BRIGHT HORIZONS FAMILY SOLUTIONS INC, DEF 14A, 2000-04-20

BRIGHT HORIZONS FAMILY SOLUTIONS INC
DEF 14A, 2000-04-20
CHILD DAY CARE SERVICES

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<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:

<TABLE>
<S> <C>
[ ] 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
</TABLE>

Bright Horizons Family Solutions, 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 it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2

BRIGHT HORIZONS FAMILY SOLUTIONS, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 25, 2000

--------------------

The 2000 annual meeting of stockholders of Bright Horizons Family
Solutions, Inc. will be held at 10:00 a.m., local time, on Thursday, May 25,
2000, at the Company's corporate offices, One Kendall Square, Building 200,
Cambridge, Massachusetts. At the meeting, stockholders will act on the following
matters:

1. Election of three directors, each for a term of three years; and

2. Any other matters that may properly come before the meeting.

Stockholders of record at the close of business on April 3, 2000 are
entitled to vote at the meeting or any postponement or adjournment.

Your vote is important. Please COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY, in order that as many shares as possible will be represented.

By order of the Board of Directors,

/s/ Stephen I. Dreier
--------------------------------------
Stephen I. Dreier
Chief Administrative Officer and
Secretary

Cambridge, Massachusetts
April 20, 2000

<PAGE> 3

TABLE OF CONTENTS

ABOUT THE MEETING..............................................................1
What is the purpose of the annual meeting?...............................1
Who is entitled to vote?.................................................1
What constitutes a quorum?...............................................1
How do I vote?...........................................................1
Can I change my vote after I return my proxy card?.......................2
What are the Board's recommendations?....................................2
What vote is required to approve each item?..............................2

STOCK OWNERSHIP................................................................3
Who are the largest owners of the Company's stock?.......................3
How much stock do the Company's directors and executive officers own?....4

ITEM 1--ELECTION OF DIRECTORS..................................................6
Directors Standing for Election..........................................6
Directors Continuing in Office...........................................7
How are directors compensated?...........................................9
How often did the Board meet during 1999?................................9
What committees has the Board established?...............................9

EXECUTIVE COMPENSATION........................................................10

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION................13

PERFORMANCE GRAPH.............................................................16

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................17

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................17

INDEPENDENT PUBLIC ACCOUNTANTS................................................17

ADDITIONAL INFORMATION........................................................17

</TABLE>

<PAGE> 4

BRIGHT HORIZONS FAMILY SOLUTIONS, INC.

ONE KENDALL SQUARE, BUILDING 200
CAMBRIDGE, MASSACHUSETTS 02139

--------------------

PROXY STATEMENT

--------------------

The Board of Directors is soliciting proxies to be used at the 2000
annual meeting. This proxy statement and the enclosed proxy will be mailed to
stockholders on or about April 20, 2000.

The Company was incorporated in Delaware in April 1998. On July 24,
1998, two publicly traded companies, CorporateFamily Solutions, Inc. and Bright
Horizons, Inc., were merged into two wholly owned subsidiaries of the Company.
Pursuant to the merger, each share of common stock of CorporateFamily Solutions
was exchanged for one share of the Company's common stock, and each share of
common stock of Bright Horizons was exchanged for 1.15022 shares of the
Company's common stock. The Company also assumed all outstanding options to
purchase CorporateFamily Solutions and Bright Horizons common stock. Unless the
context otherwise requires, references in this proxy statement to the Company
for periods prior to July 24, 1998 refer to one or both of the Company's
predecessors, CorporateFamily Solutions and Bright Horizons, as appropriate.

ABOUT THE MEETING

WHAT IS THE PURPOSE OF THE ANNUAL MEETING?

At the Company's annual meeting, stockholders will act upon the matters
outlined in the accompanying notice of meeting. In addition, the Company's
management will report on the performance of the Company during fiscal 1999 and
respond to questions from stockholders.

WHO IS ENTITLED TO VOTE?

Only stockholders of record at the close of business on the record
date, April 3, 2000, are entitled to receive notice of the annual meeting, and
to vote the shares of common stock that they held on that date at the meeting,
or any postponement or adjournment of the meeting. Each outstanding share
entitles its holder to cast one vote on each matter to be voted upon.

WHAT CONSTITUTES A QUORUM?

The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its business. As of the
record date, 11,825,427 shares of common stock of the Company were outstanding.
Proxies received but marked as abstentions and broker non-votes will be included
in the calculation of the number of shares considered to be present at the
meeting.

HOW DO I VOTE?

If you complete and properly sign the accompanying proxy card and
return it to the Company, it will be voted as you direct. If you are a
registered stockholder and attend the meeting, you may deliver your completed
proxy card in person. "Street name" stockholders who wish to vote at the meeting
will need to obtain a proxy form from the institution that holds their shares.

<PAGE> 5

CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?

Yes. You can revoke your proxy at any time before it is exercised in
any of three ways:

- by submitting written notice of revocation to the Secretary;

- by submitting another proxy that is later dated and properly
signed; or

- by voting in person at the meeting.

WHAT ARE THE BOARD'S RECOMMENDATIONS?

Unless you give other instructions on your proxy card, the persons
named as proxies on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board recommends a vote for
election of the nominated slate of directors (see page 6).

With respect to any other matter that properly comes before the
meeting, the proxies will vote as recommended by the Board of Directors or, if
no recommendation is given, in their own discretion.

WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?

ELECTION OF DIRECTORS. The affirmative vote of a plurality of the votes
cast by the stockholders entitled to vote at the meeting is required for the
election of directors. A properly executed proxy marked "WITHHOLD AUTHORITY"
with respect to the election of one or more directors will not be voted with
respect to the director or directors indicated, although it will be counted for
purposes of determining whether there is a quorum.

OTHER ITEMS. For each other item, the affirmative vote of the holders
of a majority of the shares present in person or represented by proxy and
entitled to vote on the item will be required for approval. A properly executed
proxy marked "ABSTAIN" with respect to any such item will not be voted, although
it will be counted for purposes of determining whether there is a quorum.
Accordingly, an abstention will have the effect of a negative vote.

If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting
discretion with respect to some of the items to be acted upon. Thus, if you do
not give your broker or nominee specific instructions, your shares may not be
voted on those items and will not be counted in determining the number of shares
necessary for approval. Shares represented by such "broker non-votes" will,
however, be counted in determining whether there is a quorum.

<PAGE> 6

STOCK OWNERSHIP

WHO ARE THE LARGEST OWNERS OF THE COMPANY'S STOCK?

The following table shows those stockholders, other than our directors
and executive officers, who beneficially own more than 5% of the Company's
common stock.

<TABLE>
<CAPTION>
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AGGREGATE NUMBER PERCENT OF
OF SHARES SHARES
NAME BENEFICIALLY OWNED OUTSTANDING(1)

<S> <C> <C>
John McStay Investment Counsel, L.P. (2)....... 1,847,380 15.62%

Wellington Management Company, LLP (3)......... 1,072,900 9.07%

Capital Research and Management Company (4).... 1,050,000 8.88%

The Hartford Mutual Funds, Inc. (5)............ 647,500 5.48%

T. Rowe Price Associates, Inc. (6)............. 634,900 5.37%
--------------------------------------------------------------------------------------
</TABLE>

(1) Based on the number of shares outstanding at April 3, 2000.
(2) This information is based upon a Schedule 13F filed by American
Investment Group, Inc. on February 14, 2000, on behalf of itself and
four other institutional investment managers, including John McStay
Investment Counsel, L.P. As of December 31, 1999, John McStay
Investment Counsel reports shared voting power as to 1,847,380 shares
of the Company's common stock. Its principal address is 5949 Sherry
Lane, Suite 1560, Dallas, Texas 75225.
(3) This information is based upon a Schedule 13G/A filed on February 11,
2000. Wellington Management Company, LLP is an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940 and
reports shared voting power as to 1,053,200 shares and shared
dispositive power as to 1,072,900 shares of the Company's common stock.
Its principal address is 75 State Street, Boston, Massachusetts 02109.
(4) This information is based upon a Schedule 13G filed on February 11,
2000. Capital Research and Management Company is an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940 and
reports sole dispositive power and no voting power as to 1,050,000
shares of the Company's common stock, but disclaims beneficial
ownership of all 1,050,000 shares. Its principal address is 333 South
Hope Street, Los Angeles, California 90071.
(5) This information is based upon a Schedule 13G filed on February 11,
2000 by The Hartford Mutual Funds, Inc., on behalf of The Hartford
Capital Appreciation Fund. The Hartford Mutual Funds, Inc. is an
investment company registered under Section 8 of the Investment Company
Act of 1940 and reports shared voting power as to 647,500 shares and
shared dispositive power as to 647,500 shares of the Company's common
stock. Its principal address is 200 Hopmeadow Street, Simsbury, CT
06089.
(6) This information is based upon a Schedule 13G filed on February 4,
2000. T. Rowe Price Associates, Inc. is an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940 and
reports sole voting power as to 37,500 shares and sole dispositive
power as to 634,900 shares of the Company's common stock. Its principal
address is 100 E. Pratt Street, Baltimore, Maryland 21202.

<PAGE> 7

HOW MUCH STOCK DO THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS OWN?

The following table shows the amount of common stock of the Company
beneficially owned (unless otherwise indicated) by the Company's directors, the
executive officers of the Company named in the Summary Compensation Table below
and the directors and executive officers of the Company as a group. Except as
otherwise indicated, all information is as of the record date, April 3, 2000.

<TABLE>
<CAPTION>
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AGGREGATE NUMBER RIGHT TO ACQUIRE PERCENT OF
OF OUTSTANDING SHARES WITHIN 60 SHARES
NAME BENEFICIALLY OWNED(1) DAYS(2) OUTSTANDING(3)

Roger H. Brown (4).................................... 422,014 285,084 5.84%

Linda A. Mason (4).................................... 422,014 285,084 5.84%

Robert D. Lurie....................................... 524,151 1,000 4.44%

Marguerite W. Sallee.................................. 252,487 95,084 2.92%

E. Townes Duncan...................................... 150,904 16,317 1.41%

Mary Ann Tocio........................................ -- 103,438 *

Stephen I. Dreier..................................... 47,573 51,323 *

David H. Lissy........................................ -- 58,442 *

Elizabeth J. Boland................................... 12,250 13,469 *

William H. Donaldson.................................. 1,000 21,837 *

Joshua Bekenstein..................................... 10,406 2,667 *

Sara Lawrence-Lightfoot............................... -- 12,251 *

Fred K. Foulkes....................................... 9,201 1,000 *

JoAnne Brandes........................................ -- 6,567 *

Ian M. Rolland........................................ 1,000 1,667 *

Directors and executive officers as a group (15 persons) 1,430,986 670,146 16.82%
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</TABLE>

* Represents less than 1% of the Company's outstanding common stock

- ------------------

(1) The number of shares shown includes shares that are individually or
jointly owned, as well as shares over which the individual has either sole
or shared investment or voting authority. Certain of the Company's
directors and executive officers disclaim beneficial ownership of some of
the shares included in the table, as follows:

- Mr. Brown - 241,863 shares held by Mr. Brown and Linda A. Mason, his
wife, as co-trustees of the Roger H. Brown, Jr. Trust, 180,151
shares held by Ms. Mason and Mr. Brown, as co-trustees of the Linda
A. Mason Trust. North American Management Corp., the investment
advisor of the Roger H. Brown, Jr. Trust and Linda A. Mason Trust,
has discretionary authority to dispose of the shares held in the
trusts.
- Ms. Mason - 180,151 shares held by Ms. Mason and Roger H. Brown, her
husband, as co-trustees of the Linda A. Mason Trust, 241,863 shares
held by Mr. Brown and Ms. Mason as co-trustees of the Roger H.
Brown, Jr. Trust. North American Management Corp., the investment
advisor of the Roger H. Brown, Jr. Trust and Linda A. Mason Trust,
has discretionary authority to dispose of the shares held in the
trusts.
- Mr. Lurie - 1,651 shares held by Jane Kyle-Lurie, his wife.
- Ms. Sallee - 121,520 shares held by Dr. Arthur Knox Patterson, her
husband, and 9,446 shares held by Dr. Patterson as custodian for his
children.

<PAGE> 8

- Mr. Duncan - 123,794 shares held by Solidus Company, of which Mr.
Duncan is the president and a significant interest holder; 16,000
shares held by Solidus Partners, LP, of which Solidus Company is the
General Partner, except to the extent of his pecuniary interest in
Solidus Company; 400 shares held by his children; 100 shares held by
his wife; and 456 shares held in several trusts of which his wife is
trustee.

(2) Reflects the number of shares that could be purchased upon exercise of
options available at April 3, 2000 or within 60 days thereafter under the
Company's stock incentive plans. Certain of the Company's directors and
executive officers disclaim beneficial ownership of shares purchasable
upon exercise of options included in the table, as follows:

- Mr. Brown - 97,650 shares issuable upon exercise of options held by
Linda A. Mason, his wife.
- Ms. Mason - 187,434 shares issuable upon exercise of options held by
Roger H. Brown, her husband.

(3) Based on the number of shares outstanding at, or that could be purchased
upon exercise of options within 60 days of, April 3, 2000.

(4) Mr. Brown's and Ms. Mason's business address is as follows: c/o Bright
Horizons Family Solutions, Inc., One Kendall Square, Building 200,
Cambridge, Massachusetts 02139.

<PAGE> 9

ITEM 1--ELECTION OF DIRECTORS

DIRECTORS STANDING FOR ELECTION

The Board of Directors of the Company is divided into three classes
(Class I, Class II and Class III). At each annual meeting of stockholders,
directors constituting one class are elected for a three-year term. The
Company's Certificate of Incorporation provides that each class shall consist,
as nearly as possible, of one-third of the total number of directors
constituting the entire Board of Directors. The current Board of Directors is
comprised of eleven members, three of whom will be elected at the annual
meeting. The Board of Directors has nominated and recommends to the stockholders
E. Townes Duncan, Sara Lawrence-Lightfoot and Marguerite W. Sallee, each of whom
is an incumbent Class II director, for election as Class II directors to serve
until the annual meeting of stockholders in 2003 and until such time as their
respective successors are duly elected and qualified. Pursuant to an amended and
restated employment agreement with Ms. Sallee, dated July 1, 1999, the Company
has agreed to nominate Ms. Sallee to serve on the Company's Board of Directors
for the period beginning on January 1, 2000 and ending on December 31, 2005. In
addition, such agreement provides that if elected, she will serve as Co-Chairman
of the Board.

If any of the nominees should become unable to accept election, the
persons named as proxies on the proxy card may vote for such other person or
persons as may be designated by the Board of Directors. Management has no reason
to believe that any of the nominees named above will be unable to serve. Certain
information with respect to the nominees for election as Class II directors and
with respect to Class I and Class III directors (who are not nominees for
election at the annual meeting) is set forth below.

CLASS II DIRECTORS
(TO BE ELECTED; TERMS EXPIRE IN 2003)

- --------------------------------------------------------------------------------
E. Townes Duncan Age 46

E. Townes Duncan has served as a director of the Company since the merger. From
April 1988 until the merger, Mr. Duncan served as a director of CorporateFamily
Solutions. Mr. Duncan has served as the President of Solidus Company, a private
investment firm, since January 1997. Mr. Duncan was a director of Comptronix
Corporation, a provider of electronics contract manufacturing services, and
served as Chairman of the Board and Chief Executive Officer of Comptronix
Corporation from November 1993 to May 1997. Comptronix Corporation filed a
petition for Chapter 11 protection on August 9, 1996. From 1985 to November
1993, Mr. Duncan was a Vice President and principal of Massey Burch Investment
Group, Inc., a venture capital corporation. Mr. Duncan is a director of J.
Alexander's Corporation, an owner and operator of restaurants.

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Sara Lawrence-Lightfoot Age 55

Dr. Sara Lawrence-Lightfoot has served as a director of the Company since the
merger. From 1993 until the merger, Dr. Lawrence-Lightfoot served as a director
of Bright Horizons. Since 1972, Dr. Lawrence-Lightfoot has been a professor of
education at Harvard University. In addition to serving as a director of Bright
Horizons, Dr. Lawrence-Lightfoot is also a director of the Globe Newspaper
Company, a subsidiary of The New York Times Company which owns and publishes The
Boston Globe. Dr. Lawrence-Lightfoot has received honorary degrees from 16
universities and colleges including Bank Street College and Wheelock College,
two of the nation's foremost schools of early childhood education.

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Marguerite W. Sallee Age 54

Marguerite W. Sallee has served as a director of the Company since the merger
and also served as Chief Executive Officer of the Company from the merger until
May 1999 when she became Co-Chairman of the Board of the Company. In July 1999,
Ms. Sallee co-founded and became the Chief Executive Officer and a director of
Frontline Group, Inc., a corporate training company. Ms. Sallee is a founder of
CorporateFamily Solutions and served as President, Chief Executive Officer and a
director of CorporateFamily Solutions from February 1987 until the merger. Prior
thereto, Ms. Sallee served as Commissioner of Human Services in former Tennessee
Governor Lamar Alexander's cabinet. She is a director of Saks Incorporated, an
owner and operator of department stores, and is a former Chairman of the
Nashville Area Chamber of Commerce. In addition, Ms. Sallee is a delegate to the
Presidential Summit for Children.
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THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THESE NOMINEES.

6
<PAGE> 10

DIRECTORS CONTINUING IN OFFICE

CLASS III DIRECTORS
(TERMS EXPIRE IN 2001)

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William H. Donaldson Age 68

William H. Donaldson has served as a director of the Company since the merger.
From January 1998 until the merger, Mr. Donaldson served as a director of Bright
Horizons. In February 2000, Mr. Donaldson became the Chairman, President and
Chief Executive Officer of Aetna, Inc., one of the nation's largest health
benefits, insurance and financial services companies. Mr. Donaldson served as
senior advisor to Donaldson, Lufkin & Jenrette, Inc., the investment banking
firm he co-founded in 1959, from 1995 until his employment by Aetna in February
2000. He served as Chairman and Chief Executive Officer at Donaldson, Lufkin &
Jenrette, Inc. until 1973, when he became Undersecretary of State under Dr.
Henry Kissinger and later counsel to Vice President Nelson Rockefeller. Mr.
Donaldson served as Chairman and Chief Executive Officer of the New York Stock
Exchange from 1990 until 1995. He was the founding dean of the Yale University
School of Management and held the tenured chair as the William S. Beinecke
Professor of Management Studies. In addition to serving on the board of
directors of Aetna, Inc., Mr. Donaldson serves on the board of Mail.com, Inc., a
global provider of e-mail services. He also serves as Chairman of the Carnegie
Endowment for International Peace and is a trustee of the Lincoln Center for the
Performing Arts, the New York Police Foundation, the Marine Corps University
Foundation, the Aspen Institute and the Foreign Policy Association. He is also
Chairman of the Advisory Board of the Yale University School of Management.

- --------------------------------------------------------------------------------
Fred K. Foulkes Age 58

Professor Fred K. Foulkes has served as a director of the Company since the
merger. Mr. Foulkes has been the Director of the Human Resources Policy
Institute for Boston University School of Management since 1981 and has taught
courses in human resource management and strategic management at Boston
University since 1980. From 1968 to 1980, Professor Foulkes was a member of the
Harvard Business School faculty. His principal publications include Personnel
Policies in Large Nonunion Companies and Executive Compensation: A Strategic
Guide for the 1990's. Professor Foulkes is a recipient of the Employment
Management Association Award and the Fellow Award, the National Academy of Human
Resources award of distinction for outstanding achievement in the human resource
profession.

- --------------------------------------------------------------------------------
Linda A. Mason Age 45

Linda A. Mason has served as a director of the Company since the merger. Ms.
Mason also served as Chairman of the Board from the merger until May 1999 when
she became Co-Chairman of the Board. Ms. Mason co-founded Bright Horizons and
served as a director and President of Bright Horizons from its inception in 1986
until the merger. From its inception until September 1994, Ms. Mason also acted
as Bright Horizons' Treasurer. Prior to founding Bright Horizons, Ms. Mason was
co-director of the Save the Children relief and development effort in Sudan and
worked as a program officer with CARE in Thailand. Prior to 1986, Ms. Mason
worked as a management consultant with Booz, Allen and Hamilton. Ms. Mason also
is a director of The Horizons Initiative, a non-profit organization that
provides support for homeless children and their families, and Whole Foods
Market, Inc., which owns and operates retail food stores, is a Fellow of the
Yale Corporation and serves on the Advisory Board of the Yale University School
of Management. Ms. Mason is the wife of Roger H. Brown.

- --------------------------------------------------------------------------------
Ian M. Rolland Age 66

Ian M. Rolland has served as a director of the Company since September 1998. Mr.
Rolland was Chairman and Chief Executive Officer of Lincoln National
Corporation, a provider of life insurance and annuities, property-casualty
insurance and related services through its subsidiary companies, from 1992 until
July 1998 and President and Chief Executive Officer from 1975 to 1992. Mr.
Rolland continues as a director of Lincoln National Corporation. Mr. Rolland is
also a director of Wells Fargo & Company, a nationwide financial services
company, NiSource Inc., a holding company for various utility companies, and
Tokheim Corporation, a manufacturer and servicer of electronic and mechanical
petroleum dispensing systems.

- --------------------------------------------------------------------------------

<PAGE> 11

CLASS I DIRECTORS
(TERMS EXPIRE IN 2002)

- --------------------------------------------------------------------------------
JoAnne Brandes Age 46

JoAnne Brandes has served as a director of the Company since the merger. From
December 1995 until the merger, Ms. Brandes served as a director of
CorporateFamily Solutions. Ms. Brandes has served as Senior Vice President,
General Counsel and Secretary for S.C. Johnson Commercial Markets, Inc., a
manufacturer and marketer of cleaning and sanitation products and services since
October 1997. From October 1996 to October 1997, Ms. Brandes served as Vice
President and General Counsel for S.C. Johnson Commercial Markets, Inc. From May
1992 to October 1996, Ms. Brandes served as Vice President of Corporate
Communication Worldwide for S.C. Johnson & Son, Inc., a manufacturer of cleaning
and personal care products. Prior thereto, Mr. Brandes served as Senior Legal
Counsel to S.C. Johnson & Son, Inc. from 1981 to 1992. Ms. Brandes serves as a
director of Alternative Resources Corporation, a temporary technical staffing
company, a director of JohnsonFamily Funds, Inc., a mutual fund, a Regent in the
University of Wisconsin System Board of Regents, Director of Child Care Action
Campaign, a not-for-profit organization which promotes quality child care, and a
member of the State of Wisconsin's Governor's Child Care Council.

- --------------------------------------------------------------------------------
Joshua Bekenstein Age 41

Joshua Bekenstein has served as a director of the Company since the merger. From
1986 until the merger, Mr. Bekenstein served as a director of Bright Horizons.
Since 1993, Mr. Bekenstein has been a Managing Director of Bain Capital, Inc.
and has been a general partner of Bain Venture Capital since its inception in
1987. Mr. Bekenstein serves as a director of Waters Corporation, a manufacturer
and distributor of high performance liquid chromatography instruments, Sealy
Mattress Company, the leading conventional bedding manufacturer in North
America, and The Horizons Initiative.

- --------------------------------------------------------------------------------
Roger H. Brown Age 43

Roger H. Brown has served as a director and President of the Company since the
merger and has also served as Chief Executive Officer of the Company since May
1999. Mr. Brown co-founded Bright Horizons and served as Chairman and Chief
Executive Officer of Bright Horizons from its inception in 1986 until the
merger. Prior to 1986, he worked as a management consultant for Bain & Company,
Inc. Mr. Brown currently serves as a director of The Horizons Initiative, Stand
for Children, a non-profit organization dedicated to improving the quality of
life for children, and Advantage Schools, Inc., a charter school management
company. Mr. Brown is the husband of Linda A. Mason.

- --------------------------------------------------------------------------------
Robert D. Lurie Age 54

Robert D. Lurie has served as a director of the Company since the merger. Prior
to the merger, Mr. Lurie served as a director and Chairman of CorporateFamily
Solutions since December 1995 and as Director of Research and Development since
January 1998. He was President of The Resource Group, a division of
CorporateFamily Solutions focused on providing consulting and resource support
to work/life center operations, from October 1995 to December 1997. From 1984 to
1995, Mr. Lurie served as President and Chief Executive Officer of Resources for
Child Care Management, Inc., which was acquired by CorporateFamily Solutions in
October 1995.

- --------------------------------------------------------------------------------

<PAGE> 12

HOW ARE DIRECTORS COMPENSATED?

BASE COMPENSATION. Each non-employee director receives $2,000 for each
regularly scheduled Board meeting attended in person or by conference call, and
$500 for each specially scheduled meeting attended in person or by conference
call. Each non-employee director that is a member of the Audit Committee,
Compensation Committee or Nominating Committee also receives $500 for each
committee meeting attended. Directors who are also employees of the Company
receive no additional compensation for service as directors.

OPTIONS. On the date of each annual meeting of stockholders, each
non-employee director will be granted an option to purchase 1,000 shares of the
Company's common stock, so long as he or she has missed no more than one of the
regular meetings of the Board of Directors in the previous year. The exercise
price of the options will be the closing market price of the Company's common
stock on the date of grant. The options shall vest in one-third increments with
one-third vesting equally on the first, second and third anniversary dates of
the initial grant, so long as the non-employee director continues to serve as a
director of the Company, with the exception of the 1999 grant which was fully
vested upon its grant.

HOW OFTEN DID THE BOARD MEET DURING 1999?

During 1999, the Board of Directors met five times. Each director
attended more than 75% of the total number of meetings of the Board and
committees on which he or she served.

WHAT COMMITTEES HAS THE BOARD ESTABLISHED?

The Board of Directors has standing Audit, Compensation and Nominating
Committees.

AUDIT COMMITTEE. The Audit Committee is responsible for making
recommendations to the Board of Directors concerning the Company's financial
statements and the appointment of independent accountants, reviewing significant
audit and accounting policies and practices, meeting with the Company's
independent accountants concerning, among other things, the scope of audits and
reports, and reviewing the performance of the overall accounting and financial
controls of the Company. The members of the Audit Committee are Ian M. Rolland
(chair), JoAnne Brandes and E. Townes Duncan. The Audit Committee met two times
in 1999.

COMPENSATION COMMITTEE. The Compensation Committee is charged with
reviewing and approving salaries, bonuses, and other compensation and benefits
of executive officers, advising management regarding benefits and other terms
and conditions of compensation, and administering the Company's employee stock
incentive plan. The members of the Compensation Committee are E. Townes Duncan
(chair), Fred K. Foulkes and Joshua Bekenstein. The Compensation Committee met
three times in 1999.

NOMINATING COMMITTEE. The Nominating Committee is responsible for
developing general criteria concerning the qualifications and selection of Board
members and recommending candidates for such positions to the Board of
Directors. The Nominating Committee considers director nominees from
stockholders for election at each annual meeting of stockholders if a written
nomination is received by the Company's Secretary not later than the close of
business on the 90th day nor earlier than the close of business on the 120th day
prior to the first anniversary of the preceding year's annual meeting
(nomination procedures are discussed in greater detail in our bylaws which will
be provided upon written request). The members of the Nominating Committee are
Dr. Sara Lawrence-Lightfoot (chair), William H. Donaldson and Fred K. Foulkes.
The Nominating Committee met one time in 1999.

<PAGE> 13

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning total
compensation earned or paid to the Chief Executive Officer and certain other
executive officers of the Company (the "named executive officers") for services
rendered to the Company, or to one of its predecessors prior to the merger.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------

LONG - TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
----------------------------------------- ------------
NUMBER OF
SECURITIES ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY UNDERLYING COMPENSATION
POSITION YEAR ($)(1) BONUS($) OPTIONS ($)(2)
----------------------------- ------- -------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Roger H. Brown (3)...................... 1999 175,000 110,000 12,000 2,469
Chief Executive Officer and 1998 175,000 72,500 25,000 2,500
President 1997 167,875 92,500 184,035 2,065

Marguerite W. Sallee (4)................ 1999 131,250 -- -- 2,500
Co-Chairman of the Board 1998 160,993 45,000 25,000 2,455
1997 150,563 45,000 -- 2,166

Mary Ann Tocio.......................... 1999 168,000 47,500 8,000 9,289
Chief Operating Officer 1998 159,231 45,000 27,000 9,075
1997 142,596 45,000 76,680 9,181

Stephen I. Dreier....................... 1999 157,000 32,000 4,000 2,149
Chief Administrative Officer 1998 148,923 30,000 18,000 2,013
and Secretary 1997 142,192 32,500 38,340 2,375

David H. Lissy (5)...................... 1999 163,000 73,500 8,000 2,254
Chief Development Officer 1998 153,333 81,333 25,000 --
1997 50,000 56,667 49,842 --

Elizabeth J. Boland (6)................. 1999 123,000 33,000 4,000 1,656
Chief Financial Officer and 1998 112,000 29,333 18,000 --
Treasurer 1997 36,667 8,333 19,169 --
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes amounts deferred by the employee under the Company's 401(k) plan.
(2) Consists of Company matching contributions to the employee's 401(k) plan
account and, in the case of Ms. Tocio, contributions made by the Company
for car allowances.
(3) Mr. Brown was President of the Company until May 1999 when he became
President and Chief Executive Officer.
(4) Ms. Sallee was Chief Executive Officer of the Company until May 1999 when
she resigned as Chief Executive Officer and became Co-Chairman of the
Board.
(5) Mr. Lissy began working for Bright Horizons in August 1997.
(6) Ms. Boland began working for Bright Horizons in September 1997.

<PAGE> 14

OPTION GRANTS FOR 1999

The table below sets forth the following information with respect to
option grants to the named executive officers during 1999 under the Company's
1998 Stock Incentive Plan:

- the number of shares of common stock underlying options granted
during the year;
- the percentage that such options represent of all options granted
to employees during the year;
- the exercise price;
- the expiration date; and
- the potential realizable value of the options assuming both a
5% and 10% annual return on the underlying common stock from the
date of grant of each option to the end of each option term.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
---------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL POTENTIAL REALIZABLE VALUE AT
UNDERLYING OPTIONS GRANTED TO EXERCISE ASSUMED ANNUAL RATES OF
OPTIONS EMPLOYEES IN 1999 PRICE EXPIRATION STOCK APPRECIATION FOR
NAME GRANTED(#)(1) (%) ($/SHARE) DATE OPTION TERMS
--------------------- ------------- ------------------ --------- ----------- -----------------------------
5% ($) 10% ($)
-------- --------
<S> <C> <C> <C> <C> <C> <C>
Roger H. Brown............... 12,000 5.37 14.8125 11/16/09 111,786 283,287
Marguerite W. Sallee......... -- -- -- -- -- --
Mary Ann Tocio............... 8,000 3.58 14.8125 11/16/09 74,524 188,858
Stephen I. Dreier............ 4,000 1.79 14.8125 11/16/09 37,262 94,429
David H. Lissy............... 8,000 3.58 14.8125 11/16/09 74,524 188,858
Elizabeth J. Boland.......... 4,000 1.79 14.8125 11/16/09 37,262 94,429
----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Options will vest annually over five years in one-fifth increments
beginning January 1, 2000.

OPTION EXERCISES AND VALUES FOR 1999

The table below sets forth the following information with respect to
option exercises during 1999 by each of the named executive officers and the
status of their options at December 31, 1999:

- the number of shares of common stock acquired upon exercise of
options during 1999;
- the aggregate dollar value realized upon the exercise of such
options;
- the total number of shares of common stock underlying
exercisable and non-exercisable stock options held at December
31, 1999; and
- the aggregate dollar value of in-the-money exercisable options
at December 31, 1999.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------

NUMBER OF NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED UPON DECEMBER 31, 1999(#) DECEMBER 31, 1999($)(1)
EXERCISE OF VALUE REALIZED ----------------------------- ------------------------------
NAME OPTIONS(#) UPON EXERCISE($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------ ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>

Roger H. Brown.............. 49,474 886,151 184,034 32,000 1,956,842 47,250
Marguerite W. Sallee........ 138,387 1,418,891 94,084 20,000 1,003,040 --
Mary Ann Tocio.............. 18,000 276,405 100,438 29,600 1,194,723 31,500
Stephen I. Dreier........... 18,018 326,126 49,523 18,400 551,967 15,750
David H. Lissy.............. -- -- 54,842 28,000 544,773 31,500
Elizabeth J. Boland......... 6,100 66,836 11,669 18,400 88,194 15,750
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The aggregate dollar value of the options held at year-end are
calculated as the difference between the fair market value of the
common stock ($18.75 as reported on The Nasdaq National Market on
December 31, 1999) and the respective exercise prices of the stock
options.

<PAGE> 15

EMPLOYMENT AGREEMENTS

The Company currently has employment agreements with Roger Brown and
Mary Ann Tocio. The terms and conditions of the employment agreements are
summarized below:

COMPENSATION

- The employment agreements provide a base salary for Mr. Brown
and Ms. Tocio for the specific terms set forth below:

--------------------------------------------------------
BASE SALARY TERM
----------- ---------------
<S> <C> <C>
Roger H. Brown $200,000(1) Through 1/24/03

Mary Ann Tocio $160,000(2) Through 7/24/00
--------------------------------------------------------
</TABLE>

(1) For 1999, Mr. Brown agreed to an adjusted base
salary of $175,000.
(2) For 1999, the Company increased Ms. Tocio's base
salary to $168,000.

- Mr. Brown and Ms. Tocio are also eligible to receive certain
benefits and incentive bonus compensation including cash
bonuses and stock-based awards.

TERMINATION AND RESIGNATION

- The employment agreements may be terminated by the Company or
the employee may resign at any time.
- If the Company terminates the employee's employment for "cause"
(as defined in the employment agreements) or the employee resigns
for any reason other than for "good reason" (as defined in the
employment agreements), the employee will receive all accrued
salary and benefits due as of the date of termination or
resignation.
- If the employee dies or becomes disabled, the employee will
receive all accrued salary, benefits and incentive bonus
compensation as of the date of death or disability.
- If the Company terminates the employee's employment without
"cause" or the employee resigns for "good reason", the employee
will receive a lump sum payment of, (i) in the case of Mr. Brown,
2.99 times his base salary, and, in the case of Ms. Tocio, one
time her base salary, plus (ii) all accrued benefits and
incentive bonus compensation.

RESTRICTIVE COVENANTS

- Among other things, the employment agreements prohibit each
employee from competing against the Company, divulging any
trade secrets or other confidential information of the Company,
hiring away any employees of the Company and taking any property
(memoranda, notes, lists, records, etc.) relating to the
Company's business made or compiled by, or made available to,
the employee during the term of his or her employment.
- These restrictive covenants will apply for 24 months (in the
case of Mr. Brown) or 12 months (in the case of Ms. Tocio)
following such employee's termination or resignation from the
Company.

In addition to the above agreements, the Company had an employment
agreement with Marguerite W. Sallee until July 1, 1999 pursuant to which she was
entitled to receive a prorated annual base salary of $200,000. On July 1, 1999,
Ms. Sallee's employment agreement was amended. Pursuant to the amended
agreement, Ms. Sallee was employed by the Company from July 1, 1999 until
December 31, 1999 as Co-Chairman of the Board. In exchange for her services, Ms.
Sallee received a prorated annual base salary of $87,500. For the period
beginning on January 1, 2000 and ending on December 31, 2005, the Company has
agreed pursuant to the amended agreement to nominate Ms. Sallee to serve on the
Company's Board of Directors as Co-Chairman of the Board, and Ms. Sallee has
agreed to serve as a consultant to the Company to the extent and on the terms
and conditions that may be mutually agreed upon by the Company and Ms. Sallee.
During the twenty-four month period after Ms. Sallee ceases to serve on the
Company's Board of Directors, her amended agreement prohibits her from competing
against the Company, divulging any trade secrets or other confidential
information of the Company, hiring away any employees of the Company and taking
any property (memoranda, notes, lists, records, etc.) relating to the Company's
business made

<PAGE> 16

or compiled by, or made available to, Ms. Sallee during the term of her
employment and/or the term of her service to the Board.

SEVERANCE AGREEMENTS

The Company has severance agreements with Stephen I. Dreier, David H.
Lissy, and Elizabeth J. Boland which provide the following benefits to them if
their employment is terminated within twenty-four (24) months following a
"change of control" (as defined below) for any reason other than for "cause" (as
defined in the severance agreements), death or disability or if they terminate
their own employment for "good reason" (as defined in the severance agreements):

- Accrued and unpaid base salary as of the date of termination
plus a prorated portion of any bonus payable for the fiscal
year in which the termination occurs;
- For a period of twenty-four months or until the employee
secures other employment (whichever is less), monthly
severance pay equal to 1/24 of the employee's total salary and
cash bonus for the employee's last two years of employment
with the Company;
- For a period of twenty-four months or until the employee
becomes eligible for participation in a group health plan of
another employer (whichever is less), payment by the Company
of the employee's and the employee's dependents' premiums for
continuation of health insurance coverage or participation in
a substantially similar health plan; and
- Automatic vesting of the employee's stock options immediately
prior to the change in control, notwithstanding any provision
of the Company's stock option plan or any option agreements.

A "change in control" will be deemed to have occurred if:

- Any person becomes the beneficial owner of 50% of the voting
power of the Company's outstanding securities;
- The Company is a party to a merger, consolidation, sale of
assets or other reorganization, or a proxy contest, pursuant
to which the Board members in office prior to the transaction
constitute less than a majority of the Board thereafter; or
- Certain changes to the composition of the board occur, as more
particularly described in the severance agreements.

In addition, the severance agreements prohibit each employee from
competing against the Company during the period in which the employee is
receiving severance benefits and divulging any trade secrets or other
confidential information of the Company.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

Decisions concerning the compensation of the Company's executive
officers are made by the Compensation Committee of the Board of Directors. Each
member of the Compensation Committee is a non-employee director. The
Compensation Committee has the responsibility for reviewing and approving
salaries, bonuses, and other compensation and benefits of executive officers,
advising management regarding benefits and other terms and conditions of
compensation, and administering the Company's stock incentive plans.

WHAT IS THE COMPANY'S PHILOSOPHY AND WHAT ARE ITS POLICIES FOR EXECUTIVE OFFICER
COMPENSATION?

The Compensation Committee believes that the primary objectives of the
Company's executive compensation policy should be:

- to attract and retain talented executives by providing a
compensation program that is competitive with the compensation
provided to executives at companies of comparable size and
position in service businesses, while maintaining compensation
within levels that are consistent with the Company's business
plan, financial objectives and operating performance;

- to provide appropriate incentives for executives to work
towards the achievement of the annual performance goals
established by the Company; and

<PAGE> 17

- to more closely align the interests of its executives with
those of stockholders by providing long-term incentive
compensation in the form of stock option awards and other
equity-based, long-term incentive compensation.

The Compensation Committee believes that the Company's executive
compensation policies should be reviewed during the first half of the fiscal
year after the financial results of the prior fiscal year become available. The
policies should be reviewed in light of their consistency with the Company's
financial performance, its operating plan and its position within the child care
and education industry, as well as the compensation policies of similar
companies in the child care and education business and other service businesses.
The compensation of individual executive officers is then reviewed annually by
the Compensation Committee in light of its executive compensation policies for
that year.

In setting and reviewing compensation for the executive officers, the
Compensation Committee considers a number of different factors designed to
assure that compensation levels are properly aligned with the Company's business
strategy, corporate culture and operating performance. Among the factors
considered are the following:

- Comparability--The Compensation Committee considers the
compensation packages of similarly situated executives at
companies deemed to be most comparable to the Company. The
objective is to maintain competitiveness in the marketplace in
order to attract and retain the highest quality executives.
This is a principal factor in setting base levels of
compensation.

- Pay for Performance--The Compensation Committee believes that
compensation should be in part directly linked to operating
performance. To achieve this link with regard to short-term
performance, the Compensation Committee has relied on cash
bonuses which have been determined on the basis of certain
objective and subjective factors after receiving the
recommendations of senior management.

- Equity Ownership--The Compensation Committee believes that an
integral part of the executive compensation program at the
Company is equity-based compensation plans which encourage and
create ownership of the Company's stock by its executives,
thereby more closely aligning executives' long-term interests
with those of the stockholders. These long-term incentive
programs are principally reflected in the Company's
stock-based incentive plans. The Compensation Committee
believes that significant stock ownership is a major incentive
in building stockholder value and reviews awards of
equity-based incentives with that goal in mind.

- Qualitative Factors--The Compensation Committee believes that
in addition to corporate performance and specific division
performance, it is appropriate to consider in setting and
reviewing executive compensation the personal contributions
that a particular individual may make to the success of the
corporate enterprise. Such qualitative factors as leadership
skills, planning initiatives development skills, public
affairs and civic involvement have been deemed to be important
qualitative factors to take into account in considering levels
of compensation.

HOW WAS BASE COMPENSATION DETERMINED IN 1999?

Certain of the Company's executive officers, including the Chief
Executive Officer, are parties to employment agreements. In several instances,
base compensation for executive officers subject to employment agreements varied
from the terms of such agreements. Mr. Brown, the Chief Executive Officer,
volunteered to receive a reduced base compensation from that which was required
pursuant to his employment agreement. Ms. Sallee, during her service as Chief
Executive Officer until May 1999, also agreed to such a reduction. When Ms.
Sallee resigned as Chief Executive Officer in May 1999, she entered into an
amended employment agreement, the terms of which are described above under
"Employment Agreements." Based upon Ms. Mason's service to the Company on a
part-time basis, her base compensation was prorated in accordance with her
employment agreement. Ms. Tocio's base compensation for 1999 was increased to a
level higher than that required pursuant to her employment agreement based upon
the factors described below which affected the determination of base
compensation of the Company's executive officers who do not have employment
agreements with the Company.

For the remaining executive officers who do not have employment
agreements with the Company, the Compensation Committee subjectively determined
base compensation on the basis of discussions with the Chief Executive Officer,
a review of the base compensation of executive officers of comparable companies,
its experience

<PAGE> 18

with the Company and in business generally, and what it viewed to be the
appropriate levels of base compensation after taking into consideration the
contributions of each executive officer.

HOW WAS INCENTIVE COMPENSATION DETERMINED IN 1999?

Annual Incentive Compensation. For 1999, the Compensation Committee
reviewed the Company's executive officer performance in terms of achieving
pre-tax profitability targets, the successful integration of the Company
following the merger and each executive officer's contribution to the
achievement of these objectives. Based on its review of the performance goals
and on subjective factors taken into consideration, the Compensation Committee
approved incentive payments aggregating $322,600 for 1999, including $110,000
for the Chief Executive Officer. No factors in addition to the ones discussed
above were considered in setting the incentive compensation of the Chief
Executive Officer.

Long-Term Incentive Compensation. The Compensation Committee believes
the Company as a part of its regular executive compensation policies should
grant awards of long-term, equity-based incentives to executive officers as part
of the compensation package that is reviewed annually for each executive
officer. In making these awards, the Compensation Committee establishes
guidelines at the time of the annual review and takes into account the
recommendations of the Chief Executive Officer and the President prior to
approving awards of long-term, equity-based incentive compensation to the other
executive officers.

During 1999, the Compensation Committee reviewed the amount of stock
option holdings by the Company's executive officers and the terms of these
options. Based on the Compensation Committee's desire to encourage and create
ownership of the Company's common stock by its executive officers and to use
equity-based incentives as a retention tool, the Compensation Committee
determined to grant stock options for an aggregate of 40,000 shares with an
exercise price based on the fair market value of the common stock on the date of
the grant to the executive officers, including option grants for an aggregate of
12,000 shares to the Chief Executive Officer. These options generally vest
annually over five years in one-fifth increments. See "Option Grants for 1999."

HOW IS THE COMPANY ADDRESSING INTERNAL REVENUE CODE LIMITS ON DEDUCTIBILITY OF
COMPENSATION?

Section 162(m) of the Internal Revenue Code of 1986, enacted as part of
the Omnibus Budget Reconciliation Act in 1993, generally disallows a tax
deduction to public companies for compensation over $1,000,000 paid to the
Company's Chief Executive Officer and four other most highly compensated
executive officers. Compensation paid to these officers in excess of $1,000,000
that is not performance-based cannot be claimed by the Company as a tax
deduction. The Compensation Committee believes it is appropriate to take into
account the $1,000,000 limit on the deductibility of executive compensation and
to seek to qualify executive compensation awards as performance-based
compensation excluded from the $1,000,000 limit. Stock options and other
equity-based incentives granted under the Company's stock incentive plans
qualify as performance-based compensation. None of the executive officers
received compensation in 1999 that would exceed the $1,000,000 limit on
deductibility. The Committee has not determined whether it will approve any
compensation arrangements that will cause the $1,000,000 limit to be exceeded in
the future.

E. Townes Duncan, Chairman
Joshua Bekenstein
Fred K. Foulkes

<PAGE> 19

PERFORMANCE GRAPH

The following graph compares the Company's cumulative total stockholder
return on its common stock from July 27, 1998 (when the Company's common stock
commenced public trading following the merger) through December 31, 1999 with
the cumulative total return of the following:

- the Russell 2000 Index;
- the Nasdaq Stock Market (U.S. Companies) (the "Nasdaq
Composite"); and
- a peer group selected in good faith by the Company and
consisting of the Company and three other companies in the
Company's industry: Childtime Learning Centers, Inc., New
Horizon Kids Quest, Inc. and Nobel Learning Communities, Inc.
(the "Peer Group").

The Russell 2000 Index was added this year because the Company believes
that the relative performance of its constituent companies provides a better
comparison for companies of the Company's size than does the Nasdaq Composite.
In accordance with the rules promulgated by the Securities and Exchange
Commission, the Company is required to include the Nasdaq Composite for the
current year. The Peer Group consists of the same companies included in the
proxy statement for the 1999 annual meeting of stockholders.

The graph assumes that $100 was invested on July 27, 1998 in the
Company's common stock and each index, and that all dividends, if any, were
reinvested. No dividends have been declared or paid on the Company's Common
Stock since July 27, 1998.

(GRAPH)

TOTAL RETURN ANALYSIS

7/27/98 12/31/98 12/31/99
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
BRIGHT HORIZONS $100.00 $111.63 $ 77.52
- --------------------------------------------------------------------------------
PEER GROUP $100.00 $100.01 $ 85.97
- --------------------------------------------------------------------------------
NASDAQ COMPOSITE $100.00 $113.63 $211.49
- --------------------------------------------------------------------------------
RUSSELL 2000 $100.00 $ 98.02 $118.95
- --------------------------------------------------------------------------------
Source: Carl Thompson Associates www.ctaonline.com (800)959-9677. Data from
Bloomberg Financial Markets.
</TABLE>

<PAGE> 20

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company has an agreement with S.C. Johnson & Son, Inc. to operate
and manage a family center for its employees. During 1999, the Company received
management fees and operating subsidies of $274,000 from S.C. Johnson & Son,
Inc. JoAnne Brandes, a member of the Board of Directors of the Company, is
Senior Vice President, General Counsel and Secretary for S.C. Johnson Commercial
Markets, Inc., an affiliate of S.C. Johnson & Son, Inc.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The federal securities laws require the Company's directors and
executive officers, and persons who own more than 10% of the Company's capital
stock, to file initial reports of ownership and reports of changes in ownership
of any securities of the Company with the Securities and Exchange Commission,
The Nasdaq National Market and the Company.

Based solely upon a review of filings with the Securities and Exchange
Commission and written representations that no other reports were required, the
Company believes that all of the Company's directors and executive officers
complied during 1999 with their reporting requirements, with the exception of a
late filing made by David H. Lissy in June 1999 relating to him becoming a
Section 16 officer in May 1999; four late filings made by Mary Ann Tocio, one in
September 1999 relating to a transaction in May 1999, and three in February 2000
relating to transactions in May, August, and November 1999; a late filing made
by Joshua Bekenstein in December 1999 relating to a transaction in October 1999;
and a late filing made by Robert D. Lurie in December 1999 relating to a
transaction in November 1999.

INDEPENDENT PUBLIC ACCOUNTANTS

The Company has appointed Arthur Andersen LLP as the Company's
independent public accountants for 2000. Arthur Andersen LLP has audited the
accounts of the Company since the merger and served as independent public
accountants to CorporateFamily Solutions since 1994. A representative of Arthur
Andersen LLP is expected to be present at the annual meeting to respond to
appropriate questions and to make such statements as they may desire.

ADDITIONAL INFORMATION

STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING. Pursuant to Rule
14a-8(e) of the Securities Exchange Act of 1934, stockholder proposals submitted
in accordance with applicable rules and regulations for presentation at the
Company's next annual meeting and received at the Company's executive offices no
later than December 22, 2000 will be considered for inclusion in the Company's
proxy statement and form of proxy relating to such annual meeting.

For other stockholder proposals to be timely (but not considered for
inclusion in the Company's proxy statement), a stockholder's notice must be
received at the Company's executive offices not later than the close of business
on February 25, 2001 nor earlier than the close of business on January 26, 2001
and should otherwise comply with the advance notice provisions of the Company's
bylaws. For proposals that are not timely filed, the Company retains discretion
to vote proxies it receives. For proposals that are timely filed, the Company
retains discretion to vote proxies it receives provided (1) the Company includes
in its proxy statement advice on the nature of the proposal and how it intends
to exercise its voting discretion and (2) the proponent does not issue a proxy
statement.

PROXY SOLICITATION COSTS. The proxies being solicited hereby are being
solicited by the Company. The cost of soliciting proxies in the enclosed form
will be borne by the Company. Officers and regular employees of the Company may,
but without compensation other than their regular compensation, solicit proxies
by further mailing or

<PAGE> 21

personal conversations, or by telephone, telex, facsimile or electronic means.
The Company will, upon request, reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the beneficial owners
of stock.

FINANCIAL STATEMENTS AVAILABLE. A copy of the Company's 1999 Annual
Report to Stockholders containing audited financial statements accompanies this
Proxy Statement. The 1999 Annual Report does not constitute a part of the proxy
solicitation material.

Upon written request to the Company's Chief Financial Officer, Bright
Horizons Family Solutions, Inc., One Kendall Square, Building 200, Cambridge,
Massachusetts 02139, the Company will provide, without charge, copies of the
Company's annual report filed with the Securities and Exchange Commission on
Form 10-K.

18
<PAGE> 22

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

BRIGHT HORIZONS FAMILY SOLUTIONS, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON

MAY 25, 2000

PROXY

The undersigned hereby appoints Roger H. Brown and Elizabeth J. Boland,
or either of them, with full power of substitution, as proxies, and hereby
authorizes them to represent and to vote, as designated, all of the shares of
voting stock of Bright Horizons Family Solutions, Inc. held by the undersigned
on April 3, 2000, at the Annual Meeting of Stockholders to be held at the
Company's corporate offices, One Kendall Square, Building 200, Cambridge,
Massachusetts, on Thursday, May 25, 2000 at 10:00 a.m., local time, and any
adjournment(s) thereof.

1. ELECTION OF DIRECTORS.

[ ] FOR all nominees listed below (except as marked to the contrary
below).

Class II (2003)
---------------------
E. Townes Duncan
Sara Lawrence-Lightfoot
Marguerite W. Sallee

To withhold authority to vote for any individual nominee, write that
nominee's name in the space below:

-----------------------------------------------------------------

[ ] WITHHOLD AUTHORITY to vote for all nominees.

In their discretion, the proxies are authorized to vote upon such business as
may properly come before this meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1.

Dated: , 2000
----------------------------

----------------------------------------
Signature

----------------------------------------
Signature if Held Jointly
Please sign exactly as name appears on
your stock certificates. Each joint owner
must 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 as authorized. If a
partnership, please sign in partnership
name by authorized person.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY.