <C>
Bacou, S.A........................................ 12,612,600(1) 71.54%
168 Avenue des Aureats
BP 1205
26012 Valence Cedex, France
Brinson Partners, Inc............................. 927,296(2) 5.26%
209 South LaSalle Street
Chicago, IL 60604-1295
UBS AG............................................ 927,296(2) 5.26%
Bahnhofstrasse 45
8021, Zurich, Switzerland
Philippe Bacou.................................... 12,686,400(1)(3) 71.66%
Walter Stepan..................................... 522,900(4)(5) 2.95%
Christophe Bacou.................................. 25,400(3) *
Philip B. Barr.................................... 105,100(5) *
Karl F. Ericson................................... 30,400(3) *
Howard S. Leight.................................. 70,000(3)(6) *
Gilbert Vandeputte................................ 5,000(3) *
Alfred J. Verrecchia.............................. 5,500(3) *
Alan H. Bennett................................... 17,500(5) *
John F. Burt, Jr.................................. 208,060(7) 1.18%
Adrien W. Hebert.................................. 16,000(5) *
All directors and executive officers as a group
(including Messrs. Bennett, Burt and Hebert, 21
persons)........................................ 13,804,560(3)(4)(5)(6)(7) 76.04%
</TABLE>
- ---------------
(1) Philippe Bacou is Chairman, President and Chief Executive Officer of Bacou,
S.A. and has sole voting and dispositive power with respect to shares of
Common Stock owned by Bacou, S.A.
(2) According to its Schedule 13G filed with the Securities and Exchange
Commission ("Commission") on February 4, 2000, Brinson Partners, Inc.
("BPI") had, as of December 31, 1999, sole voting power and shared
dispositive power with respect to 927,296 shares of Common Stock. On the
same Schedule 13G, UBS AG, through its indirect beneficial subsidiary, BPI,
had sole voting power and shared dispositive power with respect to the same
927,296 shares of Common Stock. Both BPI and UBS AG disclaim beneficial
ownership of such securities.
(3) Includes, as applicable, the following shares of Common Stock reserved for
issuance upon exercise of stock options outstanding pursuant to our 1996
Non-Employee Directors Stock Option Plan, all of which are vested: Mr. P.
Bacou, 73,800 shares; Mr. C. Bacou, 25,400 shares; Mr. Ericson, 25,400
shares; Mr. Leight, 5,000 shares; Mr. Vandeputte, 5,000 shares; Mr.
Verrecchia, 5,000 shares; and all directors as a group, 139,600 shares.
(4) Includes 55,440 shares of Common Stock owned of record by Mr. Stepan's wife.
2
<PAGE> 5
(5) Includes, as applicable, the following shares of Common Stock reserved for
issuance upon exercise of stock options vested as of April 14, 2000 pursuant
to the Corporation's 1996 Stock Incentive Plan: Mr. Stepan, 100,000 shares;
Mr. Barr, 100,000 shares; Mr. Bennett 7,500 shares; and Mr. Hebert, 16,000
shares; and all executive officers as a group (including Messrs. Stepan,
Barr, Bennett and Hebert), 335,500 shares.
(6) Includes 50,000 shares of Common Stock reserved for issuance upon exercise
of stock options outstanding pursuant to our 1998 Howard S. Leight Stock
Option Plan, all of which options are vested and which constitute all
options reserved for issuance under this plan.
(7) Represents unregistered shares held as part of consideration for exchange of
Mr. Burt's shares in Biosystems, Inc. in our acquisition of Biosystems. Mr.
Burt has "piggyback" registration rights with respect to these shares. Does
not include up to 79,130 shares currently held in escrow that are allocable
to Mr. Burt and 12,817 such shares allocable to his wife, Roberta Burt,
pursuant to an escrow agreement as part of the Biosystems acquisition.
* Less than 1%.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has nominated the persons named below for election
at the Annual Meeting as directors. The directors who are elected shall hold
office until their respective successors shall have been duly elected and
qualified. In accordance with Delaware General Corporation Law, each nominee for
director needs a plurality of the votes of shares present in person or
represented by proxy at the Annual Meeting in order to gain election.
All nominees are members of the present Board. Each of the nominees for
director has consented to being named a nominee in this Proxy Statement and has
agreed to serve as a director, if elected at the Annual Meeting. The persons
named in the proxy intend to vote for the following nominees:
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED
BELOW.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING DIRECTOR
NAME AND AGE THE PAST FIVE YEARS SINCE
------------ --------------------------- --------
<S> <C> <C>
Philippe Bacou*, 42.................... Co-Chairman of the Board since May 1999, Chairman 7/94
from June 1996 to May 1999; Chairman, President and
Chief Executive Officer of Bacou, S.A. since July
1996; previously Executive Vice President of Bacou,
S.A. since 1993; Chief Financial Officer and Vice
President -- Finance of Bacou, S.A. since 1985;
Director of Bacou, S.A. since 1985.
Walter Stepan, 61...................... Co-Chairman since May 1999, President and Chief 7/94
Executive Officer from July 1994 to December 1999;
Chairman of the following subsidiaries: Bacou USA
Safety, Inc. ("Bacou Safety"); Titmus Optical, Inc.
("Titmus"); Perfect Fit Glove Co., LLC ("PFG").
Formerly, Chairman of Uvex Safety Manufacturing,
Inc. ("USM") and SCHAS Industries, Inc.,
predecessor of SCHAS Industries, LLC ("SCHAS").
Also a director of Bacou, S.A., Bacou Far East Ltd.
(an affiliate of Bacou, S.A.), Uvex Safety
Australia Pty Ltd. ("UXA"), Uvex (UK) Limited
("Uvex UK"), Uvex Winter Optical, Inc. ("UWI") and
Uvex Sports, Inc. ("USI"). UXA and Uvex UK are
corporate entities in each of which Uvex
Arbeitsschutz GmbH ("Uvex Germany") is majority
shareholder and Bacou USA and Bacou International
B.V., an affiliate of Bacou S.A., are equal
minority shareholders. UWI and USI are affiliates
of Uvex Germany.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING DIRECTOR
NAME AND AGE THE PAST FIVE YEARS SINCE
------------ --------------------------- --------
<S> <C> <C>
Philip B. Barr, 48..................... President and Chief Executive Officer since January 8/95
2000; previously Chief Operating Officer from
February 1999 to December 1999; Executive Vice
President from October 1996 to December 1999; Vice
President from August 1995 to October 1996; Chief
Financial Officer and Secretary from August 1995 to
May 1999; Vice Chairman of Bacou Safety and Titmus
since December 1997; Vice Chairman of PFG
(including its predecessor Perfect Fit Glove Co.,
Inc.) since April 1999; Chairman of USM and SCHAS
since January 2000; Secretary and Treasurer of
Bacou Safety from December 1997 to May 1999; Vice
Chairman of USM from December 1997 to December
1999; Vice Chairman of SCHAS Industries, Inc. from
April 1999 to December 1999. Partner of Edwards &
Angell, the Corporation's primary outside counsel,
from 1985 to 1995.
Christophe Bacou*, 36.................. Vice President of Bacou, S.A.; previously Marketing 1/96
Manager of two subsidiaries of Bacou, S.A.;
employed by affiliates of Bacou, S.A. since 1990.
Also, Director of Bacou, S.A.
Karl F. Ericson, 66.................... Independent business consultant since 1990. Partner 7/96
with Peat Marwick Mitchell & Co., predecessor to
KPMG LLP, from 1970 to 1990. Also, Director of Bank
Rhode Island.
Howard S. Leight, 59................... Founder of Howard S. Leight & Associates, Inc. 2/98
(d/b/a Howard Leight Industries); President and
sole stockholder of Howard Leight Industries from
1984 until February 1998. Consultant to Bacou
Safety since February 1998. Director of Howard
Leight Enterprises, Inc. n/k/a Continental
Polymers, Inc., since 1997. Also, Director of
Bacou, S.A.
Gilbert Vandeputte, 69................. Since 1992, Mr. Vandeputte has served as President 5/99
of the European Safety Federation and since 1975 as
President of Febelsafe, the Belgian Safety
Federation. Also, Director of Bacou, S.A.
Alfred J. Verrecchia, 57............... Executive Vice President, Global Operations, 2/99
Hasbro, Inc. from 1996 to present; Chief Financial
Officer since 1999; previously Chief Operating
Officer, Domestic Toy Operations from 1990 to 1996;
Director, Hasbro, Inc.; Director, Old Stone
Corporation.
</TABLE>
- ---------------
* Philippe Bacou and Christophe Bacou are brothers.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee, currently comprised of
Mr. Stepan (Chair), Mr. P. Bacou and Mr. Barr, which is authorized to handle
routine matters that arise between meetings of the Board of Directors. The
Executive Committee held four meetings during the last fiscal year.
The Board of Directors has a Compensation Committee, currently comprised of
Mr. P. Bacou, Mr. Ericson, Mr. Stepan (Chair) and Mr. Verrecchia, which is
charged with the responsibility of reviewing, approving and recommending to the
Board of Directors all compensation arrangements for executive officers. The
Compensation Committee also administers the Bacou 1996 Stock Incentive Plan (the
"Incentive Plan"). The Compensation Committee held five meetings during the last
fiscal year. The Compensation Committee has a sub-committee called the Covered
Employee Compensation Sub-Committee. This Sub-Committee is comprised of two
outside directors, Mr. Ericson and Mr. Verrecchia, and is charged with the
responsibility of
4
<PAGE> 7
reviewing, approving and recommending to the Compensation Committee all
compensation arrangements for covered employees (as defined by Section 162(m) of
the Internal Revenue Code), who are likely to have compensation in excess of $1
million in any fiscal year.
The Board of Directors has an Audit Committee, currently comprised of Mr.
Ericson (Chair) and Mr. Verrecchia, which is charged with recommending to the
Board of Directors the annual engagement of our independent auditors and
reviewing with the independent auditors the scope and results of audits, audit
practices and professional services furnished by the independent auditors, and
our internal accounting controls. The Audit Committee held five meetings during
the last fiscal year.
The Board of Directors has an Oversight Committee, currently comprised of
Mr. Ericson and Mr. Verrecchia, which is charged with the responsibility of
reviewing the terms of transactions between Bacou and entities or persons with
which directors are affiliated, including Bacou, S.A. and any of its
subsidiaries and affiliates (the "Bacou Group") and any possible conflicts of
interest arising in connection with corporate opportunities which become
available to each of Bacou and the Bacou Group. See "Certain Transactions --
Corporate Opportunities Agreement." The Oversight Committee held one meeting
during the last fiscal year.
The Board of Directors does not have a nominating committee, as the Board
as a whole considers the qualifications of candidates and recommends to the
stockholders the election of directors. Stockholders may recommend nominees for
election as directors by writing to the President of Bacou.
The Board of Directors held a total of five meetings during 1999. Each
member of the Board of Directors attended at least 75% of the aggregate number
of meetings of the Board of Directors and each committee on which he served.
COMPENSATION OF DIRECTORS AND OFFICERS
DIRECTOR COMPENSATION
Directors who are also employees of Bacou receive no compensation for
service on the Board of Directors. The non-employee directors receive cash
compensation for service on the Board of Directors in an annual amount of
$15,000, payable quarterly. As Co-Chairman of the Board, Mr. Philippe Bacou
receives $60,000 annually. In addition, each non-employee director receives
$1,000 per day for attendance at any meeting of the Board of Directors or any of
its Committees or $500 per day for attendance by conference call.
Since August 1, 1996, we have granted current non-employee directors
139,600 options in the aggregate at exercise prices equal to the fair market
value of the Common Stock on the date of grant, pursuant to the 1996
Non-Employee Directors Stock Option Plan (the "Director Plan"). Effective
February 27, 1998 we granted 50,000 options to Mr. Leight at an exercise price
equal to $17.00 per share, pursuant to the 1998 Howard S. Leight Stock Option
Plan (the "Leight Plan"). See "Certain Transactions". As of May 13, 1999, each
Director is granted 5,000 options per year pursuant to the Director Plan, except
for Mr. Philippe Bacou, who receives 10,000 options per year while serving as
Co-Chairman. We also granted Mr. Philippe Bacou 25,000 options in 1999 in
connection with services he provided to Bacou USA.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table summarizes certain information with respect to
compensation for services rendered to us during the years ended December 31,
1999, 1998 and 1997 by our chief executive officer and the four other most
highly compensated executive officers in 1999 whose salary and bonus exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
------------------------------------ OPTIONS/
CALENDAR OTHER ANNUAL SARS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (SHARES) COMPENSATION
- --------------------------- -------- -------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Walter Stepan.............................. 1999 $500,000 $2,400,000 $92,000(1) -- $151,058(2)
President and Chief Executive Officer
through 1998 500,000 2,100,000 62,000(1) 70,000 16,352(2)
December, 1999; currently Co-Chairman;
also 1997 500,000 1,200,000 62,000(1) 30,000 16,002(2)
Chairman of Bacou Safety, Titmus and PFG
Philip B. Barr............................. 1999 300,000 350,000 (3) -- 2,048(4)
President and Chief Executive Officer
since 1998 250,000 300,000 (3) 35,000 2,906(4)
January, 2000; Vice Chairman of Bacou 1997 210,000 235,000 (3) 20,000 1,289(4)
Safety, Vice Chairman and CEO of Titmus
and PFG; Chairman of USM and Chairman and
CEO of SCHAS; Executive Vice President
and Chief Operating Officer through
December, 1999
Alan H. Bennett............................ 1999 225,961 130,384 76,119(5) 15,000 87,543(6)
Chief Operating Officer since January,
2000; 1998 -- -- -- -- --
President and CEO of Bacou Safety and 1997 -- -- -- -- --
USM; Chief Operating Officer of PFG,
SCHAS and Titmus
John F. Burt, Jr........................... 1999 240,000 24,000 (3) -- 5,000(4)
President of Biosystems division of Bacou 1998 230,000 62,100 (3) -- 4,899(4)
Safety since March 31, 1998; President of 1997 35,000 -- (3) -- 975(4)
Biosystems, Inc., a subsidiary of the
Corporation from September 30, 1997
through March 31, 1998
Adrien W. Hebert........................... 1999 150,000 110,000 (3) -- 5,000(4)
Vice President-Finance and Chief
Financial 1998 125,000 70,000 (3) -- 4,579(4)
Officer since May 1999 1997 87,692 20,000 (3) 20,000 --
</TABLE>
- ---------------
(1) Represents reimbursement payable to Mr. Stepan by Bacou for U.S. Social
Security taxes and the applicable personal income tax effects of such
reimbursement. Certain other perquisites payable to Mr. Stepan did not
exceed the threshold referenced in footnote (3), below.
(2) Represents (i) the taxable benefit to Mr. Stepan of split-dollar life
insurance premiums paid by Bacou on his behalf ($1,707 in 1999, $1,616 in
1998 and $1,516 in 1997), (ii) term life insurance premiums paid by Bacou on
behalf of Mr. Stepan ($9,736 in each of 1999, 1998 and 1997), (iii)
contributions by Bacou on behalf of Mr. Stepan under our 401(k) Plan Trust
($5,000 in 1999; $5,000 in 1998 and $4,750 in 1997); and (iv) payment in
1999 of $134,615 in accrued but unused vacation benefits.
(3) Perquisites and other personal benefits paid to the Named Executive Officer
were less than $50,000, or 10% of aggregate salary and bonus, and
accordingly are omitted from the table as permitted by the rules of the
Commission.
(4) Represents amounts paid by Bacou under our 401(k) Plan Trust and predecessor
plans.
(5) Represents payment on behalf of Mr. Bennett by Bacou for reimbursement of
withholding taxes.
(6) Represents (i) payment on behalf of Mr. Bennett by Bacou for reimbursement
of relocation expenses in the amount of $85,524 and (ii) contributions on
behalf of Mr. Bennett under our 401(k) Plan Trust in the amount of $2,019.
6
<PAGE> 9
The following table sets forth certain information relating to option
grants pursuant to the Incentive Plan during the year ended December 31, 1999 to
Mr. Bennett. No options were granted to Mr. Stepan, Mr. Barr, Mr. Burt or Mr.
Hebert in 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
------------------------------------------------------------------- REALIZABLE
% OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS/SARS EXERCISE STOCK PRICE
UNDERLYING GRANTED TO OR GRANT- APPRECIATION FOR
OPTIONS/ EMPLOYEES BASE DATE MARKET EXPIRA- OPTION TERM(3)(4)
SARS IN FISCAL PRICE PRICE TION --------------------
NAME GRANTED(1)(2) YEAR ($/SH) PER SHARE DATE 5% 10%
- ---- ------------- ------------ -------- ----------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan H. Bennett............. 15,000 42.86% $23.75 $23.75 2/01/09 $224,044 $567,770
</TABLE>
- ---------------
(1) No options granted were options with tandem SARs and no free-standing SARs
were granted.
(2) 25% of the options issued to Mr. Bennett were exercisable at year end 1999.
(3) Potential Realizable Value is based on the assumed growth rates for the
ten-year option term (5% annual growth results in a stock price per share of
$38.69 and 10% results in a stock price per share of $61.60).
(4) The actual value, if any, an executive may realize will depend on (i) the
excess of the stock price over the exercise price on the date the option is
exercised and (ii) the percent vested. There is no assurance the value
realized by an executive will be at or near the amounts reflected in this
table.
The following table sets forth certain information with respect to
unexercised options to purchase our Common Stock granted under the Incentive
Plan to the individuals named in the Summary Compensation Table above (other
than Mr. Burt, who has no options). These individuals exercised no options in
1999.
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
OPTIONS/SARS AT FISCAL YEAR-END SARS AT FISCAL YEAR-END(1)
-------------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Walter Stepan.......................... 100,000 -- $9,390 --
Philip B. Barr......................... 91,000 9,000 $8,528 $567
Alan H. Bennett........................ 3,750 11,250 -- --
Adrien W. Hebert....................... 12,000 8,000 $ 756 $504
</TABLE>
- ---------------
(1) Based on a per share price of $15.0625, the closing price of our Common
Stock on The New York Stock Exchange on December 31, 1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Stepan, Chairman of the Board's Compensation Committee and Co-Chairman
of Bacou, serves on the Board of Directors of Bacou, S.A., and Mr. P. Bacou is
the Chairman, President and Chief Executive Officer of Bacou, S.A. and is a
member of our Board's Compensation Committee.
COMPENSATION COMMITTEE REPORT
During 1999, the membership of the Compensation Committee of the Board of
Directors consisted of Messrs. Philippe Bacou, Karl F. Ericson, Walter Stepan
(Chair) and Alfred J. Verrecchia. Mr. P. Bacou, Mr. Verrecchia and Mr. Ericson
are not Bacou employees. Mr. Stepan, the Co-Chairman, President and Chief
Executive Officer of Bacou during 1999, currently serves as our Co-Chairman and
is Chairman of Bacou Safety, PFG and Titmus. The role of the Compensation
Committee is advisory and administrative in nature, with responsibility for
matters such as making recommendations to the Board of Directors concerning
certain compensation matters and administering compensation plans adopted by the
Board of Directors, including the Incentive Plan and the Bacou Bonus Plan for
Executives for 1998 and 1999 (the "Bonus Plan").
7
<PAGE> 10
The Compensation Committee has a Sub-Committee, currently comprised of Mr.
Ericson and Mr. Verrecchia, that is charged with the responsibility of
reviewing, approving and recommending to the Compensation Committee all
compensation arrangements for covered employees (as defined by Section 162(m) of
the Internal Revenue Code) who are likely to have compensation in excess of $1
million during any fiscal year.
COMPENSATION POLICIES
The Bacou executive compensation program consists of three main components:
(1) base salary, (2) cash bonus and (3) stock options. Base salaries are
designed to attract and retain well-qualified executives who are likely to
manage our company and its operating subsidiaries in a manner that will produce
successful operating strategies and results. We use cash bonuses to provide
short-term incentives that are determined in direct relation to the company's
financial performance and that also take into account individualized objectives
and achievements. We have designed our stock option program to align the
interests of shareholders and executives by providing long-term incentives based
on growth in market value of our Common Stock.
DIRECT RELATIONSHIP OF COMPENSATION TO CORPORATE FINANCIAL PERFORMANCE
For 1999, we paid Mr. Stepan and Mr. Barr bonuses that were in direct
relation to corporate financial performance, as measured by operating income,
pursuant to their employment agreements. This resulted in our paying all of Mr.
Stepan's bonus and a portion of Mr. Barr's bonus equal to $305,000, in direct
relation to the level of Bacou's operating profit on a consolidated basis.
For the executive officers of our operating subsidiaries and divisions, we
designed executive compensation in relation to corporate performance through the
Bonus Plan, which provides increased bonus levels as subsidiary and division
operating margins, net sales and operating profits increase. On this basis, the
portion of bonuses that were in direct relation to corporate financial
performance ranged from approximately 10% to 55% of base salary for our
executive officers at operating subsidiaries and divisions.
CEO COMPENSATION
Mr. Stepan served as Chief Executive Officer of Bacou until December 31,
1999. The terms of his Employment Agreement dated January 1, 1996 determined his
salary and benefits for 1999. This agreement (except for a first amendment to
such contract dated October 24, 1997, a second amendment dated August 25, 1998
and an amended and restated agreement dated December 1, 1999), was in place
prior to both the establishment of the Compensation Committee and our initial
public offering in March 1996. Mr. Stepan's cash bonus represents approximately
83% of his 1999 compensation. He was entitled to a cash bonus pursuant to an
incentive formula that directly connected Bacou's financial performance, as
measured by consolidated operating income, to the amount of his bonus. Based on
our financial performance for 1999, the Compensation Committee awarded Mr.
Stepan a cash bonus of $2,400,000.
IRS MATTERS
Section 162(m) of the Internal Revenue Code disallows deductions by
publicly held companies for employee remuneration in excess of $1 million that
is not performance-based. Although the compensation we paid Mr. Stepan for 1999
was in excess of $1 million, we are allowed to deduct the amounts paid pursuant
to his employment agreement since (i) the original agreement was in effect prior
to our initial public offering, (ii) we disclosed that agreement in our
Registration Statement on Form S-1 filed with the Commission on March 27, 1996,
and (iii) our stockholders approved a subsequent material amendment to that
agreement.
COMPENSATION COMMITTEE
Walter Stepan (Chair)
Philippe Bacou
Karl F. Ericson
Alfred J. Verrecchia
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CORPORATE PERFORMANCE
The line graph below compares the cumulative total stockholder return for
the years ended December 31, 1996, 1997, 1998 and 1999 of our Common Stock
against the cumulative total return of the Russell 2000 Index and the S&P 500
Index. We intend to compare our return to the Russell 2000 Index in the future
because as a member of the Russell Index, we believe that it is the most
appropriate index for comparative results. We are also including the S&P 500
Index because we used that index last year and we wish to maintain continuity of
that comparison. We intend to eliminate the comparison to the S&P 500 for 2000.
The graph also compares such return for the years 1996, 1997, 1998 and 1999
against the cumulative total return of a peer group of companies in the safety
and security products market consisting of Borg-Warner Security Corp.;
Checkpoint Systems; Cintas Corporation; Indentix, Inc.; Mine Safety Appliances
Company; Pittston Brinks Group; Pittway Corporation; Safeskin Corporation; Scott
Technologies (formerly known as Figgie International); Sensormatic Electronics;
Symbol Technologies; Thermedics, Inc.; and Vivid Technologies (the "Peer
Group"). The graph and table assume that $100 was invested on March 27, 1996 in
each of Bacou Common Stock, the Russell 2000 Index, the S&P 500 Index and the
Peer Group, and that all dividends were reinvested.
[Line Graph]
<TABLE>
<CAPTION>
BACOU USA RUSSELL 2000 S&P 500 PEER GROUP
--------- ------------ ------- ----------
<S> <C> <C> <C> <C>
3/27/96 100.00 100.00 100.00 100.00
12/31/96 110.83 113.16 117.82 109.95
12/31/97 116.66 138.46 157.12 140.57
12/31/98 143.33 134.94 202.03 178.78
12/31/99 100.41 163.62 244.55 177.65
</TABLE>
EMPLOYMENT CONTRACTS
MR. STEPAN
In January 1996, we entered into an employment agreement with Mr. Stepan,
which provided for (i) an annual base salary of $500,000, (ii) an annual
incentive cash bonus based on a declining percentage ranging from four to one
percent of the company's earnings before interest and taxes ("Adjusted EBIT"),
and (iii) reimbursement of United States social security taxes and the
applicable personal income tax effect of such reimbursement, and certain other
benefits.
Effective October 24, 1997, Bacou and Mr. Stepan entered into a First
Amendment to Employment Agreement which (i) replaced the decreasing percentage
formula with an increasing percentage formula
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<PAGE> 12
ranging from 2.75% to 4.25% of Adjusted EBIT and, (ii) defined Adjusted EBIT to
eliminate the effects of (a) any accrual for Mr. Stepan's incentive
compensation; (b) amortization expense; and (c) certain non-recurring charges.
On August 25, 1998, we entered into a Second Amendment to Employment
Agreement with Mr. Stepan which extended the term of his agreement to December
31, 1999. This amendment also provided that Mr. Stepan would be nominated to
serve as a Director of Bacou through 2005. We paid Mr. Stepan a bonus of
$2,400,000 for 1999, all of which was determined pursuant to the incentive
formula defined by his employment agreement.
On December 1, 1999, we entered into an Amended and Restated Employment
Agreement with Mr. Stepan, effective January 1, 2000 for a period of three years
with respect to Mr. Stepan's service as Co-Chairman of Bacou, with annual
renewals unless either party provides six months notice prior to the end of a
term. In this position, Mr. Stepan receives $120,000 per year (subject to annual
reviews) and must devote at least 25% of his previous normal business commitment
to Bacou. He is eligible to receive incentive compensation, subject to the
approval of the Compensation Committee, measured on the success and progress
that Bacou achieves during each year, based on the time he devotes to his duties
and reflecting his former position as President and CEO. Mr. Stepan continues to
receive all employment benefits for which he was previously eligible. In the
event of any direct or indirect change of control of Bacou, Mr. Stepan will
receive a guaranteed minimum payment equal to the sum of the amounts payable to
him during the full term of this agreement, including total base salary, bonus
equal to 25% of his 1999 bonus, a number of stock options equal to those granted
to the President and CEO, plus the present value of all other benefits under the
agreement from such date until the end of the then-current term of the
agreement.
All of the above agreements prohibit Mr. Stepan from competing with Bacou
and from disclosing confidential information regarding our business during the
term of such agreement and thereafter for periods of one year and three years,
respectively.
MR. BARR
In May 1995, we entered into a five-year employment agreement with Mr. Barr
having an initial term expiring in 2000 which, unless either party were to elect
not to renew, would be automatically extended for successive three-year terms.
We paid Mr. Barr an initial annual base salary of $180,000 which we reviewed
annually (with minimum guaranteed increases based on the Consumer Price Index).
We paid Mr. Barr annual base salary of $210,000 for 1997, $250,000 for 1998, and
$300,000 for 1999. The agreement initially provided for an annual bonus having
the following components: an amount based on Bacou's profitability as measured
by the company's earnings before interest and taxes at a rate ranging from 5% to
25% of the annual base salary; a bonus up to 25% of his annual base salary based
upon the achievement of individual performance goals; and additional bonus
compensation to be awarded in connection with special projects as assigned.
Effective October 24, 1997, Bacou and Mr. Barr entered into a Third
Amendment to Employment Agreement which amended the initial agreement by (i)
replacing the aforementioned annual bonus components with an annual incentive
cash bonus based on increasing percentages ranging from 0.40% to 0.55% of
Adjusted EBIT and (ii) defining Adjusted EBIT to eliminate the effects of
amortization expense and certain non-recurring charges. We paid Mr. Barr a bonus
payment for 1999 of $350,000, $305,000 of which was determined pursuant to the
incentive formula defined by his employment agreement and the balance of which
was awarded by the Board of Directors in its discretion at the recommendation of
the Compensation Committee.
Effective January 1, 2000, Bacou and Mr. Barr entered into an Employment
Agreement regarding Mr. Barr's service as President and Chief Executive Officer
of Bacou for a three-year term, with two-year renewal terms thereafter unless
either party provides six-months' notice prior to the end of any such term. We
will pay Mr. Barr a base salary of $450,000 for the first year of the initial
term, subject to annual reviews. We will determine his bonus payments and stock
options pursuant to the Bonus and Option Plan, according to which Mr. Barr will
receive awards determined by the compound annual growth rate of Bacou's net
income
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and earnings before interest, taxes, depreciation and amortization ("EBITDA").
The agreement also provides that in the event of any change of control of Bacou,
either directly or indirectly, Mr. Barr shall receive a guaranteed minimum
payment equal to the sum of the amounts payable to him during the full term of
this agreement, including total base salary, bonus and stock options plus the
present value of all other benefits under the agreement from such date until the
end of the then-current term of the agreement ("Change of Control Payment").
All of the above agreements prohibit Mr. Barr from competing with Bacou and
from disclosing any confidential information regarding our business during the
term of the agreement and thereafter for periods of one year and three years,
respectively.
MR. BENNETT
Effective February 1, 1999, we entered into an Employment Agreement with
Mr. Bennett regarding his service as President of the Uvex Safety division of
Bacou Safety. In this position, we paid Mr. Bennett a base salary of $250,000
for the one-year term of this agreement, subject to one-year renewals unless six
months prior notice is given by either party. Mr. Bennett received a bonus
payment of $130,384 for his service in 1999.
Effective January 1, 2000, we entered into a three-year Employment
Agreement with Mr. Bennett with two-year renewal terms thereafter unless either
party provides six-months' notice prior to the end of a term. We will pay him a
base salary of $325,000 for the first year of the initial term, with bonus and
stock options subject to the Bonus and Option Plan. The agreement provides that
in the event of a change of control of Bacou, either directly or indirectly, Mr.
Bennett shall receive a Change of Control Payment.
Under both agreements, Mr. Bennett is restricted from competing with Bacou
and is prohibited from disclosing any confidential information about our
business during the term of the agreement and thereafter for periods of one year
and three years, respectively.
MR. BURT
Effective on October 1, 1997, Biosystems, Inc. entered into an Employment
Agreement with Mr. Burt. According to this agreement, Mr. Burt will serve as
President of Biosystems (now the Biosystems division of Bacou Safety) for an
initial term through December 31, 2001, subject to successive renewal terms of
one year each, unless written notice of termination is provided by either party
at least six months prior to the end of a term. The agreement provided for a
base salary of $230,000 for 1998, which was increased to $240,000 for 1999 and
$245,000 for 2000. We will pay him incentive compensation for years beginning in
1998 in accordance with the Bonus Plan, provided that his bonus in the year 2000
shall not exceed 35% of his base salary. In March, 2000, Mr. Burt received a
bonus of $24,000 for his services in 1999. Mr. Burt is eligible to participate
in our stock option and employee benefit plans. He is subject to certain
non-competition and confidentiality covenants regarding the company's business
during the term of the agreement and thereafter. Also, see "Contingent Payments
and Other Provisions of the Biosystems Agreement" and "Registration Rights."
MR. HEBERT
Effective January 1, 2000, Bacou and Mr. Hebert entered into an employment
agreement for a term of three years. We will pay Mr. Hebert a base salary of
$225,000 for the first year of the agreement, subject to annual reviews. He is
eligible for a bonus and stock options pursuant to the Bonus and Option Plan.
The agreement provides that in the event of a change of control of Bacou,
directly or indirectly, Mr. Hebert will receive a Change of Control Payment. The
agreement prohibits Mr. Hebert from competing with Bacou and from disclosing any
confidential information about our business during the term of the agreement and
thereafter, for periods of one year and three years, respectively.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Bacou's
officers and directors, and persons who own more than 10% of a registered class
of our equity securities ("Insiders"), to file reports of ownership and changes
in ownership with the SEC. Insiders are required by SEC regulation to furnish us
with copies of all Section 16(a) forms they file. Based solely on review of the
copies of such forms furnished to us, we believe that during 1999 all of our
Insiders met their Section 16(a) filing requirements.
CERTAIN TRANSACTIONS
PUT OPTION
Pursuant to an Agreement and Plan of Merger dated as of September 30, 1997
(the "Biosystems Agreement"), Bacou acquired all of the capital stock of
Biosystems, Inc. ("Biosystems"). Bacou issued 826,514 shares of its common stock
as payment of the initial purchase price for Biosystems (the "Payment Shares").
Pursuant to the Biosystems Agreement, Mr. John F. Burt, Jr., who is currently
the President of the Biosystems Division of Bacou Safety and who was formerly
the President and a principal stockholder of Biosystems prior to its purchase by
Bacou, received the right to require Bacou to repurchase up to approximately
218,083 of the Payment Shares received by him as consideration for his shares in
Biosystems (the "Put Option"). The Put Option was exercisable at any time during
a twenty-four (24) month period commencing September 30, 1997. Bacou was
obligated to purchase shares pursuant to an exercise of the Put Option at a
price equal to approximately $16.38 per share. Mr. Burt did not exercise his Put
Option and it expired on September 30, 1999.
CONTINGENT PAYMENTS AND OTHER PROVISIONS OF THE BIOSYSTEMS AGREEMENT
Pursuant to provisions of the Biosystems Agreement, Bacou is obligated to
make certain contingent earn-out payments if the operating results of Biosystems
exceed certain defined thresholds in the year 2000 (the "Contingent Payments").
Contingent Payments, if any, would be payable to the five former stockholders of
Biosystems (including Mr. John F. Burt, Jr. and Mr. Joseph Burt, who are
brothers and officers of Biosystems), and are payable in unregistered shares of
common stock of Bacou, except that the former stockholders of Biosystems have
the option to receive up to an aggregate amount of $12.0 million of any
Contingent Payments in cash.
In addition, the Biosystems Agreement includes terms and conditions
customary for transactions of this nature, including representations, warranties
and indemnities between the parties. Both Mr. John F. Burt, Jr. and Mr. Joseph
Burt are parties to the Biosystems Agreement and would be entitled to
indemnification in the event of breaches by Bacou of its representations and
warranties under the Biosystems Agreement.
REGISTRATION RIGHTS
Pursuant to agreements with Bacou, Bacou, S.A. (the "Principal
Stockholder") and Mr. John F. Burt, Jr. each has certain rights (each a "Demand
Registration Right") to cause Bacou to register its shares of Common Stock under
the Securities Act of 1933, as amended (the "Securities Act"). In addition,
subject to certain limitations, if Bacou proposes to register any of its
securities under the Securities Act, either for its own account or for the
account of other security holders, each of the Principal Stockholder, all
selling shareholders of Biosystems, and Mr. Stepan, his wife and two adult
children (together, the "Stepan Family"), are entitled to written notice of the
registration and are entitled to, at Bacou's expense, include therein shares of
Common Stock held by such holder (a "Piggyback Right"), provided, among other
conditions, that the underwriters of any offering have the right to limit the
number of such shares included in the registration. If an underwriter does so
limit the number of shares included in a registration, shares will be eliminated
from the offering in the following order: (i) shares proposed to be sold by
selling shareholders of Biosystems pursuant to a Piggyback Right, (ii) shares
proposed to be sold by the Principal Stockholder or the Stepan Family pursuant
to a Piggyback Right, (iii) shares proposed to be sold by any person pursuant to
the exercise of a Demand Registration Right, and finally (iv) shares proposed to
be sold by Bacou for its own account. Bacou generally
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is required to bear all the fees, costs and expenses of any such registration
other than underwriting discounts and commissions. Bacou also is obligated to
indemnify each of the Principal Stockholder, the selling shareholders of
Biosystems, the Stepan Family and any other party that exercises its
registration rights against certain liabilities, including liabilities under the
Securities Act.
CORPORATE OPPORTUNITIES AGREEMENT
Bacou and the Principal Stockholder have entered into an agreement that
addresses potential conflicts of interest with respect to future business
opportunities. In general, the agreement covers the following: the extent to
which the Principal Stockholder and its affiliates (together, the "Bacou Group")
may export its products to the United States; the extent to which Bacou may
export its products to France; the manner in which acquisition opportunities
will be allocated between Bacou and the Bacou Group; the basis for cooperation
between Bacou and the Bacou Group with respect to product development,
intellectual property rights, research and development and manufacturing
processes; and the terms and conditions for sale of products by one party to the
other. The agreement expires on December 31, 2016, subject to a ten-year renewal
option exercisable by either party.
Except for products supplied by Bacou as an original equipment
manufacturer, Bacou may not offer for sale in France personal protective
equipment of a type offered by the Bacou Group to its customers in France unless
it shall have first offered to supply the products to the Bacou Group and such
offer shall have been declined. At any time after the Bacou Group declines such
an offer, it may change its decision, prevent Bacou from making future sales of
such products in France and undertake sales of such products on its own behalf.
The rights of the Bacou Group to reconsider such an offer would be subject to
any agreement entered into by Bacou with third parties subsequent to the Bacou
Group's having declined the initial offer.
Except for products supplied by the Bacou Group as an original equipment
manufacturer, the Bacou Group may not offer for sale in the United States
personal protective equipment of a type offered by Bacou to its customers in the
United States unless it shall have first offered to supply the products to Bacou
and such offer shall have been declined. At any time after Bacou declines such
an offer, it may change its decision, prevent the Bacou Group from making
further sales of such products in the United States and undertake sales of such
products on its own behalf. The rights of Bacou to reconsider such an offer
would be subject to any agreement entered into by the Bacou Group with third
parties subsequent to Bacou's having declined the initial offer.
The geographic restrictions applicable generally to sales by Bacou in
France and by the Bacou Group in the United States do not apply to products sold
by either party as an original equipment manufacturer, except that either party
may determine in its reasonable discretion that such sales by the other party
would materially and adversely affect the marketability of its competing
products, in which case the other party would be required to curtail such export
sales of products supplied as an original equipment manufacturer.
Opportunities for future acquisitions generally will be allocated by
geographic location, with Bacou making acquisitions of businesses in North,
Central and South America and the Bacou Group making acquisitions elsewhere in
the world. Recognizing our expertise in eyewear products, Bacou has the right of
first refusal for any acquisitions of eyewear businesses wherever located.
The agreement requires both parties and their affiliates to regularly
exchange information about activities relating to product development,
intellectual property rights, research and development and manufacturing
processes. In the event Bacou selects a new product of the Bacou Group for sale
within the United States, Bacou may utilize the intellectual property, products,
processes and know-how associated with the selected products without payment of
any royalty or consulting fee. Bacou is subject to the same requirement for new
products of Bacou that are selected by the Bacou Group for sale in France.
Bacou's obligations are subject to the restrictions placed on Bacou Safety as
successor-in-interest to Uvex Safety, Inc. pursuant to agreements with Uvex
Germany. The obligations of both parties are subject to any restrictions
applicable under other third party agreements, such as secrecy agreements, in
force at January 1, 1996.
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Each party must supply its products to the other party generally upon the
most favorable terms and conditions applicable to transactions with unrelated
customers involving similar quantities and purchase order conditions.
INVENTORY PURCHASES FROM AND SALES TO PRINCIPAL STOCKHOLDER
Bacou purchases certain inventory items from affiliates of the Principal
Stockholder. Total purchases were approximately $16,000 in 1999, $24,000 in 1998
and $207,000 in 1997. Bacou Safety also serves as master distributor in the
Western Hemisphere for the products of Optrel A.G., a newly acquired subsidiary
of the Principal Stockholder. Bacou purchased $1,033,000 in Optrel products
during 1999 pursuant to this arrangement. Bacou also sells certain inventory
items to affiliates of the Principal Stockholder, with sales totaling
approximately $1,925,000 in 1999, $967,000 in 1998 and $270,000 in 1997. The
Principal Stockholder has been the exclusive distributor of Howard Leight
products in France since 1993.
JOINT INVESTMENTS WITH BACOU S.A.
Effective August 31, 1998, Bacou USA and Bacou International B.V. ("Bacou
NL"), an affiliate of the Principal Stockholder, entered into certain agreements
in which each company became a stockholder of PDS International Pte Ltd.
("PDS"), a Singapore distribution company. Bacou USA and Bacou NL each acquired
a 15% interest in PDS to provide channels of distribution for their respective
products in certain countries in southeast Asia. The remaining 70% ownership of
PDS was held by Uvex Germany and certain unrelated interests. Effective November
30, 1999, Bacou USA and Bacou NL sold their respective interests in PDS to Uvex
Germany. We have no remaining interest in PDS, although we continue to sell
certain of our products in that region through PDS. During 1999, Bacou sold
$225,000 in products to PDS.
Effective August 1, 1999, Bacou USA and Bacou NL entered into certain
agreements in which each party became a 15% stockholder of Uvex Australia Pty
Ltd. and of Uvex (UK) Limited. These two companies provide channels of
distribution for the products of both Bacou Companies in these regions. The
remaining 70% ownership of both Uvex Australia and Uvex UK is held by Uvex
Germany. During 1999, Bacou sold $2,119,000 in products to Uvex Australia and
$1,463,000 to Uvex UK. Mr. Stepan serves as a Director of each of these
distribution companies.
ASSET PURCHASE AGREEMENT WITH HOWARD S. LEIGHT & ASSOCIATES, INC.
Pursuant to an Asset Purchase Agreement (as amended) with Howard S. Leight
& Associates, Inc. ("Leight") on February 27, 1998, Bacou Safety acquired
substantially all of the assets and assumed substantially all of the liabilities
of Leight (the "Leight Transactions") including the capital stock of two of its
subsidiaries, from Howard S. Leight ("Mr. Leight"), currently a Director of
Bacou USA and Bacou, S.A. Bacou Safety paid cash consideration of $125.9 million
in connection with the closing of the Leight Transactions, $5.9 million of which
represented the refinancing of Leight indebtedness. In addition to cash
consideration paid at the closing, Bacou Safety must pay additional amounts, not
to exceed $2.0 million, if the sales of Leight exceed certain defined thresholds
by the year 2000.
CONSULTING AGREEMENT WITH HOWARD S. LEIGHT
In connection with the Leight Transactions, Mr. Leight entered into a
consulting agreement dated February 27, 1998 (the "Consulting Agreement") with
Bacou Safety. The Consulting Agreement requires Mr. Leight to provide advice to
Bacou Safety and to assist Bacou Safety with certain product development and
marketing efforts. As compensation for these services, we paid Mr. Leight
$200,000 in 1999, and we are required to pay him at that rate annually for the
five-year term of the Consulting Agreement. In addition, Bacou Safety is
required to make royalty payments to Mr. Leight for each new patentable hearing
protection product that is either principally derived from ideas of Mr. Leight
or principally developed by Mr. Leight subsequent to February 27, 1998. Royalty
payments will be paid at the rate of four percent (4%) of the net sales of any
qualifying product, provided sales of such product exceed thresholds defined in
the Consulting Agreement. We did not make any royalty payments to Mr. Leight
during 1999. Bacou Safety's obligation to
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make royalty payments under the Consulting Agreement continues beyond the term
of the agreement. The Consulting Agreement also provides for Mr. Leight to be
nominated as a Bacou USA Director during each year of the Consulting Agreement,
and for the grant of 50,000 stock options to Mr. Leight in 1998. Upon
consummation of the Leight Transactions, Mr. Leight joined the Boards of
Directors of Bacou USA and the Principal Stockholder and, pursuant to the Leight
Plan, he received an option to purchase an aggregate of 50,000 shares of the
Common Stock at an exercise price of $17.00 per share. Under the terms of the
Consulting Agreement, Mr. Leight is subject to non-disclosure and
non-competition provisions.
REAL ESTATE OPTION AND RIGHT OF FIRST REFUSAL AGREEMENT WITH HOWARD S. LEIGHT
Mr. Leight is the owner of a parcel of land adjacent to the Howard Leight
Industries manufacturing facility in San Diego, California (the "Option Land").
In connection with the Leight Transactions, Bacou Safety and Mr. Leight entered
into a Real Estate Option and Right of First Refusal Agreement pursuant to which
Bacou Safety obtained the right to purchase the Option Land under certain terms
and conditions in the future. In general, Bacou Safety may elect to purchase the
Option Land for a price equal to the greater of $750,000 or fair market value
determined by independent appraisal, at any time within a three-year period
beginning December 15, 1999. As of this time, Bacou Safety has not exercised its
option. Also, Mr. Leight is required to offer the Option Land to Bacou Safety on
terms and conditions as favorable as those applicable to any that Mr. Leight
proposes to accept from a third party at any time in the future.
LEASE AGREEMENT WITH HOWARD S. LEIGHT
Effective February 27, 1998, Bacou Safety entered into a lease agreement
with Mr. Leight for a 20,000 square foot warehouse located in Florence, Kentucky
(the "Lease Agreement") in connection with the Leight Transactions. The Lease
Agreement has an initial lease term of five (5) years and is subject to two (2)
successive renewal options for a period of five (5) years each. The Lease
Agreement provides for annual rent equal to $100,000 and is subject to annual
increases based upon increases in the regional Consumer Price Index. Pursuant to
the terms of the Lease Agreement, Bacou Safety is responsible for payment of
taxes, utilities, insurance and certain repairs and maintenance. Bacou Safety
made lease payments totaling $109,750 during 1999 to Mr. Leight (covering 13
monthly payments).
LETTER AGREEMENT WITH HOWARDS LEIGHT
Mr. Leight is a principal stockholder of Continental Polymers, Inc., f/k/a
Howard Leight Enterprises, Inc. ("HLE"). On January 12, 1998, in connection with
the Leight Transactions, Bacou USA entered into a letter agreement with Mr.
Leight that Bacou Safety would negotiate a supply agreement with HLE in which
Bacou Safety would purchase its requirements for polyurethane pre-polymer (the
principal raw material used in the production of foam hearing protection
products) from HLE for a period of five years, provided that the quality and
price of such raw material were equivalent to that which is then available from
third party suppliers. Bacou Safety and HLE have not been able to reach
agreement on the terms and conditions of a supply agreement and negotiations
thereon have been terminated. We have filed a declaratory judgment action with
respect to the interpretation of certain provisions of the letter agreement.
PROPOSAL 2
RATIFICATION OF SELECTION OF AUDITORS
We are submitting for ratification at the Annual Meeting the selection, by
a majority of the members of the Board who are not officers or employees of
Bacou, of KPMG LLP ("KPMG") as independent auditors to audit the books and
accounts of Bacou for the fiscal year ending December 31, 2000. Such
ratification requires
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the affirmative vote of a majority of the shares entitled to vote thereon
present in person or represented by proxy at the Annual Meeting when a quorum is
present. Representatives of KPMG will be present at the Annual Meeting and will
be given an opportunity to make a statement if they desire to do so and will
respond to appropriate questions of stockholders.
The firm of KPMG has advised us that neither it nor any of its members has
any direct financial interest in Bacou as a promoter, underwriter, voting
trustee, director, officer or employee.
All professional services rendered by KPMG during the year ended December
31, 1999 were furnished at customary rates.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF KPMG AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
OTHER MATTERS
Management does not know of any matters that will be brought before the
Annual Meeting other than those specified in the Notice of Annual Meeting.
However, if any other matters properly come before the Annual Meeting, the
persons named in the form of proxy, or their substitutes, will vote on such
matters in accordance with their best judgment.
FINANCIAL STATEMENTS
The Bacou 1999 Annual Report to Stockholders, which contains the Annual
Report filed with the Securities and Exchange Commission on Form 10-K, is
provided to stockholders along with this form of Proxy and contains the
financial statements of Bacou. The Annual Report, the Form 10-K and the
financial statements contained therein are not to be considered as a part of
this soliciting material.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Under the regulations of the Commission, a record or beneficial owner of
shares of Bacou Common Stock may submit proposals on proper subjects for action
at Bacou's 2001 Annual Meeting of Stockholders. All such proposals must be
mailed to the Secretary of Bacou at 10 Thurber Boulevard, Smithfield, Rhode
Island 02917 and must be received at that address on or before December 15,
2000, in order to be included in our proxy statement relating to the 2001 Annual
Meeting.
By order of the Board of Directors,
LOGO
WINFIELD W. MAJOR
Secretary
Smithfield, Rhode Island
March 29, 2000
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4961-PS-00
<PAGE> 20
PROXY
BACOU USA, INC.
10 THURBER BOULEVARD
SMITHFIELD, RHODE ISLAND 02917
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 15, 2000
The undersigned hereby appoints Walter Stepan and Philip B. Barr or
either one of them, as Proxies, each with the power to appoint his substitute,
and hereby authorizes each of them to represent and vote, as designated on the
reverse, all shares of Common Stock of Bacou USA, Inc. of the undersigned, at
the Annual Meeting of Stockholders to be held at The Westin Hotel, One West
Exchange Street, Providence, Rhode Island, on Monday, May 15, 2000 at 9:00
A.M., Eastern Daylight Time, or at any adjournment thereof, for the following
purposes:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
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SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU INSTRUCT THE PROXIES TO VOTE FOR PROPOSALS 1 AND 2
1. To elect directors of the Corporation for the ensuing FOR AGAINST ABSTAIN
year, and until their successors are elected and 2. To ratify the selection of KPMG
qualified. LLP as independent auditors to [ ] [ ] [ ]
NOMINEES: (01) Philippe Bacou, (02) Walter Stepan, audit the Corporation's books
(03) Philip B. Barr, (04) Christophe Bacou, (05) Karl F. and accounts for the fiscal year
Ericson, (06) Howard S. Leight, (07) Gilbert ending December 31, 2000.
Vandaputte, (08) Alfred J. Verecchia
FOR WITHHELD 3. To transact such other business as may properly come before
ALL [ ] [ ] FROM ALL the meeting or any adjournment thereof.
NOMINEES NOMINEES
[ ]
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For all nominees except as noted above MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
You are encouraged to specify your choices by marking the
appropriate boxes, but you need not mark any boxes if you
wish to vote in accordance with the Board of Director's
recommendations. The Board cannot vote your shares unless
you sign and return this card. Please complete, sign and
date this proxy and mail it as promptly as possible. If you
attend the meeting and vote in person, the proxy will not be
used.
NOTE: Please sign as name appears hereon. Joint owners each
should sign. When signing as a fiduciary or for an estate,
trust, corporation or partnership, your title or capacity
should be stated.
Signature: Date: Signature: Date:
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