Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
Bausch & Lomb Incorporated is a world leader in the development, manufacture and marketing of products and services for the healthcare and optics fields.
Bausch & Lomb was incorporated in the State of New York in 1908 to carry on a business which was established in 1853. Its principal executive offices are located in Rochester, New York. Unless the context indicates otherwise, the terms "Bausch & Lomb" and "Company" as used herein refer to Bausch & Lomb Incorporated and its consolidated subsidiaries. Highlights of the general development of the business of Bausch & Lomb during 1994 are discussed below.
The Company faced a challenging year in 1994 as it addressed the impact of high distributor inventories in its sunglass and contact lens business and the costs of associated remedial measures. Sales declined to $1,850.6 million, 1% below the 1993 amount of $1,872.2 million. Earnings fell to $13.5 million, or $.23 per share, a 91% decrease from the 1993 amounts of $156.5 million and $2.60 per share. This 91% decrease also includes the effect of a $75 million goodwill impairment charge related to the 1988 acquisition of Dental Research Corporation, which is described below.
In January 1994, the Company acquired the Revo line of high performance sunglasses. Revo sunglasses compete in the upper end of the premium price category of the U.S. market where sunglasses retail for $150 and above.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
Information concerning sales, business segment earnings and identifiable assets attributable to each of Bausch & Lomb's reportable industry segments is set forth on pages 25-29 and 44- 46 of the Annual Report and which are incorporated herein by reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS
Bausch & Lomb's operations have been classified into two industry segments: Healthcare and Optics. Below is a description of each segment and information to the extent that it is material to an understanding of the Company's business taken as a whole. In addition, pages 6-20 of the Annual Report are incorporated herein by reference.
Healthcare
The Healthcare segment includes personal health, medical and biomedical products. In the personal health sector, major lines include solutions used for the care of contact lenses and for the relief of eye irritation, contact lens accessories, Clear Choice mouthwash, certain over-the-counter pharmaceutical products, Interplak power toothbrushes and other oral care products and Curel and Soft Sense skin care products. Medical products include contact lenses and lens materials, prescription drugs, the Miracle-Ear line of hearing aids and Steri-Oss dental implants. Biomedical products include purpose-bred laboratory animals for biomedical research, products derived from specific pathogen-free eggs and a variety of other biotechnical and professional services provided to the scientific research community.
The Company markets its personal health products in the U.S. to practitioners through its own sales force and through drug stores, food stores and mass merchandisers. Personal health products are also marketed through an extensive international marketing organization. Distribution in many other countries is accomplished through distributors or dealers. Medical products are marketed through the Company's sales force and distributors to eye care and dental care practitioners, independent optical laboratories and hospitals. Hearing aids are distributed through the Miracle-Ear franchise system. Sales to pharmacies are handled by drug wholesalers, while marketing of medical products outside the U.S. is accomplished through the Company's extensive international marketing organization. In some countries, distribution is handled through dealers or distributors. Biomedical products are sold primarily through the Company's sales force worldwide.
In December 1994, the Company recognized a goodwill impairment charge of $75 million, with no associated tax benefit, related to the 1988 acquisition of Dental Research Corporation. This charge is described in greater detail on page 22 of the Annual Report, which is incorporated herein by reference.
Optics
The principal products of the Company's Optics segment include sunglasses, binoculars, riflescopes, telescopes and optical thin film services and products.
Optical products are distributed worldwide through distributors, wholesalers, manufacturers' representatives, and independent sales representatives. These products are also distributed through the Company's sales force to optical stores, department stores, catalog showrooms, mass merchandisers, sporting goods stores and, in the case of optical thin films, to a variety of industrial customers.
In January 1995, the Company announced that it had signed a letter of intent to sell its Sports Optics Division, which designs, supplies and distributes binoculars, telescopes and riflescopes. The transaction is anticipated to close in the first half of 1995.
Raw Materials and Parts; Customers
Materials and components in both of the Company's industry segments are purchased from a wide variety of suppliers and the loss of any one supplier would not adversely affect the Company's business to a significant extent. No material part of the Company's business in either of its industry segments is dependent upon a single or a few customers.
Patents, Trademarks & Licenses
While in the aggregate the Company's patents are of material importance to its businesses taken as a whole, no single patent or patent license or group of patents or patent licenses relating to any particular product or process is material to either industry segment. The Company actively pursues technology development and acquisition as a means to enhance its competitive position in its business segments.
In the healthcare segment, Bausch & Lomb has developed significant consumer, eye care professional and dental care professional recognition of products sold under the Bausch & Lomb, Sensitive Eyes, ReNu, Boston, SeeQuence, Medalist, The Boston Lens, Optima, Soflens, Charles River, VAF/Plus and Interplak trademarks. Bausch & Lomb, Ray-Ban, Revo and Wayfarer are trademarks receiving substantial consumer recognition in the optics segment.
Seasonality and Working Capital
Some seasonality exists for the Interplak line of power toothbrushes in the Healthcare segment and for sunglasses and sports optics products in the Optics segment. During some periods, the accumulation of inventories of such products in advance of expected shipments reflects the seasonal nature of the products. In general, the working capital practices followed in each of the Company's industry segments are typical of those businesses.
Competition
Each industry segment is highly competitive in both U.S. and non-U.S. markets. In both of its segments, Bausch & Lomb competes on the basis of product performance, quality, technology, price, service, warranty and reliability. In the Optics segment, the Company also competes on the basis of style.
Research and Development
Research and development constitutes an important part of Bausch & Lomb's activities. In 1994, the Company's research and development expenditures totaled $60 million, as compared to $58 million in 1993 and $53 million in 1992.
Environment
Although Bausch & Lomb is unable to predict what legislation or regulations may be adopted or enacted in the future with respect to environmental protection and waste disposal, existing legislation and regulations have had no material adverse effect on its capital expenditures, earnings or competitive position. Capital expenditures for property, plant and equipment for environmental control facilities were not material during 1994 and are not anticipated to be material in 1995 or 1996.
Number of Employees
Bausch & Lomb employed approximately 14,400 persons as of December 31, 1994.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
Information as to sales, operating earnings and identifiable assets attributable to each of Bausch & Lomb's geographic regions, and the amount of export sales in the aggregate, is set forth on page 45 of the Annual Report and is incorporated herein by reference.
ITEM 2.



ITEM 2. PROPERTIES
The principal manufacturing, distribution and production facilities and other important physical properties of Bausch & Lomb at March 1, 1995 are listed hereafter and grouped under the principal industry segment to which they relate. Certain properties relate to more than one industry segment. Except where otherwise indicated by footnote, all properties shown are held in fee and are not subject to major encumbrances.
HEALTHCARE
Manufacturing Plants Distribution Centers
Yorba Linda, CA (2) Yorba Linda, CA (2) Sarasota, FL (1) Preston, CT (2) Tampa, FL Tampa, FL Wilmington, MA (2) Tucker, GA (2) Golden Valley, MN (1) Wilmington, MA (2) Rochester, NY (1),(2) Golden Valley, MN (1) (Optics Center) Reinholds, PA (2) Greenville, SC Greenville, SC (2) North Ryde, Australia (2) Lynchburg, VA (2) Porto Alegre, Brazil Rio de Janeiro, Brazil Kitchener, Canada (2) Beijing, China (2) Berlin, Germany Bhiwadi, India Waterford, Ireland (2) Milan, Italy Umsong-Gun (Seoul), Korea Barcelona, Spain Madrid, Spain Hastings, United Kingdom
Production Facilities
Hollister, CA (2) Brussels, Belgium Lebanon, CT St. Constant, Canada Preston, CT Henfield, England Storrs, CT Margate, England Summerland Key, FL (2) Lyons, France Colbert, GA (2) St. Aubin-les-Elbeuf, France Roanoke, IL (2) Extertal, Germany Windham, ME Kisslegg, Germany Southbridge, MA (2) Sulzfeld, Germany West Brookfield, MA (2) Calco, Italy Wilmington, MA Atsugi, Japan Portage, MI Hino, Japan O'Fallon, MO Tskuba, Japan (2) Raleigh, NC Someren, Netherlands Omaha, NE Barcelona, Spain (2) Pittsfield, NH Sta. Perpetua de Mogoda, Spain Newfield (Lakeview), NJ Stone Ridge (Kingston), NY Charleston, SC (2) Oregon, WI
OPTICS
Manufacturing Plants Distribution Centers
Mountain View, CA (2) Mountain View, CA (2) Oakland, MD Overland Park, KS (2) Rochester, NY (1),(2) Rochester, NY (1),(2) (Optics Center) (Optics Center) Rochester, NY San Antonio, TX (Frame Center) Richmond Hill, Ontario. San Antonio, TX Canada (2) North Ryde, Australia (2) Rio de Janeiro, Brazil (2) Guanzhou, China New Territories, Hong Kong (2) Bhiwadi, India Waterford, Ireland (2) Nuevo Laredo, Mexico (2)
CORPORATE FACILITIES
Rochester, NY One Bausch & Lomb Place (2),(3) One Chase Square (23rd, 24th, 25th Floors) (2) Euclid Street (2) 42 East Avenue (2) Optics Center (1),(2) 1295 Scottsville Road (2)
[FN] This facility is financed under a tax-exempt financing agreement. This facility is leased. This facility is under construction. [/FN]
Bausch & Lomb considers that its facilities are suitable and adequate for the operations involved. All facilities are being productively utilized.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
1. In June 1990, the Company was served with six "toxic tort" suits filed against it and approximately eighty other defendants in the 21st Judicial Court of Louisiana. These suits, which have been certified as a class action, allege claims for personal injury, property damage and "fear of cancer" from waste allegedly generated by the Company and others and transported to an oil reclamation site in Louisiana. Each suit alleges joint and several liability and claims actual and exemplary damages exceeding 10% of the current assets of the Company on a consolidated basis. The Company believes that if its waste is or was present at the site, such waste would have amounted to approximately 0.1% of the site's total waste, and that its share of liability, if any, would be di minimis relative to other defendants' potential liability and that it is not material to the financial condition of the Company. On January 25, 1993, the Company and ten other defendants were dismissed from the action without prejudice by a motion of the plaintiffs. It is probable that either the plaintiffs or one or more of the defendants will seek to bring the Company back into the proceedings.
2. In 1994, the Circuit Court, Barbour County, Alabama, certified a nationwide class of purchasers of Miracle-Ear hearing aids manufactured and sold by the Company's Dahlberg, Inc. subsidiary between January 1989 and January 1994. The plaintiffs allege that Dahlberg induced them and others similarly situated to purchase hearing aids through allegedly false and misleading statements concerning the performance capabilities of the Clarifier circuitry. Plaintiffs claim fraud, negligence, and violation of federal and state statutes and are seeking compensatory and punitive damages in an unstated amount. A second action, based on similar allegations, has also been brought in Minnesota. However, the Minnesota court certified a much narrower class consisting only of Clarifier purchasers based on the Minnesota Consumer Fraud Act.
3. In June 1994, the Florida Attorney General, acting on behalf of disposable contact lens consumers in the State of Florida, filed an antitrust action against the Company and others in the United States District Court for the Middle District of Florida. The complaint challenges the Company's long-standing policy to protect consumers' health by selling contact lenses only to licensed professionals. Plaintiffs allege that the policy was adopted in the conspiracy with others to eliminate alternative channels of trade from the disposable lens market. The Florida Attorney General seeks treble damages on behalf of all purchasers of contact lenses, whether from the Company or others, a $1 million penalty and injunctive relief. A number of consumer class actions have been consolidated in the Middle District of Florida and actions have been filed in California and Alabama State courts. The complaints seek identical relief on behalf of consumers outside the State of Florida. The Company defends its policy in the interest of safeguarding consumers' health.
4. On June 3, 1994, the Company announced that actions to normalize high levels of inventories at distributors would cause sales and earnings for the second quarter and remainder of 1994 to be below the level of the same periods in 1993 and that results for the year would be less than originally planned. Several class action suits were filed in the United States District Court, New York and consolidated in the Western District, against Bausch & Lomb and one of its officers alleging the Company artificially inflated the value of its stock by making false and misleading statements about expected financial results. The plaintiffs seek unspecified damages based upon the decrease in market value of shares of the Company's stock. The Company is vigorously defending these claims.
5. On January 31, 1995, a proposed class action suit was filed in the United States District Court for the Western District of New York against Bausch & Lomb and several of its officers. The suit alleges that the Company failed to fully disclose the impact of the efforts to normalize distributor inventories on the Company's 1994 financial results, thus misleading the shareholders who purchased shares between June 4, 1994 and January 25, 1995. The plaintiff seeks unspecified monetary damages based upon the decreased market value of the Company's stock. The Company is vigorously defending these claims.
6. On December 28, 1994, the Company received a request from the Securities and Exchange Commission ("SEC") for information apparently prompted by accounting issues arising out of an unsuccessful 1993 marketing program initiated by the Contact Lens Division, which was designed to transfer management of a portion of the U.S. traditional lens business to optical distributors. The Company is cooperating fully with the SEC in the inquiry but there can be no assurance regarding its outcome.
7. In November 1994, the United States District Court for the Northern District of Alabama certified a nationwide class of purchasers of Optima FW and Medalist lenses between January 1, 1991 and November 1, 1994 to pursue claims related to the Company's marketing and sale of Optima FW, Medalist and SeeQuence 2 contact lens systems. Plaintiffs allege that the Company misled consumers by packaging the same lens under three different names for three different prices. Plaintiffs seek compensatory and punitive damages in an unspecified amount. The case may proceed to trial in late 1995. The Company is vigorously defending the marketing of these lens systems.
8. On February 16, 1995, a proposed class action suit was filed in the United States District Court for the Southern District of California. The suit alleges that the Company misled consumers in its marketing and sale of Sensitive Eyes Saline Solution and rewetting drops and Boston rewetting drops and conditioning solution. Plaintiffs seek injunctive relief, and compensatory and punitive damages in an unspecified amount. The Company is vigorously defending this action.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
Inapplicable.
PART II
ITEM 5.

ITEM 5. MARKET FOR BAUSCH & LOMB INCORPORATED'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
The sections entitled "Dividends" and "Quarterly Stock Prices" and table entitled "Selected Financial Data" on pages 37, 38 and 62-63, respectively, of the Annual Report are incorporated herein by reference.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The table entitled "Selected Financial Data" on pages 62-63 of the Annual Report is incorporated herein by reference.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The section entitled "Financial Review" on pages 22-37 of the Annual Report is incorporated herein by reference.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements, including the notes thereto, together with the sections entitled "Report of Independent Accountants" and "Quarterly Results" of the Annual Report included on pages 39-60, 61 and 38, respectively, are incorporated herein by reference.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Inapplicable.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF BAUSCH & LOMB INCORPORATED
Information with respect to non-officer directors is included in the Proxy Statement on pages 3-7, and such information is incorporated herein by reference. Set forth below are the names, ages (as of March 1, 1995), positions and offices held by, and a brief account of the business experience during the past five years of, each executive officer.
Name and Age Position
Daniel E. Gill (58) Chairman since 1982, Chief Executive Officer since 1981 and Director since l978.
Henry L. Foster (69) Senior Vice President since 1988, and Chairman of the Board since 1947 of Charles River Laboratories, Inc., a subsidiary of the Company; President and Chief Executive Officer, Charles River Laboratories, Inc. (1947-1991); Vice President (1986-1988).
James C. Foster (44) Senior Vice President since December 1994 and President and Chief Executive Officer of Charles River Laboratories, Inc., a subsidiary of the Company since 1991; Vice President (1991-1994); Executive Vice President, Charles River Laboratories, Inc. (1989-1991).
Jay T. Holmes (52) Executive Vice President since March 1995 and Chief Administrative Officer since December 1994; Senior Vice President (1983-March 1995); Corporate Affairs (1983-1994); Secretary (1981-1994); Director since 1986.
Harold O. Johnson (60) Senior Vice President since l985 and President, Contact Lens Division (l987-September 1994); President, International Operations (1985-1987).
James E. Kanaley (53) Senior Vice President since 1985 and President, Personal Products Division; Global Business Manager, Lens Care Products since December 1994; President, Personal Products Division (1987-1994).
Alex Kumar (47) Senior Vice President, International Operations since December 1994; Vice President (1989-1994); President, Europe, Middle East and Africa Division (1989-1994).
Stephen C. McCluski (42) Senior Vice President, Finance since February 1995; Vice President and Controller (1994); President, Outlook Eyewear Company (1992-February 1994); Vice President, Controller, Eyewear Division (1989-1992).
Robert J. Palmisano (50) Senior Vice President since 1992 and President, Eyewear Division since 1988; Vice President (1984- 1992); President, Sports Optics and Scientific Products Group (1986-1988).
Thomas M. Riedhammer (46) Senior Vice President, Worldwide Pharmaceutical, Surgical, and Hearing Care Products since December 1994; Vice President (1993-1994); President, Worldwide Pharmaceuticals (1994); President, Pharmaceutical Division (1992- 1993); Vice President, Research and Development, Pharmaceutical Division (1991-1992); Vice President, Paco Pharmaceutical Services, Inc., and President, Paco Research Corporation (1986- 1991).
Carl E. Sassano (45) Senior Vice President since 1992 and President, Contact Lens Division since September 1994; Global Business Manager, Contact Lens Products since December 1994; Vice President (1986-1992); President, Polymer Technology Corporation, a subsidiary of the Company (1983-1992).
Omar Casal (45) Vice President since 1992 and President, Latin America Division since December 1994; President, Western Hemisphere Division (1992-1994); General Manager, Bausch & Lomb IOM S.p.A. (1989-1992).
Dwain L. Hahs (42) Vice President and President, Europe, Middle East and Africa Division since December 1994; President, Europe, Middle East and Africa Division (1994); Vice President, Field Operations, Europe, Middle East and African Division (1992- 1994); Vice President, Marketing, International Division (1989- 1992); President, Bausch & Lomb Canada, Inc. (1986-1989).
Diane C. Harris (52) Vice President, Corporate Development since 1981.
Stephen A. Hellrung (47) Senior Vice President since March 1995; Secretary since December 1994; Vice President and General Counsel (1985-1994).
James T. Horn (52) Vice President and President, Asia Pacific Division since December 1994; President, Outlook Eyewear and Senior Vice President, Operations, Eyewear Division (1994); Vice President, Manufacturing, Eyewear Division (1992-1994); Vice President, Manufacturing, Xerox Corporation (1989-1992); Vice President, Quality Development, Manufacturing, Xerox Corporation (1988-1989).
Franklin T. Jepson (47) Vice President, Communications and Investor Relations since 1986.
Barbara M. Kelley (48) Vice President, Public Affairs since 1993; Staff Vice President, Public Affairs (1991-1993); Director, Public Affairs (1986-1991).
Jurij Z. Kushner (44) Vice President and Controller since February 1995; Vice President, Operations, Personal Products Division (1994-1995); Vice President and Controller, Personal Products Division (1992-1994); Staff Vice President, Financial Planning and Analysis (1986-1992).
B. Joseph Messner (42) Vice President since 1989 and President, Sports Optics Division since 1988; Vice President Operations, Sports Optics Division (1987-1988); Vice President and Controller, Sunglass Division (1984-1987).
James F. Milton (47) Vice President and President, Japan since December 1994; President, B.L.J. Company Ltd. (1994); President, Thin Film Technology Division (1992-1994); General Manager, Bausch & Lomb Canada (1989-1992); Area Director, Europe (1987-1989).
Alan H. Resnick (51) Vice President and Treasurer since 1986.
Robert F. Thompson (41) Vice President since December 1993 and President Polymer Technology Corporation, a subsidiary of the Company since 1992; Vice President, U.S. Business Operations, Polymer Technology Corporation (1991-1992); Vice President, Marketing, Polymer Technology Corporation (1988-1991).
James J. Ward (57) Vice President, Audit Services since February 1993; Vice President (1984-1993); Controller (1985- 1993).
Except for Henry and James Foster, who are father and son, there are no family relationships among the persons named above. All officers serve on a year-to-year basis through the day of the annual meeting of shareholders of the Company, and there is no arrangement or understanding between any of the officers of the Company and any other persons pursuant to which such officer was selected as an officer.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The portions of the "Executive Compensation" section entitled "Compensation Tables" and "Defined Benefit Retirement Plans", the second through fourth paragraphs of the section entitled "Board of Directors", and the second paragraph of the section entitled "Related Transactions and Employment Contracts" included in the Proxy Statement on pages 15-19, 1-2, 19, respectively, are incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section entitled "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement on pages 8-9 is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The first paragraph of the section entitled "Related Transactions and Employment Contracts" on page 19 of the Proxy Statement are incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The following documents or the portions thereof indicated are filed as a part of this report.
(a) INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES COVERED BY REPORTS OF INDEPENDENT ACCOUNTANTS.
1. Data incorporated by reference in Page in Item 8 from the Annual Report Annual Report
Report of Independent Accountants 61
Balance Sheet at December 31, 1994 and December 25, 1993 40
For the years ended December 31, 1994, December 25, 1993 and December 26, 1992:
Statement of Earnings 39
Statement of Cash Flows 41
Notes to Financial Statements 42-60
2. Filed herewith
Report of Independent Accountants on Financial Statement Schedules Exhibit (24)
For the years ended December 25, 1993, December 26, 1992 and December 28, 1991:
SCHEDULE II- Valuation and Qualifying Page S-1 Accounts
All other schedules have been omitted because the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.
(b) REPORTS ON FORM 8-K
A report on Form 8-K was filed during the last quarter of 1994 to disclose the release of the Company's third quarter earnings, which varied materially from prior Company projections of same.
(c) ITEM 601 EXHIBITS
Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits filed herewith and such listing is incorporated herein by reference. Each of Exhibits (10)-a through (10)-w is a management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 14(c) of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BAUSCH & LOMB INCORPORATED
Date: March 27, 1995 By:/s/ Daniel E. Gill Daniel E. Gill Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Principal Executive Officer
Date: March 27, 1995 By:/s/Daniel E. Gill Daniel E. Gill Chairman, Chief Executive Officer and Director
Principal Financial Officer
Date: March 27, 1995 By:/s/ Stephen C. McCluski Stephen C. McCluski Senior Vice President, Finance
Controller
Date: March 27, 1995 By:/s/ Jurij Z. Kushner Jurij Z. Kushner, Vice President and Controller
Directors Franklin E. Agnew William Balderston III Bradford R. Boss Daniel E. Gill Jay T. Holmes Ruth R. McMullin John R. Purcell Linda Johnson Rice Robert L. Tarnow Alvin W. Trivelpiece William H. Waltrip Kenneth L. Wolfe
Date: March 27, 1995 By:/s/Jay T. Holmes Jay T. Holmes Attorney-in-Fact and Director
EXHIBIT INDEX
S-K Item 601 No. Document
(3)-a Certificate of Incorporation of Bausch & Lomb Incorporated (filed as Exhibit (3)-a to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1985, File No. 1-4105, and incorporated herein by reference).
(3)-b Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (3)-b to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4105, and incorporated herein by reference).
(3)-c Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (3)-c to the Company's Annual report on Form 10-K for the fiscal year ended December 26, 1992, File No. 1-4105, and incorporated herein by reference).
(3)-d By-Laws of Bausch & Lomb Incorporated, as amended, effective October 28, 1986 (filed as Exhibit (3)-b to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1986, File No. 1-4105, and incorporated herein by reference).
(4)-a Certificate of Incorporation of Bausch & Lomb Incorporated (filed as Exhibit (4)-a to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1985, File No. 1-4105, and incorporated herein by reference).
(4)-b Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (4)-b to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4105, and incorporated herein by reference).
(4)-c Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (4)-c to the Company's Annual report on Form 10-K for the fiscal year ended December 26, 1992, File No. 1-4105, and incorporated herein by reference).
(4)-d Form of Indenture, dated as of September 1, 1991, between the Company and Citibank, N.A., as Trustee, with respect to the Company's Medium-Term Notes (filed as Exhibit 4- (a) to the Company's Registration Statement on Form S-3, File No. 33-42858, and incorporated herein by reference).
(4)-e Rights Agreement between the Company and The First National Bank of Boston, as successor to Chase Lincoln First Bank, N.A. (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated July 25, 1988, File No. 1-4105, and incorporated herein by reference).
(4)-f Amendment to the Rights Agreement between the Company and The First National Bank of Boston, as successor to Chase Lincoln First Bank, N.A. (filed as Exhibit 1 to the Company's Current Report on Form 8-K dated July 31, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-a Change of Control Employment Agreement with certain executive officers of the Company (filed as Exhibit (10)- a to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-b The Bausch & Lomb Incorporated Executive Incentive Compensation Plan (filed herewith).
(10)-c The Bausch & Lomb Supplemental Retirement Income Plan I, as restated (filed as Exhibit (10)-e to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-d The Bausch & Lomb Supplemental Retirement Income Plan II, as restated (filed as Exhibit (10)-f to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-e The Bausch & Lomb Supplemental Retirement Income Plan III (filed as Exhibit (10)-g to the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 1992, File No. 1-4105, and incorporated herein by reference).
(10)-f The Bausch & Lomb Incorporated Long Term Incentive Program, as restated (filed as Exhibit (10)-g to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1985, File No. 1-4105, and incorporated herein by reference).
(10)-g Amendment to the Bausch & Lomb Incorporated Long Term Incentive Program (filed as Exhibit (10)-i to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4105, and incorporated herein by reference).
(10)-h The Bausch & Lomb Incorporated Management Executive Incentive Plan (filed herewith).
(10)-i The Bausch & Lomb Supplemental Management Executive Incentive Plan (filed herewith).
(10)-j The Bausch & Lomb Incorporated Long Term Performance Stock Plan I (filed herewith).
(10)-k Bausch & Lomb Incorporated Long Term Performance Stock Plan II, as amended (filed as Exhibit (10)-i to the Company's Annual Report on Form 10-K for fiscal year ended December 25, 1993, File No. 1-4105 and incorporated herein by reference).
(10)-l The 1982 Stock Incentive Plan of Bausch & Lomb Incorporated (filed as Exhibit III-F to the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 1982, File No. 1-4105, and incorporated herein by reference).
(10)-m Amendment to the 1982 Stock Incentive Plan of Bausch & Lomb Incorporated (filed as Exhibit (10)-l to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4105, and incorporated herein by reference).
(10)-n Amendment to the 1982 Stock Incentive Plan of Bausch & Lomb Incorporated (filed as Exhibit (10)-k to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-o The 1987 Stock Incentive Plan of Bausch & Lomb Incorporated (filed as Exhibit I.B to the Company's Registration Statement on Form S-8, File No. 33-15439, and incorporated herein by reference).
(10)-p Amendment to the 1987 Stock Incentive Plan of Bausch & Lomb Incorporated (filed as Exhibit (10)-n to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4105, and incorporated herein by reference).
(10)-q Amendment to the 1987 Stock Incentive Plan of Bausch & Lomb Incorporated (filed as Exhibit (10)-n to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-r The 1990 Stock Incentive Plan of Bausch & Lomb Incorporated, as amended (filed as Exhibit (10)-o to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-s The Bausch & Lomb Incorporated Director Deferred Compensation Plan, as restated (filed as Exhibit (10)-p to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4105, and incorporated herein by reference).
(10)-t The Bausch & Lomb Incorporated Executive Deferred Compensation Plan, as restated (filed as Exhibit (10)-q to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4105, and incorporated herein by reference).
(10)-u The Bausch & Lomb Incorporated Executive Benefit Plan, as amended (filed as Exhibit (10)-t to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105, and incorporated herein by reference).
(10)-v The Bausch & Lomb Incorporated Executive Security Program (filed as Exhibit (10)-s to the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 1989, File No. 1-4105, and incorporated herein by reference).
(10)-w The Bausch & Lomb Retirement Benefit Restoration Plan (filed as Exhibit (10)-t to the company's Annual Report on Form 10-K for the fiscal year ended December 28, 1991, File No. 1-4105, and incorporated herein by reference).
(11) Statement Regarding Computation of Per Share Earnings (filed herewith).
(12) Statement Regarding Computation of Ratio of Earnings to Fixed Charges (filed herewith).
(13) The Bausch & Lomb 1994 Annual Report to Shareholders for the fiscal year ended December 31, 1994 (filed herewith). With the exception of the pages of the Annual Report specifically incorporated by reference herein, the Annual Report is not deemed to be filed as a part of this Report on Form 10-K.
(22) Subsidiaries (filed herewith).
(24) Report of Independent Accountants on Financial Statement Schedules and Consent of Independent Accountants (filed herewith).
(25) Power of attorney with respect to the signatures of directors in this Report on Form 10- K (filed herewith).
(27) Financial Data Schedule (filed herewith).
EXHIBIT (10)-b
THE EXECUTIVE INCENTIVE COMPENSATION PLAN
1.0 INTRODUCTION
The Executive Incentive Compensation Plan is established to provide incentive compensation in the form of a supplement to the base salaries of those officers, managers, and key employees who contribute significantly to the growth and success of the Company's business; to attract and to retain, in the employ of the Company, individuals of outstanding ability; and to align the interests of those who hold positions of major responsibility in the Company with the interests of the Company's shareholders.
2.0 ELIGIBILITY
Those members of the executive management group whose duties and responsibilities contribute significantly to the growth and success of the Company's business are eligible. This generally includes all positions in the mid-management/technical band and above, in Rochester based divisions or functions. The plan may be adopted by non-Rochester based divisions.
The participant must be on the payroll in an eligible position before July 1 of the plan year, to be eligible for an award.
3.0 DEFINITIONS
3.1 A standard incentive award has been established for each salary grade or job band and is expressed as a percentage of period salary (i.e., eligible base salary earnings for the year). Exhibit I defines standard percentage schedules.
The standard incentive award is the award payout level which over time, participants, units and the corporation should average, and will be the amount which will be used for financial accrual purposes during the incentive year.
3.2 An approved incentive award is the incentive which has been approved by the Chairman of the Board of directors and the Committee On Management of the Board to be paid by the company to the participant.
Actual incentive award amounts, based upon individual and organizational performance, can vary from 0% for unacceptable performance, or for approved incentive awards from a minimum of 25% to a maximum of 175% of standard. In any event, an award cannot exceed the maximum.
4.0 MEASURES OF PERFORMANCE
Each organizational unit and eligible participant will set performance measures. These will be applied for incentive plan purposes as follows:
4.1 The "Organizational Performance Management System" (OPMS) has been established to evaluate corporate, division, and profit center performance for Executive Incentive Compensation Plan purposes.
The OPMS is based upon four specific organizational objectives, each with a weight of 25%. These objectives are to be agreed upon at the beginning of the plan year. They must include the following measurable financial categories: sales, operating earnings, asset management, and annual contribution to long term vitality of the operating unit. For the three financial goals performance levels for 5, 4, 3, 2, and 1 ratings are to be defined at the beginning of the plan year for each goal. The fourth goal will be assessed at year end by the CEO. In addition, each operating unit must define quality/customer satisfaction objectives for the year. Achievement of these objectives may be used to modify calculated results up to +10%.
In general, it is expected that the calculated organizational results will determine the performance rating for the unit. However, after calculation of year end OPMS results, the CEO may make a modification of +20% including the +10% for Quality to the calculated rating, if performance is not accurately reflected in performance measures (i.e., due to general economic, industry change, corporate strategy change, natural disaster). Adjustments must be made in 5% increments.
4.2 The Individual Performance Management System" (IPMS) for use with the Executive Incentive Plan will consist of five or fewer specific individual objectives. These objectives are to be agreed upon at the beginning of the Plan year. They must be measurable and generally within the participant's control. Further, there will be a pre- determined weighting among the objectives reflecting the priority of these objectives. Individual performance will be determined by the participants' supervisor and approved by the Division/Group Presidents or appropriate corporate staff function head.
In general, it is expected that the calculated individual results will determine the performance rating. However, the unit or functional officer may make an adjustment of +20% to the calculated ratings if performance is not accurately reflected in performance measures. Adjustments must be made in 5% increments.
5.0 DEFINITION OF PERFORMANCE
The following "definitions of performance" are to be utilized for the plan:
6.0 PROCEDURE FOR BONUS CALCULATION AND APPROVAL
Each participant's total bonus will be calculated as follows:
1) The standard bonus (see Section 3.1) is divided into appropriate corporation/unit-individual components (as defined in Section 4.0).
2) For the organizational components;
A. The final rating is converted to a percentage factor (see Attachment I conversion table).
B. The factor is multiplied by the standard organizational bonus.
C. There is no organizational award granted if final overall rating is below 2.0.
3) For the individual component;
A. The final rating is converted to a percentage factor (see Attachment III conversion table).
B. The factor is multiplied by the standard individual bonus.
C. There is no individual award granted if final overall rating is below 2.0.
4) To calculate the total bonus, the components are added.
The Division Presidents will submit their recommendations for individual incentive awards to their immediate superiors In all instances the recommendations for the Corporate awards will be submitted to the Chief Executive Officer for concurrence.
Corporate function heads will submit their recommendations for individual awards to their immediate superior who will then submit the recommendations to the Chief Executive Officer for concurrence.
7.0 REMOVAL, TRANSFERS AND TERMINATIONS
7.1 Participants whose employment with the Company is terminated because of retirement, death, or disability:
- After the close of the plan year, but prior to the actual distribution of awards for such year, may be awarded a full incentive award for the plan year. In the case of death, such payment will be made to a beneficiary.
- After the beginning, but prior to the end of the plan year, may receive an incentive award for that year based on a prorated calculation reflecting their employment with the Company and participation in the Plan during year. Awards will not be paid for any period less than six months participation in the plan year.
7.2 Participants who are terminated in the fourth quarter of the year due to a re-structuring which results in job elimination, may receive an incentive award for that year based on a prorated calculation reflecting their employment with the Company and participation in the Plan during that year.
7.3 Participants transferred during the plan year within the Company will be awarded an incentive payment through the division in which the participant is employed at the end of the plan year. It will be based on the contribution made in each division in which the participant was employed during the year. To this end a written evaluation and rating must be completed by the participant's superior upon transfer. The awarding division will be charged for the full amount of the bonus.
7.4 Notwithstanding the foregoing, a special prorated incentive award shall be paid to participants if, during the period between the date of a change in control and the next award date determined pursuant to Section 10:
1) the participant's employment is terminated involuntarily other than for good cause, or
2) the Plan is terminated.
The amount of the award shall be calculated as a percentage of period earnings based upon standard performance and prorated through the date of termination of the participant or the Plan, as applicable.
A change of control of the Company is defined as follows:
A. The acquisition by any individual, entity or group (within the meaning of Section 13 (d) (3) or 14 (d) (2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company), (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of paragraph C of this Section 7.0 are satisfied; or
B. Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Board" and, as of the date hereof, the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
C. Approval by the shareholders of the Company of a reorganization, merger, binding share exchange or consolidation, in each case, unless, following such reorganization, merger, binding share exchange or consolidation, (i) more than 60% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger, binding share exchange or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, binding share exchange or consolidation, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger, binding share exchange or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger, binding share exchange or consolidation, directly or indirectly, 20% or more of the Outstanding Company Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, binding share exchange or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, binding share exchange or consolidation; or
D. Approval by the shareholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, (a) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the same Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (b) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (c) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.
7.5 Participants who leave the company or are terminated prior to the actual payment of award for reasons other than retirement, death, disability, termination in the fourth quarter due to a restructuring which results in job elimination, change in control, will forfeit the award for that plan year.
8.0 INCENTIVE AWARDS THROUGH CONTRACTUAL AGREEMENTS
Incentive awards may be made to participants who do not meet the six month eligibility requirements only if the following conditions are met.
(1) Award must be made through contractual agreement made upon hiring, re- assignment, or commencement of special project or assignment. These arrangements must be approved in writing by Division President, Corporate Compensation, Corporate V.P. Human Resources, and normal 1 over 1 approval matrix.
9.0 ADMINISTRATION OF THE PLAN
The Committee On Management of the Board of Directors reserves the right to interpret, amend, modify or terminate the existing program in accordance with changing conditions. Further, no participant eligible to receive any payments shall have any rights to pledge, assign, or otherwise dispose of unpaid portion of such payments. The Committee On Management is responsible for overall administration of the Plan. It will determine who will receive incentives and the amount of each incentive. It may also review the standards and objectives for a particular year. The Committee On Management may change or terminate the Plan at any time and no person has any rights with respect to an incentive award until it has been paid.
10.0 INCENTIVE AWARD DISTRIBUTION
Incentive awards, when payable, shall be paid in the latter part of the month of February following the close of the preceding fiscal year.
Participants may also elect to defer all or part of an incentive award in accordance with the procedure set forth in the Company's Deferred Compensation Plan.
BAUSCH & LOMB INCORPORATED
BY: /s/ James P. Greenawalt JAMES P. GREENAWALT CORPORATE VICE PRESIDENT HUMAN RESOURCES
AGREED to this 19th day of December, 1994.
EXHIBIT (10)-h
THE BAUSCH & LOMB INCORPORATED MANAGEMENT EXECUTIVE INCENTIVE PLAN
1.0 INTRODUCTION
The Management Executive Incentive Plan is established to provide incentive compensation in the form of a supplement to the base salaries of the officers who comprise the Management Executive Committee; to attract and to retain, in the employ of the Company, individuals of outstanding ability; and to align the interests of those who hold positions of major responsibility in the Company with the interests of the Company's shareholders.
2.0 ELIGIBILITY
The Chairman and Chief Executive Officer, President and Chief Operating Officer, Senior Vice President Corporate Affairs and Secretary, and Senior Vice President Finance are eligible to participate in The Management Executive Incentive Plan. The participant must be on the payroll in an eligible position before July 1 of the plan year, to be eligible for an award. Participants in this Plan are not eligible to participate in the Executive Incentive Compensation Plan.
3.0 DEFINITIONS
3.1 A standard incentive award has been established for each salary grade or job band for participants in this Plan and is expressed as a percentage of period salary (i.e., eligible base salary earnings for the year). The standard percentages are:
Chairman and Chief Executive 65 Officer President and Chief Operating 55 Officer Senior Vice President 50 Corporate Affairs and Secretary Senior Vice President Finance 50
3.2 An approved incentive award is the incentive award which has been approved by the Committee On Management of the Board of Directors (the "Committee on Management") to be paid by the Company to the participant.
Actual incentive award amounts, based upon organizational performance, can vary from 0% for unacceptable performance to a range from a minimum of 50% to a maximum of 175% of standard for acceptable performance. In any event, an award cannot exceed the maximum.
4.0 MEASURES OF PERFORMANCE
The Committee on Management will set performance measures to be applied for incentive plan purposes. These performance measures will determine 100% of the bonus calculation for participants in this Plan.
4.1 The "Organizational Performance Management System" (OPMS) has been established to evaluate performance for the Management Executive Incentive Plan.
The OPMS is based upon specific organizational objectives, which are established prior to the beginning of each year by the Committee on Management. These objectives include the following:
Performance levels for 5, 4, 3, 2, and 1 ratings are defined by the Committee on Management prior to the beginning of the plan year for each goal.
5.0 DEFINITION OF PERFORMANCE
The following "definitions of performance" are to be utilized for the Plan:
6.0 PROCEDURE FOR BONUS CALCULATION AND APPROVAL
Each participant's total bonus will be calculated as follows:
1) The standard award is calculated by multiplying the participant's period salary by the standard percentage set forth in Section 3.1.
2) The final organizational rating is determined by weighting the performance ratings determined under Section 5 in accordance with the percentages in Section 4.1; adding the four weighted ratings; and converting the total performance ratings to a percentage factor pursuant to Attachment I, conversion table.
3) The percentage factor is then multiplied times the standard bonus.
4) There is no award granted if final organizational rating is below 2.0.
7.0 REMOVAL, TRANSFERS AND TERMINATIONS
Participants whose employment with the Company is terminated because of retirement, death, or disability:
- After the close of the plan year, but prior to the actual distribution of awards for such year, may be awarded a full incentive award earned for the plan year. In the case of death, such payment will be made to a beneficiary. - After the beginning, but prior to the end of the plan year, may receive an incentive award for that year based on a prorated calculation reflecting their employment with the Company within the year and the award earned. Awards will not be paid for any period less than six months participation in the plan year.
Participants who leave the company for reasons other than retirement, death, disability, change in control, or are terminated prior to the actual payment of award will forfeit the award for that plan year.
Notwithstanding the foregoing, a special prorated incentive award shall be paid to participants if, during the period between the date of a change in control and the next award date determined pursuant to Section 10:
1) the participant's employment is terminated involuntarily other than for good cause, or
2) the Plan is terminated.
The amount of the award shall be calculated as a percentage of period earnings based upon standard performance and prorated through the date of termination of the participant or the Plan, as applicable.
A change of control of the Company is defined as follows:
A. The acquisition by any individual, entity or group (within the meaning of Section 13 (d) (3) or 14 (d) (2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company), (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of paragraph C of this Section 7.0 are satisfied; or
B. Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the "Board" and, as of the date hereof, the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
C. Approval by the shareholders of the Company of a reorganization, merger, binding share exchange or consolidation, in each case, unless, following such reorganization, merger, binding share exchange or consolidation, (i) more than 60% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger, binding share exchange or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, binding share exchange or consolidation, of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger, binding share exchange or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger, binding share exchange or consolidation, directly or indirectly, 20% or more of the Outstanding Company Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, binding share exchange or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, binding share exchange or consolidation; or
D. Approval by the shareholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, (a) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the same Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (b) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (c) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.
8.0 ADMINISTRATION OF THE PLAN
The Committee On Management reserves the right to interpret, amend, modify or terminate the existing program in accordance with changing conditions, but only to the extent authorized or permitted by law. The Committee On Management is responsible for overall administration of the Plan. It will determine who will receive incentives and the amount of each incentive. It may also review the standards and objectives for a particular year. The Committee On Management may change or terminate the Plan at any time and no person has any rights with respect to an incentive award until it has been paid. Notwithstanding the foregoing, the Committee on Management shall not exercise any discretionary authority granted to it pursuant to this Section in a way which would cause the Company to lose the benefit of the performance based exemption from the $1 million cap on individual compensation deductions for publicly traded corporations set forth in IRC Section 162 (m).
No participant eligible to receive any payments shall have any rights to pledge, assign, or otherwise dispose of unpaid portion of such payments.
9.0 INCENTIVE AWARD DISTRIBUTION
Incentive awards, when payable, shall be paid in the latter part of the month of February following the close of the preceding fiscal year.
Participants may also elect to defer all or part of an incentive award in accordance with the procedure set forth in the Company's Deferred Compensation Plan.
BAUSCH & LOMB INCORPORATED BY: /s/ James P. Greenawalt JAMES P. GREENAWALT CORPORATE VICE PRESIDENT HUMAN RESOURCES
AGREED to this 28th day of February, 1994.
EXHIBIT (10)-i
THE BAUSCH & LOMB INCORPORATED SUPPLEMENTAL MANAGEMENT EXECUTIVE INCENTIVE PLAN
1.0 INTRODUCTION
The Supplemental Management Executive Incentive Plan is designed to advance the interests of Bausch & Lomb and its shareholders by (i) providing incentives for those key executives who have overall responsibility for the performance of the company; (ii) reinforcing corporate financial goals; (iii) providing competitive levels of compensation for key executives; and (iv) aligning management and shareholder interests.
The Plan is established to allow the Committee on Management of the Board of Directors (the "Committee"), in its discretion, to make an incentive award in addition to that calculated in The Management Executive Incentive Plan (MEIP) or the Long Term Performance Stock Plan (LTPSP), if the executive's or company's performance exceeds the performance measured by MEIP and LTPSP.
2.0 ELIGIBILITY
Senior officers with overall responsibility for the long term performance of the Company are eligible to participate in The Supplemental Management Executive Incentive Plan. The Committee will designate the executives to participate in the Plan. The participant must be on the payroll in an eligible position before July 1 of the plan year, to be eligible for an award.
3.0 SUPPLEMENTAL AWARDS
The Committee will make an award under this Plan if it determines that such an award is in the interests of Bausch & Lomb and its shareholders given the criteria set forth in Section 1.0 above. Awards under this Plan may be made in cash or Bausch & Lomb Class B Stock granted pursuant to the 1990 Stock Incentive Plan or any successor plan.
4.0 ADMINISTRATION OF THE PLAN
The Committee reserves the right to interpret, amend, modify or terminate the existing program in accordance with changing conditions. Further, no participant eligible to receive any payments shall have any rights to pledge, assign, or otherwise dispose of unpaid portion of such payments. The Committee is responsible for overall administration of the Plan. It will determine who will receive incentives and the amount of each incentive. The Committee may change or terminate the Plan at any time and no person has any rights with respect to an incentive award until it has been paid.
5.0 INCENTIVE AWARD DISTRIBUTION
Incentive awards, when payable, shall be paid in the latter part of the month of February following the close of the preceding fiscal year.
Participants may also elect to defer all or part of an incentive award in accordance with the procedure set forth in the Company's Deferred Compensation Plan. Any payments made under this Plan which would result in incentive compensation to a participant which would not be deductible pursuant to IRC Section 162(m) ($1MM cap on individual compensation deductions for publicly traded corporations) shall, to the extent of such non-deductible compensation, automatically be paid into the Deferred Compensation Plan on behalf of the participant. Such deferred payment would be invested at the direction of the plan participant, and would be paid out subsequent to retirement.
BAUSCH & LOMB INCORPORATED BY: /s/James P. Greenawalt JAMES P. GREENAWALT CORPORATE VICE PRESIDENT HUMAN RESOURCES
AGREED to this 28th day of February, 1994.
EXHIBIT (10)-j
LONG TERM PERFORMANCE STOCK PLAN - I
I. PURPOSE
The Long Term Performance Stock Plan - I (the "Plan") is designed to advance the interests of Bausch & Lomb Incorporated (the "Company") and its shareholders by (i) providing incentives for those key executives who have overall responsibility for the long term performance of the Company; (ii) reinforcing corporate long term financial goals; (iii) providing competitive levels of long term compensation for key executives; and (iv) aligning management and shareholder interests.
II. ELIGIBILITY
Participation in the Plan is limited to senior officers with overall responsibility for the long term performance of the Company. The Committee on Management of the Board of Directors (the "Committee") will designate executives to participate in the Plan ("Participants"). Participants in this Plan are not eligible to participate in the Company's other Long Term Performance Stock Plans.
III. AWARD CYCLES
Award cycles ("Award Cycles") will be measured over three year periods, with the performance award, if any, for each Award Cycle to be paid early in the fourth year. There will be a series of overlapping Award cycles with a new Award Cycle starting and an old Award Cycle finishing each year.
IV. PERFORMANCE GOALS
The Committee, after consultation with management, will establish performance goals for each Award Cycle, ensuring that the goals are equitable and compatible with the Company's major business objectives. The performance goals for each Award Cycle will be based upon a matrix of sales growth and return on equity ("ROE") for the Company.
V. AWARDS
If the performance goals of the Company are achieved for an Award Cycle, Participants in the Plan will be eligible for awards which are calculated using an adjusted salary mid- point equal to the Participant's salary midpoint in effect in the first year of the Award Cycle multiplied times 110% ("Adjusted Salary Midpoint"). The Adjusted Salary Midpoint is then multiplied by 50% to calculate the standard award ("Standard Award") for each salary grade. If a Participant's salary grade changes in the course of an Award Cycle, the Participant's Standard Award will be adjusted using the Adjusted Salary Midpoint for the new grade level which was in effect during the first year of that Award Cycle.
Depending upon the level of performance achieved by the Company, the amount of a Participant's actual award will range from 0% to 200% of the Standard Award (the "Award"). Awards paid pursuant to this Plan will consist of cash and Bausch & Lomb Class B Stock granted pursuant to the 1990 Stock Incentive Plan or any successor plan (the "Stock Plan").
VI. PERFORMANCE UNITS
At the December meeting of the Committee prior to the commencement of the Award Cycle, each Participant will receive performance units ("Performance Units") equal to the number of shares of Class B Stock which, as of the date of such meeting of the Committee, have an aggregate fair market value (as determined under the Stock Plan) equal to 50% of each Participant's Standard Award. During the Award Cycle, the Company will accrue quarterly dividends on each Participant's Units equal to the dividends which would be payable on a like number of shares of Class B Stock. At the time of a payout pursuant to Section VII, the Participant will receive a cash payment equal to the dividends which would have been payable on the shares of Class B Stock included in the Award (if any) if such shares had been held by the Participant during the cycle. If a Participant's Standard Award calculation changes because of a salary grade change in the course of an Award Cycle, the number of Performance Units will be adjusted accordingly.
VII. PAYOUTS
At the end of each Award Cycle, the Standard Award will be adjusted by the Committee to reflect sales growth and ROE performance on the applicable payout matrix to determine the amount of the Award payable to each Participant. One half of that amount shall be paid in cash. The Participant will also receive shares of Class B Stock (pursuant to the Stock Plan) equal to the number of Performance Units granted to the Participant; provided, however, that if the Award is based upon a percentage which is more than or less than 100% of the Standard Award, the number of shares of Class B Stock to be granted will be adjusted up or down by a like percentage. There will be no adjustments in the number of shares of Class B Stock for fluctuations up or down in the fair market value of Class B Stock from the date of grant of Performance Units at the beginning of the Award Cycle to the date of grant of the Class B Stock, if any, after the Award Cycle.
Whether or not an Award is paid for an Award Cycle, all Performance Units granted hereunder for an Award Cycle shall expire at the end of the Award Cycle, and Participants shall have no further rights with respect to such Units, except to the extent that their performance entitles them to an Award. Performance Units shall not give Participants any rights under the Stock Plan maintained by the Company.
VIII. DEFERRAL
Any or all of the cash portion of an Award may be deferred, at the option of the Participant, into the Company's Deferred Compensation Plan. Notice of such a deferral must be given to the Company at least 18 months prior to the end of each Award Cycle for which deferral is requested.
IX. TERMINATION OF EMPLOYMENT
If the Participant's employment with the Company terminates before the end of any Award Cycle due to death, disability, or retirement, the Participant or his/her beneficiary is entitled to a pro rata share of any Award earned and paid at the end of the Award Cycle. If the Participant's employment with the Company terminates before the end of any Award Cycle for any other reason, the Participant's Performance Units shall be forfeited and the Participant shall not be entitled to any Award hereunder.
X. ADMINISTRATION OF THE PLAN
The Committee is responsible for the overall administration of the Plan. The Committee will, by formal resolution: 1) establish the Performance Goals for the Award Cycle before the beginning of each Award Cycle; and 2) administer the Plan in all respects to carry out its purposes and objectives including, but not limited to, responding to changes in tax laws, regulations or rulings, changes in accounting principles or practices, mergers, acquisitions or divestitures, major technical innovations, or extraordinary, non-recurring, or unusual items, to preserve the integrity of the Plan's objectives. The Committee reserves the right, in its discretion, to pay any Awards hereunder entirely in cash. The Committee further reserves the right to interpret, amend, modify or terminate the Plan, but only to the extent authorized or permitted by law. The effective date of each Award Cycle is January 1 of the first year of the performance period. Notwithstanding the foregoing, the Committee shall not exercise any discretionary authority granted to it pursuant to this Section in a way which would cause the Company to lose the benefit of the performance based exemption from the $1 million cap on individual compensation deductions for publicly traded corporations set forth in IRC Section 162 (m).
XI. RECAPITALIZATION
In the event there is any recapitalization in the form of a stock dividend, distribution, split, subdivision or combination of shares of common stock of the Company, resulting in an increase or decrease in the number of common shares outstanding, the number of Performance Units then granted under the Plan shall be increased or decreased proportionately, as the case may be.
XII. REORGANIZATION
If, pursuant to any reorganization, sale or exchange of assets, consolidation or merger, outstanding Class B Stock is or would be exchanged for other securities of the Company or of another company which is a party to such transaction, or for property, any grant of Performance Units under the Plan theretofore granted shall, subject to the provisions of this Plan for making Awards, apply to the securities or property into which the Class B Stock covered thereby would have been changed or for which such Class B Stock would have been exchanged had such Class B Stock been outstanding at the time.
Restated by Committee on Management on February 10, 1994
BY: /s/James P. Greenawalt JAMES P. GREENAWALT CORPORATE VICE PRESIDENT HUMAN RESOURCES
EXHIBIT 11
EXHIBIT 12
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REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of Bausch & Lomb Incorporated
Our audits of the consolidated financial statements referred to in our report dated January 24, 1995 appearing on page 61 of the 1994 Annual Report to Shareholders of Bausch & Lomb Incorporated (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14(a)2, of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Rochester, New York January 24, 1995
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 2-56066, 2-85158, 33- 15439 and 33-35667) and in the Prospectus constituting part of the Registration Statement on Form S-3 (No. 33-51117) of Bausch & Lomb Incorporated of our report dated January 24, 1995 appearing on page 61 of the 1994 Annual Report to Shareholders of Bausch & Lomb Incorporated which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our above report on the Financial Statement Schedules.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Rochester, New York March 27, 1995
EXHIBIT (25)
POWER OF ATTORNEY
The undersigned directors of Bausch & Lomb Incorporated (the "Company"), each hereby constitutes and appoints Daniel E. Gill and Jay T. Holmes, or either of them, his or her respective true and lawful attorneys and agents, each with full power and authority to act as such without the other, to sign for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the year ended December 31, 1994, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 and the related rules and regulations thereunder, and any amendment or amendments thereto, the undersigned hereby ratifying and confirming all that said attorneys and agents, or either one of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this instrument has been executed by the undersigned as of this 28th day of February, 1995.
/s/ Franklin E. Agnew /s/ Linda Johnson Rice Franklin E. Agnew Linda Johnson Rice
/s/ William Balderston III /s/ Robert L. Tarnow William Balderston III Robert L. Tarnow
/s/ Bradford R. Boss /s/ Alvin W. Trivelpiece Bradford R. Boss Alvin W. Trivelpiece
/s/ Daniel E. Gill /s/ William H. Waltrip Daniel E. Gill William H. Waltrip
/s/ Jay T. Holmes /s/ Kenneth L. Wolfe Jay T. Holmes Kenneth L. Wolfe
/s/ Ruth R. McMullin Ruth R. McMullin
/s/ John R. Purcell John R. Purcell