<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
U.S. VISION
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
LOGO
U.S. VISION
May 15, 1998
Dear Stockholders:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders of
U.S. Vision, Inc. which will be held on June 16, 1998, at 10:00 a.m., Eastern
Daylight Time, at the Regency Palace Hotel, Rt. 73 at Fellowship Road, Mt.
Laurel, New Jersey. The official notice of the meeting together with a proxy
statement and proxy card are enclosed. Please give this information your careful
attention.
Whether or not you expect to attend the meeting in person, it is important that
your shares be voted at the meeting. I urge you to specify your choices by
marking the enclosed proxy card and returning it promptly. Sending in a signed
proxy will not affect your right to attend the annual meeting and vote in
person. You may revoke your proxy at any time before it is voted at the annual
meeting by giving written notice to the secretary of the Company.
Sincerely,
/s/ William A. Schwartz, Jr.
- ----------------------------------
William A. Schwartz, Jr.
Chairman of the Board, President and Chief Executive Officer
YOUR VOTE IS IMPORTANT
Please Sign, Date, and Return Your Proxy Card
<PAGE>
LOGO
U.S. VISION
-------------------------
Notice of Annual Meeting of Stockholders
To Be Held on Tuesday, June 16, 1998
-------------------------
To Our Stockholders:
You are hereby notified that the annual meeting (the "Meeting") of the
stockholders of U.S. Vision, Inc. (the "Company") will be held at the Regency
Palace Hotel, Rt. 73 at Fellowship Road, Mt. Laurel, New Jersey, on June 16,
1998, at 10:00 a.m., Eastern Daylight Time, for the following purposes as more
fully described in the following pages of the proxy statement, which are made a
part of this notice:
1. To consider and vote on a proposal to elect William A. Schwartz,
Jr., Dennis J. Shaughnessy, J. Roger Sullivan, Jr., Richard K.
McDonald, E. Theodore Stolberg, G. Kenneth Macrae, David M.
Tracy and Peter M. Troup as directors of the Company to serve
until the Annual Meeting of Stockholders in 1999 or until their
successors are duly elected and qualified;
2. To ratify the selection of Ernst & Young LLP as the independent
auditor of the Company for the fiscal year ending January 31,
1999; and
3. To transact such other business as may properly come before the
meeting or any postponement or adjournment of the meeting.
Only the stockholders of record at the close of business on April 27, 1998, are
entitled to notice of and to vote at the Meeting or any adjournment thereof. The
stock transfer books will not be closed.
The Company desires your presence at the Meeting. However, so that the Company
may be certain that your shares are represented and voted in accordance with
your wishes, please mark, date, sign and return the enclosed proxy in the
enclosed return envelope (requiring no postage if mailed in the United States)
as promptly as possible to assure representation of your shares and a quorum at
the Meeting. If you attend the Meeting, you may revoke your proxy and vote in
person.
By Order of the Board of Directors,
/s/ George E. McHenry, Jr.
-----------------------------------
George E. McHenry, Jr.
Senior Vice President, Finance, Chief
Administrative Officer and Secretary
Glendora, New Jersey
May 15, 1998
<PAGE>
U.S. VISION, INC.
1 Harmon Drive
Glendora, New Jersey 08029
PROXY STATEMENT
for
1998 ANNUAL MEETING
to be held on
June 16, 1998
SOLICITATION
This Proxy Statement and accompanying form of proxy are being mailed to
stockholders commencing on or about May 15, 1998, in connection with the
solicitation by the Board of Directors (the "Board of Directors" or the "Board")
of U.S. Vision, Inc., a Delaware corporation ("USVI" or the "Company"), of
proxies from the holders of the Company's common stock, $.01 par value (the
"Common Stock").
Such proxies are to be used at the annual meeting of stockholders of the Company
(the "Meeting") to be held at the Regency Palace Hotel, Rt. 73 at Fellowship
Road, Mt. Laurel, New Jersey on June 16, 1998 at 10:00 a.m.. Eastern Daylight
Time, as set forth in the accompanying Notice of Annual Meeting of Stockholders
(the "Notice") and at any adjournment thereof, for the purposes set forth in the
Notice. Management is not currently aware of any matters other than those
referenced in this Proxy Statement that will be presented for action at the
Meeting.
RECORD DATE AND VOTING STOCK
Only stockholders of record at the close of business on Monday, April 27, 1998
(the "Record Date") will be entitled to vote on matters presented at the Meeting
or any adjournments thereof. As of the Record Date, the Company's outstanding
voting securities consisted of 7,761,544 shares of Common Stock. Under the
Company's Certificate of Incorporation, each share of Common Stock is entitled
to one vote on each of the proposals specified in the Notice of Meeting.
The holders of a majority of the Common Stock, whether or not present in person
or represented by proxy, shall constitute a quorum for the Meeting and for
action on such matters. Votes are counted and the count is certified by an
inspector of election. For purposes of determining whether a proposal has
received a majority vote, abstentions will be included in the vote totals, with
the result that an abstention will have the same effect as a negative vote for
all proposals other than the election of directors. If a broker indicates that
it is prohibited from exercising discretionary authority with respect to shares
held of record by such broker, including shares held for beneficial holders that
have not returned proxies (so-called "broker non-votes"), those shares will not
be included in the vote totals and, therefore, will have no effect on the
outcome of the vote with respect to that matter. Abstentions and broker
non-votes will, however, be treated as present for quorum purposes and may be
entitled to vote on other matters.
In the election of directors, stockholders are not entitled to cumulate their
votes and are not entitled to vote for a greater number of persons than the
number of nominees named in the Proxy Statement. Directors are elected by a
plurality of votes cast. A majority of the votes cast is required to ratify the
appointment of auditors. Regarding the election of directors, you have three
choices: by checking the appropriate box on
<PAGE>
your proxy card you may (i) vote for all of the director nominees as a group;
(ii) withhold authority to vote for all director nominees as a group; or (iii)
vote for all director nominees as a group, except the nominee you identify in
the appropriate area. See "Election of Directors."
All duly executed proxies received prior to the Meeting will be voted in
accordance with the choices specified thereon. As to any matter for which no
choice has been specified in a duly executed proxy, the shares of stock
represented thereby will be voted (i) FOR the election as directors of the
nominees listed herein, (ii) FOR the ratification of Ernst & Young LLP as the
independent auditor of the Company for the fiscal year ending January 31, 1999
and (iii) in the discretion of the persons named in the proxy in connection with
any other business that may properly come before the Meeting. A stockholder
giving a proxy may revoke it at any time before it is voted at the Meeting by
filing with the Secretary of the Company an instrument revoking it, by
delivering a duly executed proxy bearing a later date or by appearing at the
Meeting and voting in person.
The Annual Report to Stockholders for the fiscal year ended January 31, 1998,
will be mailed to each stockholder entitled to vote at the Meeting with the
mailing of this Proxy Statement. The Annual Report is not a part of the proxy
solicitation material.
The cost of soliciting proxies in the accompanying form will be borne by the
Company. In addition to solicitations by mail, regular employees of the Company
may solicit proxies in person or by telephone. The Company will also reimburse
brokers or other persons holding Common Stock in their names or in the names of
their nominees for their reasonable expenses in forwarding proxy material to
beneficial owners of Common Stock.
Proposal 1. ELECTION OF DIRECTORS
The Board of Directors has proposed eight nominees for election as directors to
serve for the coming year and until their successors are duly elected and
qualified. All of the nominees are currently directors of the Company. Following
is information about each nominee, including biographical data for at least the
last five years. Should one or more of these nominees become unavailable to
accept nomination or election as a director, the individuals named as Proxies on
the enclosed Proxy Card will vote the shares that they represent for the
election of such other persons as the Board may recommend, unless the Board
reduces the number of directors.
William A. Schwartz, Jr., 56, has served as the President, Chief Executive
Officer and Chairman of the Board of the Company and its predecessors since
1967. He is a member of the Company's Executive Committee and Compensation
Committee. Mr. Schwartz has been involved in the optical retail industry for
more than 30 years.
Dennis J. Shaughnessy, 51, has been a Director of the Company since 1994. He is
a member of the Company's Compensation Committee and Stock Option Committee.
Since September 1989, Mr. Shaughnessy has served as the Managing Director,
Treasurer and Director of Grotech Capital Group, Inc., the general partner of
Grotech Partners III, L.P., Grotech III Companion Fund, L.P. and Grotech III
Pennsylvania Fund, L.P.; and Managing Director, Treasurer and Director of
Grotech Capital Group IV, Inc., the general partner of Grotech Partners IV, L.P.
He served as the President and Chief Executive Officer of CRI International,
Inc. from 1985 to September 1989. Mr. Shaughnessy currently serves on the Board
of Tesseco Technologies, Inc., Secure Computing, Inc. and Forensic Technologies,
Inc.
-2-
<PAGE>
J. Roger Sullivan, Jr., 55, has been a Director of the Company since 1994. He is
a member of the Company's Audit Committee. Since March 1994, Mr. Sullivan has
served as a special partner of Grotech Capital Group, Inc., the general partner
of Grotech Partners III, L.P. and Grotech Capital Group IV, Inc., the general
partner of Grotech Partners IV, L.P. From 1993 to March 1994, he was self
employed as a consultant. From 1979 to 1992 he served as a Senior Vice President
of First National Bank of Maryland.
Richard K. McDonald, 51, has been a Director of the Company since 1994. He is a
member of the Company's Executive Committee and Audit Committee. Since 1988, Mr.
McDonald has served as the President and Director of Constitutional Capital
Corporation, a general partner of M&M General Partnership and a general partner
of RKM Investment Company, the general partner of Constitution Partners I, L.P.
From 1990 to 1993, he served as a Senior Vice President of Westinghouse Credit
Corporation.
E. Theodore Stolberg, 49, has been a Director of the Company since 1994. Mr.
Stolberg is a partner and founder of Stolberg Meehan and Scano, a private equity
investment and advisory firm. Prior to founding Stolberg, Meehan and Scano, Mr.
Stolberg was a co-managing partner of Weiss Peck and Greer's Private Equity
Investment Group and was a specialist in merger and acquisition activities at
the First Boston Corporation.
G. Kenneth Macrae, 69, has been a Director of the Company since 1990. He is a
member of the Company's Executive Committee, Compensation Committee and Stock
Option Committee. Mr. Macrae is a consultant to Keystone Venture Capital
Management Co., a venture capital firm in Philadelphia, Pennsylvania. Prior to
serving as a consultant, Mr. Macrae was the President of Keystone Venture
Capital Management Co. and the President and Director of KVM IV MCGP, Inc., the
general partner of Keystone Venture IV Management Company, L.P., the general
partner of Keystone IV, L.P. from 1983 to 1997. From 1983 to 1992, Mr. Macrae
and certain of his affiliates failed to file timely ownership reports on Forms 3
and 4 and to file timely and amend promptly Schedules 13D. As a result, the
Securities and Exchange Commission entered an order on August 17, 1993, pursuant
to which Mr. Macrae and certain of his affiliates agreed to permanently cease
and desist from committing or causing any violations of the requirements of
Sections 13(d) and 16(a) of the Securities Exchange Act of 1934 and certain of
the rules promulgated thereunder.
David M. Tracy, 73, has been a Director of the Company since 1994. Mr. Tracy has
extensive experience in the textile and home furnishing industries, serving as
the former Vice Chairman of J.P. Stevens and Co. and the past president of
Fieldcrest Mills, Inc. Mr. Tracy currently serves on the board of International
Executive Service Corps, Stonehill College, the Educational Foundation for the
Fashion Industries and Decorative Home Accents. For the last three years, Mr.
Tracy has been the Chairman of Calvin Klein Home, Inc. and the Vice Chairman of
Decorative Home Accents. For the two years prior to serving in such capacities,
Mr. Tracy was the Vice Chairman of Home Innovations, Inc. A petition under
Chapter 11 of Title 11 of the United States Code was filed by Home Innovations,
Inc. during fiscal 1997. A plan of reorganization was recently approved.
Peter M. Troup, 54, has been a Director of the Company since 1997. Since 1996,
Mr. Troup has served as a management consultant to the retail industry. From
1994 to 1995 he served as the vice president of international marketing of E&J
Gallo Winery. From 1991 to 1994, Mr. Troup was the general manager of Procter &
Gamble's cosmetics and fragrances operations in the United Kingdom.
-3-
<PAGE>
Board Meetings and Committees of the Board
The Board has a standing Executive Committee, Audit Committee, Compensation
Committee and Stock Option Committee. The principal responsibilities and
membership of each committee are described below.
Executive Committee. The Executive Committee has the authority to exercise
substantially all of the powers of the Board in the management and business
affairs of the Company, except it does not have the authority to declare
dividends, authorize the issuance of shares of Common Stock, modify the
Company's Certificate of Incorporation or its Bylaws, adopt any agreement of
merger or consolidation or recommend to the stockholders the sale, lease or
exchange of all or substantially all of the Company's assets or the dissolution
of the Company. Regularly scheduled meetings of the Board are held periodically
each year and special meetings are held from time to time. As a consequence, the
occasions on which this committee is required to take action are limited. The
members of this committee are Messrs. Macrae, McDonald and Schwartz.
The committee held no meetings during fiscal 1997.
Audit Committee. The Audit Committee is responsible for reviewing the Company's
accounting and financial practices and policies and the scope and results of the
Company's audit. The Audit Committee is also responsible for recommending the
selection of the Company's independent public accountants. This committee is
presently comprised of Messrs. McDonald and Sullivan. The committee met
separately from the Board on one occasion during fiscal 1997.
Compensation Committee. The Compensation Committee reviews the compensation of
executive officers, except members of the committee, and makes recommendations
to the Board regarding executive compensation. This committee is presently
comprised of Messrs. Shaughnessy, Macrae and Schwartz. The committee did not
meet separately from the Board during fiscal 1997.
Stock Option Committee. The Stock Option Committee administers the Company's
existing stock option plan. This committee is presently comprised of Messrs.
Shaughnessy and Macrae. The committee did not meet separately from the Board
during fiscal 1997.
Compensation of the Company's Directors
The current policy of the Company is to pay each director who is not also an
officer or employee of the Company, an annual fee of $15,000 for preparing for
and attending meetings of directors and committees. While directors do not
receive additional compensation for attending meetings, the Company will pay
ordinary and necessary out-of-pocket expenses for directors to attend Board and
committee meetings. Directors who are officers or employees of the Company
receive no fees for service on the Board or committees thereof.
The Company's new policy on director compensation will be to pay each director
who is not an employee of the Company an annual grant of $15,000 of the
Company's Common Stock (the "Annual Grant"). The number of shares to be issued
to each eligible director shall be determined by dividing $15,000 by the last
reported bid price of the Company's Common Stock as reported on Nasdaq on the
date of each annual meeting. The Annual Grant will customarily occur on the date
of the Company's annual meeting. The purpose of using stock as director
compensation is to encourage the ownership of Common Stock by the outside
directors upon whose judgment and ability the Company depends for its long term
growth and development, and to provide an effective and economic manner of
compensating outside directors. This is
-4-
<PAGE>
intended to promote a close identity of interest among the Company, the outside
directors and the stockholders, and to provide a further means to attract and
retain outstanding board members.
The Company has also granted options to acquire Common Stock to directors who
are not employed, affiliated with or 5% stockholders of the Company. In fiscal
1997, Mr. Tracy received options to acquire 11,111 shares of Common Stock and in
fiscal 1995, received options to acquire 16,250 shares of Common Stock. Mr.
Troup received options to acquire 22,222 shares of Common Stock.
The Board met on five occasions during fiscal 1997. Each director attended 100%
of (i) the total number of meetings of the Board held during the period in which
he was a director and (ii) the total number of meetings held by all committees
on which he served.
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<PAGE>
MANAGEMENT OF THE COMPANY
Name Age Position
- ---- --- ---------
William A. Schwartz, Jr......... 56 President, Chief Executive Officer and
Chairman of the Board
George T. Gorman................ 46 President, Retail
Gayle E. Schmidt................ 45 Executive Vice President, Manufacturing
George E. McHenry, Jr........... 45 Senior Vice President, Finance, Chief
Administrative Officer and Secretary
Kathy G. Cullen................. 33 Senior Vice President and Chief
Financial Officer
- -------------------------------------------------------------------------------
William A. Schwartz, Jr., has served as the President, Chief Executive Officer
and Chairman of the Board of the Company and its predecessors since 1967. Mr.
Schwartz has been involved in the optical retail industry for more than 30
years. Mr. Schwartz is married to Ms. Schmidt.
George T. Gorman has served as the President, Retail of the Company since
February 1998. From September 1996 to January 1998, he served as the Executive
Vice President, Retail of the Company. From 1974 until joining the Company, Mr.
Gorman was a senior retail officer with Strawbridge & Clothier, a full line
department store.
Gayle E. Schmidt has served as the Executive Vice President, Manufacturing of
the Company since 1990. From 1970 to 1990, Ms. Schmidt served in various
managerial capacities of the Company. Ms. Schmidt is married to Mr. Schwartz.
George E. McHenry, Jr. has served as the Senior Vice President, Finance, Chief
Administrative Officer and Secretary of the Company since February 1998. From
1987 to January 1998, he served as the Company's Chief Financial Officer,
Treasurer and Secretary. Prior to joining the Company, Mr. McHenry was employed
as an accountant by the firms of Touch Ross & Co. (now Deloitte & Touche) and
Main Hurdman (now KPMG Peat Marwick) from 1974 to 1987.
Kathy G. Cullen has served as the Chief Financial Officer of the Company since
February 1998. From 1992 to January 1998, she served as Vice President, Finance
and Chief Accounting Officer of the Company. Prior to joining the Company, Ms.
Cullen was employed as an accountant by Coopers & Lybrand.
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<PAGE>
Ownership of Common Stock by
Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of May 1, 1998, by (i) each director
and director nominee who beneficially owns Common Stock and certain of the
Company's executive officers, (ii) all of the Company's directors and executive
officers as a group and (iii) each person known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock as of May 1,
1998.
The number of shares of the Common Stock beneficially owned by each individual
set forth below is determined under the rules of the Securities and Exchange
Commission and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership includes
any shares as to which an individual has sole or shared voting power or
investment power and any shares that an individual presently, or within 60 days,
has the right to acquire through the exercise of any stock option or other
right. However, such shares are not deemed to be outstanding for the purpose of
computing the percentage of outstanding shares beneficially owned by any other
person. Unless otherwise indicated, each individual has sole voting and
investment power (or shares such powers with their spouse) with respect to the
shares of the Company's Common Stock set forth in the table below:
<TABLE>
<CAPTION>
Name of Beneficial Owner
- ------------------------
Directors and Nominees for Directors Number of Shares Percentage of
(including those who are also Executive Beneficially Owned Outstanding Shares
Officers): ------------------ ------------------
<S> <C> <C>
William A. Schwartz, Jr..................... 288,925(1) 3.6%
Dennis J. Shaughnessy....................... 1,949,335(2) 25.1%
J. Roger Sullivan, Jr....................... 1,949,335(2) 25.1%
Richard K. McDonald......................... 737,254(3) 9.5%
E. Theodore Stolberg........................ 1,522,931(4) 19.6%
G. Kenneth Macrae........................... 511,668(5) 6.6%
David M. Tracy.............................. 19,954(6) *
Peter M. Troup.............................. 7,407(7) *
Executive Officers:
George T. Gorman............................ 5,222(8) *
Gayle E. Schmidt............................ 77,090(9) *
George E. McHenry, Jr....................... 76,050(10) *
Kathy G. Cullen............................. 4,355(11) *
All Directors and Executive Officers as a
Group (12) persons.......................... 5,201,231(12) 63.4%
Other:
Grotech Partners IV, L.P. 873,371(13) 11.3%
Stolberg Partners, L.P. 1,522,931(14) 19.6%
Constitution Partners I, L.P. 487,228(15) 6.3%
Keystone Ventures IV, L.P. 487,293(16) 6.3%
</TABLE>
- ------------------------------
* Indicates less than 1%.
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<PAGE>
(1) Includes 228,735 shares issuable upon exercise of currently exercisable
options. Mr. Schwartz is married to Ms. Gayle E. Schmidt and,
accordingly, may be deemed to beneficially own the shares held by Ms.
Schmidt.
(2) The shares of Common Stock listed in Mr. Shaughnessy's and Mr.
Sullivan's name are owned by Grotech Partners IV, L.P., Grotech
Partners III, L.P., Grotech III Companion Fund, L.P. and Grotech III
Pennsylvania Fund, L.P., each a limited partnership in which Mr.
Shaughnessy and Mr. Sullivan serve as directors or officers of the
respective general partners. Messrs. Shaughnessy and Sullivan disclaim
beneficial ownership of these shares for all purposes.
(3) A portion of the shares of Common Stock held in Mr. McDonald's name are
owned by M&M General Partnership and Constitution Partners I, L.P.,
each a limited partnership in which Mr. McDonald serves as a director
or officer of the respective general partners. Mr. McDonald disclaims
beneficial ownership of these shares, except to the extent of his
pecuniary interest therein.
(4) The shares of Common Stock listed in Mr. Stolberg's name are owned by
Stolberg Partners, L.P., a limited partnership in which Mr. Stolberg
serves as a director or officer of its general partner. Mr. Stolberg
disclaims beneficial ownership of these shares.
(5) The shares of Common Stock listed in Mr. Macrae's name are owned by
Keystone Venture IV, L.P. and Keystone Venture II, L.P., limited
partnerships in which Mr. Macrae serves as a director or officer of its
general partner. Includes 22,945 shares of Common Stock issuable upon
exercise of currently exercisable options. Mr. Macrae disclaims
beneficial ownership of these shares.
(6) Includes 19,954 shares are issuable upon the exercise of options
exercisable at or within 60 days.
(7) Includes 7,407 shares are issuable upon the exercise of options
exercisable at or within 60 days.
(8) All 5,222 shares are issuable upon the exercise of options exercisable
at or within 60 days.
(9) Includes 76,050 shares are issuable upon the exercise of options
exercisable at or within 60 days. Ms. Schmidt is married to Mr. William
A. Schwartz, Jr. and, accordingly, may be deemed to beneficially own
the shares held by Mr. Schwartz.
(10) All 76,050 shares are issuable upon the exercise of options exercisable
at or within 60 days.
(11) All 4,355 shares are issuable upon the exercise of options exercisable
at or within 60 days.
(12) Includes 440,718 shares issuable upon the exercise of options
exercisable at or within 60 days.
(13) The business address of Grotech Partners IV, L.P. is 9690 Deereco Road,
Timonium, MD 21093.
(14) The business address of Stolberg Partners, L.P. is 767 Third Avenue,
New York, NY 10017.
(15) The business address of Constitution Partners I, L.P. is 600 Grant
Street, 57th Floor, USX Tower, Pittsburgh, PA 15219.
(16) The business address of Keystone Ventures IV, L.P. is 1601 Market
Street, 25th Floor, Philadelphia, PA 19103.
-8-
<PAGE>
Executive Compensation
The following table summarizes the compensation earned by the Company's Chief
Executive Officer and its four other most highly compensated executive officers
(whose compensation exceeded $100,000 in fiscal 1997), collectively, the "Named
Officers," for services rendered in all capacities to the Company during the
fiscal years ended January 31, 1998, 1997, and the ten months ended January 31,
1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------- ------------
Securities
Underlying
Options/ All Other
Salary Bonus SARs Compensation
Name and Principal Positions Year ($) ($) (#) ($)(C)
---------------------------- ---- ------ ----- ------------ -------------
<S> <C> <C> <C> <C>
William A. Schwartz, Jr.......... 1997 222,000 -- -- --
President and 1996 231,700 60,000 228,735 --
Chief Executive Officer 1995 212,000 8,900 -- --
Gayle E. Schmidt................. 1997 161,200 -- -- --
Executive Vice President, 1996 177,300 40,000 76,050 32,300
Manufacturing 1995 147,000 -- -- --
Reid V. Eikner(A)................ 1997 161,200 -- -- --
Executive Vice President 1996 162,100 40,000 76,050 --
1995 33,900 -- -- --
George E. McHenry, Jr............ 1997 152,200 -- -- --
Senior Vice President, Finance, 1996 153,700 25,000 76,050 14,300
Chief Administrative Officer 1995 151,000 6,500 -- --
and Secretary
George T. Gorman(B).............. 1997 161,300 -- -- --
President, Retail 1996 55,700 15,000 15,665 --
1995 -- -- -- --
</TABLE>
- --------------------
(A) The 1995 annual compensation for Mr. Eikner reflects less than a full year.
(B) The 1996 annual compensation for Mr. Gorman reflects less than a full year.
Option Grants in Fiscal 1997 to the Company's Executive Officers
The Company did not grant any options to acquire the Company's Common Stock to
the Named Officer's during the fiscal year ended January 31, 1998.
-9-
<PAGE>
Aggregate Option Exercises in Fiscal 1997 by the Company's Executive Officers
No options were exercised by the Named Officers during the fiscal year ended
January 31, 1997. The following table provides information concerning
unexercised options and the value of options held by the Named Officers at
fiscal year-end measured in terms of the last reported bid price for the shares
of the Company's Common Stock on January 31, 1998 ($9.625 as reported on
Nasdaq).
Aggregated Option Exercises in Fiscal 1997 And Year-end
Option Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of in-the-Money
Securities Underlying Options at
Unexercised Options January 31, 1998
at January 31, 1998(#) (A)($)
----------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William A. Schwartz, Jr. 228,735 -- 442,602 --
Gayle E. Schmidt 76,050 -- 147,157 --
Reid V. Eikner 76,050 -- 147,157 --
George E. McHenry, Jr. 76,050 -- 147,157 --
George T. Gorman 5,221 10,444 10,103 20,209
</TABLE>
- -------------------------
(A) Market value of shares covered by in-the-money options on January 31,
1998, less option exercise price. Options are in-the-money if the
market value of the shares covered thereby is greater than the option
exercise price.
Employment Agreements with Named Officers
The Company has employment agreements with the following executive officers:
William A. Schwartz, Jr., President and Chief Executive Officer; George T.
Gorman, President, Retail; Gayle E. Schmidt, Executive Vice President
Manufacturing; and George E. McHenry, Jr., Senior Vice President, Finance, Chief
Administrative Officer and Secretary. The employment contracts provide for a
guaranteed base salary and the right to be considered for such bonus programs as
are adopted by the Board. All of the agreements were entered into in 1994,
except that Mr. Gorman entered into his contract in 1996. The employment
agreements of all of the individuals terminate in November 1998, except that Mr.
Gorman's terminates in September, 1999. All of the contracts automatically renew
annually if not terminated by either party. Under the terms of the agreements,
the executive is entitled to salary continuation for the balance of the term of
the employment agreement in the event that the contract is terminated by the
Company other than for good cause. The severance due to such executive depends
on the monthly salary at that time and the term of such severance period. The
monthly salary for such executives is as follows: Mr. Schwartz -- $18,499; Mr.
Gorman -- $13,438; Ms. Schmidt -- $15,099; and Mr. McHenry -- $12,680. Mr.
Gorman has a non-compete and non-solicitation agreement which limits his rights
to seek competitive employment or hire away employees of the Company following
the termination of his employment with the Company.
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<PAGE>
Report of Compensation Committee on Annual Executive Compensation
The Compensation Committee met informally several times during the year and met
during three of the regular meetings of the Board. The policy of the
Compensation Committee is to provide executive officers of the Company and its
subsidiary, Styl-Rite Optical Mfg. Co., Inc. ("Styl-Rite"), with fair
compensation based on their responsibilities, and on the performance of the
Company as a whole. Regarding the executive officers of Styl-Rite, however,
their compensation is based on the performance of Styl-Rite as a whole.
The Compensation Committee believes generally that performance goals enhance
teamwork and help focus management's attention on the performance of the
companies rather than the performance of particular areas within the companies.
Additionally, particular areas may in the future need separate performance
goals, but the Compensation Committee does not believe that is currently
required.
The Compensation Committee sets target earnings levels for the Company and
Styl-Rite, and provides a bonus target to each executive officer. The bonus
target is a percentage of that executive's base salary. The Compensation
Committee then sets target levels pursuant to which an executive who is employed
at the time of the bonus award can receive all or a portion of the designated
bonus target based on the Company's or Styl-Rite's earnings performance, as the
case may be. If the earnings target is not met, an executive may receive some
portion of his bonus based on the percentage of the earnings target achieved. In
addition, if the earnings target is exceeded, the executives may receive, based
on a formula, up to twice the executive's bonus target. The earnings target is
set by the Compensation Committee prior to the commencement of each fiscal year
and is believed by the Compensation Committee to be aggressive, but achievable.
The Compensation Committee believes that its earnings and bonus targets are
confidential and disclosure of those targets would adversely effect the Company.
The report of the Compensation Committee will not be deemed to be incorporated
by reference into any filing by the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates that report by reference.
Transactions with Management and Related Parties
On December 2, 1994, all of Westinghouse Credit Corporation's ("Westinghouse")
interest in the Company was acquired by Royal Associates Acquisition
Partnership, an entity created for the sole purpose of acquiring Westinghouse's
interest in the Company ("RAA"). Following RAA's acquisition of Westinghouse's
interest, which included over 80% of the Company's Common Stock and $19,350,000
of preferred stock and debt, RAA guaranteed loans to the Company and loaned
additional funds to the Company. RAA was dissolved in fiscal 1995, and its
ownership in the Company was transferred to its former partners. Messrs. Dennis
J. Shaughnessy, J. Roger Sullivan, Jr., E. Theodore Stolberg, Richard K.
McDonald and G. Kenneth Macrae, all of whom are directors of the Company and are
officers, directors or shareholders in one or more of the entities which were
partners in RAA. The former partners of RAA agreed to guarantee a $3,600,000
overadvance on the Company's revolving line of credit until November 13, 1995.
The guarantee was extinguished in January 1996, at which time the Company issued
$7,200,000 of 12% subordinated debentures (the "Subordinated Debt") to a group
of investors, which primarily consisted of the former RAA partners. The
Subordinated Debt, the balance of which was approximately $8,837,000 as of July
31, 1997, was held by the following affiliates of directors in the amounts
indicated: Grotech Partners IV, L.P. ($3,588,000); Keystone Ventures IV, L.P.
($753,000); Stolberg Partners, L.P. ($2,803,000); Richard K. McDonald
($460,000); and Constitution Partners I, L.P. ($897,000), and by the following
non-affiliates; Penn Janney Fund, Inc. ($224,000) and Needham Capital Partners,
L.P. ($112,000). See "Ownership of Common Stock
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<PAGE>
by Certain Beneficial Owners and Management." The Company paid this debt in full
with the proceeds of its initial public offering in December 1997.
Since 1990, the Company has leased a retail store and office space located in a
7,000 square foot building in Philadelphia, Pennsylvania, from a limited
partnership in which William A. Schwartz, Jr., a director, the President and
Chief Executive Officer of the Company and the general partner of such
partnership, Gayle E. Schmidt, the Executive Vice President, Manufacturing of
the Company and George E. McHenry, Jr., the Senior Vice President, Finance,
Chief Administrative Officer and Secretary of the Company are limited partners,
each of whom owns 10% of such limited partnership. The Company made payments to
the partnership of $136,600 in each of fiscal 1995, 1996 and 1997. Management
believes that the lease terms are comparable to those that could have been
obtained pursuant to an arm's length transaction with unaffiliated parties.
The Company has a consulting arrangement with David M. Tracy, a director of the
Company, pursuant to which Mr. Tracy receives compensation in the amount of
$1,500 per day for consulting services rendered at the Company's request. During
fiscal 1997, Mr. Tracy received $4,500 in compensation from the Company for
consulting services rendered.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires the Company's directors, executive
officers and 10% owners of Common Stock of the Company to file reports of
beneficial ownership of the Company's Common Stock and changes in such
beneficial ownership with the Commission. Directors, executive officers and 10%
owners are also required by rules promulgated by the Commission to furnish the
Company with copies of all forms they file pursuant to Section 16(a). Based
solely upon a review of the copies of the forms filed pursuant to Section 16(a)
furnished to the Company, or written representation that no year-end Form 5
filings were required for transactions occurring during fiscal 1997, the Company
believes that its directors, officers and 10% owners of Common Stock of the
Company complied with the Section 16(a) filing requirements applicable to them
during fiscal 1997.
-12-
<PAGE>
Stock Performance Graph
The following performance graph compares the performance of the
Company's Common Stock, the Standard & Poor's 500 Index and an index of peer
companies selected by the Company (the "Company's Peer Group Index") since
December 2, 1997 (which is when the Company's Common Stock first traded publicly
on the National Association of Securities Dealers, Inc. Automated Quotation
System). The graph assumes that the value of the investment in the shares of the
Company's Common Stock and in each index was $100 on December 2, 1997, and that
all dividends were reinvested.
The Company's Peer Group Index shown on the performance graph (which
is weighted on the basis of market capitalization) consists of the Company and
the following companies which are engaged primarily in the retail optical
business: Cole National Corporation, Luxottica, National Vision Associates, New
West Eyeworks, Inc. and Sterling Vision.
[GRAPH]
Total Return Analysis
12/2/97 12/31/97 1/31/98
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U.S. Vision, Inc. o $100.00 $ 98.61 $106.94
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Peer Group * $100.00 $102.77 $112.42
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Nasdaq Composite (US) # $100.00 $ 97.81 $100.89
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Source: Carl Thompson Associates www.ctaonline.com (303) 494-5472. Data from
Bloomberg Financial Markets
The stock price performance depicted in the graph above is not
necessarily indicative of future price performance. The graph will not be deemed
to be incorporated by reference in any filing by the Company under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates same by reference.
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<PAGE>
Proposal 2. Ratification of Selection of Independent Auditor
The Board of Directors has approved and recommends the appointment of Ernst
& Young LLP, certified public accountants to serve as independent auditor for
the Company for the fiscal year ending January 31, 1999. Approval of the
appointment of the accountants is being sought in order to give stockholders the
opportunity to express their opinion on the matter. Approval will require the
affirmative vote of the holders of a majority of the shares of Common Stock
which are represented and entitled to vote at the Meeting. Should approval not
be obtained, the Board of Directors would expect to reconsider the appointment.
Members of Ernst & Young LLP are expected to attend the Meeting and, if
present, be available to answer appropriate questions which may be asked by
stockholders. Such members will also have an opportunity to make a statement at
the Meeting if they desire to do so.
Required Affirmative Vote
The affirmative vote of a majority of the outstanding Common Stock is
required to ratify Ernst & Young LLP as independent auditor for the Company.
The Board of Directors urges you to vote FOR the ratification of Ernst &
Young LLP as independent auditor of the Company.
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<PAGE>
Other Matters
As of the date of this proxy statement, the Company knows of no other
business that will be presented for consideration at the annual meeting.
However, the enclosed proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the meeting: (i)
matters that the Company's Board of Directors does not know, a reasonable time
before proxy solicitation, are to be presented for approval at the meeting; (ii)
approval of the minutes of a prior meeting of stockholders, if such approval
does not constitute ratification of the action at the meeting; (iii) the
election of any person to any office for which a bona fide nominee is unable to
serve or for good cause will not serve; (iv) any proposal omitted from this
proxy statement and the form of proxy pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended; and (v) matters incidental to the
conduct of the meeting. If any such matters come before the meeting, then the
proxy agents named in the accompanying proxy card will vote in accordance with
their judgment.
Stockholder proposals intended to be presented at the 1999 Annual Meeting
of Stockholders must be submitted to the Company prior to January 13, 1999, to
receive consideration for inclusion in the Company's 1999 proxy materials.
Each person from whom a proxy is solicited can obtain a copy of the
Company's annual report on Form 10-K for the year ended January 31, 1998, as
filed with the Securities and Exchange Commission by sending a written request
to the Company. Requests should be directed to Kathy G. Cullen, Chief Financial
Officer, 1 Harmon Drive, Glendora, New Jersey 08029, and a copy will be sent to
you at no charge, except for exhibits to the report.
By Order of the Board of Directors,
/s/ George E. McHenry, Jr.
--------------------------------------
George E. McHenry, Jr.
Senior Vice President, Finance, Chief
Administrative Officer and Secretary
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<PAGE>
APPENDIX A
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
PROXY
U.S. VISION, INC.
ANNUAL MEETING OF STOCKHOLDERS
June 16, 1998
The undersigned hereby constitutes and appoints William A. Schwartz, Jr. and
George E. McHenry, Jr., and each of them, as attorneys and proxies of the
undersigned, with full power of substitution, for and in the name, place and
stead of the undersigned, to appear at the 1998 Annual Meeting of Stockholders
of U.S. Vision, Inc. to be held on the 16th day of June 1998 (pursuant to the
Notice of Annual Meeting dated May 1998, and accompanying proxy statement) and
at any postponement or adjournment thereof, and to vote all of the shares of
U.S. Vision, Inc. that the undersigned is entitled to vote with all the powers
and authority the undersigned would possess if personally present in accordance
with the following instructions.
<PAGE>
I. Election of directors FOR all nominees listed to the right (except as
marked to the contrary)
For All
For Withheld Except
/ / / / / /
INSTRUCTION: To withhold your vote for any individual nominee, mark the "For
All Except" box and strike a line through the nominee's name in the list
below.
William A. Schwartz, Jr., Dennis J. Shaughnessy, J. Roger Sullivan, Jr.,
Richard K. McDonald, E. Theodore Stolberg, G. Kenneth Macrae, David M. Tracy
and Peter M. Troup.
II. Ratification of Ernst and Young LLP as independent auditor of the Company.
For Against Abstain
/ / / / / /
III. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
For Against Abstain
/ / / / / /
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
The Board of Directors recommends a vote "FOR" the directors
and the proposal listed above.
SOLICITED ON BEHALF OF THE COMPANY
AND APPROVED BY THE BOARD OF DIRECTORS
Please sign exactly as your name(s) appear(s) on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign. If a corporation,
please sign in full corporate name by President or other authorized officer. If
a partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy in the box below.
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Stockholder sign above Co-holder (if any) sign above
Date
----------------------------
o Detach above card, sign date and mail in postage paid envelope provided. o
Should the undersigned be present and elect to vote at the Meeting or at any
adjournments or postponements thereof, and after notification to the Secretary
of the Company at the Meeting of the stockholder's decision to terminate this
Proxy, then the power of such attorneys or proxies shall be deemed terminated
and of no further force and effect.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
