<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (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 Rule 14a-11(c) or Rule 14a-12
U.S. VISION, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how is was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[U.S. VISION LETTERHEAD]
May 7, 1999
Dear Stockholders:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders of
U.S. Vision, Inc. which will be held on June 8, 1999, at 8:00 a.m., Eastern
Daylight Time, at the Seaview Marriott Resort, 401 South New York Road, Galloway
Township, 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> 3
[U.S. VISION LETTERHEAD]
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JUNE 8, 1999
-------------------------
To Our Stockholders:
The 1999 annual meeting of stockholders of U.S. Vision, Inc. will be held at the
Seaview Marriott Resort, 401 South New York Road, Galloway Township, New Jersey,
on June 8, 1999, at 8:00 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, G. Kenneth Macrae, and Peter M. Troup as
directors of the company to serve until the annual meeting of
stockholders in 2000 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, 2000; 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 30, 1999, are
entitled to notice of and to vote at the annual meeting or any adjournment
thereof. The stock transfer books will not be closed.
The company desires your presence at the annual 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 card 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 annual meeting. If you attend the annual 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 7, 1999
It is important that your stock be represented at the meeting regardless of the
number of shares you hold. Please complete, sign, date and mail the enclosed
proxy card in the accompanying envelope even if you intend to be present at the
meeting. Returning the proxy card will not limit your right to vote in person or
to attend the annual meeting, but will insure your representation if you cannot
attend. If you have shares in more than one name, or if your stock is registered
in more than one way, you may receive more than one copy of the proxy material.
If so, please sign and return each copy of the proxy cards you receive so that
all of your shares may be voted. The proxy is revocable at any time prior to its
use.
<PAGE> 4
U.S. VISION, INC.
1 HARMON DRIVE
GLENDORA, NEW JERSEY 08029
--------------
PROXY STATEMENT
FOR
1999 ANNUAL MEETING
TO BE HELD ON
JUNE 8, 1999
--------------
SOLICITATION
This Proxy Statement and accompanying form of proxy are being mailed to
stockholders commencing on or about May 7, 1999, in connection with the
solicitation by the board of directors of U.S. Vision, Inc. of proxies from the
holders of the company's common stock.
Such proxies are to be used at the annual meeting of stockholders of
the company to be held at the Seaview Marriott Resort, 401 South New York Road,
Galloway Township, New Jersey, on June 8, 1999 at 8:00 a.m. Eastern Daylight
Time, as set forth in the accompanying Notice of Annual Meeting of Stockholders
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 Friday, April
30, 1999 (the "Record Date") will be entitled to vote on matters presented at
the annual meeting or any adjournments thereof. As of the Record Date, the
company's outstanding voting securities consisted of 7,793,807 shares of stock.
Under the Certificate of Incorporation of the company, each share of stock is
entitled to one vote on each of the proposals specified in the notice of the
annual meeting of stockholders.
The holders of a majority of the stock, whether or not present in
person or represented by proxy, shall constitute a quorum for the transaction of
business at the annual meeting. If a quorum is not present or represented by
proxy at the annual meeting, the stockholders entitled to vote at the meeting,
present in person or represented by proxy, shall have the power to adjourn the
meeting from time to time without notice other than announcement at the meeting,
until a quorum shall be present or represented by proxy. At such adjourned
meeting at which a quorum shall be present or represented by proxy, any business
may be transacted which might have been transacted at the annual meeting as
originally called. If the adjournment is for more than thirty (30) days, or, if
after the adjournment a new record date is set, a notice of adjourned meeting
shall be given to each stockholder of record entitled to vote at the meeting.
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.
<PAGE> 5
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. Votes are counted and the
count is certified by an inspector of election. 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 your proxy card you may (a) vote for
the director nominees as a group; (b) withhold authority to vote for the
director nominees as a group; or (c) vote for the director nominees as a group,
except the nominees you identify in the appropriate area. See "Proposal
1.Election of Directors."
All duly executed proxies received prior to the annual 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 (a) FOR the election as directors of the
nominees listed herein, (b) FOR the ratification of Ernst & Young LLP as the
independent auditor of the company for the fiscal year ending January 31, 2000
and (c) in the discretion of the persons named in the proxy in connection with
any other business that may properly come before the annual meeting. A
stockholder giving a proxy may revoke it at any time before it is voted at the
annual 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 annual meeting and voting in person.
The Annual Report to Stockholders for the fiscal year ended January 31,
1999, is being mailed to each stockholder entitled to vote at the annual 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 stock in their names or in the names
of their nominees for their reasonable expenses in forwarding proxy material to
beneficial owners of stock.
-2-
<PAGE> 6
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 stock as of May 1, 1999, by (a) each
director and director nominee who beneficially owns stock and certain of the
company's executive officers, (b) all of the company's directors and executive
officers as a group and (c) each person known by the company to be the
beneficial owner of more than 5% of the company's stock as of May 1, 1999.
The number of shares of 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 stock set forth in the table below:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER
- ------------------------
DIRECTORS AND NOMINEES FOR DIRECTORS
(INCLUDING THOSE WHO ARE ALSO EXECUTIVE NUMBER OF SHARES PERCENTAGE OF
OFFICERS): BENEFICIALLY OWNED OUTSTANDING SHARES
------------------ ------------------
<S> <C> <C>
William A. Schwartz, Jr. ............ 288,925(1) 3.6%
Dennis J. Shaughnessy ............... 1,953,791(2) 25.2%
J. Roger Sullivan, Jr. .............. 1,953,791(2) 25.2%
Richard K. McDonald ................. 739,482(3) 9.5%
G. Kenneth Macrae ................... 2,353(4) *
David M. Tracy ...................... 25,885(5) *
Peter M. Troup ...................... 18,043(6) *
EXECUTIVE OFFICERS:
George T. Gorman .................... 42,943(7) *
Gayle E. Schmidt .................... 77,090(8) *
George E. McHenry, Jr. .............. 76,050(9) *
Kathy G. Cullen ..................... 26,855(10) *
All Directors and Executive Officers
as a Group (11) persons ............. 3,248,188(11) 39.4%
OTHER:
Grotech Partners IV, L.P. ........... 873,371(12) 11.3%
Stolberg Partners, L.P. ............. 1,522,931(13) 19.6%
Constitution Partners I, L.P. ....... 487,228(14) 6.3%
Keystone Ventures IV, L.P. .......... 487,293(15) 6.3%
Goldman, Sachs & Co. ................ 939,313(16) 12.1%
</TABLE>
- ------------------------------
* Indicates less than 1%.
-3-
<PAGE> 7
(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 stock listed in Mr. Shaughnessy's and Mr. Sullivan's
name, except for 4,456 shares, 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. Grotech Capital Group, Inc., the
general of Grotech Partners III, L.P., Grotech III Companion Fund, L.P.
and Grotech III Pennsylvania Fund, L.P., is the holder of 840 of these
shares. Grotech Capital Group IV, LLC, the general partner of Grotech
Partners IV, L.P., is the holder of 3,616 of these shares. Messrs.
Shaughnessy and Sullivan disclaim beneficial ownership of these shares
for all purposes.
(3) A portion of the shares of 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) Includes 118 shares of stock issuable upon exercise of currently
exercisable options.
(5) Includes 23,657 shares issuable upon the exercise of options
exercisable at or within 60 days. Mr. Tracy's term as a director
expires at the 1999 annual meeting of stockholders and he will not
stand for reelection at the annual meeting.
(6) Includes 14,815 shares are issuable upon the exercise of options
exercisable at or within 60 days.
(7) All 42,943 shares are issuable upon the exercise of options exercisable
at or within 60 days.
(8) 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.
(9) All 76,050 shares are issuable upon the exercise of options exercisable
at or within 60 days.
(10) All 26,855 shares are issuable upon the exercise of options exercisable
at or within 60 days.
(11) Includes 489,223 shares issuable upon the exercise of options
exercisable at or within 60 days.
(12) The business address of Grotech Partners IV, L.P. is 9690 Deereco Road,
Timonium, MD 21093.
(13) The business address of Stolberg Partners, L.P. is 767 Third Avenue,
New York, NY 10017.
(14) The business address of Constitution Partners I, L.P. is 600 Grant
Street, 57th Floor, USX Tower, Pittsburgh, PA 15219.
(15) The business address of Keystone Ventures IV, L.P. is 1601 Market
Street, 25th Floor, Philadelphia, PA 19103.
(16) The business address of Goldman Sachs & Co. is 85 Broad Street, New
York, New York 10004.
-4-
<PAGE> 8
MANAGEMENT OF THE COMPANY
The board of directors elects executive officers annually at its first
meeting following the annual meeting of stockholders. The following table sets
forth, as of May 1, 1999, the names of the executive officers of the company and
their respective positions with the company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
William A. Schwartz, Jr................ 57 President, Chief Executive Officer and Chairman of the Board
George T. Gorman....................... 47 President-Retail
Gayle E. Schmidt....................... 46 Executive Vice President-Manufacturing
George E. McHenry, Jr.................. 46 Senior Vice President-Finance, Chief Administrative
Officer and Secretary
Kathy G. Cullen........................ 34 Senior Vice President and Chief Financial Officer
</TABLE>
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. He is a member of the Executive Committee. Mr. Schwartz also serves on
the board of directors of Motherswork, Inc. and Commerce Bancorp, Inc. 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 Touche 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.
-5-
<PAGE> 9
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The board of directors 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 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 of directors 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 1998.
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 1998.
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 McDonald. The committee did not
meet separately from the board during fiscal 1998.
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 met separately on one occasion from the
board during fiscal 1998.
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 has also granted options to acquire stock to directors who
are not employed, affiliated with or 5% stockholders of the company. In fiscal
1997, Mr. Troup received options to acquire 22,222 shares of stock. Mr. Tracy
received options to acquire 11,111 shares of stock in fiscal 1997 and 16,250
shares of stock in fiscal 1995. Mr. Tracy's term as a director expires at the
1999 annual meeting of stockholders and he will not stand for reelection.
The board met on five occasions during fiscal 1998. Each director
attended 100% of (a) the total number of meetings of the board held during the
period in which he was a director and (b) the total number of meetings held by
all committees on which he served.
-6-
<PAGE> 10
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.
-7-
<PAGE> 11
EXECUTIVE COMPENSATION
The following table summarizes the compensation earned by the company's
Chief Executive Officer, its four other most highly compensated executive
officers (whose compensation exceeded $100,000 in fiscal 1998) and one
additional individual for whom disclosures would have been provided had the
individual been serving as an executive officer as of January 31, 1999,
collectively, the "Named Officers," for services rendered in all capacities to
the company during the fiscal years ended January 31, 1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Underlying
Options/ All Other
Salary Bonus SARs Compensation
Name and Principal Positions Year ($) ($) (#) ($)(C)
---------------------------- ---- --- --- --- ------
<S> <C> <C> <C> <C> <C>
William A. Schwartz, Jr. ........ 1998 222,000 50,000 -- --
President and 1997 222,000 -- -- --
Chief Executive Officer 1996 231,700 60,000 228,735 --
George T. Gorman(B) ............. 1998 161,300 25,000 65,000 --
President-Retail 1997 161,300 -- -- --
1996 55,700 15,000 15,665 --
Gayle E. Schmidt ................ 1998 161,200 25,000 -- --
Executive Vice President- 1997 161,200 -- -- --
Manufacturing 1996 177,300 40,000 76,050 32,300
George E. McHenry, Jr. .......... 1998 152,200 25,000 -- --
Senior Vice President-Finance, 1997 152,200 -- -- --
Chief Administrative Officer 1996 153,700 25,000 76,050 14,300
and Secretary
Kathy G. Cullen ................. 1998 116,200 20,000 45,000 --
Senior Vice President 1997 87,600 -- -- --
and Chief Financial Officer 1996 80,200 18,000 4,355 --
Reid V. Eikner(A) ............... 1998 161,200 25,000 -- --
Executive Vice President 1997 161,200 -- -- --
1996 162,100 40,000 76,050 --
</TABLE>
- --------------------
(A) Mr. Eikner resigned as an Executive Vice President of the company in
January 1999.
(B) The 1996 annual compensation for Mr. Gorman reflects less than a full
year.
(C) Represents amounts paid by the company to the account of the Named
Officers for unused vacation time.
-8-
<PAGE> 12
OPTION GRANTS IN FISCAL 1998 TO THE COMPANY'S EXECUTIVE OFFICERS
The following table provides information regarding the stock options
granted by the company to Named Officers in fiscal 1998.
<TABLE>
<CAPTION>
1998 OPTION GRANTS
Individual Grants
--------------------------------------------------------------------------------------
Number of Percent of Potential Realizable Value
Securities Total Exercise at Assumed Annual Rates of
underlying Options of Base Stock Price Appreciation
Option/SARs Granted to Price Expiration for Option Term (A)
Name Granted (#) Employees ($/Sh) Date 5% ($) 10% ($)
---- ----------- --------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
George T. Gorman 65,000 21% $12.00 5/08/08 450,833 1,179,897
Kathy G. Cullen 45,000 14% $12.00 5/08/08 312,115 816,852
</TABLE>
- --------------------------
(A) The potential realizable values set forth under these columns result
from calculations assuming 5% and 10% growth rates as set by the SEC
and are not intended to forecast future price appreciation of the
company's stock. The amounts reflect potential future value based upon
growth of these prescribed rates. The company did not use an alternate
formula for a grant date valuation, an approach which would state gains
at present, and therefore lower, value. The company is not aware of any
formula which will determine with reasonable accuracy a present value
based on future unknown or volatile factors. Actual gains, if any, on
stock option exercises are dependent on the future performance of the
company's stock. There can be no assurance that the amounts reflected
in this table will be achieved.
(B) One-half (1/2) of these options are currently exercisable and an
additional one-fourth (1/4) becomes exercisable on each of May 8, 2000
and 2001.
AGGREGATE OPTION EXERCISES IN FISCAL 1998 BY THE COMPANY'S EXECUTIVE OFFICERS
No options were exercised by the Named Officers during the fiscal year
ended January 31, 1999. 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 stock on January 29, 1999 ($7.13 as reported on Nasdaq).
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND YEAR-END
OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of in-the-Money
Securities Underlying Options at
Unexercised Options January 31, 1999
at January 31, 1999(#) (A)($)
--------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William A. Schwartz, Jr. 228,735 -- -- --
George T. Gorman 42,944 37,721 -- --
Gayle E. Schmidt 76,050 -- -- --
George E. McHenry, Jr. 76,050 -- -- --
Kathy G. Cullen 26,855 32,500 -- --
Reid V. Eikner(B) 76,050 -- -- --
</TABLE>
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(A) Market value of shares covered by in-the-money options on January 31,
1999, 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.
(B) Mr. Eikner resigned as an Executive Vice President in January 1999. Mr.
Eikner's stock options expired unexercised in April 1999.
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<PAGE> 13
EMPLOYMENT AGREEMENTS WITH NAMED OFFICERS
The company entered into an employment agreement in 1998 with William
A. Schwartz, Jr., President and Chief Executive Officer. The employment
agreement provides for a guaranteed base salary and the right to be considered
for such bonus programs as are adopted by the board. The initial term of Mr.
Schwartz's employment agreement is for three years and is automatically renewed
annually if not terminated by either party. Under the terms of Mr. Schwartz's
agreement, he is entitled to salary continuation for the balance of the term of
his employment agreement, but not less than one year, if his employment
terminated by the company for other than cause or if he resigns for good reason
under the terms of the agreement. The severance payable to Mr. Schwartz will
depend on his monthly salary at that time. His current monthly salary is
$18,519.
The company entered into salary continuation agreements in 1998 with
the remaining Named Officers, George T. Gorman, President-Retail, Gayle E.
Schmidt, Executive Vice President-Manufacturing, George E. McHenry, Jr., Senior
Vice President-Finance, Chief Administrative Officer and Secretary, and Kathy G.
Cullen, Senior Vice President and Chief Financial Officer. Under the terms of
each of these agreements, the Named Officer is entitled to salary continuation
for one year if the Named Officer's employment is terminated by the company
other than for cause or the Named Officer resigns with good reason under the
terms of the agreement. The severance due to each Named Officer depends on such
person's monthly salary at that time. The current monthly salary for each Named
Officer is as follows: Mr. Gorman -- $13,442; Ms. Schmidt -- $13,433; Mr.
McHenry -- $12,683 and Ms. Cullen -- $9,683. Each Named Officer has also agreed
not to compete with the company for a period of six months following the
termination of such person's employment with the company.
TERMINATION OF EMPLOYMENT ARRANGEMENTS
Under the terms of Mr. Eikner's employment agreement, the company
agreed to pay Mr. Eikner his current monthly salary of $13,433 through March
2000. Mr. Eikner's stock options expired unexercised in April 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since 1990, the company has leased a retail store, office and
administrative 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 1996,
1997 and 1998. 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 had a consulting arrangement with David M. Tracy, a
director of the company, during fiscal 1998, pursuant to which Mr. Tracy would
receive compensation in the amount of $1,500 per day for consulting services
rendered at the company's request. During fiscal 1998, Mr. Tracy did not render
any consulting services for the company. Mr. Tracy, however, will not stand for
reelection as a director at the 1999 annual meeting of stockholders.
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<PAGE> 14
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the company's directors,
executive officers and 10% owners of stock of the company to file reports of
beneficial ownership of the company's stock and changes in such beneficial
ownership with the SEC. Directors, executive officers and 10% owners are also
required by rules promulgated by the SEC 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 1998, the company believes that its
directors, officers and 10% owners of stock of the company complied with the
Section 16(a) filing requirements applicable to them during fiscal 1998.
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<PAGE> 15
MATTERS TO BE BROUGHT BEFORE THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
Unless contrary instructions are set forth in the proxy, it is intended
that the persons named in the proxy will vote all shares of stock represented by
the proxy for the election of the six director nominees listed below. The
directors elected at the annual meeting will each serve for a term expiring on
the date of the annual meeting in 2000. Directors of the company are elected
annually and hold office until their successors have been elected and qualified
on their early resignation or removal.
The board proposes the election of the following six nominees for the
election as directors at the 1999 annual meeting, all of whom are currently
directors of the company. Listed below is information about each nominee,
including biographical data for at least the last five years. Should any nominee
become unavailable for election, the board of directors may designate another
nominee, in which case the persons acting under duly executed proxies will vote
for the election of the replacement nominee, although management is not aware of
any circumstances likely to render any nominee unavailable for election.
WILLIAM A. SCHWARTZ, JR., 57, 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. He is a member of the Executive Committee. Mr. Schwartz also
serves on the board of directors of Motherswork, Inc. and Commerce Bancorp, Inc.
DENNIS J. SHAUGHNESSY, 52, has been a Director of the company since 1994. He is
a member of the 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.
J. ROGER SULLIVAN, JR., 56, has been a Director of the company since 1994. He is
a member of the 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, 52, has been a Director of the company since 1994. He is a
member of the company's Executive Committee, Audit Committee and Compensation
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.
G. KENNETH MACRAE, 70, has been a Director of the company since 1990. He is a
member of the Executive Committee, Compensation Committee and Stock Option
Committee. Mr. Macrae is a
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<PAGE> 16
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.
PETER M. TROUP, 55, 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.
A stockholder may, in the manner set forth in the enclosed proxy card,
instruct the proxy holder to vote that stockholder's shares of stock for one or
more of the named nominees. The proxies solicited by this Proxy Statement cannot
be voted for a number of persons greater than the number of nominees named
above. The company's Certificate of Incorporation does not permit cumulative
voting.
REQUIRED AFFIRMATIVE VOTE
A plurality of the votes of the holders of the outstanding shares of
stock of the company, represented in person or by proxy at a meeting at which a
quorum is present may elect directors.
THE BOARD OF DIRECTORS URGES YOU TO VOTE FOR EACH OF THE NOMINEES FOR
DIRECTOR SET FORTH ABOVE.
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<PAGE> 17
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, 2000. 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 stock which are
represented and entitled to vote at the annual 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 annual 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 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> 18
STOCK PERFORMANCE GRAPH
The following performance graph compares the performance of the
company's stock, the Nasdaq Composite Index and an index of peer companies
selected by the company (the "Peer Group Index") since December 2, 1997 (which
is when the company's 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 stock and in each index
was $100 on December 2, 1997, and that all dividends were reinvested.
The 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, Vista Eyecare, Inc., New West Eyeworks, Inc.
and Sterling Vision.
[INSERT GRAPHIC HERE]
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> 19
COSTS OF SOLICITATION
The cost of soliciting proxies, which also includes the preparation,
printing, and mailing of this proxy statement, will be borne by the company.
Solicitation will be made by the company primarily through the mail, but certain
employees of the company, who will receive no compensation for their services
other than their regular remuneration, may also solicit proxies by telephone,
telecopy, or personal interview. The company will request brokers and nominees
to obtain voting instructions of beneficial owners of stock registered in the
names of such brokers and nominees and other "street names" and will reimburse
them for any expenses incurred in connection therewith. The company's transfer
agent, Registrar and Transfer Company, will assist the company in the
solicitation of proxies from brokers and nominees. The fees for the services of
the transfer agent are included in the monthly fees paid by the company.
However, the company will reimburse the transfer agent for its reasonable
out-of-pocket expenses incurred in connection with providing solicitation
services.
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: (a)
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; (b)
approval of the minutes of a prior meeting of stockholders, if such approval
does not constitute ratification of the action at the meeting; (c) 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; (d) 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 (e) 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.
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, 1999, AS
FILED WITH SEC 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.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals intended to be present at the company's annual
meeting of stockholders in 2000, must be submitted to the company no later than
January 7, 2000, to be included in the company's proxy materials for 2000.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED AS IT
WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
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 7, 1999
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<PAGE> 20
APPENDIX A
PROXY
U.S. VISION, INC.
SOLICITED ON BEHALF OF THE COMPANY AND APPROVED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints William A. Schwartz, Jr. and
George E. McHenry, Jr., and each of them, as attorneys-in-fact 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 1999 Annual Meeting of Stockholders
of U.S. Vision, Inc. to be held on the 8th day of June 1999 (pursuant to the
Notice of Annual Meeting dated May 1999, 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.
When properly executed, this Proxy will be voted in the manner directed herein
by the undersigned Stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL THE NOMINEES NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD NOMINEES: William A. Schwartz, Jr., Dennis J. Shaughnessy,
listed to the right AUTHORITY J. Roger Sullivan, Jr., Richard K. McDonald, G.
(except as marked to vote for all Kenneth Macrae and Peter M. Troup.
to the contrary) nominees listed below
</TABLE>
[ ] [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
SUCH INDIVIDUAL'S NAME IN THE SPACE PROVIDED BELOW)
- --------------------------------------------------------------------------------
(Continued, and to be marked, dated and signed, on the other side)
2. RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITOR OF THE
COMPANY.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Please sign exactly as name appears below. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such.
If a corporation, please sign in full corporate name
by President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
Dated:--------------------------------, 1999
--------------------------------------------------
(Signature)
--------------------------------------------------
(Signature if held jointly)
