<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
WESLEY JESSEN VISIONCARE, 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)(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LOGO
333 EAST HOWARD AVENUE
DES PLAINES, ILLINOIS 60018-5903
TELEPHONE: (847) 294-3000
April 20, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
(the "Annual Meeting") of Wesley Jessen VisionCare, Inc. (the "Company"),
which is scheduled to be held on Wednesday, May 20, 1998, at 10:00 a.m.
(Central time) at the Rosemont Suites Hotel, 5500 North River Road, Rosemont,
Illinois 60018.
At the meeting, we will report to you on current business conditions and
recent developments at the Company. Members of the Board of Directors and our
executive officers will be present to discuss the affairs of the Company with
you.
The Company has enclosed a copy of its 1997 Annual Report for the fiscal
year ended December 31, 1997 with this letter, notice of annual meeting of
stockholders and proxy statement. If you would like another copy of the 1997
Annual Report, please contact Ronald J. Artale, Vice President and Controller,
and you will be sent one.
It is important that your shares be represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please
complete, sign and date the enclosed proxy card and return it promptly in the
enclosed envelope to ensure your shares will be represented. If you do attend
the Annual Meeting, you may, of course, withdraw your proxy should you wish to
vote in person.
On behalf of the Board of Directors and management of the Company, I would
like to thank you for choosing to invest in our Company. We are very excited
about the future of the Company and are looking forward to our first annual
meeting since the successful completion of our initial public offering in
February 1997.
Sincerely,
LOGO
Kevin J. Ryan
President and
Chief Executive Officer
<PAGE>
LOGO
333 EAST HOWARD AVENUE
DES PLAINES, ILLINOIS 60018-5903
TELEPHONE: (847) 294-3000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 1998
The 1998 Annual Meeting of Stockholders of Wesley Jessen VisionCare, Inc., a
Delaware corporation (the "Company"), is scheduled to be held on Wednesday,
May 20, 1998, at 10:00 a.m. (Central time) (the "Annual Meeting"), at the
Rosemont Suites Hotel, 5500 North River Road, Rosemont, Illinois 60018 for the
purpose of:
(1) Electing two (2) Class I Directors to serve until the annual meeting
of stockholders in 2001 and until their successors are duly elected and
qualified or until their earlier removal or resignation (the Board of
Directors of the Company recommends a vote FOR the nominees named in the
Company's Proxy Statement);
(2) Ratifying the appointment of Price Waterhouse LLP as the independent
accountants of the Company for the fiscal year ending December 31, 1998
(the Board of Directors of the Company recommends a vote FOR this
proposal); and
(3) Transacting such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 15, 1998, as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting or any adjournment or postponement thereof.
By Order of the Board of Directors
LOGO
Edward J. Kelley
Secretary
April 20, 1998
Enclosed with this Notice of Annual Meeting of Stockholders is a Proxy
Statement and related proxy card with a return envelope. The Company's 1997
Annual Report for the fiscal year ended December 31, 1997 is also enclosed.
The 1997 Annual Report contains financial and other information about the
Company, but is not incorporated into the Proxy Statement and is not deemed to
be a part of the proxy soliciting material.
EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE,
SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES. STOCKHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR
PROXIES AND VOTE IN PERSON IF THEY SO DESIRE.
<PAGE>
LOGO
333 EAST HOWARD AVENUE
DES PLAINES, ILLINOIS 60018-5903
TELEPHONE: (847) 294-3000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELDON MAY 20, 1998
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors (the "Board") of Wesley Jessen VisionCare, Inc., a Delaware
corporation (the "Company"), of proxies to be used at the annual meeting of
stockholders of the Company scheduled to be held on May 20, 1998 (the "Annual
Meeting"). This Proxy Statement and the related proxy card are being mailed to
holders of the Company's common stock, par value $0.01 per share (the "Common
Stock"), commencing on or about April 21, 1998.
If the enclosed proxy card is executed and returned, the shares represented
by it will be voted as directed on all matters properly coming before the
Annual Meeting for a vote. Returning your completed proxy will not prevent you
from voting in person at the Annual Meeting should you be present and desire
to do so. In addition, the proxy may be revoked at any time prior to its
exercise either by giving written notice to the Company or by submission of a
later-dated proxy.
Stockholders of record of the Common Stock at the close of business on April
15, 1998 will be entitled to vote at the Annual Meeting. On that date, the
Company had outstanding 17,916,378 shares of Common Stock. A list of the
Company's stockholders will be open to the examination of any stockholders,
for any purpose germane to the meeting, at the Company's headquarters for a
period of ten days prior to the meeting. Each share of Common Stock entitles
the holder thereof to one vote on all matters submitted to stockholders. At
the Annual Meeting, inspectors of election shall determine the presence of a
quorum and shall tabulate the results of the stockholders' voting. The holders
of a majority of the total number of outstanding shares of Common Stock
entitled to vote must be present in person or by proxy to constitute the
necessary quorum for any business to be transacted at the Annual Meeting. In
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), properly executed proxies marked "abstain" as well as proxies held in
street name by brokers that are not voted on all proposals to come before the
Annual Meeting ("broker non-votes"), will be considered "present" for the
purposes of determining whether a quorum has been achieved at the Annual
Meeting. The Board recommends that the stockholders vote FOR Proposals 1 and
2.
The two nominees for Director receiving the greatest number of votes cast at
the Annual Meeting in person or by proxy shall be elected. Consequently, any
shares of Common Stock present in person or by proxy at the Annual Meeting but
not voted for any reason have no impact in the election of Directors, except
to the extent that the failure to vote for an individual may result in another
individual receiving a larger number of votes. All other matters to be
considered at the Annual Meeting require for approval the favorable vote of a
majority of the shares entitled to vote at the meeting either in person or by
proxy. Stockholders have no right to cumulative voting as to any matter,
including the election of Directors. If any proposal at the Annual Meeting
must receive a specific percentage of favorable votes for approval,
abstentions in respect of such proposal are treated as present and entitled to
vote under the DGCL and therefore have the effect of a vote against such
proposal. Broker non-votes in respect of any proposal are not counted for
purposes of determining whether such proposal has received the requisite
approval under the DGCL.
The shares represented by all valid proxies received will be voted in the
manner specified on the proxies. Where specific choices are not indicated on a
valid proxy, the shares represented by such proxies received will be voted:
(i) for the nominees for Director named in this Proxy Statement; (ii) for the
ratification of the appointment of Price Waterhouse LLP as independent
certified public accountants; and (iii) in accordance with the best judgment
of the persons named in the enclosed proxy, or their substitutes, for any
other matters which properly come before the Annual Meeting or any adjournment
or postponement thereof.
<PAGE>
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The Board is currently comprised of eight Directors who are divided into
three classes. The term of each class expires in a different year. The Board
has nominated and recommends a vote FOR the election of the two nominees set
forth below, which have agreed to serve as a Director if elected. Each nominee
currently serves as Director of the Company. If any nominee becomes
unavailable for any reason or should a vacancy occur before the election
(which events are not anticipated), the persons named on the enclosed proxy
card may substitute another person as a nominee or may add or reduce the
number of nominees to such extent as they shall deem advisable. At the Annual
Meeting, two Directors are to be elected as members of Class I to serve until
the annual meeting in 2001 and until their successors are elected and
qualified or until their earlier removal or resignation.
Subject to rights of holders of any series of preferred stock to fill newly
created directorships or vacancies, any newly created directorships resulting
from an increase in the authorized number of Directors or any vacancies on the
Board resulting from death, resignation, disqualification or removal for cause
shall be filled by a vote of a majority of the total number of Directors then
in office.
John W. Maki has been a Director of the Company since November 1996 and
serves on the Audit Committee. Michael A. D'Amato was appointed to the Board
on September 29, 1997 to fill a vacancy on the Board resulting from an
increase in the authorized number of Directors pursuant to the terms of the
Company's Amended and Restated Certificate of Incorporation (the "Restated
Certificate") and Restated By-Laws (the "By-Laws") and currently serves on the
Audit Committee.
Information regarding the nominees for Director of the Company is set forth
below:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
John W. Maki (2)........ 37 Director
Michael A. D'Amato (2).. 44 Director
Information regarding Directors of the Company not subject to reelection at
the Annual Meeting is set forth below:
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Stephen G. Pagliuca (1). 43 Chairman of the Board
Kevin J. Ryan (1)....... 57 President, Chief Executive Officer and Director
Edward J. Kelley........ 50 Vice President, Finance, Chief Financial Officer
and Director
Adam W. Kirsch.......... 36 Executive Vice President and Director
Sol Levine (1).......... 69 Director
John J. O'Malley........ 50 Director
</TABLE>
- --------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
There are no family relationships between or among any Directors or
executive officers of the Company.
DIRECTOR NOMINEES (CLASS I DIRECTORS)
John W. Maki has been a Director of the Company since November 1996. Mr.
Maki is currently a Managing Director of Technology Directors II, LLC. Mr.
Maki was a Principal at Bain Capital, Inc. ("Bain Capital") from 1995 to July
1997 and was an associate at Bain Capital from 1993 to 1995 and at Bain
Venture Capital from 1988 to 1993. Prior to joining Bain Venture Capital, Mr.
Maki was a consultant at Bain & Company, an international management
consulting firm, where he specialized in healthcare and consumer product
companies. He also serves on the board of Medical Specialties Group, Inc. and
Biosource Technologies, Inc.
2
<PAGE>
Michael A. D'Amato has been a Director of the Company since September 1997.
Mr. D'Amato has served as the Chief Financial Officer of The Advisory Board
Company, a private information industry company, since 1996 and as Special
Adviser to the Chairman since 1995. Prior to joining The Advisory Board
Company, Mr. D'Amato was a Partner of Bain & Company from 1982 through 1995.
Mr. D'Amato joined Bain & Company in 1977.
CLASS II DIRECTORS (TERM EXPIRING AT THE 1999 ANNUAL MEETING)
Adam W. Kirsch has been a Director of the Company since its incorporation.
Mr. Kirsch has also held the office of Executive Vice President of the Company
since its incorporation. Mr. Kirsch has been a Managing Director of Bain
Capital since May 1993 and a general partner of Bain Venture Capital since
1990. Mr. Kirsch joined Bain Venture Capital in 1985 as an associate, and
prior to joining Bain Venture Capital, Mr. Kirsch was a consultant at Bain &
Company, where he worked in mergers and acquisitions. He serves on the board
of several companies including Therma-Wave, Inc., Brookstone, Inc., Dade
International Inc. and several other private companies.
Edward J. Kelley has served as Vice President, Finance, Chief Financial
Officer and a Director of the Company since June 1995. Prior to joining the
Company, Mr. Kelley served as the President, Asia Pacific and Latin America of
Barnes-Hind and its Chief Financial Officer. Prior to joining Barnes-Hind, Mr.
Kelley held positions of increasing responsibility with Simon & Schuster,
Revlon Health Care and Peat Marwick Mitchell & Company.
Sol Levine has been a Director of the Company since September 1997. Mr.
Levine is currently the President of Mardan Corporation. Mr. Levine served as
President of Revlon, Inc. prior to his retirement in December 1991. Mr. Levine
also serves on the board of Biosource Technologies, Inc. and several other
private companies.
CLASS III DIRECTORS (TERM EXPIRING AT THE 2000 ANNUAL MEETING)
Stephen G. Pagliuca has been Chairman of the Board of the Company since its
incorporation. Mr. Pagliuca has been a Managing Director of Bain Capital since
May 1993 and a general partner of Bain Venture Capital since 1989, where he
founded Information Partners. Prior to joining Bain Venture Capital, Mr.
Pagliuca was a partner at Bain & Company, where he provided strategic and
operational advice for clients in the healthcare and information industries.
He also worked as a senior accountant and international tax specialist for
Peat Marwick Mitchell & Company in the Netherlands. Mr. Pagliuca serves as
Chairman of the Board of Dade International Inc. and Physio-Control
International Corporation. He also serves as a director of several other
companies including Coram Healthcare Corporation, Gartner Group, Inc., Medical
Specialties Group, Inc. and Physician Quality Care.
Kevin J. Ryan has served as President, Chief Executive Officer and a
Director of the Company since June 1995. From 1991 to 1995, Mr. Ryan was
President of BioSource Genetics Corporation. From 1987 to 1990, Mr. Ryan
served as President of the Barnes-Hind contact lens business; from 1983 to
1987, as President of Revlon VisionCare (a division of Revlon, Inc.); and from
1978 to 1983, as President of Barnes-Hind (then a part of Revlon VisionCare).
John J. O'Malley has been a Director of the Company since November 1996. Mr.
O'Malley has been an Executive Vice President of Bain Capital since 1993. From
1991 to 1993, Mr. O'Malley was President and Chief Executive Officer of
Robertson Ceco, an international construction products and engineering
company. From 1986 to 1991, he was Executive Vice President of HMK Group Inc.,
a diversified manufacturing and services company. Mr. O'Malley is also a
director of Physio-Control International Corporation, GS Industries, Inc. and
Medical Specialties Group, Inc.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company or are affiliated with its
significant stockholders do not receive a salary or an annual retainer for
their services. The Company pays non-employee Directors not otherwise
3
<PAGE>
affiliated with the Company or its significant stockholders an annual cash
retainer of $10,000. In addition, the Company reimburses all Directors for
reasonable expenses incurred in attending Board meetings. Pursuant to the
Company's 1997 Non-Employee Director Stock Option Plan (the "Director Option
Plan"), non-employee Directors are granted options to purchase 10,000 shares
of Common Stock upon their initial election or appointment to the Board (or
upon the adoption of the Director Option Plan for those Directors in office on
the date of such adoption) and will be entitled to options to purchase an
additional 2,000 shares of Common Stock on an annual basis on each anniversary
of such Director's election to the Board (which will be granted on the date of
the Company's next annual meeting of stockholders following such anniversary).
See "Non-Employee Director Stock Option Plan." Messrs. Pagliuca, Kirsch, Maki
and O'Malley will be granted annual options on the date of the Annual Meeting.
The Directors do not receive any additional compensation for committee
participation.
COMMITTEES AND DIRECTORS' MEETINGS
The Board has two standing committees: the Audit Committee and the
Compensation Committee.
The Compensation Committee is authorized to provide a general review of the
Company's compensation and benefit plans to ensure that they meet corporate
objectives. In addition, the Compensation Committee reviews the Chief
Executive Officer's recommendations on (i) compensation of all officers of the
Company and (ii) adopting and changing major Company compensation policies and
practices, and reports its recommendations to the whole Board for approval and
authorization. The Compensation Committee administers the Company's stock
plans (subject to approval by the full Board of any awards made thereunder)
and is currently comprised of Messrs. Pagliuca, Levine and Ryan. The
Compensation Committee did not meet in 1997.
The Audit Committee is authorized to make recommendations to the Board
regarding the independent auditors to be nominated for election by the
stockholders and to review the independence of such auditors, approve the
scope of the annual audit activities of the independent auditors, approve the
audit fee payable to the independent auditors and review such audit results.
Price Waterhouse LLP presently serves as the independent accountants of the
Company. The Audit Committee is currently comprised of Messrs. D'Amato and
Maki. The Audit Committee did not meet in 1997.
The Board held three meetings and took action by written consent an
additional eleven times during 1997. All of the Directors attended 75% or more
of the total number of meetings of the Board.
The Company does not have a nominating committee. The entire Board currently
is responsible for filling vacancies on the Board as they occur and
recommending candidates for election as Directors at the annual meetings of
stockholders. The Board will consider individuals recommended for nominations
by stockholders of the Company. Such recommendations should be submitted in
writing to the Chairman of the Board, who will submit them to the entire Board
for its consideration. The recommendation must be accompanied by the consent
of the individual nominated to be elected and to serve.
In addition, the By-Laws require that advance notice of nominations for the
election of Directors to be made by a stockholder (as distinguished from a
stockholder's recommendation to the Board) be given to the Secretary of the
Company (i) in the case of an annual meeting, no later than 60 days and no
more than 90 days before first anniversary of the previous year's annual
meeting, provided, that in the event that the date of the annual meeting is
changed by more than 30 days from such anniversary date, notice by the
stockholder must be received no later than the close of business on the tenth
(10th) day following the earlier of the date on which notice of the meeting
date was mailed or public announcement of the meeting was made, and (ii) in
the case of a special meeting at which Directors are to be elected, not later
than the close of business on the 10th day following the earlier of the day on
which notice of the date of the meeting was mailed or public announcement of
the meeting was made. Such stockholder's notice must include (i) as to each
person whom the stockholder proposes to nominate for election as a Director at
such meeting all information relating to such person that is required to be
disclosed in solicitations of proxies for election of Directors, or is
otherwise required, in each case pursuant to Regulation
4
<PAGE>
14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a Director if elected), (ii) as to the
stockholder giving the notice (A) the name and address, as they appear on the
Company's books, of such stockholder and (B) the class and number of shares of
the Company which are beneficially owned by such stockholder and also which
are owned of record by such stockholder, and (iii) as to the beneficial owner,
if any, on whose behalf the nomination is made, (A) the name and address of
such person and (B) the class and number of shares of the Company which are
beneficially owned by such person.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to the Company's initial public offering in February 1997 ("IPO"), the
Company did not have a Compensation Committee. Instead compensation decisions
regarding the Company's executive officers were made by the Board. The
Compensation Committee was established in connection with the IPO and is
currently comprised of Messrs. Pagliuca, Levine and Ryan. Mr. Pagliuca is a
Managing Director of Bain Capital, which is a party to the Advisory Agreement
with the Company. Mr. Ryan is the President and Chief Executive Officer of the
Company. The compensation for employees who are also Directors of the Company
(Messrs. Ryan and Kelley) for the years ended 1996 and 1997 were pursuant to
the terms of their respective employment agreements with the Company. See
"Certain Relationships and Related Transactions" and "Compensation Committee
Report on Executive Compensation."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Advisory Agreement
In June 1995, the Company entered into an Advisory Agreement with Bain
Capital, which was amended and restated in October 1996 (the "Advisory
Agreement"), pursuant to which Bain Capital agreed to provide management
consulting, advisory services and support, negotiation and analysis of
financial alternatives, acquisitions and dispositions and other services
agreed upon by the Company and Bain Capital. In exchange for such services,
Bain Capital receives: (i) a quarterly management fee of not more than
$500,000, plus reasonable out-of-pocket expenses, and (ii) a transaction fee
in connection with the consummation of each acquisition, divestiture or
financing by the Company or its subsidiaries in an amount equal to 1.0% of the
aggregate value of such transaction. For the year ended December 31, 1997, the
Company paid Bain Capital fees of $2,100,000 under the Advisory Agreement. The
Advisory Agreement has an initial term ending on January 31, 2004, subject to
automatic one-year extensions unless the Company or Bain Capital provides
written notice of its desire not to extend such term.
Registration Agreement
The Company, certain investment funds controlled by Bain Capital (the "Bain
Capital Funds") and their related investors and BT Investment Partners, Inc.
are parties to a registration agreement (the "Registration Agreement"). Under
the Registration Agreement, the holders of a majority of the registrable
securities owned by the Bain Capital Funds and their related investors have
the right at any time, subject to certain conditions, to require the Company
to register any or all of their shares of Common Stock under the Securities
Act of 1933, as amended (the "Securities Act") on Form S-1 (a "Long-Form
Registration") or on Form S-2 or Form S-3 (a "Short-Form Registration") each
on an unlimited number of occasions at the Company's expense. The Company is
not required, however, to effect any such Long-Form Registration or Short-Form
Registration within six months after the effective date of a prior demand
registration and may postpone the filing of such registration for up to six
months if the holders of a majority of the registerable securities agree that
such a registration would reasonably be expected to have an adverse effect on
any proposal or plan by the Company or any of its subsidiaries to engage in an
acquisition, merger or similar transaction. In addition, all holders of
registerable securities are entitled to request the inclusion of any shares of
Common Stock subject to the Registration Agreement in any registration
statement at the Company's expense whenever the Company proposes to register
any of its securities under the Securities Act, subject to certain conditions.
In connection with all such
5
<PAGE>
registrations, the Company has agreed to indemnify all holders of registerable
securities against certain liabilities, including liabilities under the
Securities Act. The holders of an aggregate of 5,250,481 shares of Common
Stock have certain demand registration rights pursuant to the Registration
Agreement.
Indebtedness of Management
On May 7, 1997, the Company loaned Mr. Ryan $1.2 million pursuant to the
terms of an unsecured promissory note bearing interest at an annual rate of
8%, payable quarterly. The note is due on the earlier of (i) May 9, 2002, or
(ii) the date Mr. Ryan ceases to be employed by the Company.
Indemnification Agreements
The Company has entered into agreements to provide indemnification for its
Directors and executive officers in addition to the indemnification provided
for in the Company's Restated Certificate and By-laws.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers, Directors
and persons who beneficially own more than ten percent of the Company's Common
Stock to file reports of securities ownership and changes in such ownership
with the Securities and Exchange Commission ("Commission"). Officers,
Directors and greater than ten percent beneficial owners also are required by
rules promulgated by the Commission to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Company, the Company believes that during the period from February 12, 1997
(the date the Common Stock became registered under the Exchange Act) through
December 31, 1997, all Section 16(a) filing requirements applicable to its
officers, Directors and greater than ten percent beneficial owners were
complied with except that certain general partners of the Bain Capital Funds
(as defined herein), which may be deemed to be beneficial owners of the Common
Stock held by such funds, filed a Form 3 and Form 4 with respect to themselves
on December 15, 1997 to report all holdings of and transactions regarding
Common Stock held by such funds. Such funds had previously reported such
holdings and transactions on Form 3s and Form 4s in compliance with all
Section 16(a) filing requirements.
PROPOSAL NO. 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board has appointed Price Waterhouse LLP as the independent accountants
of the Company and its subsidiaries to audit the books and accounts for the
Company and its subsidiaries for the year ending December 31, 1998. The Board
recommends a vote FOR the ratification of such appointment. Price Waterhouse
LLP audited the financial statements of the Company and its subsidiaries for
the year ended December 31, 1997. It is expected that representatives of Price
Waterhouse LLP will attend the Annual Meeting, with the opportunity to make a
statement if they so desire, and will be available to answer appropriate
questions.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Except as otherwise noted, the following table sets forth certain
information as of March 1, 1998 as to the security ownership of equity
securities of the Company by (i) each of the executive officers named in the
Summary Compensation Table, (ii) each of the Directors and Director nominees
of the Company, (iii) all Directors and executive officers as a group and (iv)
each person or entity known to the Company to be the beneficial owner of five
percent or more of the voting securities of the Company. All information with
respect to beneficial ownership has been furnished by the respective Director,
Director nominee, executive officer or five percent beneficial owner, as the
case may be. Unless otherwise indicated, each person or entity named below has
sole voting and investment power with respect to the number of shares set
forth opposite his or its name.
6
<PAGE>
Beneficial ownership of the Common Stock listed in the table has been
determined in accordance with the applicable rules and regulations promulgated
under the Exchange Act.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
------------------------
NUMBER PERCENT
NAME OF SHARES OF CLASS
---- ------------- ----------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
Stephen G. Pagliuca(1)(2)............................. 5,297,428 29.8%
Kevin J. Ryan(3)(4)................................... 931,786 5.0%
Edward J. Kelley(5)................................... 253,844 1.4%
Lawrence L. Chapoy(6)................................. 72,749 *
Daniel M. Roussel(7).................................. 145,601 *
Thomas F. Steiner(8).................................. 106,793 *
Michael A. D'Amato(1)................................. 13,000 *
Adam W. Kirsch(1)(2).................................. 5,297,428 29.8%
Sol Levine(1)......................................... 25,000 *
John W. Maki(1)(2).................................... 737,963 4.2%
John J. O'Malley(1)(2)................................ 737,963 4.2%
All Directors and Executive Officers (16) as a group
(9).................................................. 7,242,014 37.4%
5% STOCKHOLDERS:
Bain Capital Funds (10)............................... 5,317,428 29.9%
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Putnam Investments, Inc.(11).......................... 1,594,200 9.0%
One Post Office Square
Boston, Massachusetts 02109
</TABLE>
- --------
*Represents less than one percent.
(1) Includes currently exercisable options to purchase 10,000 shares of
Common Stock issued to such person pursuant to the Director Option Plan.
(2) Messrs. Pagliuca, Kirsch, Maki and O'Malley are each Directors of the
Company. Messrs. Pagliuca and Kirsch are each Managing Directors of Bain
Capital Investors, Inc. ("BCII") and limited partners of Bain Capital
Partners IV, L.P., the sole general partner of Bain Capital Fund IV, L.P.
("Fund IV") and Bain Capital Fund IV-B, L.P. ("Fund IV-B"). BCII is the
sole general partner of Bain Capital Partners IV, L.P. Accordingly,
Messrs. Pagliuca and Kirsch may be deemed to beneficially own shares
owned by Fund IV and Fund IV-B. Messrs. Pagliuca, Kirsch, Maki and
O'Malley are each general partners of BCIP Associates ("BCIP") and BCIP
Trust Associates, L.P. ("BCIP Trust" and collectively with Fund IV, Fund
IV-B and BCIP, the "Bain Capital Funds") and, accordingly, may be deemed
to beneficially own shares owned by such funds. Each such person
disclaims beneficial ownership of any such shares in which he does not
have a pecuniary interest. The address for Messrs. Pagliuca, Kirsch and
O'Malley is c/o Bain Capital, Inc., Two Copley Place, Boston,
Massachusetts 02116. Mr. Maki is no longer employed by Bain Capital.
(3) The address of such person is c/o the Company, 333 East Howard Avenue,
Des Plaines, Illinois 60018-5903.
(4) Includes 923,792 shares of Common Stock that can be acquired through
currently exercisable options.
(5) Includes 171,608 shares of Common Stock that can be acquired through
currently exercisable options. Certain of Mr. Kelley's shares are held by
an individual retirement account for his sole benefit.
(6) Includes 59,302 shares of Common Stock that can be acquired through
currently exercisable options.
(7) Includes 123,037 shares of Common Stock that can be acquired through
currently exercisable options.
(8) Includes 89,661 shares of Common Stock that can be acquired through
currently exercisable options.
7
<PAGE>
(9) Includes an aggregate of 1,664,504 shares of Common Stock that can be
acquired through currently exercisable options held by the Directors and
executive officers of the Company. Excluding the shares owned by the Bain
Capital Funds that are attributed to Messrs. Pagliuca, Kirsch, Maki and
O'Malley, the Directors and executive officers of the Company as a group
would own 1,869,658 shares of Common Stock, representing approximately
9.6% of the outstanding Common Stock.
(10) Includes: (i) 2,126,215 shares of Common Stock held by Fund IV; 2,433,251
shares of Common Stock held by Fund IV-B; 340,285 shares of Common Stock
held by BCIP; and 387,677 shares of Common Stock held by BCIP Trust, and
(ii) currently exercisable options to purchase an aggregate of 30,000
shares granted to Messrs. Pagliuca, Kirsch and O'Malley pursuant to the
Director Option Plan.
(11) Putnam Investments, Inc. on behalf of itself and Marsh & McLennan
Companies, Inc., Putnam Investment Management, Inc. and The Putnam
Advisory, Company, Inc. reported beneficial ownership of an aggregate of
1,594,200 shares of Common Stock on a Schedule 13G filed with the
Commission on January 16, 1998.
COMPENSATION OF EXECUTIVE OFFICERS
GENERAL
Executive officers of the Company are elected by and serve at the discretion
of the Board. The following table sets forth information concerning the
compensation paid or accrued for the years ended December 31, 1997, 1996 and
1995 for the Chief Executive Officer and each of the four other most highly
compensated executive officers of the Company as of the end of the last fiscal
year (the "Named Executives"). The amounts shown include the combined
compensation for services in all capacities that were provided to the Wesley
Jessen division of Schering-Plough Corporation ("Schering-Plough") prior to
its acquisition by Bain Capital and management (the "Wesley Jessen
Acquisition") from January 1, 1995 through June 28, 1995, and to the Company
from June 29, 1995 through December 31, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- ------------
OTHER ANNUAL SECURITIES
NAME AND COMPENSATION UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(A) (B) OPTIONS COMPENSATION
- ------------------ ---- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Kevin J. Ryan(c) ....... 1997 $250,008 $477,125 $ -- 32,000 $2,275(e)
President and Chief 1996 250,008 590,000 -- 126,398 1,800(e)
Executive Officer 1995 127,885 125,000 -- 1,018,202 720(e)
Edward J. Kelley(d)..... 1997 $175,000 $338,713 $ -- 25,000 $ 717(e)
Chief Financial Officer 1996 175,000 417,500 -- 35,800 688(e)
and Vice President,
Finance 1995 83,574 87,500 -- 234,969 145(e)
Lawrence L. Chapoy...... 1997 $146,100 $176,888 $ -- 5,000 $1,143(e)
Vice President,
Research 1996 146,100 216,228 -- 5,592 841(e)
& Development 1995 143,100 10,000 -- 67,137 5,870(f)
Daniel M. Roussel....... 1997 $120,622 $144,432 $ -- 5,000 $ --
Vice President, Europe 1996 133,843 184,703 -- 15,621 --
1995 127,339 20,000 -- 134,271 --
Thomas F. Steiner....... 1997 $140,000 $169,502 $ -- 5,000 $ 746(e)
Vice President,
Marketing 1996 120,000 177,600 -- 16,103 668(e)
1995 120,000 18,000 -- 100,698 9,404(g)
</TABLE>
- --------
(a) Reflects bonuses received by such Named Executives under the Company's
Management Bonus Plan as a result of the Company meeting certain
performance targets in such fiscal year. Bonuses for 1997 also include
payments made under the Company's profit sharing plan in the following
amounts: Mr. Ryan--$15,750; Mr. Kelley--$15,750; Mr. Chapoy--$14,610; and
Mr. Steiner--$14,000. In 1996, such payments
8
<PAGE>
were as follows: Mr. Ryan--$15,000; Mr. Kelley--$15,000; Mr. Chapoy--
$14,610; and Mr. Steiner--$12,000. Mr. Roussel is not eligible to
participate in such plan.
(b) None of the perquisites and other benefits paid to each Named Executive in
1997, 1996 or 1995 exceeded 10% of the total annual salary and bonus
received by such Named Executive during that year.
(c) Mr. Ryan commenced employment with the Company in June 1995.
(d) Mr. Kelley commenced employment with the Company in June 1995.
(e) Reflects premium payments made by the Company on behalf of such Named
Executives for life and long-term disability insurance as follows:
<TABLE>
<CAPTION>
LONG-TERM
LIFE DISABILITY
NAME YEAR INSURANCE INSURANCE
---- ---- --------- ----------
<S> <C> <C> <C>
Kevin J. Ryan................................... 1997 $1,800 $475
1996 1,800 --
1995 720 --
Edward J. Kelley................................ 1997 $ 435 $282
1996 435 253
1995 145 --
Lawrence L. Chapoy.............................. 1997 $ 865 $278
1996 554 282
Thomas F. Steiner............................... 1997 $ 518 $228
1996 403 265
</TABLE>
(f) Includes $5,329 paid by Schering-Plough under its Profit Sharing Plan
prior to the Wesley Jessen Acquisition and $541 as a result of premium
payments made by the Company on behalf of Mr. Chapoy for life insurance.
(g) Includes $9,003 paid by Schering-Plough under its Profit Sharing Plan
prior to the Wesley Jessen Acquisition and $401 as a result of premium
payments made by the Company on behalf of Mr. Steiner for life insurance.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding stock options granted
by the Company to the Named Executives during the Company's last fiscal year:
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
NUMBER OF RATES OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS EXERCISE OR MARKET PRICE FOR OPTION TERM(D)
OPTIONS GRANTED IN BASE PRICE ON DATE EXPIRATION -------------------
NAME GRANTED (#)(A) FISCAL YEAR ($/SHARE) OF GRANT(B) DATE(C) 5% ($) 10% ($)
- ---- -------------- ----------- ----------- ------------ ---------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Kevin J. Ryan........... 32,000 12.0% $16.75 $16.75 5/6/07 $ 337,088 $ 854,246
Edward J. Kelley........ 25,000 9.4 16.75 16.75 5/6/07 263,350 667,380
Lawrence L. Chapoy...... 5,000 1.9 16.75 16.75 5/6/07 52,670 133,476
Daniel M. Roussel....... 5,000 1.9 16.75 16.75 5/6/07 52,670 133,476
Thomas F. Steiner....... 5,000 1.9 16.75 16.75 5/6/07 52,670 133,476
</TABLE>
- --------
(a) Options vest in four equal annual installments beginning on the first
anniversary of the date of grant, which is May 6, 1998.
(b) Market price was determined based on the last reported sale price of the
Common Stock as reported by the Nasdaq National Market.
(c) Options will expire the earlier of 30 days after the date of termination
or May 6, 2007.
9
<PAGE>
(d) Amounts reflect certain assumed rates of appreciation set forth in the
executive compensation disclosure rules of the Commission. Actual gains,
if any, on stock option exercises depend on future performance of the
Company's stock and overall market conditions. At an annual rate of
appreciation of 5% per year for the option term, the price of the Common
Stock would be approximately $27.28 per share. At an annual rate of
appreciation of 10% per year for the option term, the price of the Common
Stock would be approximately $43.45 per share.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth information for the Named Executives
concerning stock option exercises during the Company's last fiscal year and
options outstanding at the end of the last fiscal year:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)(A)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE/EXERCISABLE UNEXERCISABLE/EXERCISABLE
- ---- --------------- ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
Kevin J. Ryan........... 25,000 $ 557,482 227,808/923,792 $8,342,638/34,004,537
Edward J. Kelley........ 60,000 1,653,759 64,162/171,608 2,082,393/6,182,354
Lawrence J. Chapoy...... -- -- 18,428/59,302 634,539/2,193,226
Daniel M. Roussel....... -- -- 31,853/123,037 1,157,711/4,927,221
Thomas F. Steiner....... 7,000 228,578 25,139/89,661 896,067/3,261,815
</TABLE>
- --------
(a) Assumes a fair market value of the Common Stock at December 31, 1997 equal
to $39.00 per share.
EMPLOYMENT AGREEMENTS
On June 28, 1995, the Company and Kevin J. Ryan entered into an employment
agreement (the "Employment Agreement"), pursuant to which Mr. Ryan agreed to
serve as President and Chief Executive Officer of the Company for a period
that will end with Mr. Ryan's resignation, death or disability, or upon
termination by the Company, with or without cause. Under the Employment
Agreement, Mr. Ryan will receive (i) an annual base salary equal to at least
$250,000; (ii) an annual bonus based on the Company's achievement of certain
targeted operating results; and (iii) certain fringe benefits. If Mr. Ryan's
employment is terminated by the Company without cause (as defined therein), he
will be entitled to receive his base salary and fringe benefits for 12 months
following such termination in addition to his bonus for the year in which his
employment was terminated, pro rated based on the number of days elapsed in
the year, if he would have otherwise been entitled to receive such bonus had
he not been terminated. Mr. Ryan has agreed not to compete with the Company
for a period of one year following his termination of employment with the
Company and not to disclose any confidential information at any time without
the prior written consent of the Company.
On June 28, 1995, Edward J. Kelley entered into an employment agreement with
the Company containing substantially similar terms as those described above.
Under such agreement, Mr. Kelley has agreed to serve as the Chief Financial
Officer of the Company for (i) an annual base salary equal to at least
$175,000; (ii) an annual bonus based on the Company's achievement of certain
targeted operating results; and (iii) certain fringe benefits.
MANAGEMENT BONUS PLAN
In May 1997, the Board adopted the Wesley Jessen Corporation Professional
Incentive Plan for calendar year 1997 (the "Bonus Plan"). Under the Bonus
Plan, participants are eligible to earn an annual bonus upon the achievement
by the Company of a specified level of earnings per share. The annual bonus is
equal to a specified percentage of a participant's annual salary (the "Target
Percentage"), subject to increase based on achievement beyond targeted levels.
Bonuses under the Bonus Plan are not subject to any cap. Approximately 137
employees participated in the Bonus Plan for 1997, including each of the Named
Executives.
10
<PAGE>
1997 STOCK INCENTIVE PLAN
In connection with the IPO, the Board and stockholders of the Company
approved the Wesley Jessen VisionCare, Inc. 1997 Stock Incentive Plan (the
"1997 Stock Plan"). The 1997 Stock Plan is currently administered by the
Compensation Committee, with all awards made thereunder being approved by the
full Board. Certain employees, advisors and consultants of the Company are
eligible to participate in the 1997 Stock Plan (a "Participant"). The Board or
the Compensation Committee, as the case may be, is authorized under the 1997
Stock Plan to select the Participants and determine the terms and conditions
of the awards under the 1997 Stock Plan. The 1997 Stock Plan provides for the
issuance of the following types of incentive awards: stock options, stock
appreciation rights, restricted stock, performance grants and other types of
awards that the Compensation Committee deems consistent with the purposes of
the 1997 Stock Plan. An aggregate of 800,000 shares of Common Stock of the
Company have been reserved for issuance under the 1997 Stock Plan, subject to
certain adjustments reflecting changes in the Company's capitalization. The
1997 Stock Plan provides that Participants will be limited to receiving awards
relating to no more than 50,000 shares of Common Stock per year. To date,
options to purchase an aggregate of 266,700 shares of Common Stock have been
granted under the 1997 Stock Plan.
Options granted under the 1997 Stock Plan may be either incentive stock
options ("ISOs") or such other forms of non-qualified stock options ("NQOs")
as the Compensation Committee may determine. ISOs are intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). The exercise price of (i) an
ISO granted to an individual who owns shares possessing more than 10% of the
total combined voting power of all classes of stock of the Company (a "10%
Owner") will be at least 110% of the fair market value of a share of common
stock on the date of grant and (ii) an ISO granted to an individual other than
a 10% Owner and an NQO will be at least 100% of the fair market value of a
share of Common Stock on the date of grant.
Options granted under the 1997 Stock Plan may be subject to time vesting and
certain other restrictions at the sole discretion of the Compensation
Committee. Subject to certain exceptions, the right to exercise an option
generally will terminate at the earlier of (i) the first date on which the
initial grantee of such option is not employed by the Company for any reason
other than termination without cause, death or permanent disability or (ii)
the expiration date of the option. If the holder of an option dies or suffers
a permanent disability while still employed by the Company, the right to
exercise all unexpired installments of such option shall be accelerated and
shall vest as of the latest of the date of such death, the date of such
permanent disability and the date of the discovery of such permanent
disability, and such option shall be exercisable, subject to certain
exceptions, for 180 days after such date. If the holder of an option is
terminated without cause, to the extent the option has vested, such option
will be exercisable for 30 days after such date.
All outstanding awards under the 1997 Stock Plan will terminate immediately
prior to consummation of a liquidation or dissolution of the Company, unless
otherwise provided by the Board. In the event of the sale of all or
substantially all of the assets of the Company or the merger of the Company
with another corporation, all restrictions on any outstanding awards will
terminate and Participants will be entitled to the full benefit of their
awards immediately prior to the closing date of such sale or merger, unless
otherwise provided by the Board.
The Board generally will have the power and authority to amend the 1997
Stock Plan at any time without approval of the Company's stockholders, subject
to applicable federal securities and tax laws limitations (including
regulations of the Nasdaq National Market).
EMPLOYEE STOCK DISCOUNT PURCHASE PLAN
The Wesley Jessen VisionCare, Inc. Employee Stock Discount Purchase Plan,
including a substantially identical plan for international employees (the
"Employee Stock Purchase Plan") was established to give employees desiring to
do so a convenient means of purchasing shares of Common Stock through payroll
deductions. The Employee Stock Purchase Plan provides an incentive to
participate by permitting purchases at a
11
<PAGE>
discounted price. The Company believes that ownership of stock by employees
will foster greater employee interest in the success, growth and development
of the Company. As of March 1, 1998, an aggregate of 42,016 shares of Common
Stock have been issued under the Employee Stock Purchase Plan.
Subject to certain restrictions, each employee of the Company is eligible to
participate in the Employee Stock Purchase Plan if he or she has been employed
by the Company for more than six months. Participation is discretionary with
each eligible employee. The Company has reserved 500,000 shares of Common
Stock for issuance in connection with the Employee Stock Purchase Plan. Each
eligible employee is entitled to purchase a maximum of 500 shares per year.
Elections to participate and purchases of stock are made on a quarterly basis.
Each participating employee contributes to the Employee Stock Purchase Plan by
choosing a payroll deduction in any specified amount, with a minimum deduction
of $10 per payroll period. A participating employee may increase or decrease
the amount of such employee's payroll deduction, including a change to a zero
deduction as of the beginning of any calendar quarter. Elected contributions
are credited to participants' accounts at the end of each calendar quarter. In
addition, employees may make lump sum contributions at the end of the year to
enable them to purchase the maximum number of shares available for purchase
during the plan year.
Each participating employee's contributions are used to purchase shares for
the employee's share account within 15 days after the last day of each
calendar month. The cost per share is 85% of the lower of the closing price of
the Company's Common Stock on the Nasdaq National Market on the first or the
last day of the calendar month. The number of shares purchased on each
employee's behalf and deposited in his/her share account is based on the
amount accumulated in such participant's cash account and the purchase price
for shares with respect to any month. Shares purchased under the Employee
Stock Purchase Plan carry full rights to receive dividends declared from time
to time. Under the Employee Stock Purchase Plan, any dividends attributable to
shares in the employee's share account are automatically used to purchase
additional shares for such employee's share account. Share distributions and
share splits are credited to the participating employee's share account as of
the record date and effective date, respectively. A participating employee has
full ownership of all shares in such employee's share account and may withdraw
them for sale or otherwise by written request to the Committee following the
close of each calendar quarter. Subject to applicable federal securities and
tax laws, the Board has the right to amend or to terminate the Employee Stock
Purchase Plan. Amendments to the Employee Stock Purchase Plan will not affect
a participating employee's right to the benefit of the contributions made by
such employee prior to the date of any such amendment. In the event the
Employee Stock Purchase Plan is terminated, the Committee is required to
distribute all shares held in each participating employee's share account plus
an amount of cash equal to the balance in each participating employee's cash
account.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The 1997 Non-Employee Director Stock Option Plan (the "Director Option
Plan") was established to encourage stock ownership by certain Directors of
the Company and to provide those individuals with an additional incentive to
manage the Company in the shareholders' best interests and to provide a form
of compensation that will attract and retain highly qualified individuals as
members of the Board. The Director Option Plan provides for the granting of
options to non-employee Directors, as defined, covering an aggregate of
250,000 shares of Common Stock of the Company, subject to certain adjustments
reflecting changes in the Company's capitalization. To date, options to
purchase an aggregate of 60,000 shares of Common Stock have been granted under
the Director Option Plan. Options to acquire an additional 8,000 shares of
Common Stock will be granted on the date of the Annual Meeting.
The Committee or the full Board is authorized under the Director Option Plan
to make discretionary grants of options and determine the terms and conditions
of such options. In addition, the Director Option Plan provides for an initial
one-time grant of options to purchase 10,000 shares of Common Stock to each
non-employee Director serving as a member of the Board upon the effectiveness
of the Director Option Plan or to any new non-employee Director upon being
elected to the Board. The Director Option Plan also provides that each non-
employee Director shall automatically be entitled to options to purchase 2,000
shares of Common Stock upon each anniversary of such Director's election to
the Board (which will be granted at the Company's next annual
12
<PAGE>
meeting of stockholders following such anniversary). The Director Option Plan
requires that the exercise price for each option granted under the plan must
equal 100% of the fair market value of the Company's Common Stock on the date
the option is granted. The initial one-time grants are immediately exercisable
and the annual grants will vest in three equal installments commencing on the
first anniversary of the grant date. Nothing contained in the Director Option
Plan or any agreement to be executed pursuant to the Director Option Plan will
obligate the Company, its Board or its stockholders to retain an optionee as a
Director of the Company.
WESLEY JESSEN RETIREMENT PLAN
Substantially all full-time United States and Puerto Rico employees of the
Company participate in the Wesley Jessen Cash Balance Pension Plan (the
"Retirement Plan"), a defined benefit plan intended to qualify under Section
401(a) of the Code. The Retirement Plan became effective on January 1, 1996.
The Retirement Plan is a cash balance plan whereby each participant's benefits
are determined based on annual pay credits and interest credits made to each
participant's account. In general, a participant becomes vested under the
Retirement Plan upon completion of five years of service.
Annual pay credits range from 3.0% to 6.0% of compensation, depending on a
participant's length of service with the Company. Compensation refers to
pension eligible earnings of a participant under the Retirement Plan (up to
$160,000 for 1997, as limited by the Code), including all direct compensation
paid to participants plus any pretax deferrals.
Interest credits are based on a participant's account balance on the first
day of each calendar year and the plan's interest credit rate. This interest
credit rate is determined for each calendar year and equals the value as of
December of the immediately preceding calendar year of the average yield on 1-
year Treasury bills.
No pay or interest credits are granted under the Retirement Plan for periods
of employment prior to June 29, 1995. However, service is calculated from date
of hire for the purpose of determining the level of pay credit for the plan
year, subject to bridging service for participants from certain acquired
entities. The normal retirement age under the plan is age 65. Benefits are
computed on a straight line basis. The Company contributes actuarially
determined amounts to fund benefits under the Retirement Plan within
regulatory minimum requirements and maximum tax deductible limits.
The aggregate estimated annual benefits payable from the Retirement Plan to
Messrs. Ryan, Kelley, Chapoy and Steiner upon normal retirement age is
$24,226, $51,753, $13,922 and $33,940, respectively. Mr. Roussel is not
eligible to participate in the Retirement Plan. Messrs. Ryan, Kelley, Chapoy
and Steiner currently have approximately 14 (including 12 years of service
with acquired entities), 19 (including 17 years of service with acquired
entities), 4 and 14 years of credited service, respectively, under the
Retirement Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The following report has been submitted by the Compensation Committee of the
Board:
The Compensation Committee was established by the Board in February 1997 in
connection with the IPO. The Compensation Committee is currently comprised on
Messrs. Pagliuca, Levine and Ryan.
On a going forward basis, the Compensation Committee will be responsible (i)
for reviewing the recommendations of the Company's Chief Executive Officer on
compensation levels of all other officers of the Company and (ii) adopting and
changing compensation policies and practices of the Company and to report its
13
<PAGE>
recommendations to the full Board. In addition, the Compensation Committee
will be responsible for the administration of the Company's stock plans. In
reviewing the Company's compensation programs, the Compensation Committee
intends to adhere to a compensation philosophy that (i) attracts and retains
qualified executives who will add to the long-term success of the Company,
(ii) relates to the achievement of operational and strategic objectives, and
(iii) is commensurate with each executive's performance, level of
responsibility and overall contribution to the success of the Company. In
making its recommendations to the full Board concerning adjustments to
compensation levels, the Compensation Committee intends to consider the
financial condition and operational performance of the Company during the
prior year. The Compensation Committee expects the Company's executive
compensation program to consist of three principal components: (i) base
salary; (ii) annual bonus; and (iii) long-term equity incentives. Although the
Compensation Committee did not participate per se in determining the
compensation for the Company's executive officers for 1997, the Committee has
set forth below a discussion as to how such compensation was determined by the
full Board.
Base Salary. The base salaries for Messrs. Ryan and Kelley in 1997 were
established pursuant to their employment agreements with the Company. The
terms of their respective employment agreements were determined through arms-
length negotiations with representatives of Bain Capital. See "Compensation of
Executive Officers--Employment Agreements." The base salary for each of the
other executive officers of the Company was determined based on the expected
level of responsibility of each and competitive market conditions. Such
salaries were initially established by the Chief Executive Officer and
subsequently approved by the full Board.
Annual Bonus. Under their respective employment agreements, Messrs. Ryan and
Kelley receive an annual bonus based on the Company's achievement of certain
targeted operating results, which are established at the beginning of each
year by the full Board. The level of bonus that such executive officer is
eligible to earn is also established by the Board at the beginning of each
year. Each of the other executive officers of the Company participated in the
Bonus Plan, which enables them to earn an annual bonus based upon the
Company's achievement of a specified level of earnings per share. The annual
bonus was equal to a specified percentage of each participant's annual salary,
which was subject to increase based on achievement beyond targeted levels. The
Company achieved such levels in 1997 and, as a result, bonus payments were
awarded by the Board under the Bonus Plan for 1997.
Long-Term Equity Incentives. All of the executive officers of the Company
participated in the acquisition of the Company from Schering-Plough in 1995.
In that capacity, each purchased shares of Common Stock at the same price paid
by Bain Capital and was granted options to purchase Common Stock. As a result
of such participation, the executive officers of the Company own a significant
equity interest in the Company. Therefore, to a large extent, the interests of
the Company's executive officers are already aligned with those of its
stockholders since the value of management's holdings is tied directly to the
market price of the Company's Common Stock.
Prior to the completion of the IPO, the Company adopted the 1997 Stock Plan.
Under the 1997 Stock Plan, the Board or the Compensation Committee, as the
case may be, was granted broad authority to award equity-based compensation
arrangements to any eligible employee, consultants or advisors of the Company.
An aggregate of 800,000 shares of Common Stock were reserved for issuance upon
the exercise of awards granted to eligible participants under the 1997 Stock
Plan. Since the ultimate value of stock options bear a direct relationship to
market price of the Common Stock, the Committee believes that awards under the
1997 Stock Plan are an effective incentive for the Company's management to
create value for the Company's stockholders. As of December 31, 1997, the
Board has awarded options to purchase an aggregate of 266,700 shares of Common
Stock under the 1997 Stock Plan.
The foregoing report has been approved by all members of the Compensation
Committee.
Sol Levine, Chairman
Stephen G. Pagliuca
Kevin J. Ryan
14
<PAGE>
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total stockholder
return since the Common Stock became publicly traded on February 12, 1997 with
the Nasdaq Composite Index and the Standard & Poor's Midcap 400 Index. At this
time, the Company does not believe it can reasonably identify an industry peer
group and, therefore, the Company has instead selected the Standard & Poor's
Midcap 400 Index, which includes companies with similar market capitalizations
to that of the Company. The graph assumes that the value of the investment in
the Company's Common Stock at its initial public offering price of $15.00 per
share and each index was $100.00 on February 12, 1997.
COMPARISON OF THE COMPANY'S COMMON STOCK,
NASDAQ COMPOSITE INDEX AND STANDARD & POOR'S MIDCAP 400 INDEX
LOGO
<TABLE>
<CAPTION>
FEBRUARY 12, DECEMBER 31,
1997 1997
------------ ------------
<S> <C> <C>
Wesley Jessen VisionCare, Inc. (1).................... $100 $260
Nasdaq Composite Index $100 $116
Standard & Poor's Midcap 400 Index.................... $100 $125
</TABLE>
- --------
(1) The closing sale price of the Common Stock on December 31, 1997 was $39.00
per share, as reported by the Nasdaq National Market.
SUBMISSION OF STOCKHOLDERS' PROPOSALS AND ADDITIONAL INFORMATION
Proposals of stockholders intended to be eligible for inclusion in the
Company's proxy statement and proxy card relating to the 1999 annual meeting
of stockholders of the Company must be received by the Company on or before
the close of business December 21, 1998. Such proposals should be submitted by
certified mail, return receipt requested.
15
<PAGE>
The By-Laws provide that a stockholder wishing to present a nomination for
election of a director or to bring any other matter before an annual meeting
of stockholders must give written notice to the Company's Secretary not less
than 60 days nor more than 90 days prior to the meeting and that such notice
must meet certain other requirements. Any stockholder interested in making
such a nomination or proposal should request a copy of the provisions of the
By-Laws from the Secretary of the Company.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE ANNUAL
REPORT ON FORM 10-K OF THE COMPANY FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997, AS FILED WITH THE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO. REQUESTS FOR COPIES OF SUCH ANNUAL REPORT ON FORM 10-K
SHOULD BE DIRECTED TO THE RONALD J. ARTALE, VICE PRESIDENT AND CONTROLLER,
WESLEY JESSEN VISIONCARE, INC., 333 EAST HOWARD AVENUE, DES PLAINES, ILLINOIS
60018-5903.
OTHER MATTERS
The Company will bear the costs of soliciting proxies from its stockholders.
In addition to the use of the mails, proxies may be solicited by the
Directors, officers and employees of the Company by personal interview,
telephone or telegram. Such Directors, officers and employees will not be
additionally compensated for such solicitation, but may be reimbursed for out-
of-pocket expenses incurred in connection therewith. Arrangements will also be
made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of Common
Stock held of record by such persons, and the Company will reimburse such
brokerage houses, custodians, nominees and fiduciaries for reasonable out-of-
pocket expenses incurred in connection therewith.
The Directors know of no other matters which are likely to be brought before
the Annual Meeting, but if any such matters properly come before the meeting
the persons named in the enclosed proxy, or their substitutes, will vote the
proxy in accordance with their best judgment.
By Order of the Board of Directors
LOGO
Edward J. Kelley
Secretary
April 20, 1997
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. EVEN IF YOU EXPECT TO
ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN, DATE AND MAIL THE
ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
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WESLEY JESSEN VISIONCARE, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Kevin J. Ryan, Edward J. Kelley
and Ronald J. Artale, and each or any of them, proxies of the undersigned, with
full power of substitution, to vote all of the shares of Wesley Jessen
VisionCare, Inc., a Delaware corporation (the "Company") which the undersigned
may be entitled to vote at the Annual Meeting of Stockholders of the Company to
be held at the Rosemont Suites Hotel, 5500 North River Road, Rosemont, Illinois
60018 on Wednesday, May 20, 1998 at 10:00 a.m. (Central time) or at any
adjournment or postponement thereof, as shown on the voting side of this card.
------------------
See Reverse Side
------------------
<PAGE>
[X] Please mark your votes as in this example.
This proxy will be voted as specified. If a choice is not specified, this
proxy will be voted FOR the nominees for Class I Directors and FOR Proposal
2.
1. Election of All Nominees for Class I Directors Listed Hereon.
Nominees: John W. Maki
Michael A. D'Amato
FOR Withheld
[_] [_]
For all nominees listed hereon, except vote withheld from the following
nominee(s):
_____________________________________________________________
2. Ratify the appointment of Price Waterhouse LLP as the independent
accountants of the Company for the 1998 fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournment
or postponement thereof.
This proxy should be dated, signed by the stockholder exactly as the
stockholder's name appears hereon and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate.
Please sign exactly as name(s) appear hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
_________________________________________
_________________________________________
Signature(s) Date
