<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BeautiControl, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE> 2
BEAUTICONTROL, INC.
2121 MIDWAY ROAD
CARROLLTON, TX 75006
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 11, 2000
To the Holders of Common Stock of
BEAUTICONTROL, INC.:
Notice is hereby given that the 2000 Annual Meeting of Stockholders of
BeautiControl, Inc., a Delaware corporation (the "Company"), will be held at the
Company's executive offices, 2121 Midway Road, Carrollton, Texas, on Tuesday,
April 11, 2000 at 10:00 A.M., Dallas, Texas time, for the following purposes:
(1) To elect three persons to serve as directors until the Annual
Meeting of Stockholders in the year 2003 or until their successors are duly
elected and qualified; and
(2) To transact any other proper business brought before the meeting
or any adjournments or postponements thereof.
The Board of Directors has fixed February 15, 2000, at the close of
business, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the meeting and any adjournment or postponement
thereof. Only holders of record of the Company's Common Stock on that date are
entitled to vote on matters coming before the meeting and any adjournment or
postponement thereof. A complete list of stockholders entitled to vote at the
meeting will be maintained at the Company's offices at 2121 Midway Road,
Carrollton, Texas, for ten days prior to the meeting.
Please advise the Company's transfer agent, Harris Trust and Savings Bank,
311 West Monroe Street, 11th Floor, Chicago, Illinois 60606, of any change in
your address.
Your vote is important. Whether or not you plan to attend the meeting in
person, please mark, sign, date, and return the enclosed proxy in the envelope
provided, which requires no postage if mailed within the United States.
By Order of the Board of Directors,
/s/ KRISTI L. HUBBARD
KRISTI L. HUBBARD
Senior Vice President -- Controller
and Secretary
Carrollton, Texas
March 6, 2000
<PAGE> 3
BEAUTICONTROL, INC.
2121 MIDWAY ROAD
CARROLLTON, TEXAS 75006
---------------------------------------------
PROXY STATEMENT
---------------------------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 11, 2000
The accompanying proxy, mailed together with this Proxy Statement to
stockholders on or about March 6, 2000 is solicited by BeautiControl, Inc. (the
"Company"), in connection with the Annual Meeting of Stockholders to be held on
April 11, 2000. The proxy may be revoked by the stockholder at any time prior to
its exercise by executing and returning a proxy bearing a later date, by giving
written notice of revocation to the Secretary of the Company, or by attending
the meeting and voting in person.
As stated in the Notice to which this Proxy Statement is attached, at the
meeting stockholders will vote and elect three directors to the Board of
Directors to serve as directors until the Annual Meeting of Stockholders in the
year 2003 or until their successors are duly elected and qualified.
All properly executed, unrevoked proxies received before the meeting will
be voted in accordance with the directions contained therein. When no direction
has been given by a stockholder returning a proxy, the proxy will be voted FOR
the election as directors of the nominees named in this Proxy Statement.
The close of business on February 15, 2000, has been set as the record date
for determination of stockholders entitled to vote at the meeting. Holders of
the Company's Common Stock on the record date will be entitled to one vote per
share on all business at the meeting.
On the record date, there were outstanding and entitled to vote 7,231,448
shares of Common Stock. The presence, in person or by proxy, of a majority of
the outstanding shares of Common Stock entitled to vote at the meeting will
constitute a quorum.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth, as of February 15, 2000, the number and
percentage of outstanding shares of Common Stock beneficially owned by all
persons known by the Company to own more than 5% of the Company's Common Stock,
by each director of the Company, by each nominee for director, by each named
executive officer, and by all executive officers and directors of the Company as
a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------- ------------ -------
<S> <C> <C>
Jinger L. Heath............................................. 1,553,887(2) 19.4%
2121 Midway Road
Carrollton, Texas 75006
Richard W. Heath............................................ 1,553,887(2) 19.4%
2121 Midway Road
Carrollton, Texas 75006
Charles M. Diker............................................ 323,875(3) 4.0%
One New York Plaza -- 31st Floor
New York, New York 10004
Robert S. Folsom............................................ 203,000(4) 2.5%
16475 Dallas Parkway
Dallas, Texas 75248
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------- ------------ -------
<S> <C> <C>
J. Robert Ward-Burns........................................ 135,000(5) 1.7%
328 Beach Road North
Wilmington, North Carolina 28411
M. Douglas Tucker........................................... 74,400(6) 1.2%
6031 Worth Street
Dallas, Texas 75214
Joseph M. Haggar, III....................................... 3,500(7) *
6311 Lemmon Avenue
Dallas, Texas 75209
Jo-Anne C. Jaeger........................................... 60,150(8) *
2121 Midway Road
Carrollton, Texas 75006
Sheila O'Connell Cooper..................................... 0 *
2121 Midway Road
Carrollton, Texas 75006
Clifton R. Sanders.......................................... 0(9) *
4564 Hitching Post Lane
Plano, Texas 75024
A. Starke Taylor, Jr. ...................................... 29,250(10) *
17916 Cedar Creek Canyon
Dallas, Texas 75252
Joel T. Williams, Jr. ...................................... 54,000(11) *
2121 Midway Road
Carrollton, Texas 75006
Jim Sowell Construction Co., Inc. .......................... 1,620,033(12) 20.2%
3131 McKinney Avenue, Suite 200
Dallas, Texas 75204
All executive officers and directors as a group (13
persons).................................................. 3,811,449(13) 47.5%
</TABLE>
- ---------------
* Less than 1%
(1) Unless otherwise noted, each of the listed individuals has sole voting and
dispositive power for the shares beneficially owned.
(2) Includes options to purchase 200,000 shares of Common Stock exercisable
within 60 days. Mr. Heath's shares do not include 1,200,000 shares owned by
Jim Sowell Construction Co., Inc. Mr. Heath has been granted a proxy to
vote such shares.
(3) Includes options to purchase 18,000 shares of Common Stock exercisable
within 60 days. Includes 12,125 shares of Common Stock which are indirectly
owned for which Mr. Diker shares voting and investment power. Does not
include 11,250 shares of Common Stock owned by the wife of Mr. Diker and
9,000 shares owned by clients of Mr. Diker, for which Mr. Diker disclaims
beneficial ownership.
(4) Includes options to purchase 18,000 shares of Common Stock exercisable
within 60 days. Does not include 3,000 shares of Common Stock owned by the
wife of Mr. Folsom, for which Mr. Folsom disclaims beneficial ownership.
(5) Includes options to purchase 135,000 shares of Common Stock exercisable
within 60 days.
(6) All outstanding options canceled effective January 11, 2000 and February
10, 2000 due to separation of employment pursuant to terms of option plan
agreements.
(7) Includes options to purchase 3,500 shares of Common Stock exercisable
within 60 days.
(8) Includes options to purchase 60,150 shares of Common Stock exercisable
within 60 days.
2
<PAGE> 5
(9) All outstanding options canceled effective November 29, 1999 and December
29, 1999 due to separation of employment pursuant to terms of option plan
agreement.
(10) Includes options to purchase 18,000 shares of Common Stock exercisable
within 60 days. Does not include 55,205 shares of Common Stock owned by the
wife of Mr. Taylor, for which Mr. Taylor disclaims beneficial ownership.
(11) Includes options to purchase 18,000 shares of Common Stock exercisable
within 60 days.
(12) A proxy to vote 1,200,000 of these shares has been granted to Richard W.
Heath. For as long as Jim Sowell Construction Co., Inc. is the owner of at
least 1,200,000 shares of Common Stock, the Company and Richard W. Heath
have agreed to use their best efforts to cause Mr. James E. Sowell, Chief
Executive Officer of Jim Sowell Construction Co., Inc., to be elected to
the Board of Directors of the Company. To date, Mr. Sowell has not chosen
to exercise this contractual right.
(13) Includes options to purchase 565,550 shares of Common Stock exercisable
within 60 days.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation divides the Board of Directors
into three classes. The term of office of one class of directors expires at this
Annual Meeting of Stockholders. A second class of directors will serve until the
2001 Annual Meeting of Stockholders, and a third class of directors will serve
until the 2002 Annual Meeting of Stockholders. Robert S. Folsom, A. Starke
Taylor, Jr. and Sheila O'Connell Cooper will stand for election at this Annual
Meeting for a three-year term of office expiring at the Annual Meeting of
Stockholders in the year 2003 or until their successors are duly elected and
qualified. Proxies cannot be voted for the election of more than three persons
to the Board.
The Company is informed that Mr. Folsom, Mr. Taylor and Ms. Cooper are
willing to serve as directors. However, if Mr. Folsom, Mr. Taylor or Ms. Cooper
should decline or become unable to serve as a director for any reason, votes
will be cast instead for a substitute nominee designated by the Board of
Directors or, if none is so designated, will be cast according to the judgment
of the person or persons voting the proxy.
The following table sets forth certain information as to the directors of
the Company as of January 1, 2000.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES DIRECTOR
NAME AND AGE WITH THE COMPANY SINCE
------------ -------------------------------------------- --------
NOMINEES
<S> <C> <C>
Present Term Expiring in 2000
Robert S. Folsom, 72 Director 1985
A. Starke Taylor, Jr., 77 Director 1985
Sheila O'Connell Cooper, 41 Director, President and Chief Operating 1999
Officer
DIRECTORS CONTINUING IN OFFICE
Present Term Expiring in 2001
Jinger L. Heath, 47 Chairman of the Board of Directors 1981
Joseph M. Haggar, III, 48 Director 1996
Present Term Expiring in 2002
Richard W. Heath, 57 Director, Chairman of the Executive 1981
Committee and Chief Executive Officer
Charles M. Diker, 65 Director 1987
Joel T. Williams, Jr., 79 Director 1986
</TABLE>
3
<PAGE> 6
DIRECTORS AND EXECUTIVE OFFICERS
Jinger L. Heath is a founder of the Company and has been Chairman of the
Board of Directors of the Company since its inception in January 1981. She
identifies the Company's product needs and manages the development and quality
of the Company's skin care, cosmetics and nutritional and beauty supplements.
Ms. Heath also serves on the Company's Executive Committee and is Chairman of
the Board of the Company's division, BeautiControl Research Institute.
Richard W. Heath is a founder of the Company and has been Chief Executive
Officer and a director of the Company since its inception in January 1981. On
September 1, 1999, Mr. Heath assumed the position of Chief Executive Officer and
Chairman of the Executive Committee. Mr. Heath has over 32 years of experience
in the direct sales industry. Mr. Heath currently serves as a director of Haggar
Clothing Co., a public company.
Sheila O'Connell Cooper, 41, has been President and Chief Operating Officer
and a director of the Company since September 1999. Ms. Cooper also serves on
the Company's Executive Committee. Prior to joining BeautiControl, Ms. Cooper
was employed by Mary Kay Inc. for over eleven years most recently serving as
Executive Vice President and member of the Board of Directors and Executive
Committee of Mary Kay Inc.
Richard A. Heath, 33, has been Senior Vice President, Sales, since October
1999. Prior to that time and since August 1999, he was Senior Vice President,
Sales and Marketing for Eventus International, Inc., a BeautiControl subsidiary.
From February 1999 to August 1999, he was an Independent Distributor for Eventus
International, Inc. Prior to that and since September 1998, he was Vice
President, Sales Development for Eventus International, Inc. Prior to that he
was Director of Sales for BeautiControl from April 1995 to September 1998. Prior
to that he was Manager of Leadership Development from March 1994 to April 1995.
Prior to that and since October 1991, he was Senior Supervisor of Administrative
Services. Prior to that he was a Sales Analyst from October 1990 to October
1991.
Kristi L. Hubbard, 35, has been Senior Vice President and Controller since
January 2000. Prior to that and since January 1999, Ms. Hubbard was Vice
President and Controller. Prior to that and since March 1997, Ms. Hubbard was
Controller and Managing Director of Accounting. From March 1996 to February
1997, Ms. Hubbard held the position of Director of Accounting and from December
1993 to February 1996, served as Manager of Accounting. Ms. Hubbard joined the
Company in October 1990 and served in various accounting staff and management
positions through November 1993. Prior to joining the Company, Ms. Hubbard held
accounting and auditing positions with Medical Systems Support, Inc., a
subsidiary of HBO & Company and with the Texas Comptroller of Public Accounts.
Jo-Anne C. Jaeger, 54, has been Senior Vice President, Marketing, since
August 1999. Ms. Jaeger served as Senior Vice President, Merchandising and
International from December 1995 to August 1999. Ms. Jaeger was Senior Vice
President, Marketing Strategies from January 1992 to December 1995. Ms. Jaeger
joined the Company in April 1990 as Vice President, Product Marketing. Prior to
joining the Company, Ms. Jaeger was employed by Avon Products for 15 years, most
recently as Vice President Sales Planning.
James L. Montgomery, 52, has been Senior Vice President, Manufacturing
Operations, since November 1999. Previously Mr. Montgomery served as Vice
President of Purchasing after joining the Company in November 1997. Prior to
joining the Company, Mr. Montgomery served as Manager of Worldwide Sourcing at
Jafra Cosmetics International, a subsidiary of the Gillette Company, from August
1991 through October 1997. Prior to that and since September 1987, Mr.
Montgomery was Manager of Global Purchasing.
Amelia G. Spolec, 42, has been Senior Vice President and Chief Information
Officer since March 1999. Prior to that time, Ms. Spolec was Senior Vice
President, Information Services since March 1998. Prior to that time and since
July 1996, Ms. Spolec was Vice President, Information Services. Prior to that
and since January 1995, Ms. Spolec was Managing Director, Information Services.
In February 1992, Ms. Spolec joined the Company as Director, Information
Services. Prior to joining the Company, Ms. Spolec was Senior Manager with Grant
Thornton LLP for seven years.
4
<PAGE> 7
M. Douglas Tucker, 56, had been Senior Vice President, Finance, and Chief
Financial Officer since April 1995 and Secretary of the Company since August
1995 up to January 11, 2000. Mr. Tucker also held the position of Treasurer of
the Company from August 1995 to October 1997. Prior to that time and from April
1993, Mr. Tucker was a business and financial consultant. From July 1990 to
April 1993, Mr. Tucker was Vice President, Finance at The BOC Group Americas.
Prior to July 1990, Mr. Tucker was with Tambrands, Inc., one year as
International Director of Finance and with General Foods Corporation twenty-one
years in financial management.
Charles M. Diker has been a director of the Company since May 1987. Since
1986, Mr. Diker has been Chairman of the Board of Directors of Cantel Industries
Inc. Mr. Diker currently serves as a director of Chyron Corporation,
International Specialty Products, Inc. and AMF Bowling, Inc.
Robert S. Folsom has been a director of the Company since June 1985. Mr.
Folsom is Chairman of the Board of Directors of Folsom Properties, Inc., a real
estate development firm. Mr. Folsom served as Mayor of the City of Dallas from
1976 to 1981.
Joseph M. Haggar, III, has been a director of the Company since August
1996. Mr. Haggar has been Chairman of the Board of Haggar Clothing Co., a
marketer of men's and women's dress and casual clothing since 1994 and Chief
Executive Officer since 1990. Mr. Haggar also serves as a director of Chase Bank
of Texas.
A. Starke Taylor, Jr., has been a director of the Company since June 1985.
From 1978 until 1987, Mr. Taylor was Chairman of the Board of Directors of
Graylor Investments, a private investment firm. Mr. Taylor served as Mayor of
the City of Dallas from 1983 to 1987. Mr. Taylor currently serves as President
of Taylor Investments, a private investment firm.
Joel T. Williams, Jr., has been a director of the Company since January
1986. From 1985 to 1989, Mr. Williams was an advisory director of Bright Banc
Savings Association. From 1969 to 1985, Mr. Williams was Chairman of the Board
and Chief Executive Officer of Texas Federal Savings and Loan Association.
Richard W. Heath and Jinger L. Heath are husband and wife. Richard A. Heath
is the son of Richard W. Heath. There are no other family relationships between
other directors or current executive officers of the Company. Robert S. Heath is
the son of Richard W. Heath who had served as Senior Vice President, Sales, of
the Company from January 1996 to April 1999.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
GENERAL
The Board of Directors has established a Compensation Committee, an Audit
Committee, and a Nominating Committee. The Company's Bylaws provide that the
Compensation Committee and the Audit Committee are required to be comprised of
directors who are not employees of the Company.
The Compensation Committee, composed of Messrs. Folsom and Taylor, met
three times during the fiscal year ended November 30, 1999, and took action by
unanimous consent five times. This committee reviews and approves salaries and
bonuses of executive officers and administers the Company's Incentive Stock
Option Plan, Non-Qualified Stock Option Plan, and Special Stock Option Plan.
The Audit Committee, composed of Messrs. Williams, Haggar and Diker, met
two times during the fiscal year ended November 30, 1999. This committee
recommends to the Board of Directors the appointment of independent auditors,
reviews the plan and scope of audits, reviews the Company's significant
accounting policies and internal controls, and has general responsibility for
related matters.
The Nominating Committee, composed of Messrs. Folsom and Taylor, met one
time during fiscal 1999. This committee nominates persons for election to the
Board of Directors. The Board of Directors will consider
5
<PAGE> 8
nominees submitted by holders of Common Stock if submitted to the Company on or
before November 8, 2000. See "Stockholder Proposals."
The Board of Directors held six meetings during the fiscal year ended
November 30, 1999 and took action by unanimous consent two times. All of the
directors attended more than 75% of the meetings of the Board of Directors, with
the exception of Mr. Williams. All of the members attended at least 75% of the
meetings of the committees on which they served.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are not officers or employees of the
Company receive an annual fee of $12,000 together with $1,500 for each
directors' meeting they attend and $750 for each committee meeting they attend.
Directors are reimbursed for expenses relating to attendance at meetings.
SPECIAL STOCK OPTION PLAN
The Company's Special Stock Option Plan provides for the granting of
options to purchase a maximum of 59,000 shares of Common Stock to non-employee
directors of the Company. Under the terms of the Special Stock Option Plan, a
non-employee director receives an automatic grant of options for 2,500 shares of
Common Stock when such person first becomes a director of the Company.
Additional options to purchase 1,000 shares of Common Stock are automatically
granted to non-employee directors annually if the Company's net income is equal
to or greater than 105% of net income for the previous year. All grants of
options under the Special Stock Option Plan are made automatically and without
any discretion on the part of the Compensation Committee with respect to the
grantee, the number of options granted and the exercise price of the options.
The Special Stock Option Plan requires that the exercise price for each option
be equal to 100% of the fair market value of the Common Stock on the date of the
grant. Each option will expire ten years from the date of grant and no option is
exercisable until one year from the date of grant. Notwithstanding any other
restriction in the Special Stock Option Plan, options will become immediately
exercisable upon a reorganization, merger or consolidation of the Company or a
change in control of the Company.
EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by
the Company for services rendered during the fiscal years ended November 30,
1999, 1998 and 1997. The table includes the following: the Company's Chief
Executive Officer and the four other most highly compensated executive officers
who were serving as executive officers at the end of November 30, 1999 and whose
total cash compensation for the year exceeded $100,000 and two additional
individuals for whom disclosure would have been provided but were not serving as
an executive officer at November 30, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ----------------------
-------------------------------------------------- LONG-TERM
NAME AND OTHER ANNUAL OPTION INCENTIVE ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS(#) PAYOUTS($) COMPENSATION($)
------------------ ---- --------- ---------- ------------------ --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard W. Heath(3) 1999 750,000 125,000 0 0 N/A 0
Chairman of the Executive 1998 575,000 0 0 200,000(4) N/A
Committee and 1997 497,068 10,340 0 0 N/A
Chief Executive Officer
Jinger L. Heath 1999 750,000 125,000 115,069(2) 0 N/A 0
Chairman of the Board 1998 575,000 0 0 200,000(4) N/A
1997 497,068 10,340 0 0 N/A
Sheila O'Connell Cooper(3) 1999 112,500 200,000(5) 0 500,000(6) N/A 0
President and Chief
Operating Officer
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ----------------------
-------------------------------------------------- LONG-TERM
NAME AND OTHER ANNUAL OPTION INCENTIVE ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS(#) PAYOUTS($) COMPENSATION($)
------------------ ---- --------- ---------- ------------------ --------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jo-Anne C. Jaeger 1999 225,000 0 0 30,000(6) N/A 4,000(7)
Senior Vice President 1998 165,000 0 0 0
Marketing 1997 165,000 10,000 0 0
J. Robert Ward-Burns(3) 1999 319,375 0 0 50,000(8) N/A 371,500(9)
Former Executive Vice 1998 347,500 0 0 150,000(10) N/A
President and 1997 327,500 7,033 0 0 N/A
President Global
Network Marketing
M. Douglas Tucker 1999 260,000 0 0 0 N/A 106,917(11)
Senior Vice President 1998 212,270 0 0 55,000(12) N/A
Finance and Chief 1997 183,583 10,000 0 0 N/A
Financial Officer
Clifton R. Sanders 1999 235,000 0 0 0 N/A 121,500(13)
Former Senior Vice
President 1998 235,000 0 0 38,400(14) N/A
Research and Development 1997 220,000 10,000 0 0 N/A
</TABLE>
- ---------------
(1) Exceeding the lesser of $50,000 or 10% of salary and bonus.
(2) Includes $71,600 for wardrobe for numerous video productions, stage and
television appearances.
(3) Sheila O'Connell Cooper succeeded Richard W. Heath as President and J.
Robert Ward-Burns as Chief Operating Officer effective September 1, 1999,
having previously served as Executive Vice President of Mary Kay Inc.
Richard W. Heath maintained his position as Chief Executive Officer, and J.
Robert Ward-Burns, now separated from the Company, was assigned
responsibilities as President of Global Network Marketing.
(4) Options granted in previous years, exchanged for repriced options in
October 1998.
(5) Signing bonus.
(6) Options granted August 26, 1999.
(7) Company match for 401(k) plan.
(8) Options granted August 26, 1999, canceled October 5, 1999, due to
separation of employment pursuant to terms of option plan agreement.
(9) Includes payments related to an effective employment separation date of
October 5, 1999, in the amount of $365,000, Company match for 401(k) plan
in the amount of $4,000 and premium for term life insurance in the amount
of $2,500.
(10) Includes options granted in previous years, exchanged for repriced options
in October 1998. Options cancel effective October 31, 2000, pursuant to
terms of option plan agreement amendment, effective October 5, 1999.
(11) Includes amounts offered in connection with an effective employment
separation date of January 11, 2000 in the amount of $102,917, which has
not yet been accepted, and Company match for 401(k) plan in the amount of
$4,000.
(12) Includes options granted in previous years, exchanged for repriced options
in October 1998. 15,000 options canceled effective January 11, 2000, and
40,000 options canceled effective February 10, 2000 due to separation of
employment pursuant to terms of option plan agreements.
(13) Includes payments related to an effective employment separation date of
November 29, 1999, in the amount of $117,500 and Company match for 401(k)
plan in the amount of $4,000.
(14) Includes 28,400 options granted in previous years, exchanged for repriced
options in October 1998 and 10,000 options granted in October 1998. 28,400
options canceled effective November 29, 1999, and 10,000 options canceled
effective December 29, 1999, due to separation of employment pursuant to
terms of option plan agreements.
7
<PAGE> 10
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options during fiscal 1999 to the individuals named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED
------------------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS APPRECIATION FOR
GRANTED TO A PERIOD OF TEN
EMPLOYEES YEARS($)(4)
OPTIONS IN FISCAL EXERCISE EXPIRATION ---------------------
NAME GRANTED(#) YEAR PRICE($/SH) DATE 5% 10%
---- ---------- ---------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Heath............................... N/A $ 0 $ 0
Jinger L. Heath................................ N/A 0 0
Sheila O'Connell Cooper........................ 250,000(1) 31.3% 3.625 8/26/09 569,941 1,444,327
250,000(2) 31.3% 3.625 8/26/09 569,941 1,444,327
Jo-Anne C. Jaeger.............................. 30,000(1) 3.8% 3.625 8/26/09 68,393 173,319
J. Robert Ward-Burns........................... 50,000(3) 6.3% 3.625 8/26/09 113,988 288,865
M. Douglas Tucker.............................. N/A 0 0
Clifton R. Sanders............................. N/A 0 0
</TABLE>
- ---------------
(1) Options were granted in 1999 and are exercisable at fifty percent per year
beginning one year from date of grant.
(2) Options were granted in 1999 and are exercisable at thirty three and
one-third percent per year beginning one year from date of grant.
(3) Options were granted in 1999 and canceled effective October 5, 1999, due to
a separation of employment pursuant to terms of option plan agreement.
(4) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock and overall market conditions. There can be
no assurance that the amounts reflected in this table will be achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT FISCAL YEAR
END
The following table provides information, with respect to the named
executive officers, concerning the exercise of options during the last fiscal
year and unexercised options held as of November 30, 1999.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard W. Heath................. N/A N/A 200,000 0 $ 0 $ 0
Jinger L. Heath.................. N/A N/A 200,000 0 0 0
Sheila O'Connell Cooper.......... N/A N/A 0 500,000 0 0
Jo-Anne C. Jaeger................ N/A N/A 60,150 30,000 0 0
J. Robert Ward-Burns(2).......... N/A N/A 135,000 15,000 0 0
M. Douglas Tucker(3)............. N/A N/A 32,000 23,000 0 0
Clifton R. Sanders(4)............ N/A N/A 2,000 8,000 0 0
</TABLE>
- ---------------
(1) Based on the closing price of $3.313 for the Common Stock on November 30,
1999, the Company's fiscal year end.
(2) Due to separation of employment and amendment of option plan agreement,
options canceled effective October 31, 2000.
(3) Due to separation of employment and pursuant to option plan agreements,
15,000 options canceled effective January 11, 2000, and 40,000 options
canceled effective February 10, 2000.
(4) Due to separation of employment and pursuant to option plan agreement,
options canceled effective December 29, 1999.
8
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During fiscal 1999 the Compensation Committee consisted of Messrs. Folsom
and Taylor. None of the members of the Compensation Committee has ever been an
officer or employee of the Company. Mr. Heath is on the Compensation Committee
of Haggar Clothing Co., and Mr. Haggar is a director of the Company.
REPORT OF THE COMPENSATION COMMITTEE ON ANNUAL COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for overseeing all stock option plans, setting the compensation for
the Chief Executive Officer ("CEO"), the Chairman of the Board ("Chairman"), the
President/Chief Operating Officer ("President/COO") and providing guidelines to
the CEO for determining the annual compensation of other officers.
Executive Officer Compensation Other than CEO, Chairman and President/COO
The Committee believes that total compensation for the Company's officers
must be in amounts sufficient to attract, retain and motivate key employees,
while at the same time maintaining reasonable linkage between executive
compensation and Company performance.
The Committee sets guidelines for officer pay based upon industry levels.
As in prior years, 1999 base salaries were set at mid-range pay levels when
compared to similar companies in the industry, with potential additional
compensation to be made through cash bonuses. Cash bonuses for all officers
other than the President/COO, CEO and Chairman were based on a combination of
individual performance and Company performance. Forty percent of the bonus
amount was tied to individual performance against stated objectives and the
remaining sixty percent was dependent upon the Company reaching stated sales
objectives. Neither portion of the bonus was to be paid unless the Company
reached a stated pre-tax earnings objective. For 1999, no bonus amounts were
paid.
Stock options are granted to executive officers by the Committee at the
time the officers are hired and thereafter based on individual contributions.
Stock options are granted at the fair market value of the Common Stock on the
date of grant, with an exercise period of up to nine years.
CEO, Chairman and President/COO Compensation
The compensation for both the CEO and the Chairman is determined by the
Committee based upon a combination of base pay and cash bonus, with the total
cash compensation being strongly affected by Company performance. The base pay
for both the CEO and Chairman for fiscal 1999 was $750,000 as noted in the
Summary Compensation Table. Annual cash bonus payments for the CEO and the
Chairman are each set at 3% of the Company's pre-tax profits for the fiscal
year. As a result, bonus payments to the CEO and the Chairman fluctuate based
upon the Company's pre-tax profits. The Committee may grant additional
discretionary cash bonuses to the CEO and the Chairman based on the Committee's
evaluation of individual performance. Discretionary bonuses of $125,000 each
were granted to the CEO and the Chairman for fiscal 1999 of which one half was
deferred for payment into 2000.
The compensation for the President/COO is determined by the committee based
upon a combination of base pay and a signing bonus for fiscal 1999. The annual
base pay for fiscal 1999 was $450,000 and was prorated to the effective hiring
date as noted in the Summary Compensation Table. In 1999, a signing bonus of
$200,000 was paid.
The Committee grants stock options to the CEO, Chairman and President/COO
based upon a subjective evaluation of many factors including performance,
leadership, motivational effect, and extraordinary contributions to the Company.
This report is submitted by the members of the Compensation Committee:
Robert S. Folsom
A. Starke Taylor, Jr.
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return for the Company's Common Stock from December 1, 1994,
through November 30, 1999 with the cumulative total return for the NASDAQ Market
Index and the Peer Group(1). The comparison assumes $100 was invested in the
Company's Common Stock on December 1, 1994, and in each of the foregoing indices
and assumes reinvestment of dividends.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
BEAUTICONTROL, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX
[GRAPH]
<TABLE>
<CAPTION>
BEAUTICONTROL COSMETICS PEER GROUP INDEX NASDAQ MARKET INDEX
----------------------- ---------------- -------------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 65.00 122.47 126.79
1996 101.34 191.49 157.31
1997 61.35 202.79 195.40
1998 49.08 284.05 241.54
1999 28.22 260.69 395.59
</TABLE>
- ---------------
(1) The Peer Group includes Avon Products, Inc., Nature's Sunshine Products
Inc., and Herbalife International, Inc.
10
<PAGE> 13
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 own more than 10% of the
Company's Common Stock, to file with the Securities and Exchange Commission (the
"SEC") initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Such persons are
required by SEC regulations to furnish the Company with copies of all Section
16(a) reports they file. To the Company's knowledge, based on its review of the
copies of such reports and written representations that no other reports were
required, during the fiscal year ended November 30, 1999, all Section 16(a)
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with. The Company is not aware of any failure to
file a required report.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 13, 1998, M. Douglas Tucker, the Company's Senior Vice
President -- Finance, Secretary and Chief Financial and Accounting Officer,
borrowed $50,000 from the Company. Thereafter, Mr. Tucker borrowed additional
amounts from the Company from time to time, with the last borrowing occurring
October 26, 1999. The largest aggregate principal amount outstanding on these
loans during fiscal 1999 was $84,500. Promissory notes with interest at the then
effective prime rates evidence the indebtedness. As of February 15, 2000, the
aggregate principal amount outstanding on these loans was $59,500.
AUDITORS
Representatives of Ernst & Young LLP, the Company's independent auditors
for 1999, are expected to be present at the meeting with the opportunity to make
a statement if they desire to do so and to be available to respond to
appropriate questions.
BOARD OF DIRECTORS'
RECOMMENDATION; VOTE REQUIRED
The Board of Directors unanimously recommends a vote FOR the election as
director of each of the nominees named in the proxy.
Nominees for director receiving a plurality of the votes cast will be
elected as directors.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. A broker is entitled to vote on the election of directors
if such broker holds shares in street name for a customer who does not deliver
voting instructions. Under applicable Delaware law, a broker non-vote resulting
from the failure to deliver voting instructions to a broker will have no effect
on the outcome of the election of directors.
STOCKHOLDER PROPOSALS
In order for stockholder proposals to receive consideration for inclusion
in the Company's Proxy Statement for next year, such proposals must be received
at the Company's offices at 2121 Midway Road, Carrollton, Texas 75006,
Attention: Secretary, by November 8, 2000.
The Company's Bylaws contain a provision which requires that a stockholder
may nominate a person for election as a director only if written notice of such
stockholder's intent to make such nomination has been given to the Secretary of
the Company not later than 60 days prior to an annual meeting. This provision
also requires that the notice set forth, among other things, a description of
all arrangements or understandings between the nominating stockholder and the
nominee pursuant to which the nomination is to be made or the nominee is to be
elected, and such notice must also contain such other information regarding the
nominee as would be required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission had the nominee
been nominated by the Board of Directors of the Company. This
11
<PAGE> 14
provision is intended to give the Company the opportunity to obtain all relevant
information regarding persons nominated for director. The Board of Directors may
disqualify any nominee who fails to provide the Company with complete and
accurate information as required by this provision. No stockholder has nominated
a candidate for election to the Board of Directors at the 2000 Annual Meeting.
SOLICITATION OF PROXIES
The Company will pay the expenses of this proxy solicitation. In addition
to solicitation by mail, some of the officers and regular employees of the
Company may solicit proxies personally or by telephone, if deemed necessary. The
Company will request brokers and other fiduciaries to forward proxy soliciting
material to the beneficial owners of shares which are held of record by the
brokers and fiduciaries, and the Company may reimburse them for reasonable
out-of-pocket expenses incurred by them in connection therewith.
OTHER BUSINESS
The Board of Directors is not aware of any matter, other than the matter
described above, to be presented for action at the meeting. However, if any
other proper items of business should come before the meeting, it is the
intention of the person or persons acting under the enclosed form of proxy to
vote in accordance with their best judgment on such matters.
By Order of the Board of Directors,
/s/ KRISTI L. HUBBARD
KRISTI L. HUBBARD
Senior Vice President -- Controller
and Secretary
Carrollton, Texas
March 6, 2000
12
<PAGE> 15
BEAUTICONTROL. INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
P This undersigned hereby appoint(s) Richard W. Heath, with full power of
substitution, proxies of the undersigned, with all the powers that the
R undersigned would possess if personally present to cast all votes that the
undersigned would be entitled to vote at the Annual Meeting of Stockholders
O of BeautiControl, Inc. (the "Company") to be held on Tuesday, April 11, 2000,
at the Company's executive offices, 2121 Midway Road, Carrollton, Texas, at
X 10:00 A.M., Dallas, Texas time, and any and all adjournments or postponements
thereof (the "Annual Meeting"), including (without limiting the generality of
Y the foregoing) to vote and act as follows:
1) Election of Directors, Nominees:
Robert S. Folsom, A. Starke Taylor and Sheila O'Connell Cooper
Please complete, date, sign and mail this Proxy promptly in the enclosed
envelope. No postage is required for mailing in the United States.
-----------
SEE REVERSE
SIDE
-----------
<PAGE> 16
BEAUTICONTROL, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
1. Election of Directors, Nominees:
1) Robert S. Folsom, 2) A. Starke Taylor, and 3) Sheila O'Connell
Cooper
FOR WITHHELD FOR ALL
ALL ALL EXCEPT
[ ] [ ] [ ] -------------------
Nominee Exception
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting. This Proxy will be
voted at the Annual Meeting or any adjournment or postponement thereof as
specified. If no specifications are made, this Proxy will be voted FOR the
election as directors of the three nominees named to the term described in
the accompanying Proxy Statement. This Proxy hereby revokes all prior proxies
given with respect to the shares of the undersigned.
SIGNATURE(S) DATE
------------------- --------------
SIGNATURE(S) DATE
------------------- --------------
IMPORTANT: Please date this Proxy and sign exactly as your name appears to
the left. If shares are held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee or guardian, please give title
as such. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name
by authorized person.
