<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only
(as permitted by Rule 14a-
6(e)(2))
[_] 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 Certificate)
Not applicable
(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.:
(3)Filing Party:
(4) Date Filed:
Notes:
<PAGE>
WESLEY JESSEN VISIONCARE, INC.
333 East Howard Avenue
Des Plaines, Illinois 60018-5903
Telephone: (847) 294-3000
May , 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
(the "Annual Meeting") of Wesley Jessen VisionCare, Inc. (the "Company"),
which is scheduled to be held on Friday, June 23, 2000, 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 1999 Annual Report for the fiscal
year ended December 31, 1999 with this letter, notice of annual meeting of
stockholders and proxy statement. If you would like another copy of the 1999
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 white 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, vote in person, which will
revoke any proxy card previously submitted.
If you have any questions or comments, please contact our proxy solicitors,
Innisfree M&A Incorporated at (888) 750-5834.
We look forward to seeing you at the Annual Meeting.
Sincerely,
Kevin J. Ryan
Chairman, President and
Chief Executive Officer
<PAGE>
WESLEY JESSEN VISIONCARE, INC.
333 East Howard Avenue
Des Plaines, Illinois 60018-5903
Telephone: (847) 294-3000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 23, 2000
The 2000 Annual Meeting of Stockholders of Wesley Jessen VisionCare, Inc., a
Delaware corporation (the "Company"), is scheduled to be held on Friday, June
23, 2000, 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 three (3) Class III Directors to serve until the annual
meeting of stockholders in 2003 and until their successors are duly elected
and qualified or until their earlier removal or resignation (the Board of
Directors recommends a vote FOR the nominees named in the Company's Proxy
Statement);
(2) Ratifying the appointment of PricewaterhouseCoopers LLP as the
independent accountants of the Company for the fiscal year ending December
31, 2000 (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 May 1, 2000, 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
Edward J. Kelley
Secretary
May , 2000
Enclosed with this Notice of Annual Meeting of Stockholders is a Proxy
Statement and related proxy card with a return envelope. The Company's 1999
Annual Report for the fiscal year ended December 31, 1999 is also enclosed.
The 1999 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.
YOUR BOARD OF DIRECTORS ALSO URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO
YOU BY BAUSCH & LOMB INCORPORATED. EVEN IF YOU HAVE PREVIOUSLY SIGNED A
PROXY CARD SENT TO YOU BY BAUSCH & LOMB, YOU CAN REVOKE THAT EARLIER PROXY
BY SIGNING, DATING, AND MAILING THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED.
<PAGE>
WESLEY JESSEN VISIONCARE, INC.
333 East Howard Avenue
Des Plaines, Illinois 60018-5903
Telephone: (847) 294-3000
PRELIMINARY PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON JUNE 23, 2000
General
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 June 23, 2000 (the "Annual
Meeting") and at any and all adjournments or postponements thereof. 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 May , 2000.
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.
Bausch & Lomb Incorporated ("B&L") has publicly announced that it intends to
solicit proxies for three nominees for election to the Company's Board of
Directors in opposition to the Board of Directors' nominees. B&L's
solicitation of proxies is in connection with its unsolicited tender offer for
all of the outstanding shares of Common Stock of the Company. The position of
the Company's Board of Directors with respect to B&L's unsolicited tender
offer has been disclosed, and will continue to be disclosed, in the Company's
Schedule 14D-9, as it may be amended from time to time (the "Schedule 14D-9").
The Board of Directors is soliciting votes FOR the Company's slate of
nominees for election to the Board of Directors. A WHITE proxy card is
enclosed for your use. THE BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND
RETURN THE WHITE PROXY CARD TODAY IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
If you have any questions or need further assistance in voting your shares,
please call:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
CALL TOLL FREE (888) 750-5834
THE BOARD OF DIRECTORS URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY
B&L. IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PREVIOUSLY SIGNED PROXY
BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY CARD IN
THE ENCLOSED ENVELOPE.
Quorum and Voting Requirements
Stockholders of record of the Common Stock at the close of business on May
1, 2000 will be entitled to vote at the Annual Meeting. On that date, the
Company had outstanding 17,657,095 shares of Common Stock. A
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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. Stockholders have no right to cumulative voting as to any
matter, including the election of Directors. 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. For purposes of the quorum and the
discussion below regarding the vote necessary to take stockholder action,
stockholders of record who are present at the meeting in person or by proxy
and who abstain, including brokers holding customers' shares of record who
cause abstentions to be recorded at the meeting, are considered stockholders
who are present and entitled to vote and they count toward the quorum.
Brokers holding shares of record for customers generally are not entitled to
vote on certain matters unless they receive voting instructions from their
customers. As used herein, "uninstructed shares" means shares held by a broker
who has not received instructions from its customers on such matters and the
broker has so notified the Company on a proxy form in accordance with industry
practice or has otherwise advised the Company that it lacks voting authority.
As used herein, "broker non-votes" means the votes that could have been cast
on the matter in question by brokers with respect to uninstructed shares if
the brokers had received their customers' instructions. Although there are no
controlling precedents under Delaware law regarding the treatment of broker
non-votes in certain circumstances, the Company intends to apply the
principles set forth herein.
Election of Directors: Directors are elected by a plurality and the three
nominees who receive the most votes will be elected. Abstentions and broker
non-votes will not be taken into account in determining the outcome of the
election.
Approval of Auditors: To be approved, this matter must receive the
affirmative vote of the majority of the shares present in person or by proxy
at the Annual Meeting and entitled to vote. Uninstructed shares are entitled
to vote on this matter. Therefore, abstentions and broker non-votes have the
effect of negative notes.
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 PricewaterhouseCoopers 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. The Board recommends that the stockholders vote FOR
Proposals 1 and 2.
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 its three nominees for
Director to be elected at the Annual Meeting. The nominees are Kevin J. Ryan,
Stephen G. Pagliuca and John J. O'Malley, each of whom has agreed to serve as
a Director if elected. Each nominee currently serves as a Director of the
Company. Messrs. Ryan and Pagliuca have each been a Director of the Company
since June and April 1995, respectively. Mr. O'Malley was appointed to the
Board in November 1996. 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, three Directors are to be elected
as members of Class III to serve until the annual meeting in 2003 and until
their successors are elected and qualified or until their earlier removal or
resignation.
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<PAGE>
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.
On March 27, 2000, B&L notified the Company of its intention to nominate
three individuals to serve as directors of the Company. In a press release
issued on March 28, 2000, B&L indicated that it intends to file proxy
materials with the Securities and Exchange Commission (the "Commission") to be
used to solicit proxies for its nominees. To date, B&L has not filed any
preliminary proxy materials with the Commission. B&L's solicitation of proxies
is in connection with its unsolicited tender offer for all of the outstanding
shares of Common Stock of the Company. The position of the Company's Board of
Directors with respect to B&L's unsolicited tender offer has been disclosed,
and will continue to be disclosed, in the Schedule 14D-9. The Company's
Schedule 14D-9 is available at the Internet web site maintained by the
Commission at "http://www.sec.gov" and through commercial document retrieval
services.
The Board of Directors believes that the election of the individuals
nominated by B&L would not be in the best interests of the Company and its
stockholders. The current Directors are intimately familiar with the Company
and the industry in which it operates. The Board of Directors is fully
committed to maximizing value for all the Company's stockholders. In this
regard, the Company notes, among others, the following completed and pending
initiatives: (i) the announced strategic merger with Ocular Sciences, Inc.,
(ii) the announced strategic alliance with the U.S. Consumer Products Division
of Alcon Laboratories, (iii) the launch of a new line of soft lenses designed
to enhance sports performance, (iv) the introduction of new lines of
disposable bifocal lenses and frequent-replacement toric color blend lenses
and (v) the recent acquisitions of three additional lens companies outside the
United States and other potential strategic initiatives. The Board of
Directors believes that a change in the Board of Directors at this time would
be highly disruptive to the strategy the Company is actively pursuing and
could raise significant concerns with current and future business partners.
Moreover, uncertainties arising from such a change could result in the loss of
key personnel who are unique and important to the Company.
The Board of Directors recommends that stockholders vote in favor of the
three nominees of the Board of Directors described below and not vote in favor
of any nominees of B&L.
Information regarding the Director nominees of the Company is set forth
below:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Kevin J. Ryan(1)........ 60 Chairman of the Board, Chief Executive Officer and Director
Stephen G. Pagliuca(1).. 45 Director
John J. O'Malley(3)..... 52 Director
</TABLE>
Information regarding Directors of the Company not subject to reelection at
the Annual Meeting is set forth below:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Edward J. Kelley(3)..... 52 Vice President, Finance, Chief Financial Officer and Director
Adam W. Kirsch(3)....... 38 Director
Sol Levine(1)(2)........ 71 Director
John W. Maki(2)......... 39 Director
Michael A. D'Amato(2)... 46 Director
</TABLE>
- --------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Nominating Committee.
There are no family relationships between or among any Directors or
executive officers of the Company.
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<PAGE>
Director Nominees (Class III Directors)
Kevin J. Ryan has served as President, Chief Executive Officer and a
Director of the Company since June 1995 and has served as Chairman of the
Board since February 1999. From 1991 to 1995, Mr. Ryan was President of Large
Scale Biology Corporation (formally known as BioSource Technologies Inc.), a
company engaged in discovery, development and production of new
biopharmaceuticals and gene-based agricultural products. From 1987 to 1990,
Mr. Ryan served as President of Barnes-Hind's 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).
Stephen G. Pagliuca has been a Director of the Company since its
incorporation in April 1995. Mr. Pagliuca served as Chairman of the Board from
April 1995 to February 1999. Mr. Pagliuca has been a Managing Director of Bain
Capital, Inc. ("Bain Capital"), a private equity investment firm based in
Boston, Massachusetts, 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 also serves as director of Dade Berhing Inc., Coram
Healthcare Corporation, Gartner Group, Inc., Epoch Senior Living, Inc. and The
Corporate Executive Board Company.
John J. O'Malley has been a Director of the Company since November 1996. Mr.
O'Malley is currently a Managing Director of Audax Management Company, LLC
("Audax"), which manages a series of money management investment businesses.
From February 1999 to October 1999, Mr. O'Malley was a Managing Director of
Technology Directors Inc., a private equity investment firm. Mr. O'Malley was
an Executive Vice President of Bain Capital from 1993 to February 1999. 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 GS Industries, Inc., Medical Specialties Group, Inc. and Large
Scale Biology Corporation.
Class I Directors (term expiring at the 2001 annual meeting)
John W. Maki has been a Director of the Company since November 1996. Mr.
Maki is currently a Managing Director of Audax. From July 1997 through October
1999, Mr. Maki was a Managing Director of Technology Directors Inc. Mr. Maki
was a Principal at 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 Large Scale Biology Corporation.
Michael A. D'Amato has been a Director of the Company since September 1997.
Since October 1997, Mr. D'Amato has served as the Executive Vice President of
The Advisory Board Company, an advisory firm with practices in financial
services and healthcare and a for-profit membership association, and the Chief
Financial Officer of DGB Enterprises, Inc., and from 1996 until July 1998, he
was the Chief Financial Officer of The Advisory Board Company. From July 1998
until February 1999, Mr. D'Amato also served as the Executive Vice President--
Finance and the Secretary of The Corporate Executive Board Company ("CEBC").
From October 1997 until November 1998, Mr. D'Amato served as the Chief
Financial Officer of CEBC. From 1995 to 1996, Mr. D'Amato served as the
Special Advisor to the Chairman of The Advisory Board Company. 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. Mr.
D'Amato also serves as a director of CEBC.
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Class II Directors (term expiring at the 2002 annual meeting)
Adam W. Kirsch has been a Director of the Company since its incorporation in
April 1995. Mr. Kirsch also held the office of Executive Vice President of the
Company from April 1995 to May 1998. Mr. Kirsch is the Chief Executive Officer
of NetVentures, L.L.C., an investment fund focusing on Internet-related
companies. Mr. Kirsch was a Managing Director of Bain Capital from May 1993
through July 1999 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 Berhing 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's contact lens business from 1994 to 1995 and its Chief Financial
Officer from 1989 to 1994. 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 a private investor. Mr. Levine served as President of
Revlon, Inc. prior to his retirement in December 1991. Mr. Levine also serves
on the board of Large Scale Biology Corporation and several other private
companies.
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
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 are 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 or appointment to the Board (which are 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, O'Malley, Levine and D'Amato 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 three standing committees: the Audit Committee, the
Compensation Committee and the Nominating 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. Levine, Pagliuca and Ryan. The
Compensation Committee held two meetings in 1999.
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.
PricewaterhouseCoopers LLP presently serves as the
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<PAGE>
independent accountants of the Company. The Audit Committee is currently
comprised of Messrs. D'Amato, Levine and Maki. The Audit Committee held two
meetings in 1999.
In November 1999, the Board appointed a Nominating Committee. The Nominating
Committee 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 Nominating Committee 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 Nominating Committee its consideration. The
recommendation must be accompanied by the consent of the individual nominated
to be elected and to serve. The Nominating Committee is currently comprised of
Edward J. Kelly, Adam W. Kirsch and John J. O'Malley. The Nominating Committee
did not meet in 1999.
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 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.
The Board held four meetings and took action by written consent an
additional two times during 1999. All of the Directors attended 75% or more of
the total number of meetings of the Board.
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 Chairman of the Board, 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 1997,
1998 and 1999 was established 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,
6
<PAGE>
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, 1999, the Company paid Bain
Capital fees of $1,566,785 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 registrable 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 registrable 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 registrations, the Company has agreed
to indemnify all holders of registrable securities against certain
liabilities, including liabilities under the Securities Act. The holders of an
aggregate of 687,428 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, the Company's Chairman,
President and Chief Executive Officer, $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, (ii) the date
Mr. Ryan ceases to be employed by the Company or (iii) the date Mr. Ryan
disposes of any of his Common Stock. The Company has previously waived the
requirement that Mr. Ryan repay such loan pursuant to clause (iii) above. As
of May 15, 2000, an aggregate of $1.2 million was outstanding under the note.
On July 27, 1999, the Company loaned Mr. Ryan $2.6 million pursuant to the
terms of a promissory note bearing interest at an annual rate 5.3125%,
computed on a daily basis. The borrowings under the note were secured by all
of the stock options held by Mr. Ryan. The note was repaid in full on August
27, 1999.
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
7
<PAGE>
in such ownership with the 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 January 1, 1999
through December 31, 1999, all Section 16(a) filing requirements applicable to
its officers, Directors and greater than ten percent beneficial owners were
complied with except that Form 4s on behalf of Messrs. Ryan, Althisar, Flynn,
Steiner, Kelley, Artale and Foos to report transactions which occurred in
August, 1999 were filed approximately one week late, and Form 5s on behalf of
each executive officer of the Company to report the grant of options in 1999
were filed approximately one month late.
PROPOSAL NO. 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board has appointed PricewaterhouseCoopers 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,
2000. The Board recommends a vote FOR the ratification of such appointment.
PricewaterhouseCoopers LLP audited the financial statements of the Company and
its subsidiaries for the year ended December 31, 1999. It is expected that
representatives of PricewaterhouseCoopers 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.
8
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
Except as otherwise noted, the following table sets forth certain
information as of May 15, 2000 as to the security ownership of equity
securities of the Company by (a) each of the executive officers named in the
Summary Compensation Table, (b) each of the Directors and Director nominees of
the Company, (c) all Directors and executive officers as a group and (d) 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. 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 of Percent
Name Shares of Class
- ---- --------- --------
<S> <C> <C>
Directors and Executive Officers:
Kevin J. Ryan(1)(2)...................................... 1,016,908 5.5%
Edward J. Kelley(3)...................................... 171,213 *
Lawrence L. Chapoy(4).................................... 75,718 *
Daniel M. Roussel(5)..................................... 167,703 *
Thomas F. Steiner(6)..................................... 101,249 *
Michael A. D'Amato(7).................................... 10,667 *
Adam W. Kirsch(7)(8)..................................... 106,642 *
Sol Levine(7)............................................ 25,677 *
John W. Maki(7)(8)....................................... 106,642 *
John J. O'Malley(7)(8)................................... 106,642 *
Stephen G. Pagliuca(7)(8)................................ 699,426 4.0%
All Directors and executive officers as a group (16
persons)(9)............................................. 2,618,182 13.4%
5% Stockholders:
Putnam Investments, Inc.(10)............................. 1,526,178 8.7%
One Post Office Square
Boston, Massachusetts 02109
T. Rowe Price Associates, Inc.(11)....................... 1,471,600 8.3%
100 E. Pratt Street
Baltimore, Maryland 21202
Suzanne Zak(12).......................................... 1,176,190 6.7%
100 N. Sixth Street, Ste. 476A
Minneapolis, Minnesota 55403
American Express Company(13)............................. 1,202,911 6.8%
200 Vesey Street
New York, New York 10285
Ocular Sciences, Inc.(14)................................ 3,506,397 19.9%
475 Eccles Avenue South
San Francisco, California 94080
</TABLE>
- --------
* Represents less than one percent.
(1) The address of such person is c/o the Company, 333 East Howard Avenue,
Des Plaines, Illinois 60018-5903.
(2) Includes 969,850 shares of Common Stock that can be acquired through
currently exercisable options or options that will become exercisable
prior to May 31, 2000.
(3) Includes 126,270 shares of Common Stock that can be acquired through
currently exercisable options or options that will become exercisable
prior to May 31, 2000. Certain of Mr. Kelley's shares are held by an
individual retirement account for his sole benefit.
9
<PAGE>
(4) Includes 60,778 shares of Common Stock that can be acquired through
currently exercisable options or options that will become exercisable
prior to May 31, 2000.
(5) Includes 155,140 shares of Common Stock that can be acquired through
currently exercisable options or options that will become exercisable
prior to May 31, 2000.
(6) Includes 94,050 shares of Common Stock that can be acquired through
currently exercisable options or options that will become exercisable
prior to May 31, 2000.
(7) Includes currently exercisable options to purchase 11,998 shares of
Common Stock issued to Messrs. Kirsch, Maki, O'Malley and Pagliuca and
currently exercisable options to purchase 10,667 shares of Common Stock
issued to Messrs. D'Amato and Levine pursuant to the Director Option
Plan.
(8) Includes, with respect to Messrs. Pagliuca, Kirsch, Maki and O'Malley,
44,240 shares of Common Stock held by BCIP Associates ("BCIP") and 50,404
shares held by BCIP Trust Associates, L.P. ("BCIP Trust"), as a result of
each being a general partner of such entities. In addition, with respect
to Mr. Pagliuca, includes 276,432 shares held by Bain Capital Fund IV,
L.P. ("Fund IV") and 316,352 shares held by Bain Capital Fund IV-B, L.P.
("Fund IV-B"), as a result of Mr. Pagliuca being a Managing Director of
the general partner of such funds. Each such person disclaims beneficial
ownership of any such shares in which he does not have a pecuniary
interest. Messrs. Kirsch, Maki and O'Malley are no longer employed by
Bain Capital.
(9) Includes an aggregate of 1,725,658 shares of Common Stock that can be
acquired through currently exercisable options or options that will
become exercisable prior to May 31, 2000 held by the Directors and
executive officers of the Company.
(10) Pursuant to an Amendment to Schedule 13G filed with the Commission on
February 18, 2000: (i) Putnam Investments, Inc. ("PI") reported shared
voting power with respect to 194,100 shares and shared dispositive power
with respect to 1,526,178 shares; (ii) Putnam Investment Management, Inc.
("PIM") reported shared dispositive power with respect to 1,152,478
shares; (iii) The Putnam Advisory Company, Inc. ("PAC") reported shared
voting power with respect to 194,100 shares and shared dispositive power
with respect to 373,700 shares; (iv) Putnam Health Services Trust
("PHST") reported shared dispositive power with respect to 984,370
shares; and (v) Marsh & McLennan Companies, Inc. ("MMC"), as the parent
holding company of PI, was listed as a reporting person in the Schedule
13G but did not report beneficial ownership with respect to any shares.
The address for PIM, PAC and PHST is the same as the address for PI
listed in the table above. The address for MMC is 1166 Avenue of the
Americas, New York, New York 10036.
(11) Pursuant to a Schedule 13G filed with the Commission on February 10,
2000, T. Rowe Price Associates, Inc. reported the sole power to vote
222,400 shares and the sole power to dispose of 1,471,600 shares and T.
Rowe Price New Horizons Fund, Inc. (the "Horizons Fund") reported the
sole power to vote 1,100,000 shares. The address for the Horizons Fund is
the same as the address listed for T. Rowe Price Associates, Inc. in the
table above.
(12) Pursuant to a Schedule 13G filed with the Commission on February 12,
1999: (i) Suzanne Zak, the chief executive officer of Zak Capital, Inc.
and the managing member of the general partner of Zak Minotaur Fund,
L.P., reported the shared power to vote and to dispose of 1,176,190
shares; (ii) Zak Capital, Inc. reported the shared power to vote and to
dispose of 1,150,490 shares; and (iii) Zak Minotaur Fund, L.P. reported
the shared power to vote and to dispose of 25,700 shares. The address for
Zak Capital, Inc. and Zak Minotaur Fund, L.P. is the same as the address
listed for Suzanne Zak in the table above.
(13) Pursuant to a Schedule 13G filed with the Commission on February 8, 2000,
American Express Company, in its capacity as a parent holding company,
and American Express Financial Corporation ("AEFC"), as an investment
advisor registered under Section 203 of the Investment Advisors Act of
1940, reported the shared power to vote of 754,170 shares and the shared
power to dispose of 1,202,911 shares. The address for AEFC is IDS Tower
10, Minneapolis, Minnesota 55440.
(14) Pursuant to a Schedule 13D filed with the Commission on March 29, 2000,
Ocular Sciences, Inc. ("OSI") reported beneficial ownership of 3,506,397
shares of Common Stock as a result of OSI holding an option that is
exercisable under certain circumstances for an aggregate of 3,506,397
shares of Common Stock. The option was granted to OSI by the Company in
connection with the execution of an Agreement and Plan of Merger, dated
as of March 19, 2000, between the Company, OSI Acquisition Corp. and OSI.
10
<PAGE>
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, 1999, 1998 and
1997 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").
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
-------------------------------------- ------------
Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary Bonus(a) Compensation(b) Options Compensation(c)
- ------------------ ---- -------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Kevin J. Ryan........... 1999 $250,008 568,625 $-- 25,000 $3,602
Chairman, President 1998 250,008 584,625 -- 25,000 4,466
and
Chief Executive 1997 250,008 477,125 -- 32,000 2,275
Officer
Edward J. Kelley........ 1999 $175,000 $398,038 $-- 15,000 $1,568
Chief Financial 1998 175,000 414,038 -- 15,000 2,018
Officer and
Vice President,
Finance 1997 175,000 338,713 -- 25,000 717
Lawrence L. Chapoy...... 1999 $146,100 $199,383 $-- 5,000 $1,958
Vice President, 1998 146,100 213,993 -- 5,000 2,423
Research &
Development 1997 146,100 176,888 -- 5,000 1,143
Daniel M. Roussel....... 1999 $129,003 $214,132 $-- 6,000 $ --
Vice President, Europe 1998 134,341 179,308 -- 6,000 --
1997 120,622 144,432 -- 5,000 --
Thomas F. Steiner....... 1999 $140,000 $191,058 $-- 6,000 $1,212
Vice President,
Marketing 1998 140,000 205,058 -- 6,000 1,557
1997 140,000 169,502 -- 5,000 746
</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 1999 also include
payments made under the Company's profit sharing plan in the following
amounts: Mr. Ryan--$16,000; Mr. Kelly--$16,000; Mr. Chapoy--$14,610; and
Mr. Steiner--$13,719. In 1998, such payment were as follows: Mr. Ryan--
$16,000; Mr. Kelley--$16,000; Mr. Chapoy--$14,610; and Mr. Steiner--
$14,000. In 1997, such payments were as follows: Mr. Ryan--$15,750; Mr.
Kelley--$15,750; Mr. Chapoy--$14,610; and Mr. Steiner--$14,000.
(b) None of the perquisites and other benefits paid to each Named Executive in
1999, 1998 or 1997 exceeded the lesser of $50,000 or 10% of the total
annual salary and bonus received by such Named Executive during that year.
(c) Reflects premium payments made by the Company on behalf of such Named
Executives for life and long-term disability insurance as follows:
11
<PAGE>
<TABLE>
<CAPTION>
Long-term
Life disability
Name Year Insurance insurance
- ---- ---- --------- ----------
<S> <C> <C> <C>
Kevin J. Ryan......................................... 1999 $3,186 $416
1998 4,050 416
1997 1,800 475
Edward J. Kelley...................................... 1999 $1,278 $290
1998 1,728 290
1997 435 282
Lawrence L. Chapoy.................................... 1999 $1,715 $243
1998 2,180 243
1997 865 278
Thomas F. Steiner..................................... 1999 $ 980 $232
1998 1,325 232
1997 518 228
</TABLE>
Option Grants in Last Fiscal Year
The following table sets forth information regarding stock options granted
by the Company to the Named Executives during the Company's last fiscal year:
<TABLE>
<CAPTION>
Potential
Realizable
Value at Assumed
Annual
Rates of Stock
Price Appreciation
for
Option Term(d)
-------------------
Number of
Securities % of Total Exercise Market
Underlying Options or Base Price on
Options Granted in Price Date of Expiration
Granted (#)(a) Fiscal Year ($/Share) Grant(b) Date(c) 5% ($) 10% ($)
-------------- ----------- --------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Kevin J. Ryan........... 25,000 7.0% $28.88 $28.88 11/9/09 $454,000 $1,150,750
Edward J. Kelley........ 15,000 4.2 28.88 28.88 11/9/09 272,400 690,450
Lawrence L. Chapoy...... 5,000 1.4 28.88 28.88 11/9/09 90,800 230,150
Daniel M. Roussel....... 6,000 1.7 28.88 28.88 11/9/09 108,960 276,180
Thomas F. Steiner....... 6,000 1.7 28.88 28.88 11/9/09 108,960 276,180
</TABLE>
- --------
(a) Options vest in four equal annual installments beginning on the first
anniversary of the date of grant. The grant date of such options was
November 9, 1999.
(b) Market price was determined based on the last reported sale price of the
Common Stock as reported by the Nasdaq National Market on the date of
grant.
(c) Options will expire the earlier of 30 days after the date of termination
or November 9, 2009.
(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 $47.04 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 $74.91 per share.
12
<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table sets forth information for the Named Executives
concerning stock option exercises during the Company's last fiscal year and
options outstanding at the end of the last fiscal year:
<TABLE>
<CAPTION>
Shares
Acquired Number of Securities Value of Unexercised In-
on Value Underlying Unexercised the-Money Options at FY-
Exercise Realized Options at FY-End (#) End ($)(a)
Name (#) ($) Unexercisable/Exercisable Unexercisable/Exercisable
- ---- -------- ---------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Kevin J. Ryan........... 130,000 $4,005,866 59,750/961,850 $2,263,330/$36,434,878
Edward J. Kelley........ 66,000 1,955,092 38,750/120,020 $ 1,467,850/$4,546,377
Lawrence J. Chapoy...... 8,000 244,794 11,250/59,528 $ 426,150/$2,254,921
Daniel M. Roussel....... 0 0 13,000/153,890 $ 492,440/$5,829,353
Thomas F. Steiner....... 14,000 443,683 13,000/92,800 $ 492,440/$3,515,264
</TABLE>
- --------
(a) Fair market value of the Common Stock was determined based on the last
reported sale price of the Common Stock as reported by the Nasdaq National
Market on December 31, 1999, which was $37.88 per share.
Employment Agreements
Kevin J. Ryan. On March 6, 2000, the Company and Kevin J. Ryan entered into
a new employment agreement to supercede and replace his existing employment
agreement with the Company. The new employment agreement provides that it
shall be deemed effective as of October 1, 1999. The principal terms and
provisions of the new employment agreement are set forth below.
Term, Position and Duties. Mr. Ryan agreed to serve as the Chief Executive
Officer and President of the Company for a period commencing on October 1,
1999 and ending on September 30, 2004, subject to automatic one-year
extensions unless either party gives notice to other at the end of each 12
month period beginning on the first anniversary of the effective time but in
no event will the term extend beyond September 30, 2012. The Company has
agreed to use its best efforts to have Mr. Ryan elected as a member of and
Chairman of the Board and to ensure his re-election to such positions during
the term of the agreement.
Compensation. Under the new employment agreement, Mr. Ryan is entitled to
(i) receive an initial base salary of $500,000 per annum, subject to an annual
review for increases beginning of each calendar year after 2000, (ii)
participate in the Company's Professional Incentive Plan and/or any other
annual incentive plan established by the Company for either Mr. Ryan alone or
for other members of the Company's senior management, (iii) participate in any
long-term incentive plan established by the Company either for Mr. Ryan alone
or for members of the Company's senior management, (iv) be eligible to receive
grants of options to purchase shares of the Company's Common Stock and awards
of shares of Common Stock, either or both as determined by the Compensation
Committee, under and in accordance with the terms of applicable plans of the
Company, (v) prompt reimbursement for all reasonable out-of-pocket expenses
incurred by him in performing services under the employment agreement, (vi)
customary perquisites for a senior manager, (vii) participate in all of the
Company's employee benefit plans and programs made available to the Company's
senior executives or to its employees generally, (viii) reimbursement for all
medical expenses incurred by him or his spouse that are not otherwise covered
by insurance and lifetime healthcare coverage for him and his spouse, (ix) an
individual permanent life insurance benefit in an initial amount of $5.0
million and (x) the benefits provided under the Company's Supplemental
Executive Retirement Plan (the "SERP").
Severance Arrangements. Except as set forth below, in the event that Mr.
Ryan's employment terminates for any reason, Mr. Ryan will be entitled to (i)
his base salary through the termination date, (ii) a cash payment in lieu of
any unused vacation, (iii) any annual bonus earned but not yet paid, (iv) any
deferred compensation under any incentive compensation plan, (v) any other
compensation and benefits that have vested through the termination date and
(vi) reimbursement of any business and medical expenses incurred by Mr. Ryan
or his
13
<PAGE>
spouse, as applicable, through the termination date (items (i) through (vi)
being referred to herein as the "General Benefits"). In the event that Mr.
Ryan's employment terminates by reason of his retirement upon or after his
attainment of age 65, he is entitled, in addition to the General Benefits, the
benefits provided under the SERP. In the event that Mr. Ryan's employment
terminates by reason of his death, his beneficiary is entitled, in addition to
the General Benefits, to his base salary though the end of the month following
the month in which his death occurs and an annual bonus, if any, prorated to
the date of death. In the event that Mr. Ryan's employment terminates by
reason of his disability he or his beneficiary, as the case may be, will be
entitled, in addition to the General Benefits, to (i) an annual bonus, if any,
prorated to the termination date, and (ii) the retirement benefit under the
SERP that Mr. Ryan would be entitled to upon his termination with the Company
by reason of his disability. In the event that Mr. Ryan is terminated for
cause, he will only be entitled to the General Benefits. If Mr. Ryan is
terminated by the Company without cause or resigns for good reason, he will be
entitled, in addition to the General Benefits, to (i) his base salary through
the remainder of the employment term, (ii) annual bonuses for the remainder of
the employment term equal to the average of the three highest annual bonuses
awarded to him during the ten years preceding the termination, (iii) continued
medical reimbursement for the remainder of the employment term and lifetime
medical benefits, (iv) the retirement benefit under the SERP, (v) continued
participation in all employee benefit plans and programs through the remainder
of the employment term and, (vi) other benefits in accordance with applicable
plans and programs of the Company. If Mr. Ryan voluntarily resigns without
good reason prior to obtaining the age of 65, he will be entitled to the
General Benefits, and if he voluntarily resigns after that age, he will be
entitled to the General Benefits and the retirement benefit under the SERP.
Consulting Arrangement. Effective upon the termination of Mr. Ryan's
employment, unless his termination was due to death or disability or if was
terminated for cause or resigned without good reason prior to age 65, Mr. Ryan
has agreed to become a consultant to the Company for a period of 5 years. Mr.
Ryan is not required to devote more than 50 days in any calendar year
performing consulting services for the Company. During the consulting period,
Mr. Ryan shall be entitled to receive an amount equal to the applicable
percentage of his base salary upon termination of his employment as follows:
<TABLE>
<CAPTION>
% of
Base
Year Salary
---- ------
<S> <C>
1................................................................... 100
2................................................................... 90
3................................................................... 80
4................................................................... 70
5................................................................... 60
</TABLE>
Confidential Information, Noncompetition and Nonsolicitation
Arrangements. Pursuant to the employment agreement, Mr. Ryan agreed that: (1)
during the employment period and any consulting period or thereafter, he will
keep confidential any information obtained or learned by him during the course
of his employment relating to the operational, financial, business and other
affairs of the Company (subject to limited exceptions); (2) that all
inventions, innovations, improvements, developments and all similar or related
information that relate to the Company or any of its subsidiaries that are
conceived, developed or made by Mr. Ryan while employed by the Company and any
of its subsidiaries belong to the Company or such subsidiary; and (3) during
the employment period and any consulting period and for 12 months thereafter,
not to compete with the Company or any of its subsidiaries, not to solicit,
endeavor to entice away from or knowingly interfere with the Company or any of
its subsidiaries, any of its or their customers or sources of supply or employ
or retain any person who was employed or retained by the Company or any of its
subsidiaries.
Edward J. Kelley. On June 28, 1995, the Company and Edward J. Kelley entered
into an employment agreement, pursuant to which Mr. Kelley agreed to serve as
Chief Financial Officer of the Company for a period that will end with Mr.
Kelley's resignation, death or disability, or upon termination by the Company,
with or without cause. Under the employment agreement, Mr. Kelley will
receive: (i) an annual base salary equal to at
14
<PAGE>
least $175,000; (ii) an annual bonus based on the Company's achievement of
certain targeted operating results; and (iii) certain fringe benefits. If Mr.
Kelley'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. Kelley 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.
Change of Control Severance Plan
The Wesley Jessen VisionCare, Inc. Change of Control Severance Plan (the
"Severance Plan") provides for benefits for certain employees of the Company
and its affiliates (each, a "Participant") in the event that such Participant
is terminated on or within two years following the date of the Change in
Control, (i) by the Company or its successor other than for cause, or (ii) by
the Participant for good reason. The Severance Plan provides that "good
reason" for all Participants entitled to level 1 benefits and certain
Participants entitled to level 2 benefits (as discussed below) includes the
failure of such Participants to be named as executive officers of any publicly
traded company which is the ultimate parent of any acquirer. A Participant
will not be entitled to benefits if his or her employment is discontinued by
reason of the Participant's death or a physical or mental condition resulting
in his or her inability to substantially perform his or her duties with the
Company. Under the Severance Plan, a "Change of Control" is deemed to have
occurred if the event set forth in any one of the following paragraphs occurs:
(a) any person is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities; or
(b) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
date hereof, constitute the entire Board plus any new director whose
appointment or election by the Board or nomination for election by the
Company's stockholders was approved or recommended by a vote of at least
two-thirds ( 2/3) of the directors then still in office who either were
directors as of the effective date of the Severance Plan or whose
appointment, election or nomination for election was previously so approved
or recommended; or
(c) there is consummated a merger or consolidation or similar business
combination transaction of the Company or any direct or indirect subsidiary
of the Company with any other corporation or other entity, other than (i) a
merger or consolidation or similar business combination transaction (A)
which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
at least 55% of the combined voting power of the securities of the Company
or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation and (B) as a result of which, no person
is or becomes the beneficial owner, directly or indirectly, of 20% or more
of the combined voting power of the securities of the Company or such other
surviving entity or any parent thereof outstanding immediately after such
merger or consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no person is or becomes the beneficial owner, directly or indirectly,
of securities of the Company representing 20% or more of the combined
voting power of the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or disposition
by the Company of all or substantially all of the Company's assets to an
entity at least 55% of the combined voting power of the voting securities
of which are owned by stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to such
sale.
15
<PAGE>
There are generally three levels of severance benefits that are payable
under the Severance Plan depending upon the Participant. The three levels of
severance benefits are summarized below:
Level 1--Severance pay equal to (i) the sum of his or her annual base
salary and his or her highest annual incentive compensation earned during
the 3 calendar years immediately preceding the calendar year in which the
Change in Control occurs (ii) multiplied by 3.
Level 2--Severance pay equal to (i) the sum of his or her annual base
salary and his or her highest annual incentive compensation earned during
the 3 calendar years immediately preceding the calendar year in which the
Change in Control occurs (ii) multiplied by 2.
Level 3--Severance pay equal to (i) the sum of his or her annual base
salary and his or her highest annual incentive compensation earned during
the 3 calendar years immediately preceding the calendar year in which the
Change in Control occurs (ii) multiplied by 1.
All of the Named Executive are Participants in the Severance Plan (other
than Mr. Ryan) and are entitled to level 1 or level 2 benefits. The Severance
Plan by its terms is not applicable to the pending merger between the Company
and OSI.
Management Bonus Plan
In November 1998, the Board adopted the Wesley Jessen Corporation
Professional Incentive Plan for calendar year 1999 (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 135 employees participated in the Bonus Plan for 1999,
including each of the Named Executives.
Stock Incentive Plan
In connection with the IPO, the Board and stockholders of the Company
approved the Wesley Jessen VisionCare, Inc. Stock Incentive Plan (the
"Incentive Plan"). The Incentive Plan was amended in 1999 to increase the
number of shares of Common Stock reserved for issuance under the Incentive
Plan by 1,000,000 shares. The Incentive 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 Incentive Plan (a "Participant"). The Board or
the Compensation Committee, as the case may be, is authorized under the
Incentive Plan to select the Participants and determine the terms and
conditions of the awards under the Incentive Plan. The Incentive 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 Incentive Plan. An aggregate of 1,800,000 shares of Common
Stock of the Company have been reserved for issuance under the Incentive Plan,
subject to certain adjustments reflecting changes in the Company's
capitalization. The Incentive 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 900,150 shares of Common
Stock have been granted under the Incentive Plan.
Options granted under the Incentive 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.
16
<PAGE>
Options granted under the Incentive 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 Incentive 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 Incentive
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 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 May 15,
2000, an aggregate of 184,818 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. 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 125
shares per quarter. Elections to participate can be made at any time 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 at any
time. Elected contributions are credited to participants' accounts at the end
of each calendar month. In addition, employees may make lump sum contributions
at the end of the quarter 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
17
<PAGE>
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 at any time. 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 80,000 shares of Common Stock have been granted under
the Director Option Plan. Options to acquire an additional 12,000 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 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 8.0% 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 1998, 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 plans 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.
18
<PAGE>
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
$23,055, $54,529, $14,355 and $37,822, respectively. Mr. Roussel is not
eligible to participate in the Retirement Plan. Messrs. Ryan, Kelley. Chapoy
and Steiner currently have approximately 16 (including 12 years of service
with acquired entities), 21 (including 17 years of service with acquired
entities), 6 and 16 years of credited service, respectively, under the
Retirement Plan.
There is a supplemental benefit payable to Mr. Ryan pursuant to a
Supplemental Executive Retirement Plan (SERP) earned during his employment
with Barnes-Hind and Revlon Visioncare, the obligation for which was assumed
by the Company as a result of the acquisition of PBH. The estimated annual
benefit payable to Ryan upon normal retirement age is equal to $30,480.
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 of
Messrs. Pagliuca, Levine and Ryan.
The Compensation Committee is 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
recommendations to the full Board. In addition, the Compensation Committee is
responsible for the administration of the Company's stock plans. In reviewing
the Company's compensation programs, the Compensation Committee adheres 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 considers the financial condition and operational performance of the
Company during the prior year. The Company's executive compensation programs
consist of three principal components: (i) base salary; (ii) annual bonus; and
(iii) long-term equity incentives.
Base Salary. The base salaries for Messrs. Ryan and Kelley in 1999 were
established pursuant to their employment agreements with the Company. On March
6, 2000, the Company and Kevin J. Ryan entered into a new employment agreement
to supercede and replace his existing employment agreement with the Company.
In determining the terms of the new employment agreement, the Compensation
Committee retained a consulting firm specializing in executive compensation to
conduct an extensive survey of the compensation arrangements for chief
executive officers of similarly sized companies. Based upon such survey and
the Company's recent operating performance, the Compensation Committee
concluded that Mr. Ryan should receive a significant increase in compensation.
Under his new employment agreement, Mr. Ryan's base salary was increased from
approximately $250,000 to $500,000. Prior to this increase, Mr. Ryan's base
salary had not been increased since
19
<PAGE>
he joined the Company in 1995. Under his new employment agreement, Mr. Ryan is
entitled to annual review for increases in his base salary. Mr. Ryan did not
participate as a member of the Compensation Committee in establishing the
terms of his new employment agreement. The terms of Mr. Kelley's 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 1999 and, as a result, bonus payments were
awarded by the Board under the Bonus Plan for 1999.
Long-Term Equity Incentives. All of the executive officers of the Company
(other than Mr. Althisar) 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 Incentive Plan.
Under the Incentive 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.
The Incentive Plan was amended in 1999 to increase the number of shares
reserved for issuance thereunder by 1,000,000. As a result, an aggregate of
1,800,000 shares of Common Stock are reserved for issuance upon the exercise
of awards granted to eligible participants under the Incentive 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 Incentive Plan
are an effective incentive for the Company's management to create value for
the Company's stockholders. As of December 31, 1999, there were outstanding
options to purchase an aggregate of 837,550 shares of Common Stock that had
been granted by the Board under the Incentive Plan, including options to
purchase 347,350 shares of Common Stock that were granted in 1999.
The foregoing report has been approved by all members of the Compensation
Committee.
Sol Levine, Chairman
Stephen G. Pagliuca
Kevin J. Ryan
20
<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
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
February 12, December 31, December 31, December 31,
1997 1997 1998 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Wesley Jessen VisionCare,
Inc...................... $100 $260 $185 $253
Nasdaq Composite Index.... $100 $116 $162 $303
Standard & Poor's Midcap
400 Index................ $100 $125 $147 $167
</TABLE>
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 2001 annual meeting
of stockholders of the Company must be received by the Company on or before
the close of business January , 2001. Such proposals should be submitted by
certified mail, return receipt requested.
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 first anniversary of the
previous year's annual
21
<PAGE>
meeting (provided that in the event that date of the annual meeting is changed
by more than 30 days from such anniversary date, notice by the stockholders
must be received no later than the close of business on the tenth day
following of the public announcement of such meeting) and that such notice
must meet certain other requirements. As a result, stockholders who intend to
present a proposal at the 2001 annual meeting without inclusion of such
proposal in the Company's proxy materials are required to provide notice of
such proposal no later than April 24, 2001 (assuming the date of next year's
annual meeting is not changed by more than 30 days). The Company's proxy
related to the 2001 annual meeting will give discretionary voting authority to
the proxy holders to vote with respect to any such proposal that is received
by the Company after such date. 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,
1999, 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 Ronald J. Artale, Vice President and Controller, Wesley
Jessen VisionCare, Inc., 333 East Howard Avenue, Des Plaines, Illinois 60018-
5903.
COST AND METHOD OF SOLICITATION
The Company will bear the cost of this solicitation. While no precise
estimate of this cost can be made at the present time, the Company currently
estimates that it will spend a total of approximately $50,000 for its
solicitation of proxies, including expenditures for attorneys, solicitors and
advertising, printing, transportation and related expenses, but excluding the
salaries and wages of regular employees and officers and the normal expenses
of an uncontested proxy solicitation for the election of directors. As of May
15, 2000, the Company has incurred proxy solicitation expenses of
approximately $ . In addition to soliciting proxies by mail, Directors of the
Company may solicit proxies in person or by telephone or telecopy.
The Company will also reimburse brokers, fiduciaries, custodians and other
nominees, as well as persons holding stock for others who have the right to
give voting instructions, for out-of-pocket expenses incurred in forwarding
this proxy statement and related materials to, and obtaining instructions or
authorizations relating to such materials from, beneficial owners of the
Company's capital stock. The Company will pay for the cost of these
solicitations, but these individuals will receive no additional compensation
for these solicitation services. The Company has retained the proxy
solicitation firm of Innisfree M&A Incorporated ("Innisfree") at estimated
fees of not more than $225,000 in the aggregate, plus reasonable out-of-pocket
expenses, to participate in the solicitation of proxies and revocations. The
Company also has agreed to indemnify Innisfree against certain liabilities and
expenses. The Company estimates that approximately 75 employees of Innisfree
will be involved in the solicitation of proxies on behalf of the Company.
INFORMATION CONCERNING DIRECTORS WHO MAY SOLICIT PROXIES
Under the applicable regulations of the Commission, the Company and each of
the Directors of the Company is deemed to be a "participant" in the Company's
solicitation of proxies. The following table sets forth (a) the name, business
address and any officers and employees of the Company who may also solicit
proxies from shareholders of the Company ("Participants") and (b) the dates,
types and amounts of each Participant's purchases and sales of the Company's
Common Stock within the past two years.
Except as otherwise indicated, shares of Common Stock of the Company owned
of record by each Participant are also owned beneficially by such Participant.
The number of shares of Common Stock of the Company owned by each Director or
nominee is set forth in the table under "Beneficial Owners of Common Stock."
22
<PAGE>
<TABLE>
<CAPTION>
Purchase (P),
Date Of Sale (S)
Name, Business Address Transaction Or Award (A) Type And Amount
- ---------------------- ----------- ------------- -------------------------------------
<S> <C> <C> <C>
Michael A. D'Amato...... 11/19/99 S 5,000 shares of Common Stock
Executive Vice President 5/26/99 A 2,000 shares of Common Stock Options
The Advisory Board
Company
The Watergate
600 New Hampshire
Avenue, NW
Washington, D.C. 20037
Edward J. Kelley........ 12/30/99 S 3 shares of Common Stock
Chief Financial Officer 11/09/99 A 15,000 shares of Common Stock Options
Wesley Jessen
VisionCare, Inc. 8/09/99 S 40,000 shares of Common Stock
333 East Howard Avenue 5/11/99 S 30,000 shares of Common Stock
Des Plaines, Illinois
60018 3/02/99 S 15,000 shares of Common Stock
3/12/99 P 372 shares of Common Stock
11/09/98 A 15,000 shares of Common Stock Options
5/22/98 S 16,000 shares of Common Stock
3/10/98 S 25,000 shares of Common Stock
Adam W. Kirsch.......... 5/26/99 A 2,000 shares of Common Stock Options
Chief Executive Officer 5/20/98 A 2,000 shares of Common Stock Options
Net Ventures, LLC
2 Canal Park
Cambridge, Massachusetts
02141
Sol Levine.............. 5/26/99 A 2,000 shares of Common Stock Options
Retired
4 East 72nd Street
New York, New York 10021
John W. Maki............ 5/26/99 A 2,000 shares of Common Stock Options
Managing Director 5/20/98 A 2,000 shares of Common Stock Options
Audax Management
Company, LLC
101 Huntington Avenue
Boston, Massachusetts
02199
John J. O'Malley........ 5/26/99 A 2,000 shares of Common Stock Options
Managing Director 5/20/98 A 2,000 shares of Common Stock Options
Audax Management
Company, LLC
101 Huntington Avenue
Boston, Massachusetts
02199
Stephen G. Pagliuca..... 5/26/99 A 2,000 shares of Common Stock Options
Managing Director 5/20/98 A 2,000 shares of Common Stock Options
Bain Capital, Inc.
2 Copley Place
Boston, Massachusetts
02116
Kevin J. Ryan........... 11/09/99 A 25,000 shares of Common Stock Options
President and Chief
Executive Officer 8/17/99-
Wesley Jessen
VisionCare, Inc. 8/24/99 S 130,000 shares of Common Stock
333 East Howard Avenue 3/12/99 P 393 shares of Common Stock
Des Plaines, Illinois
60018 12/10/98 P 4,000 shares of Common Stock
11/09/98 A 25,000 shares of Common Stock Options
8/31/98 P 25,000 shares of Common Stock
9/02/98 P 9,000 shares of Common Stock
3/20/98 S 50,000 shares of Common Stock
2/11/98 S 236,947 shares of Common Stock
</TABLE>
23
<PAGE>
The table below sets forth all shares of Common Stock purchased by the
Company within the past two years:
<TABLE>
<CAPTION>
NUMBER NUMBER
PURCHASE OF PURCHASE OF
DATE SHARES DATE SHARES
-------- ------- -------- ------
<S> <C> <C> <C>
6/12/98 197,000 7/29/98 25,000
6/16/98 5,000 7/30/98 30,000
6/17/98 45,000 7/31/98 58,000
6/18/98 30,000 8/11/98 20,000
6/19/98 45,000 8/12/98 20,000
6/22/98 45,000 8/14/98 10,000
6/23/98 45,000 8/17/98 10,000
6/24/98 40,000 8/20/98 2,000
6/25/98 40,000 8/21/98 2,000
6/26/98 30,000 8/24/98 2,000
6/29/98 30,000 8/25/98 2,000
6/30/98 25,000 8/26/98 2,000
7/1/98 20,000 8/31/98 2,000
7/21/98 20,000 9/3/98 1,000
7/22/98 20,000 9/4/98 10,000
7/23/98 30,000 9/18/98 10,000
7/24/98 40,000 9/21/98 10,000
7/27/98 20,000 9/22/98 5,000
7/28/98 35,000 9/23/98 17,000
</TABLE>
There were no shares of Common Stock sold by the Company within the past two
years other than pursuant to employee benefit plans.
On February 5, 1998, certain investment funds affiliated with Bain Capital
(the "Bain Capital Funds") sold an aggregate of 2,001,603 shares of Common
Stock. On June 18, 1999, the Bain Capital Funds sold an aggregate of 4,242,200
shares of Common Stock. Messrs. Kirsch, Maki, O'Malley and Pagliuca, each a
Director of the Company, may be deemed to be the beneficial owner of certain
of the shares sold by the Bain Capital Funds.
Except as described in this Proxy Statement, none of the Participants nor
any of their respective affiliates or associates (together, the "Participant
Affiliates") (i) directly or indirectly beneficially owns any securities of
the Company or of any subsidiary of the Company or (ii) has had any
relationship with the Company in any capacity other than as a shareholder,
employee, officer or director. Furthermore, except as described in the Proxy
Statement, no Participant or Participant Affiliate is either a party to any
transaction or series of transactions since December 31, 1999, or has
knowledge of any currently proposed transaction or series of transactions, (i)
to which the Company or any of its subsidiaries was or is to be a party, (ii)
in which the amount involved exceeds $60,000, and (iii) in which any
Participant or Participant Affiliate has or will have, a direct or indirect
material interest.
Except as described in this Proxy Statement, no Participant or Participant
Affiliates has entered into any agreement or understanding with any person
respecting any (i) future employment by the Company or its affiliates or (ii)
any transactions to which the Company or any of its affiliates will or may be
a party. Except as described in this Proxy Statement, there are no contracts,
arrangements or understandings by any Participant or Participant Affiliates
within the past year with any person with respect to any capital stock of the
Company.
OTHER MATTERS
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.
24
<PAGE>
IMPORTANT
1. Be sure to vote on the WHITE proxy card. We urge you not to sign any
proxy card which is sent to you by B&L.
2. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the person responsible for your account and direct him
or her to vote on the WHITE proxy "FOR" the Board of Directors' nominees.
3. If you have any questions or need assistance in voting your shares,
please call toll free:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
CALL TOLL FREE (888) 750-5834
By Order of the Board of Directors
Edward J. Kelley
Secretary
May , 2000
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 WHITE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
25
<PAGE>
WESLEY JESSEN VISIONCARE, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 23, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints 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, located as 5500 North River Road, Rosemont,
Illinois 60018 on Friday, June 23, 2000, at 10:00 a.m. or any adjournment or
postponement thereof, as shown on the voting side of this card.
-----------
SEE REVERSE
SIDE
-----------
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
WESLEY JESSEN VISIONCARE, INC.
June 23, 2000
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
[X]Please mark your vote 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 III Directors and FOR Proposal 2.
FOR WITHHELD
1. Election of ALL [_] [_] Nominees: Kevin J. Ryan
Nominees for Stephen G. Pagliuca
Class III John J. O'Malley
Directors Listed Hereon.
For all nominees listed hereon, except vote
withheld from the following nominee(s):
___________________________________________
2. Ratify the appointment of PricewaterhouseCoopers [_] [_] [_]
LLP as the independent accountants of the
Company for the 2000 fiscal year.
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.
Signature(s)_________________________________________________ Date________ 2000
Note: 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.
