<PAGE> 1
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
THE FIRST YEARS INC.
(Name of Registrant as Specified In Its Charter)
THE FIRST YEARS INC.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
THE FIRST YEARS INC.
ONE KIDDIE DRIVE
AVON, MASSACHUSETTS 02322
TEL. (508) 588-1220
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1999
------------------------
Notice is hereby given that the Annual Meeting of Stockholders of The First
Years Inc. (the "Company") will be held on Thursday, May 20, 1999, at 10:30
a.m., local time, at the Marriott Courtyard Hotel, 200 Technology Center Drive,
Stoughton, Massachusetts, for the following purposes:
1. To elect three Class I Directors to the Board of Directors with terms
expiring at the 2002 Annual Meeting of Stockholders.
2. To approve an amendment to the Company's Articles of Organization to
increase the number of authorized shares of the Company's Common Stock
from 15,000,000 to 50,000,000, $.10 par value per share.
3. To ratify the selection by the Board of Directors of Deloitte & Touche
LLP as the Company's independent auditors for the fiscal year 1999.
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments of the meeting.
Stockholders of record at the close of business on March 22, 1999 will be
entitled to notice of and to vote at the meeting. The stock transfer books of
the Company will remain open.
All stockholders are cordially invited to attend the meeting.
STOCKHOLDERS ARE URGED TO MARK, SIGN AND RETURN PROMPTLY
THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE
By order of the Board of Directors
Evelyn Sidman
Clerk
Avon, Massachusetts
April 9, 1999
<PAGE> 3
THE FIRST YEARS INC.
ONE KIDDIE DRIVE
AVON, MASSACHUSETTS 02322
TEL. (508) 588-1220
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
MAY 20, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The First Years Inc. (the "Company") for
use at the Annual Meeting of Stockholders to be held on Thursday, May 20, 1999,
at 10:30 a.m., local time, at the Marriott Courtyard Hotel, 100 Technology
Center Drive, Stoughton, Massachusetts and at any adjournments of that Meeting
("Meeting").
The representation in person or by proxy by at least a majority of the
outstanding shares of the Company's Common Stock, $.10 par value ("Common
Stock") entitled to vote at the Meeting is necessary to constitute a quorum for
the Meeting. An affirmative vote of holders of a majority of the shares of the
Company's Common Stock, outstanding and entitled to vote at the Meeting is
required for approval of the proposal to amend the Company's Articles of
Organization. An affirmative vote of holders of a majority of the shares of the
Company's Common Stock, present or represented, and entitled to vote at the
Meeting, is required for the approval of all other proposals presented to the
Company's stockholders at the Meeting other than the election of directors which
requires a plurality of votes cast for any nominee or nominees at the Meeting.
Abstentions and broker non-votes (i.e. shares held by brokers or nominees
as to which (i) instructions have not been received from the beneficial owners
and (ii) the broker or nominee does not have the discretionary authority to vote
on a particular matter) are counted as present or represented for purposes of
determining the presence or absence of a quorum for the Meeting. Abstentions are
entitled to vote and thus have the effect of a vote against every proposal other
than the proposal with respect to the election of directors. Generally broker
non-votes are not entitled to vote and thus will have no effect on the outcome
of any proposal; however with respect to the proposal to amend the Company's
Articles of Organization, broker non-votes will have the effect of a vote
against the proposals.
All proxies will be voted in accordance with the instructions contained in
the proxy and if no choice is specified, a proxy will be voted in favor of a
proposal unless it constitutes a broker non-vote. Any proxy may be revoked by a
stockholder at any time before it is exercised, by written or oral request to
Evelyn Sidman, Clerk of the Company. A proxy may also be revoked by a
stockholder attending the Meeting and voting in person.
Only holders of Common Stock of record at the close of business on March
22, 1999 will be entitled to vote at the Meeting. On March 22, 1999, there were
outstanding 10,459,644 shares of Common Stock of the par value of $.10 per
share. With respect to all matters which will come before the Meeting, each
stockholder may cast one vote for each share registered in his name on the
record date.
The Company's Annual Report for the fiscal year ended December 31, 1998 was
mailed to the stockholders with the mailing of this Notice and Proxy Statement
on or about April 9, 1999.
<PAGE> 4
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, to the knowledge of the Company, the
beneficial ownership of the Common Stock of the Company as of February 28, 1999
by (i) persons owning more than 5% of the Company's Common Stock, (ii) each
director of the Company, (iii) each of the executive officers named in the
Summary Compensation Table on page 7 who were serving as executive officers at
the end of the 1998 fiscal year and (iv) all directors and executive officers of
the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP(2) OF CLASS
--------------------------------------- ------------ ----------
<S> <C> <C>
Evelyn Sidman............................................... 726,800 7.0%
Jerome M. Karp.............................................. 1,040 *
Ronald J. Sidman............................................ 1,059,324(3) 10.0%
Benjamin Peltz.............................................. 221,802 2.1%
Fred T. Page................................................ 63,200(4) *
Kenneth R. Sidman**......................................... 228,632 2.2%
Lewis M. Weston**........................................... 0 *
Walker J. Wallace**......................................... 0 *
John R. Beals............................................... 31,882(5) *
Wayne Shea.................................................. 47,582(6) *
Bruce Baron................................................. 15,333(7) *
James N. Turner............................................. 10(8) *
Santa Monica Partners, L.P.................................. 692,000(9) 6.6%
1865 Palmer Avenue
Larchmont, NY
Neuberger Berman, LLC....................................... 613,200(10) 5.9%
Neuberger Berman Management Inc.
605 Third Avenue
New York, NY
All directors and executive officers as a group
(12 persons)........................................... 2,395,605(11) 22.4%
</TABLE>
- ---------------
* Less than 1% of outstanding shares of Common Stock.
** Lewis M. Weston was elected to the Board of Directors on December 29, 1998
to fill the vacancy in the Board resulting from the death of Merton N.
Alperin on November 30, 1998. Mr. Kenneth R. Sidman was also elected to the
Board on December 29, 1998. Mr. Walker J. Wallace was elected to the Board
on January 22, 1999.
(1) The address of all such persons other than Santa Monica Partners, L.P. is
c/o the Company, One Kiddie Drive, Avon, Massachusetts.
(2) Unless otherwise indicated, each stockholder referred to above has sole
voting and investment power with respect to shares listed.
(3) Includes 126,718 shares issuable to Mr. Sidman pursuant to currently
exercisable stock options. Also includes 49,486 shares owned beneficially
by Mr. Sidman's wife, Marjorie Sidman, who has sole voting and investment
power over such shares. Mr. Sidman disclaims any beneficial interest in
such shares.
(4) Includes 56,000 shares issuable to Mr. Page pursuant to options, which are
either currently exercisable or will be exercisable within the next sixty
days.
(5) Includes 19,882 shares issuable to Mr. Beals pursuant to currently
exercisable stock options.
(6) Includes 30,182 shares issuable to Mr. Shea pursuant to currently
exercisable stock options.
2
<PAGE> 5
(7) Includes 13,333 shares issuable to Mr. Baron pursuant to currently
exercisable stock options.
(8) Mr. Turner holds these shares as custodian for his sons under the Uniform
Gifts to Minors Act.
(9) As reported on Schedule 13D filed with the Securities and Exchange
Commission in August 1994, Lawrence J. Goldstein, general partner of Santa
Monica Partners, L.P., may be deemed to beneficially own 692,000 shares of
the Company's stock and shares voting and dispositive power with Santa
Monica Partners, L.P. over such shares.
(10) As reported on Schedule 13G filed with the Securities and Exchange
Commission in February, 1999, Neuberger Berman LLC and Neuberger Berman
Management Inc. are deemed to be beneficial owners of 613,200 shares of the
Company's stock since they share voting and dispositive power over such
shares with many of their unrelated clients (although the clients are the
actual owners of the stock.) Neuberger Berman LLC and Neuberger Berman
Management Inc. are sub-advisor and investment manager, respectively, of
Newberger Berman's various mutual funds which hold the stock.
(11) The total for all directors and executive officers as a group includes
246,115 shares issuable to the directors and officers pursuant to currently
exercisable stock options or to options exercisable within the next 60
days.
3
<PAGE> 6
ELECTION OF DIRECTORS
(NOTICE ITEM 1)
The Company's Board of Directors is divided into three classes, with
members of each class holding office for staggered three-year terms. Currently
the three classes -- Class I, Class II and Class III -- consist of three, three
and two directors each, respectively, whose terms expire, respectively, at the
1999, 2000 and 2001 Annual Meeting of Stockholders. At each Annual Meeting of
Stockholders, a Class of directors are elected for a term of three years or
until their successors are duly-elected and qualified. The three Class I
directors elected at this Meeting will be elected to serve until the 2002 Annual
Meeting of Stockholders.
The Board of Directors has fixed the number of directors at eight and has
designated as Class I director nominees Jerome M. Karp, Fred T. Page and Kenneth
R. Sidman. Each of the nominees is currently a Class I director of the Company.
The persons named in the proxy will vote to elect Jerome M. Karp, Fred T.
Page and Kenneth R. Sidman as Class I directors, unless authority to vote for
the election is withheld by marking the proxy to that effect, or the proxy is
marked with the names of directors as to whom authority to vote is withheld. If
a nominee becomes unavailable, the persons acting under the proxy may vote the
proxy for the election of a substitute. It is not presently contemplated that
any of the nominees will be unavailable.
Set forth below is certain information furnished to the Company by each
director of the Company (including the three nominees for Class I director).
Information regarding the number of shares of the Company's Common Stock
beneficially owned by each of them, directly or indirectly, as of February 28,
1999, appears on page 3:
NOMINEES FOR ELECTION AS CLASS I DIRECTORS -- TERMS EXPIRING AT THE 2002
ANNUAL STOCKHOLDERS MEETING
<TABLE>
<CAPTION>
YEAR FIRST
BECAME
NAME AND PRINCIPAL OCCUPATION OR EMPLOYMENT(1)(2) AGE DIRECTOR
- ------------------------------------------------------------ --- ----------
<S> <C> <C>
Jerome M. Karp, Vice Chairman of the Board of Directors..... 71 1969
Fred T. Page, President -- Network Services, Southern New
England Telecommunications Corporation.................... 52 1988
Kenneth R. Sidman, Vice President -- Business Technology
Development, Norton Performance Plastics Corp............. 53 1998
</TABLE>
CLASS II DIRECTORS -- TERMS EXPIRING AT THE 2000
ANNUAL STOCKHOLDERS MEETING
<TABLE>
<S> <C> <C>
Evelyn Sidman, Clerk of the Company......................... 85 1979
Lewis M. Weston, Independent Financial Consultant and
Limited Partner, Goldman, Sachs & Co...................... 72 1998
Walker J. Wallace, Independent Consultant................... 54 1999
</TABLE>
CLASS III DIRECTORS -- TERMS EXPIRING AT THE 2001
ANNUAL STOCKHOLDERS MEETING
<TABLE>
<S> <C> <C>
Ronald J. Sidman, Chairman of the Board, Chief Executive
Officer and President..................................... 52 1975
Benjamin Peltz, Director.................................... 59 1975
</TABLE>
- ---------------
(1) Mr. Ronald J. Sidman has been the President of the Company since
January, 1989 and the Chairman of the Board and Chief Executive Officer of the
Company since March, 1995. Mr. Peltz served as
4
<PAGE> 7
the Treasurer of the Company from May, 1970 to January, 1998 and as the Senior
Vice President of the Company from January 1980 until June 30, 1997 when he
retired from the Company. Evelyn Sidman has held the same position with the
Company for over five years. Jerome M. Karp has been employed by, and held the
same position with, the Company for over five years. Mr. Page has been President
- -- Network Services of Southern New England Telecommunications Corporation
("SNET"), a subsidiary of Southwestern Bell, since January 1994 and has been
with SNET for over five years.
Kenneth R. Sidman has been Vice President, Business & Technology
Development, at Norton Performance Plastics Corp., Wayne, NJ, a subsidiary of
Compagnie de Saint-Gobain, since 1997. Mr. Sidman joined Norton Performance
Plastics Corp. in 1984 as Director, New Business Development, and from 1992 to
1997, was Vice President, Marketing & New Business Development.
Mr. Lewis M. Weston has been a Limited Partner of Goldman, Sachs & Co.,
since 1978. He has been with Goldman Sachs since 1951 and was made a General
Partner in 1967. He was Partner in charge of the Syndicate Department from 1969
to 1978, a period during which he was also active with the National Association
of Securities Dealers (NASD), serving three years as a member of the NASD's
Board of Governors. Currently, Mr. Weston is a board member of South East Asia
Venture Investment Company (SEAVIC) and SEAVIC, III, Singapore, and the Thai
Prime Fund, Singapore, as well as a member of the International Advisory Board
of Banco Finantia, Lisbon, Portugal. He also serves on the Investors
Representative Committee of the China Dynamic Investment Fund.
Walker J. Wallace was with Proctor & Gamble for 30 years, from 1967 to
1997. He was made a Vice President of Proctor & Gamble in 1991 and served as
Vice President -- Worldwide Strategic Planning for various core product
categories (laundry and cleaning products, paper products, diapers) from 1993 to
1997. Mr. Wallace is on the Board of the Student Loan Funding Resources in
Cincinnati, Ohio and a member of the Board of Visitors, Babcock Graduate School
of Management, Wake Forest.
(2) Evelyn Sidman is the mother of Ronald J. Sidman and Kenneth R. Sidman.
Benjamin Peltz is Mrs. Sidman's son-in-law and the brother-in-law of Kenneth R.
Sidman and Ronald J. Sidman.
COMMITTEES OF THE BOARD
The Board of Directors of the Company has an Audit Committee and a
Compensation Committee.
The Audit Committee is responsible for reviewing the Company's financial
statements. Among other matters, the Audit Committee reviews the Company's
expenditures, reviews the Company's internal accounting controls and financial
statements, reviews with the Company's independent auditors the scope of their
audit, their independent auditors' report and recommendations, and recommends
the selection of the Company's independent auditors. During 1998, the Audit
Committee, which in 1998 consisted of Messrs. Alperin and Page, held two
meetings. The Committee currently consists of Messrs. Page, Weston and Peltz.
The Compensation Committee is responsible for determining and reporting to
the Board of Directors on the annual compensation for all executive officers
including salaries, fringe benefits and incentive compensation paid to the
executive officers under the Company's Annual Incentive Plan, as amended
("Annual Incentive Plan"). The Committee is also responsible for both
administering and granting stock options, stock appreciation rights, stock
awards, and other awards under the Company's 1993 Equity Incentive Plan as
amended ("Equity Incentive Plan"). During 1998, the Compensation Committee,
which in 1998 consisted of Messrs. Alperin, and Page, held four meetings. The
Committee currently consists of Messrs. Page and Weston.
During 1998, the Board of Directors held eight meetings. Each director
attended at least 75% of the aggregate number of meetings of the Board of
Directors and all Committees of the Board on which he or she then served.
5
<PAGE> 8
COMPENSATION OF DIRECTORS
During 1998, the Company paid each director who is not an employee of the
Company an annual retainer of $17,500 for Board service, plus attendance fees of
$1,050 per meeting for each Board or committee meeting attended. The Company
also reimbursed expenses incurred in connection with service on the Board or on
a Committee.
In 1998 each non-employee director who served on the Board for the entire
previous 12 months was eligible to receive an option to purchase 6,000 shares of
the Company's common stock under the Company's 1993 Stock Option Plan for
Directors, as amended which is exercisable on the date of the grant. In
addition, each non-employee Board member upon election to the Board receives a
one-time award of an option for 20,000 shares that becomes exercisable in three
equal annual installments commencing on the first anniversary of the date of
grant. Under this Plan, the exercise price is equal to the fair market value per
share of the Company's Common Stock on the date of the grant. Pursuant to this
Plan, on May 21, 1998, each of Messrs. Alperin and Page were granted options to
purchase 6,000 shares of Common Stock at an exercise price of $17.00 per share.
Each option will expire 10 years after the date of grant. If the director
dies or otherwise ceases to be a director prior to the date the option becomes
exercisable, that option will immediately expire. Following death or other
termination of an individual's status as a director, each vested option will
remain exercisable for a period of one year but in no event beyond the tenth
anniversary of the date of grant. In the event of any merger, consolidation,
sale of substantially all of the Company's assets or dissolution or liquidation
of the Company ("transactions"), all options outstanding under the Directors
Plan that are not otherwise exercisable will become immediately exercisable at
least twenty (20) days prior to the effective date of such transaction.
COMPENSATION AND OTHER INFORMATION
CONCERNING EXECUTIVE OFFICERS
EXECUTIVE OFFICERS
In addition to the incumbent directors and nominees for Class I director,
as to whom information is furnished in the table on page 4, the executive
officers of the Company also include the following:
John R. Beals, age 44, has been the Senior Vice President -- Finance of the
Company since March, 1998, and Treasurer of the Company since January, 1998. He
also has been Chief Financial Officer since July, 1997. From July, 1997 to
March, 1998 he was Vice President -- Finance of the Company and from January,
1990 to June 1997, Mr. Beals was the Assistant Treasurer and Controller of the
Company.
Wayne Shea, age 44, has been Senior Vice President -- World Wide Sales &
Merchandising of the Company since July, 1997. From January, 1995 to June, 1997
Mr. Shea was Vice-President -- World Wide Sales & Merchandising. From July, 1991
to December, 1994, Mr. Shea was the Vice President -- Service & Merchandising of
the Company.
Bruce Baron, age 38, has been Senior Vice President -- Operations since
August, 1997. Prior to that time, he was Vice President of operations at
Crabtree & Evelyn from 1988 to July, 1997.
James N. Turner, age 41, has been Senior Vice President -- New Marketing
and Product Development since July, 1998. Prior to that time, from July, 1995 to
June, 1998 Mr. Turner was Vice President -- Product Development of Tupperware
Americas; and from November, 1992 to June, 1995, he was Vice President --
Marketing of Tupperware Asia Pacific.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation for
the fiscal years ended December 31, 1996, 1997 and 1998 paid or accrued by the
Company to each of the following (i) the Company's Chief Executive Officer; and
(ii) the Company's four most highly paid executive officers who earned more than
$100,000 in the 1998 fiscal year (collectively, the "named officers").
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------- LONG-TERM
OTHER COMPENSATION AWARDS
ANNUAL ---------------------
NAME AND COMPEN- SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) SATION(2) OPTIONS(3) COMPENSATION(4)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ronald J. Sidman 1998 $334,821 $416,571 -- 80,000 $ 38,046
Chairman of the Board 1997 251,110 547,500 -- 30,000 37,532
of Directors, Chief 1996 231,993 306,667 -- 28,000 30,121
Executive Officer and
President
John R. Beals 1998 144,212 89,806 -- 4,650 18,421
Senior Vice President -- 1997 115,455 62,625 -- 5,000 18,592
Finance,
Chief Financial Officer and 1996 102,999 35,001 -- 3,000 15,496
Treasurer
Wayne Shea 1998 155,633 97,028 -- 6,546 18,421
Senior Vice President -- World 1997 139,186 75,497 -- 6,000 18,592
Wide Sales & Merchandising 1996 124,082 42,181 -- 6,000 17,351
Bruce Baron 1998 151,186 94,281 -- 10,000 16,421
Senior Vice President -- 1997 59,431* 31,772* -- 30,000 --
Operations 1996 -- -- -- -- --
James N. Turner 1998 74,412* 45,457* $60,000 20,000 --
Senior Vice President -- 1997 -- -- -- -- --
Marketing and New 1996 -- -- -- -- --
Product Development
</TABLE>
- ---------------
(1) The bonus amounts were earned by these individuals in fiscal year 1998, 1997
and 1996 under the Company's Annual Incentive Plan.
(2) Represents the amount reimbursed by the Company to Mr. Turner for relocation
expenses; otherwise this column excludes perquisites and other personal
benefits, the aggregate annual amount of which for each officer was less
than the lesser of $50,000 or 10% of the total salary and bonus reported.
(3) These numbers represent options to purchase shares of the Company's Common
Stock granted pursuant to the Company's 1993 Equity Incentive Plan. See
"Options/ SAR Grants in Last Fiscal Year" for more detailed information on
such options.
(4) The amounts shown in this column for 1998 reflect (i) a life insurance
premium payment of $19,625 made on behalf of Ronald J. Sidman by the Company
during the 1998 fiscal year; and (ii) contributions in the amount of $18,421
made by the Company to the Company's defined contribution pension and 401(k)
plans on behalf of each of Messrs. Sidman, Beals and Shea, respectively, and
a contribution in the amount of $16,421 made by the Company on behalf of Mr.
Baron to such plans.
* Mr. Baron's salary and bonus in 1997 reflect approximately 5 months of
employment in 1997. Mr. Turner's salary and bonus in 1998 reflect
approximately 6 months of employment in 1998.
7
<PAGE> 10
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth grants of stock options pursuant to the
Company's 1993 Equity Incentive Plan during the 1998 fiscal year to the named
officers reflected in the Summary Compensation Table above:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
PERCENTAGE VALUE AT ASSUMED ANNUAL
NUMBER OF OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(2)
OPTIONS/SARS EMPLOYEES IN PRICE PER EXPIRATION ------------------------
NAME GRANTED(1) FISCAL YEAR SHARE(1) DATE 5% 10%
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ronald J. Sidman 56,290** 27.3% $13.6875 3/5/08 $484,544 $1,227,930
Ronald J. Sidman 23,710* 11.5 15.0562 3/5/03 76,621 185,089
Wayne Shea 6,546* 3.2 13.6875 3/5/08 56,348 142,797
John R. Beals 4,649* 2.3 13.6875 3/5/08 40,019 101,415
Bruce Baron 10,000* 4.9 13.6875 3/5/08 86,080 218,143
James N. Turner 20,000* 9.7 17.75 7/13/08 223,258 565,779
</TABLE>
- ---------------
* An incentive stock option.
** A non-qualified stock option.
(1) All stock options were granted in 1998 pursuant to the Company's 1993 Equity
Incentive Plan. The exercise price of the incentive stock options granted to
all the named officers (other than Mr. Ronald J. Sidman) and the exercise
price of the non-qualified option granted to Ronald J. Sidman was equal to
the fair market value (the closing sale price) of the Company's shares on
the date of the grant. The exercise price of the incentive stock option
granted to Mr. Sidman was 110% of the fair market value of the Company's
shares on such date. The options are generally exercisable in three equal
annual installments beginning on the first anniversary of the date of grant.
Options are not transferable except by will or by the laws of descent and
distribution. The post-retirement exercise period for exercisable options is
generally three months. In the event the Company is acquired (through
consolidation or merger or sale of substantially all of the Company's
assets), all outstanding stock options terminate unless the Committee
administering the Plan, in its discretion, accelerates the exercisability of
the outstanding options.
(2) In accordance with the rules of the Securities and Exchange Commission, the
amounts shown on this table represent hypothetical gains that could be
achieved for the respective options if exercised at the end of the option
term. These gains are based on assumed rates of stock appreciation of 5% and
10% compounded annually from the date the respective options were granted to
their expiration date. The gains shown are net of the option exercise price,
but do not include deductions for taxes or other expenses associated with
the exercise. Actual gains, if any, on stock option exercises will depend on
the future performance of the Company's common stock, the optionholder's
continued employment through the option period, and the date on which the
options are exercised.
8
<PAGE> 11
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options to
purchase the Company's Common Stock granted under the Company's 1993 Equity
Incentive Plan including the number of unexercised options outstanding on
December 31, 1998 and the value of such unexercised options on December 31,
1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SARS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END AT FISCAL YEAR END(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ronald J. Sidman 85,948 $ 327,928 $80,719 $109,333 $ 840,100 $396,200
Wayne Shea 17,200 $ 202,950 24,000 12,546 265,800 73,600
John R. Beals 8,000 $ 96,375 15,667 8,982 182,100 45,600
Bruce Baron 0 0 13,334 26,666 30,200 60,500
James N. Turner 0 0 0 20,000 0 0
</TABLE>
- ---------------
(1) Value is based on the difference between the option exercise price and the
fair market value at 1998 fiscal year end ($15.8125 per share -- the closing
sale price on the Nasdaq National Market) multiplied by the number of shares
underlying the option.
EMPLOYMENT AGREEMENTS
In August, 1994, the Company entered into a Transition Agreement (the
"Agreement") with Mr. Jerome M. Karp ("Mr. Karp"). The Agreement provides that
Mr. Karp will continue to be employed by the Company on a reduced-time basis for
a period of five years until his retirement from the Company in August, 1999
(the "Term") and will continue to serve as the Vice Chairman of the Board of
Directors subject to election by the Board of Directors. The Agreement provides
for an annual salary of $100,000 and participation by Mr. Karp in the benefits
and benefit plans provided by the Company to its executive officers during the
Term, except the Company's Annual Incentive Plan and 1993 Equity Incentive Plan.
If Mr. Karp terminates the Agreement for any reason, or if Mr. Karp is
terminated for cause, his right to salary and the benefits terminate. In the
event of Mr. Karp's death, the Company will pay to Mr. Karp's legal
representative the lesser of $100,000 or the balance of salary due Mr. Karp in
the fifth year of the Term. In the event Mr. Karp becomes disabled, the Company
will pay Mr. Karp the sum of $100,000 in 12 equal monthly installments. In the
event of certain corporate transactions (merger, sale of all or substantially
all of the Company's assets, or sale of a majority of the Company's Common
Stock) the Agreement terminates and the Company will pay Mr. Karp in a lump sum
payment, the lesser of $100,000 or the balance of salary due Mr. Karp in the
fifth year of the Term. As additional consideration for entering into the
Agreement, Mr. Karp has agreed not to disclose the Company's confidential
information and not to compete with the Company or solicit its employees or
customers during the Term and for a five-year period following termination of
his employment.
On March 23, 1995, the Company entered into an employment agreement with
Mr. Ronald J. Sidman which was amended on January 16, 1997 (the "Agreement").
The Agreement provides that, initially, Mr. Sidman will serve as President for a
term of five years, provided, however, that the Agreement is automatically
renewed for additional three-year periods unless either party gives the other
party notice of termination at least 90 days prior to the expiration of the
initial or any renewal term (the "Term"). The initial base salary under the
Agreement is $214,000 which may be increased or decreased during the Term in the
9
<PAGE> 12
discretion of the Compensation Committee ("Salary"). Mr. Sidman is also entitled
to participate in the Company's Annual Incentive Plan ("Annual Bonus"), the
Company's 1993 Equity Incentive Plan, and the benefits and benefit plans
provided by the Company to its other executive officers during the Term
("Benefits").
If Mr. Sidman is terminated for cause, his Salary and Benefits cease
immediately and he will not be entitled to receive an Annual Bonus for the year
in which the termination for cause occurs. In the event of his death, the
Company will pay the his legal representative an amount equal to his Salary then
in effect, in 12 equal monthly installments. In the event he becomes disabled,
he will receive an amount equal to his Salary then in effect, in 12 equal
monthly installments. Any Annual Bonus amounts due Mr. Sidman in the year of his
death or disability will be paid on a pro rata basis. In the event the Company
or he terminates the Agreement for any reason (other than death, disability or
cause), any Annual Bonus to which he is entitled will be paid on a pro rata
basis.
In consideration for his obligation not to disclose the Company's
confidential information and not to compete with the Company or solicit its
employees during the Term and for a two-year period following termination of his
employment by either party for any reason (other than death, disability or
cause), Mr. Sidman will receive his Salary and Benefits (then in effect) for
such two year period less any amount earned by Mr. Sidman from other employment
during such period and coverage under the Company's group medical, dental and
medical reimbursement plans until Mr. Sidman is eligible for and entitled to
coverage under Medicare.
Mr. Benjamin Peltz retired from the Company on June 30, 1997 and under his
employment agreement dated March 23, 1995 (as amended on January 16, 1997) has
been receiving, and will continue to receive his base salary (then in effect on
the date of his retirement) until June 30, 1999 and is being provided, and will
continue to be provided, coverage under the Company's medical and dental plans
until Mr. Peltz is eligible for and entitled to coverage under Medicare.
The Company also has agreements with Messrs. Wayne Shea, Bruce Baron and
James N. Turner which generally restrict such officers from engaging in any
business competitive with the Company's business (as defined in the agreements)
for a 12 month period following termination of employment for any reason (other
than disability, voluntary termination or for cause as defined in the
agreements) subject to a severance payment to such officer equal to his annual
base salary to be paid over a 12 month period.
IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE COMMISSION, THE
FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH
IMMEDIATELY THEREAFTER SHALL NOT BE DEEMED TO BE "SOLICITING MATERIAL" OR TO BE
"FILED" WITH THE COMMISSION OR SUBJECT TO REGULATIONS 14A OR 14C OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), OR TO THE
LIABILITIES OF SECTION 18 OF THE EXCHANGE ACT AND SHALL NOT BE DEEMED
INCORPORATED BY REFERENCE INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE EXCHANGE ACT, NOTWITHSTANDING ANY GENERAL INCORPORATION BY
REFERENCE OF THIS PROXY STATEMENT INTO ANY OTHER FILED DOCUMENT.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for establishing the compensation
of Messrs. Ronald J. Sidman, John R. Beals, Wayne Shea, Bruce Baron and James N.
Turner, the Company's executive officers ("executive officers") and
administering and granting stock options and other awards to the Company's
10
<PAGE> 13
executive officers under the Company's 1993 Equity Incentive Plan. The Committee
which established the compensation of the Company's executive officers for
fiscal year 1998 consisted of Fred T. Page and Merton N. Alperin. Mr. Alperin
died on November 30, 1998. Consequently, this report concerning compensation of
the executive officers for the fiscal year ended December 31, 1998 is being
furnished only by Mr. Fred T. Page.
The compensation of the executive officers in 1998 consisted of base
salary, stock option awards and annual incentive cash awards under the Company's
Annual Incentive Plan.
BASE SALARY
At the beginning of each fiscal year the Committee establishes the base
salaries of the Chief Executive Officer and President ("CEO") and the Company's
other executive officers. The base salaries of these executive officers are
based on general salary information publicly-available on companies of similar
size and on the responsibilities, experience, and individual performance of each
officer, taking into account the past and expected future contributions to the
Company of such officer. In addition, the Committee also considers the per-share
earnings of the Company, the Company's growth in net earnings and sales over the
years, the market valuation of the Company's Common Stock, and current economic
and business conditions in determining the base salaries of the executive
officers.
Based on all these considerations, the Committee established for fiscal
year 1998 the base salary of the Company's CEO to be in the mid-range of base
salaries of CEOs of companies of similar size. The Committee also established
the base salaries for the other executive officers of the Company for fiscal
year 1998 to be, in the judgement of the Committee, competitive with companies
of similar size.
ANNUAL INCENTIVE PLAN
Each executive officer was eligible to receive an annual incentive cash
payment for 1998 under the Company's Annual Incentive Plan ("the Plan"). Payment
of such incentive awards to executive officers under the Plan was contingent
upon the Company's achievement in 1998 of substantial net earnings in relation
to a range of profit targets established by the Committee. Incentive awards
under the Plan are based on a percentage of base salary and increase in
proportion to each higher profit target achieved by the Company. The Committee
determined that the primary objective of the incentive award to the Company's
CEO and its other executive officers under the Plan was to make a significant
percentage of their total compensation in 1998 contingent upon the achievement
by the Company of significant profitability.
STOCK OPTIONS
In order to align the interests of the Company's executive officers towards
the enhancement of corporate value, and to further motivate the Company's
executive officers to concentrate on the long-term growth of the Company, the
Company in 1998 granted options to purchase the Company's stock to the CEO and
the other executive officers. Accordingly, options generally vest incrementally
over a three-year period.
SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code of 1986 (the "Code") limits a
company's ability to take a deduction for federal tax purposes for certain
compensation paid to its executive officers. The Company currently expects that
all compensation payable to executive officers during fiscal year 1998 will be
deductible by the Company for federal income tax purposes.
Submitted by the Compensation Committee of the Company's Board of Directors
for fiscal year 1998:
Fred T. Page
11
<PAGE> 14
STOCK PERFORMANCE CHART
The following graph compares the cumulative total stockholder return on the
Company's common stock during the five fiscal years ended December 31, 1998 with
the cumulative total return on the NASDAQ-USA Index and the NASDAQ SIC #30
Index. The comparison assumes that the value of the investment in the Company's
common stock and in each index was $100 on December 31, 1993 and that all
dividends were reinvested.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
THE FIRST YEARS INC. NASDAQ - USA NASDAQ - SIC #30
-------------------- ------------ ----------------
<S> <C> <C> <C>
'1993' 100.00 100.00 100.00
'1994' 195.41 97.75 88.72
'1995' 222.90 138.26 96.91
'1996' 335.12 170.02 137.89
'1997' 477.09 208.58 171.51
'1998' 657.21 293.21 153.33
</TABLE>
Note: The stock price performance shown on the graph above is not
necessarily indicative of future price performance. Information used in the
graph was obtained from the Center for Research in Security Prices (CRSP) at the
University of Chicago, a source believed to be reliable, but the Company is not
responsible for any errors or omissions in such information.
The list of firms on the NASDAQ exchange changes constantly and CRSP
continuously updates its data on NASDAQ stock prices; therefore, the performance
of the NASDAQ indexes may vary slightly from one proxy statement to the next.
12
<PAGE> 15
APPROVAL OF AMENDMENT TO THE COMPANY'S ARTICLES OF ORGANIZATION
INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
(NOTICE ITEM 2)
At the Meeting, the stockholders of the Company will be requested to adopt
a proposed amendment to Article 3 of the Articles of Organization of the
Company, increasing the number of authorized shares of Common Stock from
15,000,000 to 50,000,000, $.10 par value per share.
On October 29, 1998, the Board of the Company adopted the proposed
amendment to Article 3 of the Articles of Organization of the Company, the text
of which is set forth below:
"3. The total number of shares and the par value, if any, of each class of
stock which the Corporation is authorized to issue is as follows:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE WITH PAR VALUE
----------------- -----------------------------
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE
-------------- ---------------- ---------------- ---------
<S> <C> <C> <C>
Preferred........................................ None None --
Common........................................... None 50,000,000 $ .10"
</TABLE>
The Company's Articles of Organization currently authorize the issuance of
15,000,000 shares of Common Stock, $.10 par value per share. As of February 28,
1998, there were 10,440,014 shares of Common Stock issued and outstanding plus
an additional 21,394 treasury shares issued, but not outstanding. In addition
2,051,632 shares are currently reserved for issuance under the Company's 1993
Equity Incentive Plan and Stock Option Plan for Directors (the "Plans").
The additional authorized shares that would be available for issuance if
the proposed amendment is adopted may be issued for any proper corporate purpose
by the Board at any time without further corporate approval unless required by
applicable statutes. The Board believes it is desirable to give the Company this
flexibility in considering such matters as stock splits or dividends, raising
additional capital, acquisitions, or other corporate purposes. The authorization
of such shares will enable the Company to act promptly and without additional
expense if appropriate circumstances arise which require the issuance of such
shares.
While the Company has no present plans, agreements or commitments to issue
any additional shares (other than the shares already subject to outstanding
stock options), the Board does regularly consider the Company's capital needs,
the subject of stock dividends and the granting of options and other stock-based
awards to employees and its directors under the Plans.
Holders of Common Stock are not entitled to preemptive rights, and to the
extent that any additional shares of Common Stock may be issued on other than a
pro rata basis to current stockholders, the present ownership portion of current
stockholders may be diluted.
Depending upon the circumstance in which additional shares of Common Stock
are issued, the overall effects of such issuance may be to render more difficult
or to discourage a merger, tender offer, proxy contest, or the assumption of
control by a holder of a large block of Common Stock. Management of the Company
is not aware of any possible takeover attempts at this time.
The approval of this proposal requires the affirmative vote of the holders
of a majority of the Company's Common Stock, outstanding and entitled to vote at
the Meeting. Broker non-votes and abstentions will have the effect of a vote
against this proposal. The Board believes that the amendment to the Articles of
Organization is in the best interests of the Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF ORGANIZATION TO INCREASE THE NUMBER OF
13
<PAGE> 16
AUTHORIZED SHARES OF COMMON STOCK. PROXIES SOLICITED BY THE BOARD WILL BE VOTED
SO UNLESS STOCKHOLDERS SPECIFY OTHERWISE.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who beneficially own more than ten
percent of the Company's Common Stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission (the
"SEC"). Executive officers, directors and greater than ten percent Stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations from the Company's
executive officers and directors that no other reports are required, during 1998
all Section 16(a) filing requirements applicable to the executive officers,
directors and greater than ten percent beneficial owners were complied with.
INFORMATION REGARDING AUDITORS OF THE COMPANY
(NOTICE ITEM 3)
Deloitte & Touche LLP were the Company's auditors for the fiscal year ended
December 31, 1998, and the Board of Directors has selected them to act as
auditors for the fiscal year 1999, subject to ratification of such selection by
the stockholders. Unless otherwise directed by the stockholders, proxies will be
voted for a resolution ratifying the appointment by the Board of Directors of
Deloitte & Touche LLP as the independent auditors for the fiscal year 1999.
A representative of Deloitte & Touche LLP is expected to attend the
Meeting, will have the opportunity to make a statement if he or she desires to
do so and will be available to respond to appropriate questions from
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR 1999. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE.
OTHER MATTERS
Management does not know of any other matters which may come before the
Meeting. However, if any other matters are properly presented to the Meeting, it
is the intention of the persons named in the accompanying proxy to vote, or
otherwise to act, in accordance with their judgment on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone and
personal interviews. Brokers, custodians and fiduciaries will be requested to
forward proxy soliciting material to the owners of stock held in their names and
the Company will reimburse them for their out-of-pocket expenses in this
connection.
14
<PAGE> 17
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders and included in the Company's proxy statement and proxy
for such annual Meeting, pursuant to Rule 240.14a-8 of the Securities and
Exchange Act of 1934 ("Rule 14a-8"), must be received by the Company at its
principal executive offices not later than December 16, 1999 for inclusion in
the proxy statement for that meeting.
As established by the Company's advance notice by-law provision, proposals
of Stockholders intended to be presented at the 2000 Annual Meeting of
Stockholders, but which are submitted outside the processes of Rule 14a-8, and
not intended to be included in the Company's proxy statement or proxy for such
Annual Meeting, must be received by the Company at its principal executive
offices not later than December 23, 1999. If such a proposal is not submitted by
a stockholder by such date, then the proxies appointed under the proxy shall be
allowed to use their discretionary voting authority when a proposal is raised at
the 2000 Annual Meeting, without any discussion of the matter in the proxy
statement for such meeting.
By Order of the Board of Directors
EVELYN SIDMAN
Clerk
Dated: April 9, 1999
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
15
<PAGE> 18
THE FIRST YEARS INC.
This Proxy is Solicited on Behalf of the Board of Directors
Annual Meeting of Stockholders -- May 20, 1999
The undersigned stockholder of The First Years Inc. (the "Company") hereby
appoints Ronald J. Sidman, Benjamin Peltz and Gitta M. Kuriat (each with power
to act without the others and with power of substitution) proxies to represent
the undersigned at the Annual Meeting of Stockholders of the Company to be held
on May 20, 1999, and at any adjournment thereof, with all the power the
undersigned would possess if personally present, and to vote as designated on
the reverse side of this card, all shares of Common Stock of the Company which
the undersigned may be entitled to vote at said Meeting, hereby revoking any
proxy heretofore given.
Each of the matters referred to on the reverse side of this card is more fully
described in the Notice of and Proxy Statement for the Meeting, receipt of which
is hereby acknowledged. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
ITEMS 1, 2 AND 3 AND THAT YOU GRANT THE PROXIES DISCRETIONARY AUTHORITY TO VOTE
UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS
MADE ON THE REVERSE. IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS EXCEPT WITH RESPECT TO A
BROKER NON-VOTE WHICH WILL HAVE NO EFFECT ON THE OUTCOME OF ANY ITEM.
- --------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
______________________________________ ______________________________________
______________________________________ ______________________________________
______________________________________ ______________________________________
<PAGE> 19
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
--------------------
THE FIRST YEARS INC.
--------------------
Mark box at right if an address change or comment has been noted on the reverse
side of this card. [ ]
RECORD DATE SHARES:
Please be sure to sign and date this Proxy. Date
-------------------------
- --------------------------------------------------------------------------------
- -----Stockholder sign here---------------------------Co-owner sign here---------
For All With- For All
1. Election of Class 1 Directors: Nominees hold Except
Jerome M. Karp
Fred T. Page [ ] [ ] [ ]
Kenneth R. Sidman
NOTE: If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through the name(s) of the nominee(s).
Your shares will be voted for the remaining nominee(s).
For Against Abstain
2. Proposal to approve an amendment to the
Company's Articles of Organization [ ] [ ] [ ]
to increase the number of authorized
shares of the Company's common stock
from 15,000,000 to 50,000,000, $.10
par value.
For Against Abstain
3. Proposal to ratify the selection of
Deloitte & Touche L.L.P as auditors for [ ] [ ] [ ]
the fiscal year 1999.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or at any adjournment thereof.
DETACH CARD DETACH CARD
THE FIRST YEARS INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of The
First Years Inc. that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, May 20,
1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
The First Years Inc.
