SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Additional Materials Commission Only (as permitted)
[ ] Soliciting Material Pursuant to by Rule 14a-6(e)(2)
Rule 14a-11(c) or Rule 14a-12
JUNO LIGHTING, INC.
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(Name of Registrant as Specified In Its Charter)
Lens Investment Management, LLC
Ram Trust Services, Inc.
Robert B. Holmes
John B. Goodrich
Nell Minow
Robert A.G. Monks
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: Common
Stock, $.01 par value, of Juno Lighting, Inc.
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(2) Aggregate number of securities to which transaction applies: Not
applicable.
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(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): Not
applicable.
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(4) Proposed maximum aggregate value of transaction: Not applicable.
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(5) Total Fee Paid: Not applicable.
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[ ] 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: Not applicable.
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(2) Form, Schedule or Registration Statement No.: Not applicable.
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(3) Filing Party: Not applicable.
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(4) Date Filed: Not applicable.
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June 17, 1999
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Preliminary Copy
PROXY STATEMENT OF THE LENS GROUP
IN CONNECTION WITH
THE SPECIAL MEETING OF STOCKHOLDERS
OF JUNO LIGHTING, INC.
TO BE HELD ON JUNE 29, 1999
This Proxy Statement is being furnished to stockholders of
Juno Lighting, Inc. ("Juno" or the "Company") by the Lens Group (as defined
below) in connection with its solicitation of proxies AGAINST approval of the
Merger Agreement (as defined below) at the Special Meeting of Stockholders of
the Company scheduled to be held on June 29, 1999 and at any adjournments
thereof (the "Special Meeting"). The Lens Group consists of Lens Investment
Management, LLC ("Lens"), Ram Trust Services, Inc. ("Ram"), Robert B. Holmes,
John B. Goodrich, Nell Minow and Robert A.G. Monks (collectively, the "Lens
Group"), who own, in the aggregate, approximately 7.2% of the Company's
outstanding shares of common stock, par value $.01 per share ("Common Stock").
The Special Meeting is being called to consider, among other things, approval of
an Agreement and Plan of Merger, dated as of March 26, 1999 (the "Merger
Agreement"), by and among Juno, Fremont Investors I, LLC ("Fremont Investors")
and Jupiter Acquisition Corp. ("Jupiter"), and the transactions contemplated by
the Merger Agreement, including the merger of Jupiter with and into Juno (the
"Merger"). The Company has stated in its proxy statement/prospectus dated May
28, 1999 in respect of the Special Meeting (the "Juno Proxy Statement"), that
the Special Meeting will be held on June 29, 1999, at 10:00 a.m., central time,
at Juno's headquarters at 1300 South Wolf Road, Des Plaines, Illinois
60017-5065. The Company has also stated in the Juno Proxy Statement that the
record date for the Special Meeting was set for May 24, 1999 (the "Record
Date"). Only stockholders of record at the close of business on the Record Date
will be entitled to notice of and to vote at the Special Meeting.
FOR THE REASONS SET FORTH HEREIN, THE LENS GROUP URGES
STOCKHOLDERS TO VOTE NO WITH RESPECT TO THE MERGER AGREEMENT. Please complete,
sign and date the enclosed BLUE proxy card as promptly as possible and return it
in the enclosed pre-addressed envelope. Any stockholder who executes and
delivers such proxy will have the right to revoke it at any time before it is
exercised, by filing with Lens Investment Management, LLC c/o Georgeson &
Company Inc., Wall Street Plaza, 88 Pine Street, 30th Floor, New York, NY 10005,
Attention: John Purcell or with the Secretary of the Company at its principal
executive offices at 1300 South Wolf Road, P.O. Box 5065, Des Plaines, Illinois
60017-5065, an instrument revoking it or a duly executed proxy bearing a later
date, or, by appearing in person and voting at the Special Meeting.
This Proxy Statement is first being sent or given to one or
more stockholders on or about June __, 1999. The Company reported in the Juno
Proxy Statement that, as of the Record Date, the Company's outstanding voting
securities consisted of 18,612,467 shares of Common Stock. Unless otherwise
indicated, references herein to the percentage of outstanding shares of Common
#559870 v7.
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Stock owned by any person were computed based upon such number of outstanding
shares. Each share of Common Stock is entitled to one vote.
WHY YOU SHOULD JUST VOTE NO
The Lens Group believes that you should vote AGAINST approval
of the Merger Agreement for the following reasons:
1. The Price is Too Low. Even if we assume that the value of
the proposed merger consideration that would be received by Juno stockholders
amounts to $25 per share of Common Stock (which, as described below, we don't
believe), the Lens Group believes that this price is inadequate.
Juno Stock Is Worth More Than $25 Per Share. We believe that
Juno is worth more as a stand-alone entity than the price offered by Fremont
Investors. Juno's industry peers(1) traded, as of May 31, 1999, at an average
P/E multiple(2) of 15.25x and an average EV/Adjusted EBITDA multiple(3) of
9.88x. Juno should trade at least as high as its peers owing to the following:
(1) its superior operating margins (the highest of its peers);
(2) its superior returns on equity and assets (the highest of its peers, when
adjusted to exclude the income, as well as asset and book values, of excess
cash and equivalents); and
(3) its excellent growth prospects given both a superior market niche presence
and a recently completed plant capacity addition.
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1. We have assumed that Juno's "peers" consist of the following five publicly
traded companies in the lighting industry which, according to Juno's Proxy
Statement for the Special Meeting, were used by Juno's financial advisor,
William Blair & Company, L.L.C. ("Blair"), in its analysis: Advanced Lighting
Technology, Inc., Genlyte Group, Inc., Holophane Corp., LSI Industries, Inc. and
SLI Inc.
2. P/E multiple is equal to the market price per share divided by the First Call
Corporation mean earnings per share estimate for the current fiscal year. For
purposes of computing the average P/E multiple, the P/E multiple of Advanced
Lighting Technology Inc. (which was a negative 25.9x) and the P/E multiple for
Genlyte Group Inc. (for which a First Call Corporation estimate was not
available) were excluded.
3. EV/Adjusted EBITDA multiple means Enterprise Value (market value of common
capital plus total debt less cash and cash equivalents) divided by Adjusted
EBITDA. We define "Adjusted EBITDA" to mean trailing 12 months earnings before
interest, taxes, depreciation and amortization (EBITDA) as adjusted to exclude
interest, dividend and other miscellaneous income and special and non-recurring
charges. Our computations are based upon periodic reports filed by the
applicable companies with the Securities and Exchange Commission and, in any
case in which a company's quarterly depreciation and amortization data have not
been reported, such data has been estimated from such company's data for its
prior fiscal year. We excluded the EV/Adjusted EBITDA multiples for Advanced
Lighting Technology Inc. (23.2x) and Genlyte Group Inc. (5.3x), the highest and
lowest multiples in the group.
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Applying these multiples to our estimate of Juno's fiscal 1999 earnings(4) and
actual trailing 12-month EBITDA, Juno's shares should trade at approximately
$27.19 per share based upon the P/E multiple and $27.89 per share based upon the
EV/EBITDA multiple, or an average of $27.54 per share based upon these two
multiples.
By way of further comparison, on May 31, 1999, a group of 24
electrical product companies(5) with market capitalizations in excess of $100
million had an average P/E multiple of 16.3x and an average EV/Adjusted EBITDA
multiple of 10.3x..
We note that, according to the Juno Proxy Statement (under the
heading "Opinion of Financial Advisor-Analysis of Certain Publicly Traded
Companies"), William Blair & Company, L.L.C.("Blair"), Juno's financial advisor,
compared the trading multiples of this peer group of companies to the trading
multiples of Juno, indicating that these companies were selected "because they
are publicly traded companies whose operations and financial condition Blair
deemed most comparable to Juno's." We believe it is disingenuous, at best, for
Juno to suggest in its June 11, 1999 letter to shareholders (Juno's "June 11
Letter") that these are not the appropriate "peers" for our analysis.
We also note that, according to the Juno Proxy Statement
(under the heading "Opinion of Financial Advisor-Discounted Cash Flow
Analysis"), Blair's discounted cash flow analysis of the Company's value, based
upon management's "base case" projections, showed values of in the range of
$26.87 to $40.29 per share. For purposes of its discounted cash flow analysis,
Blair also developed "lower case" projections showing values in the range of
$20.97 to $30.50 per share. Could it be that Blair developed these "lower case"
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4. We estimate that Juno will have fiscal 1999 earnings per share of $1.78. We
derived estimated net income based upon Juno's estimates of fiscal 1999 sales
and EBITDA contained in Juno's Proxy Statement for the Special Meeting and
taking into account the effects of the use of cash and borrowings by the
following pro forma adjustments for fiscal 1999: additional interest expense of
approximately $8.1 million; reduced interest and dividend income of
approximately $5.0 million; and an income tax rate of approximately 40%. In
preparing our estimate of fiscal 1999 net income, we also subtracted from the
estimate of fiscal 1999 EBITDA contained in Juno's Proxy Statement for the
Special Meeting (approximately $50.6 million), our estimates of (i) depreciation
and amortization (we used $3.8 million as compared with actual depreciation and
amortization of approximately $3.7 million for fiscal 1998), (ii) net interest
and dividend income (we used approximately $5.1 million, representing four times
the actual result for the first quarter of fiscal 1999) and (iii) income taxes
(we estimated approximately $18.7 million based on our estimate of $51.9 million
of fiscal 1999 pre-tax income taxable at a 36% rate, as compared with actual
income taxes of $14.6 million in fiscal 1998).
5. These companies are: Emerson Electric Co., Molex Inc., American Power
Conversion, Raychem Corp., Thomas & Betts Corp., SLI Inc., Oak Industries Inc.,
Baldor Electric, Rayovac Corp., Superior Telecom Inc., Belden Inc., AFC Cable
Systems Inc., Littlefuse Inc., Franklin Electric Co., C&D Technologies Inc.,
Magnetek Inc., Thomas Industries Inc., Genlyte Group Inc., Holophane Corp.,
Alpine Group Inc., Advanced Lighting Technology Inc., Woodhead Industries Inc.,
Kollmorgen Corp. and Powell Industries Inc.
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projections because it could not otherwise justify the fairness of a transaction
valued at $25 per share when its own discounted cash flow analysis would show
much higher values under management's "base case"?
Based on the foregoing, we believe a price of $25 per share is
too low and, as discussed below under "An Alternative to Enhance Stockholder
Value," the Company can also take other and better steps now to increase
stockholder value.
The Value of the Proposed Merger Consideration May Be Less
Than $25 Per Share. Under the terms of the Merger Agreement, current Juno
stockholders would elect to receive for each share of Juno common stock, either
$25 in cash or one share of common stock of Juno as the surviving corporation in
the Merger ("New Juno Common Stock"). However, because of certain proration
requirements, it is likely that current Juno stockholders who elect to receive
all cash would be paid in both cash and shares of New Juno Common Stock.(6)
According to Juno's Proxy Statement and Juno's June 11 letter,
Blair values the New Juno Common Stock at $25 per share. However, despite
repeated statements of such purported value, Blair has expressed no opinion as
to the trading price of the New Juno Common Stock after the Merger. Blair also
does not acknowledge that a "minority discount" may apply to the shares of New
Juno Common Stock to be received by current stockholders because such shares
cannot convey control of the Company to a new buyer. Moreover, were Fremont
Investors to eventually sell its controlling interest in Juno to a third party,
the holders of New Juno Common Stock have no assurance that they will be
permitted to participate in such sale on the same terms.
In addition, Juno admits in the Juno Proxy Statement that the
reduced public float after the Merger may result in a significant decrease in
the liquidity of shares of New Juno Common Stock and could cause the market
price of such shares to be subject to significant fluctuations. Juno further
conceded that it cannot assure stockholders that New Juno Common Stock will
continue to be listed on NASDAQ, and that such delisting could make it more
difficult to sell shares and obtain prices that reflect its value. Additionally,
the Juno Proxy Statement makes clear that no dividends are expected to be paid
on the New Juno Common Stock after the Merger, as opposed to dividends paid by
the Company for the last two quarters at the rate of $.40 per share per annum.
There is one stockholder, however, who will get dividends -- Fremont Investors,
as the sole owner of the new series of convertible preferred stock to be issued
in connection with the Merger. Finally, Juno admits that the substantial debt
leverage of New Juno after the Merger will have a negative effect on net income.
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6. If all current stockholders elect to receive cash for all of their shares,
because of the proration provisions of the Merger Agreement, they would receive,
in effect, only $21.775 per share in cash and a continuing equity interest or
"stub" for the balance.
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Based on the foregoing, the Lens Group is of the opinion that
the shares of New Juno Common Stock will not be valued in the market at $25 per
share, and may be worth far less than that.
2. The Timing is Bad. There is no need to sell control of the
Company now. The Company makes no attempt to justify the timing of the sale.
Indeed, since the deal with Fremont Investors was struck, the market multiples
and the stock prices of Juno's peers have improved materially. Based on the
analysis above, the Lens Group believes that Juno should be trading at a price
in excess of $25 per share and, as discussed below, other steps can be taken to
increase stockholder value. If Juno's Board of Directors cannot obtain a better
return for stockholders than the current deal with Fremont Investors, the sale
of the Company should be postponed until market conditions are more favorable or
until its profits, which have increased steadily, lead to higher share
valuations (the Company estimates in its Proxy Statement for the Special Meeting
that EBITDA will grow by approximately 18.0% per annum over the next five
years).
In Juno's June 11 Letter, Juno counters this argument by
suggesting that the timing cannot be bad because the stock market is near its
all-time high, the economy is strong and interest rates are low. We suggest
that, if the Fremont Investors deal or any other transaction does not provide
shareholders with Juno's current or potential value, the timing of the
transaction is, by definition, bad. We are dealing with one company, your
Company, and not market indices, interest rates or the economy in general.
3. The Selling Process was Inadequate. Once the decision is
made to sell a company, the Lens Group believes that the best way to achieve
optimal stockholder value is an open, public auction. This means that all viable
strategic and financial buyers would be contacted. The Company's secret,
selective process may have deprived stockholders of the best possible deal. We
know of at least one potential strategic buyer, which Juno itself includes in
its peer group, that was never contacted by Juno to make a bid. In a public
auction context, we would not have the problem of potential buyers being "left
off the list."
In its June 11 Letter, Juno discusses its auction process but
does not challenge our statement that at least one member of its peer group was
not contacted to make a bid.
4. If the Deal Goes Through, Public Stockholders Will Have No
Meaningful Say in the New Company. If the Merger Agreement is approved, current
stockholders who receive New Juno Common Stock will have no meaningful say in
matters put to a stockholder vote because Fremont Investors will own
approximately 60.5% of the fully-diluted voting power of Juno's equity
securities. Fremont Investors will control the Board.
We note that Juno does not challenge this analysis and admits
that Fremont Investor's control over the Company is a "risk factor."
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5. A New Stock Incentive Plan Should Not Be a Condition to the
Merger. A condition to the Fremont Investors' deal is that Juno stockholders
approve the 1999 Stock Award and Incentive Plan, which would allow up to 940,000
additional shares of common stock to be issued by Juno to management pursuant to
option grants. If options for all those shares are issued, they would represent
approximately 28% of the New Juno Common Stock after the deal (assuming 2.4
million shares remain outstanding) and over 12% of the New Juno Common Stock on
a fully-diluted basis. The Lens Group believes that making approval of the
option plan a condition to the deal serves the interests of management at the
expense of the stockholders. The Lens Group has no problem in seeking to
incentivize management through equity ownership; however, it does not see why
adopting a highly dilutive new option plan should be a condition to the Merger.
In Juno's June 11 Letter, it claims that Fremont Investors
insisted on this plan, that such a plan is customarily adopted in
recapitalization transactions and that non-employee directors approved the plan.
The Company disputes that conditioning the Merger on approval of the plan serves
the interests of management at the expense of the shareholders. Are we to
believe that Fremont Investors would not agree to the transaction unless it had
a plan in place that would allow for substantial dilution of the shareholders'
interests? While anything is possible, we continue to have our doubts.
AN ALTERNATIVE TO ENHANCE STOCKHOLDER VALUE
We believe Juno can substantially enhance stockholder value by
instituting a meaningful share repurchase program, using a combination of modest
borrowings against the real estate and cash flow of the operating business plus
excess cash to fund substantial repurchases. For example, we believe Juno should
be able to borrow $100 million at an assumed interest rate of 8.0% per annum and
combine this borrowing with approximately $110 million of excess cash and cash
equivalents that we estimate it will have on its balance sheet by the end of its
fiscal year,(7) and use this $210 million to fund repurchases. If, for example,
Juno could use such funds to acquire 8.4 million shares (approximately 45% of
the outstanding shares) at an average price of $25 per share, the pro forma
earnings per share estimate for fiscal 1999 would rise to $2.28. Applying the
P/E multiple of 15.25x and the EV/EBITDA multiple of 9.88x after such
repurchases, the shares that remain outstanding would be valued at $34.83 per
share and $30.26 per share, respectively, or an average of $32.54 per share,
based on these two multiples.
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7. The Company had approximately $103.7 million of cash and marketable
securities on its balance sheet as of February 28, 1999, as reported in its
Quarterly Report on Form 10-Q for the fiscal quarter ended on such date. Based
upon Juno's estimate of 1999 EBITDA contained in Juno's Proxy Statement for the
Special Meeting, we anticipate that such amount will increase to approximately
$117 million by November 30, 1999.
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If, subsequent to such share repurchase, the market values
described above are achieved and Juno can then receive a significant premium
over such values through a sale or merger of its business, then it might well be
time to sell or merge. If not, the Company should seek to maximize its
profitability and pursue internal growth or growth through acquisition.
Juno would have you believe that a share repurchase program
would not enhance Juno's ultimate value, saying in its June 11 Letter that the
buyback would not affect EBITDA. First, as we describe, the buyback would result
in increased earnings per share on the remaining outstanding shares (and we
never said EBITDA is the only basis for valuation). Second, and most simply put,
if the shares of Common Stock are worth more than $25 per share as we believe,
buying some in at $25 per share represents a bargain to the continuing
shareholders because the buyback will increase the value of the remaining
outstanding shares.
Juno also says in its June 11 Letter that our logic is flawed
- - why would shareholders sell at $25 per share if the shares are worth more? We
believe that, if the Merger Agreement is terminated and shares of Common Stock
do not trade in the market at above $25 per share in the near term, shareholders
who do not believe that Juno will attain a higher market valuation may find such
price to be acceptable (Juno certainly thinks that price is fair or it should
not have signed the Fremont deal). Those shareholders who, like Lens, believe
that the current or potential value of the Company is greater, will not sell. If
the repurchase program is unsuccessful because the stock market recognizes a
value for Juno that is greater than $25 per share, all shareholders will have
the benefit of a market price higher than the price offered in the Fremont deal.
As to Juno's argument that the buyback may discourage some
buyers because it would prevent "pooling-of-interest" accounting treatment for
some time, we don't disagree. However, not all buyers rely on "pooling"
treatment if an acquisition makes good business sense and, as indicated above,
there is no compelling reason that we can see for selling the Company at this
time.
WHAT CAN JUNO STOCKHOLDERS DO?
VOTE NO!
If we vote NO on the proposed Merger Agreement, Juno
management will have to abandon the deal and let current stockholders continue
to control the destiny of the Company. If stockholders vote down the approval of
the Merger Agreement, Juno will be forced to hold an annual meeting, at which
the Lens Group has proposed (i) electing two nominees to the Company's Board of
Directors, Robert A.G. Monks and Nell Minow, and (ii) the adoption of an
amendment to the Company's by-laws which, effective one year after such
approval, would prohibit more than one "inside director" from serving on the
Company's Board at any given time. If elected, the Lens Group nominees will urge
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the adoption of a plan to return excess cash to stockholders through the share
repurchase program described above.
In addition, if and when market conditions are favorable, the
Lens Group nominees would attempt to cause Juno to publicly and professionally
auction the Company. The Lens Group believes that, independent of the effects of
any share repurchase program, a future auction would be likely to yield better
results than the Fremont Investors transaction because (1) the auction would be
conducted in public, (2) the sale would not take place until the market valued
the Company at a price reflective of its true value, and (3) the presence of
bona fide independent directors on the Board would help ensure that all
potential strategic buyers will be fully pursued. As indicated above, if market
conditions for such an auction are not favorable, the Lens Group nominees would
attempt to cause Juno to focus on expansion through internal growth or
acquisition. If members of current management are not up to the task, the Lens
Group's nominees would urge the Board to find suitable replacements.
Accordingly, the Lens Group recommends that Juno stockholders
vote against the Merger Agreement. Additionally, the Lens Group recommends that
Juno stockholders vote against the other proposals set forth in the Juno Proxy
Statement, which proposals include (1) the approval of the purchase by Fremont
Investors or its assigns of $106 million of a new series of convertible
preferred stock of Juno, (2) the adoption of an amended and restated certificate
of incorporation of Juno and (3) the adoption of the Juno Lighting, Inc. 1999
Stock Award and Incentive Plan.
Juno belongs to the stockholders, not to management or the
Board of Directors. We believe the Fremont Investors deal does not reflect
Juno's current or potential value and that Juno has better alternatives. We at
the Lens Group plan to vote against the Merger Agreement at the Special Meeting
and we urge you to do the same. The time has come to just vote NO.
VOTE REQUIRED
The affirmative vote by the holders of a majority of the
outstanding Juno shares is required to approve the Merger Agreement and the
transactions contemplated thereby and the amended and restated Certificate of
Incorporation of Juno.
The affirmative vote by the holders of a majority of the
shares present, in person or by properly executed proxy, is required to approve
the Juno Lighting, Inc. 1999 Stock Award and Incentive Plan.
Because each of the proposals being voted upon by stockholders
relate to the Merger, approval of each proposal is contingent upon approval of
the other proposals. If any of these proposals is not approved by stockholders,
none of the proposals will be implemented and the Merger will not be
consummated.
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BACKGROUND OF THE LENS GROUP'S OPPOSITION TO
MANAGEMENT'S MERGER PROPOSAL
The Lens Group has been urging Juno for substantially more
than a year to (i) add independent directors to its Board of Directors and (ii)
develop a strategy to utilize its excess cash and marketable securities. Because
Juno was not responsive to its requests, prior to Juno's 1998 Annual Meeting of
Stockholders (the "1998 Annual Meeting"), a member of the Lens Group notified
Juno that it was nominating Mr. Monks for election to the Board at the 1998
Annual Meeting and was proposing the adoption of an amendment to the Company's
by-laws at such meeting which would require a majority of the Board to consist
of independent directors. Representatives of the Lens Group then engaged in
discussions with members of the Board and withdrew such nomination and proposal
based upon an understanding that (i) two new independent directors, who would be
selected with the aid of a search firm, would be added to the Board and (ii) the
Board would create a capital allocation committee of the Board consisting of a
majority of independent directors to review the Company's capital structure and
use of cash and marketable securities, and to make recommendations with respect
thereto with a view toward maximizing stockholder value. The Company's
commitment to take such action is referenced in its proxy statement for the 1998
Annual Meeting.
Following the 1998 Annual Meeting, the Lens Group made
numerous requests for status updates and ultimately made a demand for access to
the books and records of the Company. Nevertheless, Juno did not appoint
additional independent directors to the Board or, to the knowledge of the Lens
Group, create a capital allocation committee.
Because of the Company's failure to take such promised
actions, the Lens Group determined in February 1999 to solicit proxies in
connection with Juno's 1999 Annual Meeting of Stockholders (the "1999 Annual
Meeting") for (i) the election of Robert A.G. Monks and Nell Minow as directors
of the Company and (ii) the approval by stockholders of an amendment to the
Company's by-laws which, effective one year after such approval, would prohibit
more than one "inside director" from serving on the Company's Board of Directors
at any given time (collectively, the "Lens Group Proposals").
Approximately two months after the Lens Group filed its
preliminary proxy materials with the SEC regarding the Lens Group Proposals for
the 1999 Annual Meeting, Juno announced that it had entered into the Merger
Agreement. Juno is calling the Special Meeting to consider the Merger Agreement
and has not yet announced any date for the 1999 Annual Meeting.
If the Merger Agreement is adopted, Juno will be
majority-owned by Fremont Investors and, accordingly, Juno's other stockholders
will not have a meaningful vote with respect to the Lens Group Proposals or any
other matters that may be brought before stockholders at the 1999 Annual Meeting
or otherwise.
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CERTAIN INTERESTS IN THE PROPOSALS AND
WITH RESPECT TO SECURITIES OF THE ISSUER
To the knowledge of the Lens Group, no member of the Lens
Group nor any of such members' associates, or controlling persons thereof, has
any direct or indirect economic or other interests in the proposals which differ
in any way from the other stockholders of the Company.
As part of their client relationships, Lens and Ram have the
power to direct the voting and the disposition of shares of Common Stock owned
by their respective clients in the accounts they manage or held by affiliated
limited partnerships pursuant to written investment management agreements with
such clients and limited partnerships. Under such agreements, Lens' compensation
for its services thereunder may include a share in the appreciation earned by
such investments and, accordingly, Lens' compensation for its services
thereunder may vary with the value of the assets (including any Common Stock)
under its management. None of such agreements, however, requires that such
accounts be invested in securities of the Company or include in their provisions
any terms specifically relating to or varying with the investment of the
accounts in securities of the Company. Mr. Holmes has entered into an investment
management agreement with Ram in his capacity as a client of Ram, has an
ownership interest in Lens and participates in its management. Mr. Goodrich has
entered into an investment management agreement with Ram in his capacity as a
client of Ram and is an employee of Ram. Ms. Minow has entered into an
investment management agreement with Ram, has an ownership interest in Lens and
participates in Lens' management. Mr. Monks has entered into an investment
management agreement with Ram, has an ownership interest in Lens and
participates in the management of each of Lens and Ram. To the knowledge of the
Lens Group, except as set forth herein, within the past year, there have been no
contracts, arrangements or understandings between or among any of the members of
the Lens Group or their respective associates or controlling persons or between
any members of the Lens Group and any other person with respect to any
securities of the Company, including but not limited to, joint ventures, loan or
option agreements, puts or calls, guarantees against loss, or guarantees of
profit, division of losses or profits, or the giving or withholding of proxies.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 15, 1999, based
solely, except as described in the next sentence, on information contained in
the Juno Proxy Statement, the number and percentage of outstanding shares of
Common Stock beneficially owned by each person known to the Lens Group as of
such date to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock. The information with respect to the Lens
Group has been provided by the members thereof as of June 16, 1999.
10
<PAGE>
<TABLE>
<CAPTION>
Shares Percentage
Beneficially of Shares
Name and Address Owned Outstanding
- ---------------- ----- -----------
<S> <C> <C>
Harris Associates L.P. 1,742,700(1) 9.37%
Two North LaSalle Street
Suite 500
Chicago, Illinois 60602-3790
National Rural Electric Cooperative Association 1,340,000(2) 7.21%
Lens Investment Management, LLC 1,346,263(3) 7.23%
Ram Trust Services, Inc.
Robert B. Holmes
John B. Goodrich
Nell Minow
Robert A.G. Monks
(collectively, the "Lens Group")
Royce & Associate, Inc.,
Royce Management Company 975,800(4) 5.25%
and Charles M. Royce
1414 Avenue of the Americas
New York, New York 10019
Bank One Corporation 945,800(5) 5.09%
One First National Plaza
Chicago, Illinois 60670
</TABLE>
- ---------------------------------------------------
1. Harris Associates L.P. ("Harris") beneficially owns 1,742,700 shares of
Common Stock, has shared power to vote or direct the votes of such shares,
has sole power to dispose or direct the disposition of 581,400 shares of
Common Stock and has shared power to dispose or direct the disposition of
1,161,300 shares of Common Stock of which 1,085,000 shares are owned by the
Oakmark Fund, an investment trust whereby Harris serves as investment
advisor.
2. National Rural Electric Cooperative Association beneficially owns 1,340,000
shares of Common Stock, has sole power to vote or direct the vote and
dispose or direct the disposition of such shares.
3. Lens beneficially owns 917,537 shares of Common Stock, Ram beneficially
owns 420,276 shares of Common Stock, Mr. Holmes beneficially owns 5,300
shares of Common Stock and Mr. Goodrich beneficially owns 3,150 shares of
Common Stock. By virtue of the joint management of Lens and Ram, each may
also be deemed to be the beneficial owner of the shares of Common Stock
owned by the other. Additionally, each member of the Lens Group, including
the Lens Group Nominees, may be deemed to beneficially own the shares of
Common Stock beneficially owned by Lens and Ram. Each member of the Lens
Group disclaims such beneficial ownership.
4. Royce & Associates, Inc. ("Royce") beneficially owns 949,100 shares of
Common Stock, has sole power to vote or direct the vote and dispose or to
direct the disposition of such shares. Royce Management Company ("RMC")
beneficially owns 26,700 shares of Common Stock, has sole power to vote or
direct the vote and dispose or to direct the disposition of such shares.
Mr. Royce may be deemed to be a controlling person of Royce and RMC, and,
as such, may be deemed to beneficially own the shares of Common Stock
beneficially owned by Royce and RMC. Mr. Royce disclaims beneficial
ownership of such shares.
5. Bank One Corporation ("Bank One") beneficially owns 945,800 shares of
Common Stock and has sole power to vote or direct the vote of 882,250 of
such shares. Bank One has sole power to dispose or to direct the
disposition of 922,300 shares of Common Stock and shared power to dispose
or to direct the disposition of 18,000 shares of Common Stock.
11
<PAGE>
Directors' and Executive Officers' Stock Ownership
The following table sets forth, as of March 15, 1999, based
solely on information contained in the Juno Preliminary Proxy Statement, the
number and percentage of outstanding shares of Common Stock beneficially owned
by each director, each of the executive officers and all executive officers and
directors as a group. The persons named hold sole voting and investment power
with respect to the shares of Common Stock listed below, except as otherwise
indicated.
<TABLE>
<CAPTION>
Shares of Common Stock Percentage of
Beneficially Shares of Common Stock
Name Owned Outstanding
- ---- ----- -----------
<S> <C> <C>
Robert S. Fremont(1) 619,856 3.33%
Glenn R. Bordfeld(4,5) 10,400 *
Thomas W. Tomsovic(1,2) 16,000 *
Julius Lewis(3) 4,000 *
Allan Coleman(3) 2,000 *
George M. Ball(3) 2,500 *
George J. Bilek(4,6) 26,350 *
Charles F. Huber(4,7) 20,800 *
All Directors and Executive Officers as a
group(8) 703,006 3.78%
</TABLE>
- ---------------------------------------------
1. Executive Officer and Director.
2. Represents 12,000 shares of Common Stock which Mr. Tomsovic has the right
to acquire within 60 days of February 16, 1998.
3. Director.
4. Executive Officer.
5. Includes 4,000 shares of Common Stock which Mr. Bordfeld has the right to
acquire within 60 days of March 15, 1999.
6. Includes 16,000 shares of Common Stock which Mr. Bilek has the right to
acquire within 60 days of March 15, 1999.
7. Includes 16,000 shares of Common Stock which Mr. Huber has the right to
acquire within 60 days of March 15, 1999.
* Less than 1%.
12
<PAGE>
PROXY SOLICITATION; EXPENSES
Proxies may be solicited by the Lens Group and partners and
employees of the Lens Group by mail, telephone, telecopier, the Internet and
personal solicitation. Regular employees of the Lens Group and its affiliates
may be used to solicit proxies and, if used, will not receive additional
compensation for such efforts. Banks, brokerage houses and other custodians,
nominees and fiduciaries will be requested to forward the solicitation material
of the Lens Group to their customers for whom they hold shares of Common Stock,
and the Lens Group will reimburse them for their reasonable out-of-pocket
expenses.
The entire expense of preparing, assembling, printing and
mailing this Proxy Statement and related materials, and the cost of soliciting
proxies for the proposals endorsed by the Lens Group, will be borne by the Lens
Group. The Lens Group estimates such expenses to be $______ (including
professional fees and expenses, but excluding any costs represented by salaries
and wages of regular employees of the Lens Group and its affiliates). The total
expenditures incurred to date have been approximately $______, to be paid by the
Lens Group. The Lens Group does not intend to seek reimbursement from Juno for
the Lens Group's expenses.
STOCKHOLDER PROPOSALS
Any proposals of Juno stockholders intended to be presented at
Juno's next annual meeting of stockholders should be addressed to the Company's
Vice President, Finance, 1300 South Wolf Road, P.O. Box 5065, Des Plaines,
Illinois 60017-5065, and must be received by the Corporate Secretary of Juno a
reasonable time before Juno begins to print and mail its proxy materials for
such annual meeting.
Dated: June , 1999
Sincerely,
Your Fellow Stockholder
LENS INVESTMENT MANAGEMENT, LLC
By:____________________________
Name: Nell Minow
Title: Member
13
<PAGE>
PROXY
LENS INVESTMENT MANAGEMENT, LLC
PROXY SOLICITED ON BEHALF OF LENS INVESTMENT MANAGEMENT, LLC AND THE OTHER
PARTICIPANTS IDENTIFIED IN THE PROXY STATEMENT FURNISHED HEREWITH (COLLECTIVELY,
THE "LENS GROUP") FOR THE SPECIAL MEETING OF STOCKHOLDERS, JUNE 29, 1999 AT
10:00 A.M.
The undersigned stockholder of Juno Lighting, Inc. (the "Company") hereby
appoints Nell Minow and Robert A.G. Monks and each of them, as attorneys and
proxies, each with power of substitution and revocation, to represent the
undersigned at the Special Meeting of Stockholders of Juno Lighting, Inc. to be
held at 1300 South Wolf Road, Des Plaines, Illinois 60017-5065 on June 29, 1999
at 10:00 A.M., and at any adjournment or postponement thereof, with authority to
vote all shares held or owned by the undersigned in accordance with the
directions indicated herein.
Receipt of the Proxy Statement furnished herewith is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED STOCKHOLDER. ON MATTERS FOR WHICH YOU DO NOT SPECIFY
A CHOICE, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE
LENS GROUP.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
<PAGE>
THE LENS GROUP RECOMMENDS A VOTE "AGAINST" PROPOSAL 1.
1. Proposal to approve an Agreement and Plan of Recapitalization and Merger,
dated as of March 26, 1999, by and among Juno Lighting, Inc., Fremont Investors
I, LLC and Jupiter Acquisition Corp., and the transactions contemplated thereby,
including (a) the merger of Jupiter Acquisition Corp., a wholly-owned subsidiary
of Fremont Investors I, LLC, with and into Juno Lighting, Inc., with Juno being
the surviving corporation, and (b) the purchase by Fremont Investors I, LLC or
its assigns of $106 million of a new series of convertible preferred stock of
Juno Lighting, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE LENS GROUP RECOMMENDS A VOTE "AGAINST" PROPOSAL 2.
2. Proposal to adopt an amended and restated certificate of incorporation of
Juno Lighting, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
THE LENS GROUP RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.
3. Proposal to adopt the Juno Lighting, Inc. 1999 Stock Award and Incentive
Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- --------------------------------------------------------------------------------
4. In their discretion on any other matters that may properly come before the
meeting.
P Dated: _____________, 1999
-------------------------------------
R (Signature)
O
-------------------------------------
(Signature if held jointly)
X
Y The signature should agree with the name
on your stock certificate. If acting as
attorney, executor, administrator,
trustee, guardian, etc., you should so
indicate when signing. If the signer is
a corporation, please sign the full
corporate name by duly authorized
officer. If shares are held jointly,
each shareholder should sign.
