<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BELL & HOWELL COMPANY
- --------------------------------------------------------------------------------
(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>
[BELL & HOWELL LOGO]
NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
<PAGE>
[BELL & HOWELL LOGO]
BELL & HOWELL COMPANY
5215 OLD ORCHARD ROAD
SKOKIE, ILLINOIS 60077
APRIL 10, 1998
DEAR SHAREHOLDER,
YOU ARE INVITED TO ATTEND THE 1998 ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON WEDNESDAY, MAY 13, 1998, IN ANN ARBOR, MICHIGAN.
AS IN PREVIOUS YEARS, SHAREHOLDERS WHO CANNOT ATTEND THE MEETING IN
PERSON WILL BE ABLE TO HEAR THE MEETING LIVE OVER THE INTERNET. YOU ARE
DIRECTED TO THE INSTRUCTIONS FOR CONNECTING TO THE BELL & HOWELL WEB SITE
ENCLOSED SEPARATELY WITH THIS PROXY STATEMENT.
THE ANNUAL MEETING WILL BEGIN WITH VOTING ON THE MATTERS SET FORTH IN
THE ACCOMPANYING NOTICE OF ANNUAL MEETING AND PROXY STATEMENT AND ON OTHER
BUSINESS MATTERS PROPERLY BROUGHT BEFORE THE MEETING, FOLLOWED BY DISCUSSION.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU CAN BE SURE YOUR SHARES ARE
REPRESENTED AT THE MEETING BY PROMPTLY COMPLETING, SIGNING, DATING AND
RETURNING YOUR PROXY FORM IN THE ENCLOSED ENVELOPE.
CORDIALLY,
/s/ JAMES P. ROEMER
JAMES P. ROEMER
CHAIRMAN OF THE BOARD
<PAGE>
BELL & HOWELL COMPANY
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
Bell & Howell Company's 1998 Annual Meeting of Shareholders will be held at
300 N. Zeeb Road, Ann Arbor Michigan, on Wednesday, May 13, 1998, at 8:00
a.m., EDT. The shareholders will act on the matters listed below:
(1) Election of Directors for the ensuing year
(2) Approval of an amendment to the Company's 1995 Stock Option Plan to
reserve an additional 1,500,000 shares of common stock for issuance
thereunder, and
(3) Transaction of such other business as may properly come before the
meeting.
This Proxy Statement is furnished in connection with the solicitation of
proxies by Bell & Howell Company on behalf of the Board of Directors for the
1998 Annual Meeting of Shareholders.
Only Shareholders of record at the close of business on March 20, 1998,
will be entitled to vote at the meeting and any adjournments.
Bell & Howell's audited financial statements, along with other financial
information, are included in Exhibit A to this Proxy Statement.
You can ensure that your shares are voted at the meeting by promptly
completing, signing, dating and returning the enclosed proxy form in the
envelope provided. You can also vote your shares on the Internet or by
telephone. (See the proxy form for specific instructions.) Sending in a
signed proxy or voting your proxy over the Internet or by telephone will not
affect your right to attend the meeting and vote. A shareholder who gives a
proxy may revoke it at any time before it is exercised by voting in person at
the Annual Meeting, by submitting another proxy bearing a later date or by
notifying the Inspector of Election in writing of such revocation.
If you plan to attend the meeting, please complete and return the advance
registration form on the back page of this Proxy Statement. An admission
card, which will expedite your admission to the meeting, will be mailed to
you about ten days prior to the meeting.
/s/ GARY S. SALIT
GARY S. SALIT April 10, 1998
Corporate Counsel and Secretary
-2-
<PAGE>
1. ELECTION OF DIRECTORS
At the 1998 Annual Meeting of Shareholders, 10 Directors are to be elected to
hold office until the 1999 Annual Meeting and until their successors have
been elected and have qualified. The Board's nominees, Messrs. James P.
Roemer (Chairman), David Bonderman, David G. Brown, J. Taylor Crandall,
Daniel L. Doctoroff, Nils A. Johansson, William E. Oberndorf, Gary L.
Roubos, John H. Scully and William J. White, listed on pages 3 and 4 with
brief biographies, are all current Bell & Howell Directors. The Board knows
of no reason why any nominee may be unable to serve as a Director. If any
nominee is unable to serve, the shares represented by all valid proxies will
be voted for the election of such other person as the Board may recommend.
The following sets forth the names, ages and year each Director was first
elected a Director, and the recent business experience and certain other
information relating to each Director:
James P. Roemer, 50, has served as Chairman of the Board since January 1998
and has been a Director of the Company since February 1995. In February 1997
he was elected President and Chief Executive Officer of the Company. From
February 1995 to February 1997 he served as President and Chief Operating
Officer of the Company. Prior to that, he served as President and Chief
Executive Officer of UMI Company from January 1994 to June 1995. Mr. Roemer
joined Bell & Howell as a Vice President and Bell & Howell Publication
Systems Company (PSC) as President and Chief Operating Officer in October
1991 and was promoted to President and Chief Executive Officer of PSC in
September 1993. Prior to joining Bell & Howell, Mr. Roemer was President of
the Michie Group, Mead Data Central from December 1989 to October 1991. From
January 1982 to December 1989 he was Vice President and General Manager of
Lexis, an on-line information service. From April 1981 to December 1982 he
served as acting President of Mead Data Central.
David Bonderman, 55, has been a Director of the Company since December 1987.
He has been the Managing General Partner of TPG Partners L.P. (a private
investment company) since December 1993. From August 1992 to December 1993,
he was a private investor. From July 1983 through August 1992, he was Vice
President and Chief Operating Officer of Keystone, Inc. (a private investment
company). He is also a Director of Beringer Wine Estates, Inc., Continental
Airlines, Inc., Denbury Resources, Inc. and Washington Mutual Inc.
David G. Brown, 41, has been a Director of the Company since January 1994.
He has been a principal in Arbor Investors LLC (a private investment company)
since August 1995 and has been a Vice President of Keystone, Inc. since
August 1993. Prior to joining Keystone, Mr. Brown was a Vice President in the
Corporate Finance Department of Salomon Brothers Inc from August 1985 to July
1993. He is a director of AER Energy Resources, Inc.
J. Taylor Crandall, 44, has been a Director of the Company since November
1990. He has been Vice President and Chief Financial Officer of Keystone,
Inc. since October 1986. He was President, Director and sole stockholder of
Acadia MGP, Inc. (managing general partner of Acadia Investment Partners,
L.P., the sole general partner of Acadia Partners, L.P. (an investment
partnership) from January 1992 to September 1995. He is a Director of
Integrated Orthopedics, Inc., Physicians Reliance Network, Quaker State
Corporation, Signature Resorts, Inc., Specialty Foods, Inc. and Washington
Mutual Inc.
Daniel L. Doctoroff, 39, has been a Director of the Company since June 1990.
He has served as Managing Director of Oak Hill Partners, Inc. (successor to
Rosecliff, Inc., the investment advisor to Acadia Partners, L.P.) since
August 1987. Since October 1992, he also has been a Vice President of
Keystone, Inc. and since February 1994 has been Managing Partner of
Insurance Partners Advisors, L.P. He is also a Director of Capstar Hotels,
Inc. and Williams Scotsman, Inc.
-3-
<PAGE>
Nils A. Johansson, 49, has been a Director of the Company since April 1990.
Since January 1994, he has held the office of Executive Vice President and
Chief Financial Officer of the Company. Mr. Johansson served as Senior Vice
President, Finance and Chief Financial Officer of the Company from May 1989
to January 1994. From February 1981 to May 1989 he held various executive
positions with Bell & Howell, including Corporate Treasurer and positions in
financial planning and analysis, as well as business development.
William E. Oberndorf, 44, has been a Director of the Company July 1988. He
has served as Managing Director of SPO Partners & Co. (a private investment
company) since March 1991. He is also a Director of Plum Creek Timber
Company, L.P.
Gary L. Roubos, 61, has been a Director of the Company since February 1994.
He has been Chairman of the Board of Dover Corporation (a diversified
equipment manufacturer) since August 1989 and was President from May 1977 to
May 1993. He is also a Director of Omnicom Group, Inc.
John H. Scully, 53, has been a Director of the Company since July 1988. He
has served as Managing Director of SPO Partners & Co. since March 1991. He
is also a Director of Plum Creek Timber Company, L.P.
William J. White, 59, has served as a Director of the Company since February
1990 and was Chairman of the Board from February 1990 to January 1998. He
served as Chief Executive Officer of the Company from February 1990 to
February 1997. He was also President of the Company from February 1990 to
February 1995. He is also a Director of Ivex Packaging Corporation, Readers
Digest Association, Inc. and TJ International, Inc.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held three meetings during 1997. The average
attendance by Directors at these meetings was 97%, and all nominees attended
at least 2/3rds of the Board and Committee meetings they were scheduled to
attend.
The committees of the Board of Directors are a Compensation Committee and an
Audit Committee.
Members of the Compensation Committee are Directors Oberndorf (Chairman),
Bonderman, Crandall, Doctoroff and Roubos. This Committee has two primary
responsibilities: (1) to monitor the Company's management resources,
structure, succession planning, development and selection process and the
performance of key executives; and (2) to review and approve executive
compensation. It also serves as the committee administering the Bell &
Howell 1995 Stock Option Plan and the Management Incentive Bonus Plan. This
Committee met twice during 1997.
Members of the Audit Committee are Directors Roubos (Chairman), Oberndorf and
Scully. This Committee addresses the quality of the Company's financial
reporting and related systems of internal accounting controls. Its duties
include: (1) approving the selection of independent auditors; (2) reviewing
the scope and results of the independent audit; (3) reviewing the evaluation
of the Company's systems of internal accounting controls and (4) appraising
the Company's financial reporting (including its Proxy Statement and 10-K)
and the accounting standards and principles followed. The Audit Committee
met twice during 1997.
All of the Directors, except for Messrs. Johansson and Roemer (and Mr. White
prior to this year), participate in the 1995 Non-Employee Directors' Stock
Option Compensation Plan. The Plan provides for annual non-qualified stock
option grants to each Director who is serving on the Board at the time of
such grant and who is not also an employee of Bell & Howell or any of its
affiliates.
-4-
<PAGE>
Each annual grant permits a non-employee Director to purchase a specified
number of shares of the Company's Common Stock at an exercise price not less
than the fair value of the Common Stock on the date the option is granted.
The number of shares which may be purchased is equal to the total annual
compensation otherwise payable to a Director divided by the fair market value
of an option on one share of Common Stock. For these purposes, the value of
an option is determined using the Black-Scholes option-pricing model. Annual
grants will be made as of the last day of trading of the Company's Common
Stock in the second fiscal quarter of each fiscal year through 2005. The
options expire ten years after the date they are granted or at such earlier
date as may be provided by the Plan provisions upon retirement, disability,
death or other termination of service.
For 1997, the annual compensation was set at $20,000 per annum for each
non-employee Director. Based on that amount, each non-employee Director
received an option grant on 1,300 shares of the Company's Common Stock at an
exercise price of $30.8125, determined as of June 30, 1997, the last day of
the second fiscal quarter 1997, using the formula described above. All
Directors are reimbursed travel expenses for attendance at Board meetings.
INFORMATION RELATING TO DIRECTORS AND EXECUTIVE OFFICERS
The following table includes all Bell & Howell stock holdings, as of March 1,
1998, of the Company's Directors and five most highly compensated executive
officers.
<TABLE>
<CAPTION>
Directors and Executive Officers: Number of Shares Percent
--------------------------------- ---------------- -------
<S> <C> <C>
DAVID BONDERMAN(2) 731,060 3.1%
WILLIAM J. WHITE(1) 379,540 1.6%
NILS A. JOHANSSON 247,812 1.1%
JAMES P. ROEMER 171,555 *
J. TAYLOR CRANDALL 115,341 *
JOHN H. SCULLY (3) 76,487 *
WILLIAM E. Oberndorf 57,865 *
BEN L. MCSWINEY 29,703 *
MICHAEL A. DERING 20,000 *
DANIEL L. DOCTOROFF 14,433 *
GARY L. ROUBOS 5,379 *
DAVID G. BROWN 3,675 *
ALL DIRECTORS AND EXECUTIVE OFFICERS 1,959,270 8.4%
AS A GROUP (16 PERSONS)
</TABLE>
(1) Includes 287,300 shares held in a trust of which Mr. White is neither
trustee nor beneficiary but for which he has the power to vote and
dispose of shares.
(2) Includes 72,488 shares owned by Group Management, Inc. and 64,483 shares
owned by Bonderman Family Limited Partnership.
(3) Consists of 76,487 shares owned by Cranberry Lake Partners Limited over
which Mr. Scully exercises investment discretion.
* less than 1%.
-5-
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
The Compensation Committee of the Board of Directors (Committee), consisting
entirely of non-employee Directors, approves the objectives and policies
governing the compensation to the Company's executive officers. In 1997, the
Committee met twice, primarily to review and approve performance targets and
achievement levels and to review major compensation actions.
The philosophy of the Committee is:
-- to align executive compensation with shareholder interests
-- to ensure that compensation is at a level that enables the Company to
attract and retain high quality talent
-- to provide significant rewards for achievement of business objectives
and growth in shareholder value
The Company's compensation program for executive officers currently consists
of the following key elements: base salary, annual bonuses, long term
incentive bonuses and stock option grants. Each element of the program has a
somewhat different purpose, and all of the Committee's determinations during
1997 (as in prior years) regarding the appropriate form and level of
executive compensation payments and awards were ultimately judgments based
upon the Committee's ongoing assessment and understanding of the Company and
its executive officers and c:\temp performance against established goals.
Salary payments in 1997 were made to compensate ongoing performance through
the year, while 1997 bonuses were paid in 1998 based upon the Committee's
judgment regarding the executive officers' contributions and achievement of
business objectives during 1997. Stock option grants are primarily designed
to provide strong incentives for creation of long-term shareholder value and
continued retention by the Company of executive officers and other key
employees. Unvested stock option grants are generally forfeited if the
executive officer leaves the Company before retirement.
All stock option grants are made under the Bell & Howell 1995 Stock Option Plan
and are directly linked to the shareholders' interest as the value of the awards
will increase or decrease based upon the future price of the Company's Common
Stock.
In determining the overall level and form of executive compensation to be
paid or awarded in 1997, the Committee's judgment was primarily based upon
its ongoing assessment of the Company's overall performance - against
specific targets, as well as individual performances and contributions. Some
of the specific factors affecting the Committee's judgment in 1997 included,
among other things: continued increases in the Company's sales and
productivity in a period of rapid change and intensified competition. The
Committee also considered the compensation practices and performances of
other major corporations, which are most likely to compete with the Company
for the services of its executive officers.
The Committee's decisions concerning the specific 1997 compensation elements
for individual executive officers, including the Chief Executive Officer,
were made within this broad framework and in light of each executive
officer's level of responsibility, performance and current salary.
Federal tax law establishes certain requirements in order for compensation
exceeding $1 million earned by certain executives to be deductible. Because
the total compensation for executive officers is below the $1 million
threshold, the Compensation Committee has not had to address the issues
relative thereto.
-6-
<PAGE>
BASES FOR CHIEF EXECUTIVE OFFICER COMPENSATION
For 1997, Mr. Roemer received total cash payments of $638,451 in salary and
bonuses (as shown in the Summary Compensation Table on page 8).
As shown in the Summary Compensation Table, Mr. Roemer was also granted stock
options for 385,000 shares of Bell & Howell common stock in 1995, the first
portion of which becomes exercisable in May 1998. These grants would be
forfeited if he were to leave the Company for reasons other than disability
or death before they become exercisable. These grants offer Mr. Roemer an
opportunity for significant capital accumulation if exceptional shareholder
value is created.
In determining Mr. Roemer's 1998 compensation, the Committee has focused on
his ability to enhance the long-term value of the Company. During his tenure
with Bell & Howell, he has been a leader in the revitalization of the Company
and its evolution into a provider of technological solutions within a number
of market segments. Mr. Roemer's total compensation is based on both Bell &
Howell's recent performance and his contributions to the overall long-term
strategy and financial strength of the Company.
*****
The foregoing report on executive compensation is provided by the following
outside directors, who comprised the Compensation Committee during 1997:
William E. Oberndorf (Chairman) Daniel L. Doctoroff
David Bonderman Gary L. Roubos
J. Taylor Crandall
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists beneficial owners of more than five percent of
the Company's Common Stock as of December 31, 1997.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Number of Shares Percent
------------------------------------ ---------------- -------
<S> <C> <C>
Keystone, Inc. 4,363,000 18.6%
3100 Texas Commerce Tower
201 Main Street
Fort Worth, Texas 76102
Manning & Napier Advisors, Inc. 1,859,355 7.9%
1100 Chase Square
Rochester, NY 14604
Lazard Freres & Co. LLC 1,433,555 6.1%
30 Rockefeller Plaza
New York, NY 10020
Fir Tree Partners
1211 Avenue of the Americas 1,190,000 5.1%
24th Floor
New York, NY 10036
</TABLE>
-7-
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company or a
subsidiary of the Company to each of its five most highly compensated
executive officers for fiscal 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Long Term
Compensation
--------------------------------------
Awards Payouts
--------------------------- ---------
Annual Compensation Securities
Name and Fiscal ----------------------- Underlying Restricted LTIP All Other
Principal Position Year Salary Bonus(1) Options(2) Stock Payouts(3) Compensation
- ------------------ ---- ------ -------- ---------- ----- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
James P. Roemer, 1997 $567,298 $ 71,153 --- $316,875 --- $ 101,288(4)
Chairman of the Board 1996 510,572 233,331 --- --- $54,384 94,984(4)
President and 1995 405,655 252,689 385,000 --- --- 21,992(4)
Chief Executive Officer
William J. White, 1997 669,816 83,727 --- --- --- 39,232(5)
Former Chairman of the Board 1996 643,853 294,241 --- --- --- 30,092(5)
1995 614,427 307,501 460,000 --- --- 34,574(5)
Nils A. Johansson, 1997 433,082 54,135 --- --- --- 44,336(6)
Executive Vice President 1996 396,162 181,046 --- --- 79,380 27,069(6)
and Chief Financial Officer 1995 363,827 216,063 270,000 --- --- 31,768(6)
Michael A. Dering, 1997 265,056 164,617 12,000 259,875 --- 11,599(8)
President of Bell & Howell 1996(7) 105,770 75,000 10,000 --- --- 87,728(8)
Mail Processing Systems
Company (MPS)
Ben L. McSwiney, 1997 275,100 --- 12,000 306,250 --- 14,598(10)
Former President of MPS 1996 254,539 107,413 12,000 --- --- 113,422(10)
1995(9) 140,219 9,363 10,500 --- --- 2,963(10)
</TABLE>
(1) Consists of amounts awarded under an employment agreement in respect of
Mr. White and under Bell & Howell Company's Management Incentive Bonus
Plan (the "MIB") in respect of Messrs. Roemer, Johansson, Dering and
McSwiney. The MIB provides a financial incentive for key management
employees to focus their efforts on, and achieve, annual financial
targets. Payments under the MIB for fiscal 1997 were made in March 1998.
(2) Amounts reflected in this column are for grants of stock options under
the Company's 1995 Stock Option Plan. No Stock Appreciation Rights
(SAR's) have been used by the Company.
(3) For fiscal 1996 consists of amounts earned under Bell & Howell Company's
Long-Term Incentive Plan: 1993-1996 (" LTIP II"). LTIP II provided
long-term cash incentives to key management employees by rewarding them
for achieving financial targets for the period commencing fiscal 1993
through fiscal 1996. LTIP II was terminated as of the end of fiscal 1994
and replaced with the 1995 Stock Option Plan. Awards earned as of the
end of 1994 were frozen at that time. Prorated payments under the LTIP
II were made in cash in February 1997.
(4) For fiscal 1997, 1996 and 1995 includes $4,775, $3,000 and $3,000,
respectively, in contributions to the Bell & Howell Profit Sharing
Retirement Plan ("PSRP"); $6,207, $3,384 and $2,084, respectively, in
contributions to the Bell & Howell Replacement Benefit Plan ("RBP");
$20,933, $12,38l and $16, 908, respectively, for imputed life insurance,
and for fiscal 1997 and 1996 includes $69,373 and $76,219, respectively,
for relocation and related expenses.
(5) For fiscal 1997, 1996 and 1995 consists of $4,775, $3,000 and $3,000,
respectively, in contributions to the PRSP; $24,147, $16,027 and
$20,944, respectively, in contributions to the RBP; and, $10,310,
$11,065 and $10,630, respectively, in imputed life insurance.
(6) For fiscal 1997, 1996 and 1995 consists of $9,600, $6,000 and $6,000,
respectively, in contributions to the PSRP; $32,010, $18,489 and
$23,328 respectively, in contributions to the RBP, and, $ 2,726, $2,580
and $2,440, respectively, in imputed life insurance.
(7) Reflects compensation for the six month period from July 1996, when Mr.
Dering's employment with the Company began, through December 1996.
(8) For fiscal 1997 and 1996 includes $2,263 and $694, respectively, in
imputed life insurance; for fiscal 1997 includes $4,775 in contribution
to the PSRP and $4,561 in contributions to the RBP; and for fiscal 1996
includes $87,034 in relocation and related expenses.
(9) Reflects compensation for the six month period from July 1995, when Mr.
McSwiney's employment with the Company began, through December 1995.
(10) For fiscal 1997, 1996 and 1995 includes $4,775, $3,000 and $2,308,
respectively, in contributions to the PRSP; and $3,039, $3,011 and $655,
respectively, in imputed life insurance; for fiscal 1997 and 1996
includes $6,784 and $2,278, respectively, in contributions to the RPB;
and for fiscal 1996 includes of $59,571 for relocation and related
expenses and $45,562 of income resulting from the exercise of
nonqualified stock options.
-8-
<PAGE>
STOCK OPTIONS
In May 1995, the Company adopted the 1995 Stock Option Plan (the "Option
Plan"). A total of 2,160,000 shares of Common Stock were reserved for
issuance under the Option Plan. The intent of the Option Plan is to increase
shareholder value and maintain an entrepreneurial spirit within the Company
by providing significant capital accumulation opportunities to the Company's
key employees, but only if exceptional shareholder value is created. Under
the Option Plan, the Company granted options to Messrs. White, Roemer and
Johansson in May 1995 in the amounts shown on the table which follows on page
10, exercisable in a series of six option exercise prices, the first of which
was $15.50, the initial public offering price, and the remainder of which
will equal 120% of the exercise price of the preceding increment. These
options which expire six years from the date of grant are exercisable as
follows: up to 25% after three years, up to 50% after four years and up to
100% after five years.
Under the terms of the Option Plan, selected officers and key employees may
receive incentive stock options in such amounts as may be established by the
Compensation Committee at the time of grant. The exercise price of each
option will also be determined by the Compensation Committee at the time of
grant, but the price will not be less than the fair market value of the
Common Stock on the date of grant. Options to Messrs. Dering and McSwiney,
in the amounts shown on the table which follows, as well as to other officers
and key employees, were granted by the Company in fiscal 1997 to those
persons selected by the Compensation Committee based on the value of their
contribution to the Company. The term for such options, is ten years and for
every grant vests in equal increments over a five year period from the date
of each grant, the first increment of which is not exercisable until one year
from the initial date of grant. The Company had outstanding grants of
1,679,850 shares to officers and key employees as of end of fiscal 1997.
The table on page 10 also shows the potential realizable value from stock
options granted in 1995, 1996 and 1997. These hypothetical gains are based
entirely on assumed annual growth rates of five, ten and twenty per cent in
the value of the Company's Common Stock price over the lives of the stock
options granted. The options granted to Mr. Roemer, for example, would
produce the pre-tax gain of $7,308,360 shown in the table if the Company's
Common Stock price rises by 20% per annum over the six year life of the
options. Based on the number of shares outstanding at the end of 1997, such
an increase in the Company's Common Stock price would produce a corresponding
aggregate pre-tax gain of almost $654,000,000 for the Company's shareholders.
In other words, Mr. Roemer's potential gain from stock options granted in
1995 would equal about one and one-tenth percent (i.e., 1.1%) of the
potential gain to all shareholders resulting from the assumed future stock
price increases.
Under current law, the following are U.S. federal income tax consequences
generally arising with respect to awards under the Plan.
A participant who is granted an incentive stock option does not recognize any
taxable income at the time of the grant and, similarly, the Company is not
entitled to any deduction at the time of grant. If the participant makes no
disposition of the shares acquired pursuant to an incentive stock option
before the later of two years from the date of grant and one year from the
date of exercise, any gain or loss realized on a subsequent disposition of
the shares will be treated as a long-term capital gain or loss. Under such
circumstances, the Company will not be entitled to any deduction for federal
income tax purposes. Conversely, if a participant disposes of the acquired
shares before two years from the date of grant or one year from the date of
exercise, any gain will be treated as ordinary income and any loss will be
treated as a short-term capital loss. The Company will then be entitled to a
deduction for federal income tax purposes for the ordinary income recognized
by the participant.
A participant who is granted a non-qualified stock option will not have
taxable income at the time of grant, but will have taxable income at the time
of exercise equal to the difference between the exercise price and the market
value of the Company's Common Stock on the date of exercise. The Company is
entitled to a tax deduction for the same amount.
Option grants totaling approximately 72,400 shares were exercisable at the
end of fiscal 1997.
-9-
<PAGE>
STOCK OPTIONS GRANTED FROM 1995 TO 1997
<TABLE>
<CAPTION>
Number of Percent
Securities of Total Exercise Latest Potential Realizable Value at Assumed
Underlying Annual or Possible Annual Rates of Stock Price
Year of Options Options Base Price Expiration Price Appreciation for Option Term(1)
Name Grant Granted (#) Granted ($/Sh) Date 5% 10% 20%
- ---- ------ ----------- ------- ----- ---- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James P. Roemer 1995 38,500 15.50 May 2001 $202,952 $460,429 $1,185,136
1995 38,500 18.50 May 2001 87,452 344,929 1,069,636
1995 77,000 22.25 May 2001 -- 401,108 1,850,522
1995 77,000 26.75 May 2001 -- 54,608 1,504,022
1995 77,000 32.00 May 2001 -- -- 1,099,772
1995 77,000 38.50 May 2001 -- -- 599,272
-------
385,000 29.7%
William J. White 1995 46,000 $15.50 May 2001 242,488 550,123 1,416,007
1995 46,000 18.50 May 2001 104,488 412,123 1,278,007
1995 92,000 22.25 May 2001 -- 479,246 2,211,013
1995 92,000 26.75 May 2001 -- 65,246 1,797,013
1995 92,000 32.00 May 2001 -- -- 1,314,013
1995 92,000 38.50 May 2001 -- -- 716,013
-------
460,000 35.4%
Nils A. Johansson 1995 27,000 15.50 May 2001 142,330 322,898 831,134
1995 27,000 18.50 May 2001 61,330 241,898 750,134
1995 54,000 22.25 May 2001 -- 281,297 1,297,769
1995 54,000 26.75 May 2001 -- 38,297 1,054,769
1995 54,000 32.00 May 2001 -- -- 771,269
1995 54,000 38.50 May 2001 -- -- 420,269
-------
270,000 20.8%
Michael A. Dering 1997 12,000 3.9% 21.125 Mar.2007 159,425 404,014 1,316,105
1996 10,000 4.4% 29.375 July 2006 184,738 468,162 1,525,073
Ben L. McSwiney 1997 12,000 3.9% 21.125 Mar.2007 159,425 404,014 1,316,105
1996 12,000 5.3% 31.75 May 2006 239,609 607,216 1,978,052
1995 10,500 0.8% 20.50 July 2005 135,370 343,053 1,117,521
</TABLE>
(1) The table sets forth the potential realizable values of such options,
upon their latest possible expiration date, at arbitrarily assumed
annualized rates of stock price appreciation of five, ten and twenty
percent over the term of the options. Because actual gains will depend
upon, among other things, the actual dates of exercise of the options
and the future performance of the Common Stock in the market, the
amounts reflected in this table may not reflect the values actually
realized. No gain to the named executive officers is possible without
an increase in stock price which will benefit all shareholders
proportionately.
AGGREGATED STOCK OPTION EXERCISES IN 1997 AND YEAR END STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
YEAR-END (1) YEAR-END ($)(2)
--------------------- -----------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- --------------- -------- ------------- -------------
<S> <C> <C> <C> <C>
James P. Roemer None N/A None/$385,000 (3) None/$1,010,625
William J. White None N/A None/$460,000 None/$1,207,500
Nils A. Johansson None N/A None/$270,000 (3) None/$708,750
Michael A. Dering None N/A 2,000/$20,000 (4) None/$60,750
Ben L. McSwiney None N/A 6,600/$27,900 (4) $23,888/$96,581
</TABLE>
(1) All information provided is with respect to stock options. No SARs have
been issued by the Company.
(2) The amounts have been determined by multiplying the aggregate number of
options by the difference between $26.1875, the closing price of the Common
Stock on January 2, 1998 (the last trading day of fiscal 1997), and the
exercise price of the options.
(3) These options are exercisable as follows: up to 25% after May 1998, up to
50% after May 1999 and up to 100% after May 2000.
(4) These options are exercisable in 20% cumulative increments, the first
increment beginning one year after the date of grant.
-10-
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN
The Bell & Howell Supplemental Retirement Plan ("SRP") provides officers and
certain employees with additional pension benefits upon retirement, in order to
supplement social security and other benefits provided under the Bell & Howell
Profit Sharing Retirement Plan ("PSRP") and the Bell & Howell Replacement
Benefit Plan ("RBP").
Generally, the SRP provides for lifetime monthly pension payments which equal
the excess, if any, of (i) up to 50% (the actual percentage being proportional
to length of service) of the participant's average monthly compensation (which
is defined to include salary and annual bonuses up to 150% of target) during the
highest paid four years of the participant's last six years of employment over
(ii) the sum of the aggregate monthly amounts which are payable under the PSRP,
RBP (in each case exclusive of voluntary and mandatory employee contributions
and investment additions thereon) and primary social security benefits. If a
participant is involuntarily terminated other than "for cause" and he has been a
plan participant for at least five years, he shall be entitled to deferred SRP
payments calculated as if his termination date were his retirement date. If a
participant voluntarily terminates his employment and he has been an employee
for at least ten years and a plan participant for at least five years, he shall
be entitled to deferred SRP payments calculated as if his termination date were
his retirement date. The estimated credited years of service at the end of
fiscal 1997 for each of the individuals listed in the Supplemental Retirement
Plan Table below are six, seven, sixteen, one and two years for Messrs. Roemer,
White, Johansson, Dering and McSwiney, respectively. The Company estimates that
the annual benefits which have accrued through the end of fiscal 1997 and would
be payable upon retirement at age 60 pursuant to the SRP would be $69,225,
$168,530, $165,787 and $1,586 for Messrs. Roemer, White, Johansson and McSwiney,
respectively. No SRP benefits have yet accrued at the end of fiscal 1997 for
Mr. Dering.
The Company estimates that the following annual benefits would be payable
upon retirement at or after age 60 to persons in the following specified
participation levels, compensation and year-of-service classifications, less
amounts received as social security benefits and benefits under the Company's
other retirement plans:
SUPPLEMENTAL RETIREMENT PLAN TABLE
<TABLE>
<CAPTION>
PARTICIPATION
LEVEL I YEARS OF SERVICE
REMUNERATION 15 20 OR MORE
------------ ------- ----------
<S> <C> <C>
$250,000 $ 93,750 $125,000
425,000 159,375 212,500
600,000 225,000 300,000
775,000 290,625 387,500
950,000 356,250 475,000
</TABLE>
<TABLE>
<CAPTION>
PARTICIPATION YEARS OF SERVICE
LEVEL II -------------------------------------------------------
REMUNERATION 15 20 25 30 OR MORE
- ------------ ------- ------- ------- ----------
<S> <C> <C> <C> <C>
$125,000 $34,375 $43,750 $53,125 $ 62,500
150,000 41,250 52,500 63,750 75,000
175,000 48,125 61,250 74,375 87,500
200,000 55,000 70,000 85,000 100,000
225,000 61,875 78,750 95,625 112,500
</TABLE>
Participants may elect to receive reduced benefits at age 55.
-11-
<PAGE>
RELATED PARTY TRANSACTIONS
The Company has made loans (the balance of which totaled $1,706,563 at the end
of fiscal 1997) to certain key employees in connection with their purchases of
the Company's Common Stock. Pursuant to the terms of such loans, the shares
acquired are pledged as security. The following individuals had loans in excess
of $60,000 outstanding at the end of fiscal 1997: M. A. Dering ($238,205), N. A.
Johansson ($250,712), B.L. McSwiney ($379,031), B. Moeller ($164,894) and M.T.
Rubly ($382,222). Each loan is evidenced by an installment note maturing five
years from the date of the note and bearing interest at the Company's marginal
rate of borrowing (approximately 6% in fiscal 1997). Interest and principal may
be deferred until the maturity date.
EMPLOYMENT CONTRACT
The Company entered into an employment agreement with William J. White dated
as of March 23, 1990. Mr. White's salary and bonus was set by the
Compensation Committee of the Company's Board of Directors. Pursuant to the
terms of the employment agreement, Mr. White was until December 31, 1997 an
employee at will. He retired as Chairman of the Company on December 31, 1997.
The agreement contains noncompetition and confidentiality commitments.
CERTAIN TRANSACTIONS
During 1997, Bell & Howell Company and its subsidiaries did not have any
purchase, sale, lease, finance, insurance or other transactions with
companies or organizations with which Bell & Howell's Directors are
associated.
1998 LONG TERM INCENTIVE PLAN
Bell & Howell Company and Subsidiaries 1998 Long-Term Incentive Plan (the
"LTIP") was established to provide a continuing long-term cash incentive to key
management employees by rewarding them for achieving financial targets for
overlapping three year periods (with the first plan cycle for the two year
period from fiscal 1998 through fiscal 1999 (the "Plan Cycle"). The LTIP
currently covers 54 officers and employees and provides payments based on the
participant's participation level (which will be either 20% or 30% of the
employee's base rate of pay on January 5, 1998 or the date such participant
becomes designated as eligible for the LTIP by the Board of Directors), and the
performance level achieved from the identified financial targets over the Plan
Cycle. Payments under the LTIP will be made after the Plan Cycle, but no later
than March 31, 2000. No accrued amounts will vest pursuant to LTIP since
participants are eligible for payments only if they are employed by the Company
on the last day of the Plan Cycle, except for death, long-term disability or
retirement.
-12-
<PAGE>
PERFORMANCE GRAPH: FISCAL 1997
COMPARISON OF THIRTY TWO MONTH CUMULATIVE TOTAL RETURN AMONG
BELL & HOWELL, COMPOSITE GROUP AND S&P 500.
The following graph compares the cumulative total return of the Company's
Common Stock as compared with the S&P 500 Stock Index and a weighted composite
of the S&P Publishing Index and S&P Office Equipment & Supplies Index, weighted
each year based on the Company's EBITDA ratio.
[GRAPH]
The graph assumes a $100 investment made on May 2, 1995, the first trading
date of the Company's Common Stock, and the reinvestment of all dividends, as
follows:
<TABLE>
<CAPTION>
DOLLAR VALUE OF $100 INVESTMENT AT
----------------------------------
MAY 2, 1995 JANUARY 3, 1998
----------- ---------------
<S> <C> <C>
Bell & Howell $100.00 $168.95
Composite Group $100.00 174.05
S&P 500 $100.00 189.38
</TABLE>
-13-
<PAGE>
2. PROPOSAL FOR APPROVAL OF AN AMENDMENT OF 1995 STOCK OPTION
PLAN
In May 1995, the shareholders approved the Bell & Howell Company 1995 Stock
Option Plan (the "Option Plan"). The Company is presently authorized to
issue 2,160,000 shares of Common Stock upon the exercise of options granted
under the Option Plan. At the end of fiscal 1997, 463,150 shares of Common
Stock were available for future grants under the Option Plan.
The purpose of the Option Plan is to increase shareholder value and maintain
an entrepreneurial spirit within the Company by providing significant capital
accumulation opportunities to the Company's officers and other key employees.
The Board believes that the number of shares remaining available for
issuance will be insufficient to achieve the purpose of the Option Plan over
the term of the plan which expires April 24, 2005 unless additional shares
are authorized. The Board has approved an increase in the number of shares of
the Company's Common Stock reserved under the Option Plan by 1,500,000
shares. The Board believes that the adoption of this proposal is in the best
interest of the Company for the reasons discussed below.
Further, the Board wishes to advise the shareholders that had Messrs. Roemer,
White and Johansson received ten year option grants in May 1995 under the
same terms and conditions as did all other executive officers and key
employees receiving option grants at that time, the number of shares granted
to achieve equivalent economic value, using the Black-Scholes option-pricing
model would have been 340,000 option shares and, therefore, an additional
775,000 shares would now be available under the Option Plan. That is,
340,000 shares granted at $15.50 per share and exercisable over a ten year
period, would be economically equivalent to the 1,115,000 shares granted to
Messrs. Roemer, White and Johansson and exercisable in a series of six option
exercise prices over a six year period, the first of which was $15.50 and the
remainder of which are 120% of exercise price of the preceding increment.
A copy of the Option Plan as proposed to be amended may be obtained upon
written request to Gary S. Salit, Corporate Counsel and Secretary, Bell &
Howell Company, 5215 Old Orchard Road, Skokie, Illinois 60077-1076.
DESCRIPTION OF THE PLAN
As initially approved in May 1995, the Option Plan reserved 2,160,000 of the
Company's Common Stock for issuance pursuant to stock options to be granted
under the Option Plan. The proposed amendment, if adopted, would increase the
number of shares reserved for issuance under the Option Plan by 1,500,000
shares.
The Compensation Committee of the Board of Directors (comprised entirely of
non-employee directors) has been delegated the authority to grant incentive
stock options and/or nonqualified stock options under the Option Plan to
officers and other key employees of the Company and to generally exercise all
authority of the Board under the Option Plan which expires on April 24, 2005.
Because the officers and employees of the Company who may participate and the
amount of their options are determined by the Compensation Committee in its
discretion, it is not currently possible to state the names or positions of,
or the number of options that may be granted to, the Company's officers and
employees.
-14-
<PAGE>
The Compensation Committee will establish the time or times at which options
may be exercised and whether all of the options may be exercisable at one
time or in increments over time. The option price or procedure for setting
the option price shall be established by the Compensation Committee at the
time of the granting of an option, but shall not be less than 100% of the
fair market value of the Company's stock on the date of grant.. The
Committee has the discretion to make equitable adjustments in the option
price or other outstanding terms of any stock option in appropriate
circumstances. In the event of stock dividends, splits, and similar capital
changes, the Option Plan provides for appropriate adjustments in the number
of shares available for options and the number and option prices of shares
subject to outstanding options.
The term of each option shall be no more than ten years from the date of
grant. In the event of termination of employment, options shall terminate at
such times and upon such conditions as the Committee shall, in its
discretion, set forth in the option grant at the date of grant.
The purchase price of the options shall be in cash or, in the discretion of
the Committee, by the delivery (or certification of ownership) of shares of
the Company's Common Stock then owned by the participant or by delivering an
exercise notice together with instructions to a broker to deliver to the
Company the sale or loan proceeds to pay the exercise price. The Company
shall be entitled to withhold the amount of any tax attributable to any
shares delivered under the Plan or the Committee may, in its discretion,
elect to withhold shares of Common Stock from the option exercised having a
fair market value equal to the amount to be withheld.
In the event of a change of control of the Company, including among other
things, any person or entity owning, directly or indirectly, 50% of the
securities of the Company, or a sale, lease or other transfer of all or
substantially all of the assets of the Company, or a merger, share exchange,
consolidation or other combination with another corporation and as a result
less than 50% of the outstanding securities of the resulting corporation are
owned in the aggregate by the former shareholders of the Company, all
outstanding stock options shall become immediately exercisable, whether
vested or unvested.
The Compensation Committee, in its discretion, has the right to substitute,
on an equitable basis, options in connection with any merger, consolidation,
acquisition or reorganization.
The Option Plan may be amended, suspended or discontinued by the Board,
except with respect to stock options granted prior to such action.
Notwithstanding the foregoing, no change to the Plan requiring shareholder
approval under Section Section 16 of the Securities Exchange Act of 1934
shall be made without shareholder approval.
The issuance of shares of common stock upon the exercise of options is
subject to registration with the Securities and Exchange Commissions of the
shares reserved by the Company under the Option Plan.
The closing price of the Company's common stock as reported on the New York
Stock Exchange on March 20, 1998, the record date, was $28.25.
Shareholders are being requested at the meeting to approve an amendment to
the Option Plan which increases by 1,500,000 shares the number of shares of
Company Common Stock that may be issued under the Option Plan. The Board
recommends a vote "FOR" approval of the Proposal.
-15-
<PAGE>
3. OTHER MATTERS
SHAREHOLDER PROPOSALS FOR 1999
Under the rules of the Securities and Exchange Commission, shareholder
proposals submitted for next year's Proxy Statement must be received by Bell
& Howell no later than the close of business on December 14, 1998, to be
considered. Proposals should be addressed to Gary S. Salit, Corporate
Counsel and Secretary, Bell & Howell Company, 5215 Old Orchard Road, Skokie,
Illinois 60077-1076.
VOTING SECURITIES
Shareholders of record at the close of business on March 20, 1998, will be
eligible to vote at the meeting. The voting securities of Bell & Howell
consist of its $.001 par value common stock, of which 23,422,669 shares were
outstanding on March 20, 1998. Each share outstanding on the record date
will be entitled to one vote.
Individual votes of shareholders are kept private, except as appropriate to
meet legal requirements. Access to proxies and other individual share owner
voting records is limited to the Independent Inspectors of Election (Boston
EquiServe, L.P.) and certain employees of Bell & Howell and its agents who
must acknowledge in writing their responsibility to comply with this policy
of confidentiality.
VOTE REQUIRED FOR APPROVAL
The 10 nominees for director receiving a plurality of the votes cast at the
meeting in person or by proxy shall be elected. All other matters require
for approval the favorable vote of a majority of shares voted at the meeting
in person or by proxy. Abstentions and broker non-votes will not be treated
as votes cast and, therefore, will have no effect on the outcome of the
matters to be voted on at the meeting.
MANNER FOR VOTING PROXIES
The shares represented by all valid proxies received will be voted in the
manner specified on the proxies. Where specific choices are not indicated,
the shares represented by all valid proxies received will be voted "FOR" the
nominees for director named earlier in this Proxy Statement and "FOR" the
proposal to increase the number of option shares available under the 1995
Stock Option Plan.
Should any matter not described above be acted upon at the meeting, the
persons named in the proxy form will vote in accordance with their judgment.
The Board knows of no other matters which may be presented to the meeting.
-16-
<PAGE>
VOTING ON THE INTERNET OR VIA TELEPHONE
Again this year, registered holders (that is, those stockholders who hold
stock in their own names and whose shares are not held by a broker in a
"street name" on their behalf or whose shares are not held by the Bell &
Howell Associate Stock Purchase Plan) will be able to vote their proxies over
the Internet. In addition, this year registered holders will also be able to
vote their proxies by telephone. SPECIFIC INSTRUCTIONS FOR VOTING ON THE
INTERNET OR BY TELEPHONE ARE INCLUDED ON THE PROXY CARD.
SOLICITATION OF PROXIES
Proxies will be solicited on behalf of the Board of Directors by mail,
telephone, telegraph or in person, and solicitation costs will be paid by
Bell & Howell. Copies of proxy material and of the Form 10-K for 1998 will be
supplied to brokers, dealers, banks and voting trustees, or their nominees,
for the purpose of soliciting proxies from beneficial owners, and Bell &
Howell will reimburse such record holders for their reasonable expenses.
ACCOUNTING INFORMATION
The Company's independent auditor for fiscal 1998 is and for fiscal 1997 was
KPMG Peat Marwick, LLP, which will be available to respond to appropriate
questions at the Annual Meeting of Shareholders.
-17-
<PAGE>
1998 ANNUAL MEETING OF SHAREHOLDERS
8:00 A.M. EDT
MAY 13, 1998
300 NORTH ZEEB ROAD
ANN ARBOR, MICHIGAN
CUT OFF AT DOTTED LINE
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
ADVANCE REGISTRATION FORM
Send your completed and signed proxy form in the enclosed envelope. Include
this Advance Registration Form in the envelope if you plan to attend the Annual
Meeting.
Attendance at the Annual Meeting is limited to Bell & Howell shareholders or
their named representative. We reserve the right to limit the number of
representatives who may attend the Annual Meeting.
(PLEASE PRINT)
Shareholder's Name _________________________________________________________
Address ___________________________________________________________________
___________________________________________________________________
(Admission card will be returned c/o the Shareholder's address)
<PAGE>
YOUR PROXY CARD IS ATTACHED BELOW
PLEASE READ AND FOLLOW THE INSTRUCTIONS
CAREFULLY AND DETACH AND RETURN YOUR
COMPLETED PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
DETACH HERE
PROXY
BELL & HOWELL COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS MAY 13, 1998
The undersigned hereby constitutes and appoints David G. Brown and Gary
L. Roubos, and each of them jointly and severally, proxies, with full power
of substitution to vote all shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of Bell & Howell
Company (the "Company") to be held on May 13, 1998, at 300 North Zeeb Road,
Ann Arbor, Michigan.
The undersigned acknowledges the receipt of Notice of the aforesaid
Annual Meeting and Proxy Statement, each dated April 10, 1998, grants
authority to any of said proxies, or their substitutes, to act in the absence
of others, with all the powers which the undersigned would possess if
personally present at such meeting, and hereby ratifies and confirms all that
said proxies, or their substitutes, may lawfully do in the undersigned's
name, place and stead. The undersigned instructs said proxies, or either of
them, to vote as set forth on the reverse side.
SEE REVERSE SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
VOTE VIA TELEPHONE OR THE INTERNET -- IT'S QUICK, EASY AND IMMEDIATE
Your telephone or internet vote authorizes the named proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy
card. Please note all votes cast via the telephone or the internet must be
cast prior to 5 p.m., May 12, 1998. If you wish to change your address or
notify the company that you plan to attend the meeting, please mark the boxes
below and return your proxy by mail.
TELEPHONE VOTING:
- - There is NO CHARGE for this call.
- - On a Touch Tone Telephone call TOLL FREE 1-888-807-7699 24 hours per day -
7 days a week.
- - You will be asked to enter the Control Number which is located above your
name and address below.
- -------------------------------------------------------------------------------
OPTION #1: To vote AS THE BOARD OF DIRECTORS RECOMMENDS, press 1.
- -------------------------------------------------------------------------------
Your vote will be confirmed and cast as you directed. END OF CALL.
- -------------------------------------------------------------------------------
OPTION #2: If you choose to vote ON EACH PROPOSAL. SEPARATELY, press 2. You
will hear these instructions:
- -------------------------------------------------------------------------------
Proposal 1: To vote AS THE BOARD OF DIRECTORS RECOMMENDS, press 1; to vote
AGAINST, press 2; to ABSTAIN, press 3.
Proposal 2: To vote AS THE BOARD OF DIRECTORS RECOMMENDS, press 1; to vote
AGAINST, press 2; to ABSTAIN, press 3.
Your vote will bre confirmed and cast as you directed. END OF CALL.
INTERNET VOTING:
- - As with all internet access, usage or server fees must be paid by the user.
Visit our internet voting site at http://www.bellhowell.com. Click on the
"ANNUAL MEETING" icon and follow the instructions on your screen. These
instructions are similar to those above for telephone voting.
- -------------------------------------------------------------------------------
If you vote via telephone or the internet, it is not necessary to return your
proxy by mail. THANK YOU FOR VOTING.
- -------------------------------------------------------------------------------
DETACH HERE
/X/ Please mark votes as in this example.
ALL PROXIES SIGNED AND RETURNED WILL BE VOTED IN ACCORDANCE WITH YOUR
INSTRUCTIONS, BUT THOSE WITH NO CHOICE SPECIFIED WILL BE VOTED "FOR" EACH OF
THE NOMINEES FOR DIRECTOR NAMED BELOW AND "FOR" THE AMENDMENT TO THE
COMPANY'S 1995 STOCK OPTION PLAN.
1. Election of Directors.
Nominees: David Bonderman, David G. Brown, J. Taylor Crandall, Daniel L.
Doctoroff, Nile A. Johansson, William E. Oberndorf, James P. Roemer, Gary
L. Roubos, John H. Scully and William J. White.
/ / FOR ALL NOMINEES / / WITHHELD FROM ALL NOMINEES
/ / ______________________________________
For all nominees except as noted above
2. Proposal to Approve an Amendment to the Company's FOR AGAINST ABSTAIN
1995 Stock Option Plan to reserve an additional / / / / / /
1,500,000 shares of common stock for issuance
thereunder.
3. On all matters which may properly come before the meeting or any
adjournment thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
NO POSTAGE REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND
MAILED IN THE UNITED STATES.
Please sign exactly as name appears hereon. Joint owners should each sign.
Persons signing in a representative or fiduciary capacity should add their
titles.
PLEASE SIGN BELOW, DATE AND RETURN PROMPTLY.
Signature:______________________ Date: _______________
Signature:______________________ Date: _______________
