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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
_____________________
For the fiscal year ended Commission file number
December 28, l996 1-4105
BAUSCH & LOMB INCORPORATED
(Exact name of registrant as specified in its charter)
NEW YORK 16-0345235
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE BAUSCH & LOMB PLACE, ROCHESTER, NEW YORK 14604-2701
(Address of principal executive offices) (Zip Code)
Registrant's telephone no., including area code:(716) 338-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $.40 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
[Cover page 1 of 2 pages]
Indicate by check mark whether the registrant: (1) has
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No ___
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value (based on the consolidated tape
closing price on March 5, 1997) of the voting stock held by non-
affiliates of the registrant was $2,063,214,413. For the sole
purpose of making this calculation, the term "non-affiliate" has
been interpreted to exclude directors and corporate officers.
Such interpretation is not intended to be, and should not be
construed to be, an admission by Bausch & Lomb Incorporated or
such directors or corporate officers that such directors and
corporate officers are "affiliates" of Bausch & Lomb
Incorporated, as that term is defined under the Securities Act of
1933.
The number of shares of Common Stock of the registrant,
outstanding as of March 5, 1997 was 55,457,104, consisting of
54,711,725 shares of Common Stock and 745,379 shares of Class B
Stock, which are identical with respect to dividend and
liquidation rights, and vote together as a single class for all
purposes.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II The Bausch & Lomb 1996 Annual Report to
Shareholders for fiscal year ended December 28, 1996 ("Annual
Report"). 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.
Part III Bausch & Lomb Incorporated Proxy Statement, dated
March 21, 1997 ("Proxy Statement"). With the exception of the
pages of the Proxy Statement specifically incorporated by
reference herein, the Proxy Statement is not deemed to be filed
as part of this Report on Form 10-K.
[Cover page 2 of 2 pages]
1
TABLE OF CONTENTS
PART I PAGE
Item 1. Business ................................ 2
Item 2. Properties .............................. 6
Item 3. Legal Proceedings ....................... 9
Item 4. Submission of Matters to a Vote
of Shareholders ......................... 11
PART II
Item 5. Market for Bausch & Lomb Incorporated's
Common Stock and Related Shareholder
Matters ................................. 11
Item 6. Selected Financial Data ................. 11
Item 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations................ 11
Item 8. Financial Statements and
Supplementary Data ...................... 11
Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure ................ 11
PART III
Item 10. Directors and Executive Officers
of Bausch & Lomb Incorporated............ 12
Item 11. Executive Compensation .................. 14
Item 12. Security Ownership of Certain
Beneficial Owners and Management ........ 14
Item 13. Certain Relationships and
Related Transactions .................... 14
PART IV
Item 14. Exhibits, Financial Statement
Schedule, and Reports on Form 8-K ..... . 14
Signatures .......................................... 15
Schedules .......................................... S-1
Exhibit Index ...................................... E-1
Exhibits............ (Attached to this Report on Form 10-K)
2
PART I
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 eye care and healthcare 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 1996
are discussed below.
1996 was a challenging year for Bausch & Lomb; however, the
management of the Company remains committed to improving
financial performance and has initiated strategies to reduce
costs and improve financial performance in 1997 and over the
longer term. Reported revenues for 1996 were $1,927 million, a
decrease of $6 million or less than 1% from 1995. Excluding the
oral care and dental implant businesses divested in 1996 and the
sports optics business divested in 1995, revenues from ongoing
businesses reached $1,877 million, an increase of 2% over the
$1,836 million recorded in 1995. Net earnings for 1996 amounted
to $83 million, or $1.47 per share, compared to $112 million or
$1.94 per share, reported in 1995. Excluding restructuring
charges and gains and losses on divestitures of businesses from
both periods, net earnings were $92 million or $1.62 per share in
1996, compared to $109 million or $1.88 per share in 1995.
In February 1996, the Company acquired Arnette Optic
Illusions, Inc., a designer, manufacturer and marketer of high-
performance sunglasses and goggles, which competes in market
segments where the Company was not previously represented.
Also, in February 1996, the Company acquired Award plc, a
Scotland-based company which manufactures and markets a high-
water, daily disposable soft contact lens. The patented cast-mold
manufacturing technology and highly efficient distribution
process used by Award are specifically designed to respond to the
high volumes, short cycle times and low unit costs needed to make
single-use soft contact lens wear practical and affordable for
consumers.
In June 1996, the Company's board of directors approved
plans to restructure portions of the eyewear and vision care
segments, as well as certain corporate administrative functions
and a restructuring charge of $11 million after taxes, or $0.19
per share, was recorded. These actions are part of the Company's
efforts to enhance its competitive position and to reduce the
annual impact of general and administrative, logistics and
distribution costs.
In July 1996, the Company recorded litigation provisions of
$10 million after taxes, or $0.18 per share, in connection with
the proposed settlement of a class action lawsuit. In November
1996, the court gave final approval to the settlement.
In September 1996, the Company completed the sale of its
Oral Care Division to Conair Corporation. The Oral Care Division
marketed the Interplak line of power toothbrushes for plaque
removal. The Company recorded an after-tax loss of $6 million or
$0.11 per share on the sale.
In October 1996, the Company's board of directors approved a
leadership transition plan in which William M. Carpenter, the
Company's president and chief operating officer, became chief
executive officer on January 1, 1997, replacing William H.
Waltrip, who is continuing as chairman.
In November 1996, the Company completed the sale of its
dental implant business to a group of investors sponsored by
Finisterre Capital Partners. The Company recorded an after-tax
gain of $8 million or $0.15 per share on the sale.
In December 1996, the Company's Management Executive
Committee announced plans to adopt a new financial management
system to measure and drive the Company's performance. The
system, called Economic Value Added (EVA), will be implemented
for 1997. EVA is a tool which simply yet effectively combines
earnings and capital management objectives into one index. It
aligns business decisions made by the Company with shareholder
expectations that capital is being utilized effectively.
3
Also in December 1996, the Company announced its realignment
of businesses into new segments for the purpose of reporting its
financial results. The four new segments, vision care, eyewear,
pharmaceuticals and healthcare, reflect the Company's strategic
emphasis on eye care.
(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 22-26 and 41-
42 of the Annual Report which are incorporated herein by
reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS
Bausch & Lomb's operations have been classified into four
industry segments: vision care, eyewear, pharmaceuticals and
healthcare. 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 9-
20 of the Annual Report are incorporated herein by reference.
Vision Care
The vision care segment includes contact lenses, lens
materials and lens care products. Vision care products are
marketed through licensed eye care professionals, pharmaceutical
retailers and mass merchandisers by the Company's own sales force
and distributors.
Eyewear
The eyewear segment includes premium-priced sunglasses and
optical thin film coating services. Eyewear products are
distributed worldwide through distributors, wholesalers and
manufacturer's representatives. These products are marketed
through optical stores, sunglass specialty stores, department
stores, catalog showrooms, mass merchandisers, sporting goods
stores and, in the case of optical thin films, to a variety of
industrial customers.
Pharmaceuticals
The pharmaceuticals segment manufactures and sells generic
and proprietary prescription pharmaceuticals, with a strategic emphasis in
the ophthalmic field, and over-the-counter (OTC) medications.
These products are distributed through the Company's sales force
and distributors to pharmacies, drug stores, food stores, mass
merchandisers and hospitals.
Healthcare
Included in this segment are businesses which provide
purpose-bred laboratory animals, pathogen-free eggs, biomedical
products and services, skin care products and hearing aids.
Hearing aids are distributed primarily through the Miracle-Ear
franchise system and Company-owned stores. Biomedical products
are sold through the Company's own sales force to the scientific
research community. Skin care products are sold through the
Company's sales force and distributors to drug stores, food
stores and mass merchandisers.
Raw Materials and Parts; Customers
Materials and components in all four 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 taken as a whole is dependent upon a
single or a few customers. However, in the eyewear segment
approximately 15% of segment sales are attributable to Sunglass
Hut International and in the vision care segment approximately
10% of segment sales are attributable to Wal-Mart.
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 patent licenses relating to any
particular product or process is material to any industry
segment. The Company actively pursues technology development and
acquisition as a means to enhance its competitive position in its
business segments.
In the vision care segment, Bausch & Lomb has developed
significant consumer and eye care professional recognition of
products sold under the Bausch & Lomb, ReNu, Sensitive Eyes,
SeeQuence,
4
Medalist, Boston, Optima FW and SofLens66 trademarks.
Ray-Ban, Revo, Wayfarer, Arnette and Killer Loop are trademarks
receiving substantial consumer recognition in the eyewear
segment. Bausch & Lomb and Dr. Mann are trademarks receiving
substantial consumer recognition in the pharmaceuticals segment.
In the healthcare segment, Miracle-Ear, Mirage, Curel, Soft Sense
and Charles River are trademarks receiving significant consumer
and industry professional recognition.
Seasonality and Working Capital
Some seasonality exists for sunglasses in the eyewear
segment. 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 is highly competitive in both U.S. and non-
U.S. markets. In all of its segments, Bausch & Lomb competes on
the basis of product performance, quality, technology, price,
service, warranty and reliability. In the eyewear 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 1996, the Company's research and
development expenditures totaled $75 million, as compared to $66
million in 1995 and $60 million in 1994.
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 1996
and are not anticipated to be material for 1997 or 1998.
Number of Employees
Bausch & Lomb employed approximately 13,000 persons as of
December 28, 1996.
(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 41 of the Annual Report and is incorporated herein
by reference.
5
ITEM 2. PROPERTIES
The principal manufacturing, distribution and production
facilities and other important physical properties of Bausch &
Lomb at March 1, 1997 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.
EYEWEAR
Manufacturing Plants
Beijing, China(2)
Bhiwadi, India
Waterford, Ireland (2)
Oakland, MD
Rochester, NY (Frame Center)
San Antonio, TX
New Territories, Hong Kong (2)
Nuevo Laredo, Mexico (2)
Distribution Centers
San Clemente, CA (2)
Sunnyvale, CA (2)
San Antonio, TX
Richmond Hill, Ontario, Canada (2)
Guangzhou, China (2)
Hoofdorp, Netherland (2)
HEALTHCARE
Manufacturing Plants
Golden Valley, MN (1)
Kitchener, Ontario, Canada (2)
Distribution Centers
Wilmington, MA (2)
Golden Valley, MN (1)
Reinholds, PA (2)
Production Facilities
Hollister, CA (2)
Lebanon, CT
Preston, CT
Storrs, CT
Voluntown, CT
Summerland Key, FL
Colbert, GA (2)
Benson, IL
Eureka, IL
Secore, IL
Roanoke, IL
Washburn, IL
Windham, ME
Southbridge, MA (2)
West Brookfield, MA (2)
Wilmington, MA
Portage, MI
O'Fallon, MO
Raleigh, NC
Pittsfield, NH
Newfield (Lakeview), NJ
Stone Ridge (Kingston), NY
Charleston, SC (2)
Houston, TX
Oregon, WI
Brussels, Belgium
St. Constant, Canada
Margate, England
West Sussex, England
Lyons, France (2)
St. Aubin-les-Elbeuf, France
St. Germain, France (2)
Extertal, Germany
Kisslegg, Germany
Sulzfeld, Germany
Calco, Italy
Atsugi, Japan
Hino, Japan
Tskuba, Japan (2)
Tuhuacan, Mexico (2)
Someren, Nethlands
(Healthcare Production Facilities continued)
Barcelona, Spain(2)
Uppsala, Sweden (2)
6
PHARMACEUTICALS
Manufacturing Plants
Tampa, FL
Berlin, Germany
Distribution Centers
Tampa, FL
VISION CARE
Manufacturing Plants
Sarasota, FL (1)
Wilmington, MA (2)
Rochester, NY (Optics Center) (1), (2)
Greenville, SC
Porto Alegre, Brazil
Beijing, China (2)
Bhiwadi, India
Waterford, Ireland (2)
Milan, Italy
Umsong-Gun (Seoul), Korea
Livingston, Scotland (2)
Barcelona, Spain
Hastings, United Kingdom
Distribution Centers
Rochester, NY (Optics Center) (1), (2)
Greenville, SC (2)
Lynchburg, VA (2)
Richmond Hill, Ontario, Canada (2)
Guangzhou, China
Hoofdorp, Netherlands (2)
Livingston, Scotland (2)
CORPORATE FACILITIES
Rochester, NY
One Bausch & Lomb Place (2)
Optics Center (1),(2)
1295 Scottsville Road (2)
[FN]
(1) This facility is financed under a tax-exempt financing
agreement.
(2) This facility is leased.
Bausch & Lomb considers that its facilities are suitable and
adequate for the operations involved. All facilities are being
productively utilized.
7
ITEM 3. LEGAL PROCEEDINGS
1. In June 1994, five separate shareholder actions against the
Company and its former Chief Executive Officer and Chairman,
Daniel Gill, were filed in the Western and Southern Districts of
New York and an additional action, naming the Company, Mr. Gill
and four other officers was filed in January 1995, alleging that
the Company artificially inflated the value of its stock by
making false and misleading statements about expected financial
results. In September 1995, the parties agreed to consolidate
the actions and plaintiffs have filed a third-amended
consolidated complaint. Plaintiffs seek to represent two
classes, including all persons who purchased stock during a nine-
month period prior to a June 3, 1994 announcement that the
Company was undertaking efforts to rebalance distributor
inventories, and all shareholders who purchased shares between
June 4, 1994 and January 25, 1995. In October 1996, the court
denied in substantial part the Company's and the individual
officers' motions to dismiss. The Company and individual
officers have filed motions for reconsideration of the October
1996 order or, in the alternative, certification of the order
pursuant to 28 U.S.C. Section 1292 (b). Discovery has not yet
commenced in this consolidated action. A motion by plaintiffs to
certify the alleged class is pending. The Company is vigorously
defending itself against these claims.
2. On December 28, 1994, following an article in Business Week
magazine questioning the Company's accounting treatment of a
fourth quarter 1993 sales program initiated by the Contact Lens
Division, the Company received a request from the Securities and
Exchange Commission (SEC) for information in connection with an
inquiry being conducted by the SEC. Since then, the Company has
received additional requests for information from the SEC staff,
including those with respect to the Company's accounting for
sunglass sales in its Asia-Pacific Division in the period from
late 1992 through early 1994. The Company has provided documents
and Company personnel have testified. The Company is cooperating
with the SEC's continuing investigation and is unable to predict
the outcome of this proceeding. An adverse outcome could result
in the filing of civil proceedings by the SEC against the Company
seeking injunctive relief, or administrative proceedings seeking
a cease and desist order.
3. 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 during the period
January 1, 1991 through November 1, 1994 to pursue claims
relating to the Company's marketing and sale of the Optima FW,
Medalist and SeeQuence2 contact lens systems. Plaintiffs allege
that the Company misled consumers by packaging the same lens
under three different names for three different prices. On
November 26, 1996, the court gave final approval to a settlement,
under which consumers who purchased Medalist lenses between
January 1, 1991 through December 31, 1995, Optima FW lenses
between November 1, 1990 through December 31, 1995 and Criterion
Ultra FW lenses between November 1, 1990 through April 30, 1996
were eligible to participate. The Company recorded a charge
against third quarter earnings which, in addition to existing
litigation reserves, is deemed adequate to satisfy the costs of
the settlement. Additionally, on May 2, 1996 and October 3,
1996, the Company was served with statements of claim filed in
Ontario and British Columbia, Canada, respectively, naming the
Company and Bausch & Lomb Canada. The plaintiffs seek to
represent a class of Canadian consumers alleging similar claims.
Another action filed in California state court in October 1994
raising substantially similar claims has been resolved. A
working group of state attorneys general, representing the
interests of eighteen states, also requested documents regarding
the Company's pricing, labeling and advertising of these lenses.
The Attorney General for the State of Florida has served a
subpoena seeking documents relating to the marketing and sale of
contact lenses and contact lens solutions. Management continues
to vigorously defend the marketing of these products.
4. In May and June 1995, the Company was served with several
proposed class action complaints in New York, New Jersey,
Pennsylvania and California, alleging that the Company misled
consumers in its marketing and sale of Sensitive Eyes Rewetting
Drops and Saline Solution and Bausch & Lomb Eyewash. The Company
stipulated to certification of a nationwide class of purchasers
of Sensitive Eyes Rewetting Drops, Boston Rewetting Drops, ReNu
Rewetting Drops and Bausch & Lomb Eyewash between May 1, 1989 and
June 30, 1995 in the New York action. In exchange plaintiffs
dismissed their actions in other states. Another action, which
was filed by a separate group of plaintiffs' attorneys in state
court in California, was voluntarily dismissed. Management
vigorously defends the marketing of these products.
5. 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 of
selling contact lenses only to licensed professionals.
Plaintiffs allege that the policy
8
was adopted in 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
$1.0 million penalty and injunctive relief. A number of consumer
class actions have been consolidated in the Middle District of
Florida and actions are pending in California and Tennessee state
courts. The complaints make similar allegations and seek similar
relief on behalf of consumers outside the State of Florida. In
December 1996, the New York State Attorney General, on behalf of
itself and approximately twenty-one other states, filed a substantially
similar action in the United States District Court for the
Eastern District of New York and has sought consolidation with
the pending action. The Company defends its policy as a lawfully
adopted means of insuring effective distribution of its products
and safeguarding consumers' health.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SHAREHOLDERS
Inapplicable.
PART II
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 31,
34 and 58, respectively, of the Annual Report are incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The table entitled "Selected Financial Data" on pages 58 of
the Annual Report is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The section entitled "Financial Review" on pages 22-34 of
the Annual Report is incorporated herein by reference.
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 35-57 and 34, respectively, are incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Inapplicable.
9
PART III
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, 1997), 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
William H. Waltrip (59) Chairman since January 1997; Chairman
and Chief Executive Officer (1996); Chairman of Technology
Solutions Company since 1993; Chief Executive Officer, Technology
Solutions Company (1993-1995); Chairman and Chief Executive
Officer of Biggers Brothers, Inc. (1991-1993).
William M. Carpenter (44) Chief Executive Officer since January
1997; President and Chief Operating Officer (1995-1996);
Executive Vice President, Global Business Manager, Eyewear (1995-
July 1996); President and Chief Executive Officer, Reckitt &
Colman, Inc. (1994-1995); President and Chief Operating Officer,
Reckitt and Colman, Inc. (1992-1994); President, Household
Products Division, Reckitt and Colman, Inc. (1991-1992).
Daryl M. Dickson (45) Senior Vice President, Human Resources
since November 1996; Vice President Human Resources
(snacks/cereal group), Quaker Oats Company (1993-1996); Sector
Director Management and Organization Development, Allied Signal
Aerospace Division, Allied Signal Inc. (1991-1993).
James C. Foster (46) 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).
Michael T. Gillen (38) Vice President and President, U.S.
Eyewear since June 1996; President and Chief Executive Officer of
Dahlberg/Miracle Ear, a subsidiary of the Company (1994-June
1996); Vice President and General Manager, ADVO, Inc. (1990-
1994).
Dwain L. Hahs (44) Senior Vice President, International
Operations since September 1996; Vice President and President
Europe, Middle East and Africa Division (1994-1996); Vice
President Field Operations Europe, Middle East and Africa
Division (1992-1994); Vice President Marketing International
Division (1989-1992).
10
Stephen A. Hellrung (49) Senior Vice President since March
1995; Secretary since December 1994; Vice President and General
Counsel (1985-1994).
James E. Kanaley (55) (Retirement Date June 30, 1997.)
Senior Vice President since 1985 and President North American
Vision Care since June 1996; Global Business Manager, Lens Care
Products (1994-1996); President, Personal Products Division
(1987-1996).
Stephen C. McCluski (44) Senior Vice President, Finance since
February 1995; Vice President and Controller (1994); President,
Outlook Eyewear Company (1992-1994); Vice President, Controller,
Eyewear Division (1989-1992).
W. Jeff Pontius (40) Vice President and Global Business
Manager, Eyewear since July 1996; Vice President and President,
Eyewear (1996); President, U.S. Ray Ban Eyewear (1995-1996); Vice
President Marketing, Reckitt & Colman, Inc., (1993-1995); Vice
President, Brand Management, Reckitt & Colman, Inc. (1993);
Category Director, Hard Surface, Reckitt & Colman, Inc. (1992-
1993); Plant Manager, Royston, Georgia, Johnson & Johnson (1989-
1992).
Thomas M. Riedhammer (48) 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).
Carl E. Sassano (47) Executive Vice President and President,
Bausch & Lomb Vision Care since January 1997; Senior Vice
President and Global Business Manager, Vision Care (1996); Global
Business Manager, Contact Lens Products (1994-1996); Senior Vice
President and President Contact Lens Division (1994-1996); Senior
Vice President and President of Polymer Technology Corporation, a
subsidiary of the Company (1992-1994); Vice President and
President of Polymer Technology Corporation (1986-1992).
Jurij Z. Kushner (46) 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).
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 among any of the officers of
the Company and any other persons pursuant to which such officer
was selected as an officer.
11
ITEM 11. EXECUTIVE COMPENSATION
The portions of the "Executive Compensation" section
entitled "Report of the Committee on Management", "Compensation
Tables" and "Defined Benefit Retirement Plans", the second and
third paragraphs of the section entitled "Board of Directors",
the graph entitled "Comparison of Five Year Cumulative Total
Shareholder Return" and the second paragraph of the section
entitled "Related Transactions, Employment Contracts and
Termination of Employment and Change in Control Arrangements"
included in the Proxy Statement on pages 10-13, 14-15, 17-18, 1,
16 and 18, respectively, are incorporated herein by reference.
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 page
8 is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
The first paragraph of the section entitled "Related
Transactions, Employment Contracts and Termination of Employment
and Change of Control Arrangements" on page 18 of the Proxy
Statement is incorporated herein by reference.
PART IV
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 57
Balance Sheet at December 28, 1996
and December 31, 1994 36
For the years ended December 28, 1996,
December 30, 1995 and December 31, 1994:
Statement of Earnings 35
Statement of Cash Flows 37
Notes to Financial Statements 38-57
2. Filed herewith
Report of Independent Accountants
on Financial Statement Schedules Exhibit (24)
For the years ended December 28, 1996,
December 30, 1995 and December 31, 1994:
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.
12
(b) REPORTS ON FORM 8-K
Inapplicable.
(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)-gg 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, 1997 By:/s/William M. Carpenter
William M. Carpenter
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, 1997 By:/s/William M. Carpenter
William M. Carpenter
Chief Executive Officer
Principal Financial Officer
Date: March 27, 1997 By:/s/ Stephen C. McCluski
Stephen C. McCluski
Senior Vice President,
Finance
Controller
Date: March 27, 1997 By:/s/ Jurij Z. Kushner
Jurij Z. Kushner,
Vice President and Controller
Directors
Franklin E. Agnew
William Balderston III
William M. Carpenter
Domenico De Sole
Jonathan S. Linen
Ruth R. McMullin
John R. Purcell
Linda Johnson Rice
Alvin W. Trivelpiece
William H. Waltrip
Kenneth L. Wolfe
Date: March 27, 1997 By:/s/Stephen A. Hellrung
Stephen A. Hellrung
Attorney-in-Fact
S-1
Bausch & Lomb Incorporated
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Reserves for
Doubtful Accounts
(Dollar amounts December 28, December 30, December 31,
in thousands) 1996 1995 1994
_____________________________________________________________
Balance at $ 11,232 $ 16,830 $ 13,753
beginning of year
Activity for the year:
Provision charged 8,556 8,253 8,007
to income
(Reductions)/ (399) (821) 1,769
additions resulting
from (divestiture)/
acquisition activity
Accounts written (6,899) (10,194) (7,696)
off
Recoveries on 788 634 997
accounts previ-
ously written
off
Reclassifi- -- (3,470) --
cations
Balance at end $ 13,278 $ 11,232 $ 16,830
of year
Represents reserves related to trade receivables which have
been reclassified to Notes Receivable.
Results have been restated as more fully described in Note 2
- - - "Restatement of Financial Information".
E-1
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 Change of Control Employment Agreement with
certain officers of the Company (filed herewith).
(10)-c The Bausch & Lomb Incorporated Executive
Incentive Compensation Plan (filed as Exhibit (10)-b to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, File No. 1-4105, and incorporated herein by
reference).
(10)-d Amendment to the Bausch & Lomb Incorporated
Executive Incentive Compensation Plan (filed as Exhibit (10)-c to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 30, 1996, File No. 1-4105 and incorporated herein
by reference).
E-2
(10)-e Amendment to the Bausch & Lomb Incorporated
Executive Incentive Compensation Plan (filed herewith).
(10)-f 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)-g 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)-h 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)-i 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)-j 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)-k The Bausch & Lomb Incorporated Management
Executive Incentive Plan (filed as Exhibit (10)-h to the
Company's Annual Report on Form 10-K for fiscal year ended
December 31, 1994, File No. 1-4105, and incorporated herein by
reference).
(10)-l Amendment to the Bausch & Lomb Incorporated
Management Executive Incentive Plan (filed as Exhibit (10)-l to
the Company's Annual Report on Form 10-K for fiscal year ended
December 30, 1995.
(10)-m Amendment to the Bausch & Lomb Incorporated
Management Executive Incentive Plan (filed herewith).
(10)-n The Bausch & Lomb Supplemental Management
Executive Incentive Plan (filed as Exhibit (10)-i to the
Company's Annual Report on Form 10-K for fiscal year ended
December 31, 1994, File No. 1-4105, and incorporated herein by
reference).
(10)-o Amendment to the Bausch & Lomb Supplemental
Management Executive Incentive Plan (filed as Exhibit (10)-l to
the Company's Annual Report on Form 10-K for fiscal year ended
December 30, 1995, File No. 1-4105, and incorporated herein by
reference).
(10)-p The Bausch & Lomb Incorporated Long Term
Performance Stock Plan I (filed as Exhibit (10)-j to the
Company's Annual Report on Form 10-K for fiscal year ended
December 31, 1994, File No. 1-4105, and incorporated herein by
reference).
(10)-q 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)-r 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)-s 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)-t 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)-u 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).
E-3
(10)-v 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)-w 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)-x 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)-y The 1990 Stock Incentive Plan of Bausch &
Lomb Incorporated, as amended (filed herewith).
(10)-z 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)-aa 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)-bb The Bausch & Lomb Incorporated Director
Deferred Compensation Plan, as restated (filed herewith).
(10)-cc The Bausch & Lomb Incorporated Executive
Deferred Compensation Plan, as restated (filed herewith).
(10)-dd Annual Retainer Stock Plan for Non-Employee
Directors (filed herewith).
(10)-ee 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)-ff 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)-gg 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 1996 Annual Report to
Shareholders for the fiscal year ended December 28, 1996 (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.
(21) Subsidiaries (filed herewith).
(23) Report of Independent Accountants on
Financial Statement Schedules and Consent of Independent
Accountants (filed herewith).
(24) 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).