UNITED STATES
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 26, 1998 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:
Title of each class Name of each exchange on
which registered
Common Stock, $0.40 par value New York Stock Exchange
$200,000,000 6.75% Notes, Due New York Stock Exchange
2004
Securities registered pursuant to Section 12(g) of the Act: None
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 February 23, 1999) of the voting stock held by
non-affiliates of the registrant was $3,393,433,140. For the
sole purpose of making this calculation, the term "non-affiliate"
has been interpreted to exclude directors and 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 officers that such directors and officers are
"affiliates" of Bausch & Lomb Incorporated, as that term is
defined under the Securities Act of 1933.
The number of shares of Voting Stock of the registrant,
outstanding as of February 23, 1999, was 56,827,357, consisting
of 56,171,809 shares of Common Stock and 655,548 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 The Bausch & Lomb 1998 Annual Report to
II Shareholders for fiscal year ended December 26,
1998 ("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 23, 1999 ("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.
TABLE OF CONTENTS
PART I PAGE
Item 1. Business 2
Item 2. Properties 5
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security 7
Holders
PART II
Item 5. Market for Bausch & Lomb Incorporated's Common
Stock and Related Shareholder Matters 8
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk 8
Item 8. Financial Statements and Supplementary Data 9
Item 9. Changes In and Disagreements With Accountants
on Accounting And Financial Disclosure 9
PART III
Item 10. Directors and Executive Officers of Bausch &
Lomb Incorporated 10
Item 11. Executive Compensation 11
Item 12. Security Ownership of Certain Beneficial
Owners and Management 11
Item 13. Certain Relationships and Related Transactions 11
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 12
Signatures 13
Schedules S-1
Exhibit E-1
Index
Exhibits (Attached to this Report on Form 10-K)
PART I
ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
Bausch & Lomb Incorporated is a world leader in the development,
manufacture and marketing of healthcare products for the eye.
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 1998 are
discussed below.
During the year ending December 26, 1998, the company
successfully integrated the newly acquired surgical businesses
into its existing product lines and furthered its transition
toward becoming a technology-based healthcare company for the
eye. Reported revenues for 1998 were $2,363 million, an increase
of $447 million or 23% from 1997. Net earnings for 1998 amounted
to $25 million, or $0.45 per diluted share, compared to $49
million, or $0.89 per diluted share, reported in 1997.
Significant operational matters affecting 1998 included
restructuring charges, disposition of a non-core business, and
goodwill impairment and purchased in-process research and
development (R&D) charges.
As described in the 1997 Annual Report on Form 10-K, the company
acquired Chiron Vision Corporation for $298 million and the Storz
Instrument Company for $370 million in the first quarter of 1998.
The purchase price was allocated to net assets acquired and to
purchased in-process research and development. In accordance
with applicable accounting rules, purchased in-process R&D is
required to be expensed and, accordingly a pre-tax charge of $41
million was recorded in the first quarter of 1998.
A pre-tax restructuring charge of $11 million was recorded in
1998 related to the restructuring program begun in 1997. In
early 1997, the company's board of directors approved plans to
further restructure all business segments as well as certain
corporate administrative functions. This restructuring effort is
expected to significantly reduce the company's fixed cost
structure and realign the organization to meet its strategic
objectives. Restructuring charges concluded during the second
quarter of 1998.
In May 1998, the company sold its skin care business to The
Andrew Jergens Company for $135 million in cash plus the
assumption of certain liabilities. The company recorded a pre-
tax gain of $56 million on the transaction. This business
marketed the Curel and Soft Sense brands of skin care products.
During the third quarter of 1998, the company sold $300 of
putable/callable long-term notes with varying maturities and
interest rates, and $200 million of 30-year debentures. The
proceeds were used to reduce short-term debt.
In November 1998, the company announced that as a result of its
strategic planning process, an investment-banking firm had been
hired to help assess strategic alternatives for the sunglass
business. Alternatives to be considered include joint ventures,
sale, spin-off, or other business combinations. The business
consists of well-known sunglass brands including Ray-Ban, Killer
Loop, Arnette and Revo.
In the fourth quarter of 1998, the company recorded an impairment
charge of $85 million or $1.51 per diluted share, with no
associated tax benefit, related to the goodwill acquired as part
of the company's Miracle Ear hearing aid business. During 1998,
the company began to reassess the strategic value of the business
to its total portfolio. Additionally, during the second half of
the year, profitability of the business began to decline. In the
fourth quarter, the company's senior management publicly
announced that it would be focusing on healthcare products for
the eye and no longer had the goal of becoming a diversified
healthcare company, leading to the decision to divest the
business. The combination of these factors, and their impact on
projected future cash flows of the business, led to the
conclusion that the goodwill had become impaired.
(b) FINANCIAL INFORMATION ABOUT OPERATING SEGMENTS
Information concerning sales, operating earnings and assets
attributable to each of Bausch & Lomb's operating segments is set
forth on pages 26-30 and 48-50 of the Annual Report and is
incorporated herein by reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS
Operating Segments Bausch & Lomb's operations are classified
into four segments: vision care, pharmaceuticals/surgical,
eyewear 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.
Additional information can be found on pages 3 and 7-23 of the
Annual Report and is incorporated herein by reference.
Vision Care - The vision care segment includes contact lenses and
lens care products, with lenses comprising approximately 45% and
lens care products representing approximately 55% of segment
revenues. Vision care products are marketed to licensed eye care
professionals, pharmaceutical retailers and mass merchandisers by
the company's own sales force and distributors.
Pharmaceuticals/Surgical - The pharmaceuticals/surgical segment
manufactures and sells generic and proprietary prescription
pharmaceuticals with a strategic emphasis in the ophthalmic field
and over-the-counter (OTC) ophthalmic medications, and products
and equipment for cataract, refractive, and other ophthalmic
surgery. Surgical products accounted for approximately 60% of
this segment's revenues in 1998 and were entirely incremental to
1997 results. Pharmaceuticals products accounted for
approximately 40% of 1998 segment revenues. These products are
marketed by the company's sales force and distributed through
wholesalers, independent pharmacies, drug stores, food stores,
mass merchandisers and hospitals.
Eyewear - The eyewear segment includes premium-priced sunglasses
and vision accessories. Eyewear products are distributed
worldwide through the company's direct sales force, as well as
through distributors, wholesalers and manufacturers'
representatives. These products are marketed through optical
stores, sunglass specialty stores, department stores, catalog
showrooms, mass merchandisers and sporting goods stores.
Healthcare - Included in this segment are businesses which
provide purpose-bred laboratory animals pathogen-free eggs,
biomedical products and services and hearing aids. Biomedical
products are sold through the company's own sales force to the
scientific research community. Hearing aids are distributed
primarily through the Miracle-Ear franchise system and company-
owned stores.
Suppliers and 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 12% of segment sales are
attributable to Sunglass Hut International and in the vision care
segment approximately 9% of segment sales are attributable to Wal-
Mart.
Patents, Trademarks and 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, ReNu MultiPlus,
Sensitive Eyes, SeeQuence, Medalist, Boston, Optima FW and
SofLens66 trademarks. Bausch & Lomb , Dr. Mann Pharma, Storz
Millennium, Technolas, Hydroview and Vitrasert are trademarks
receiving substantial consumer recognition in the
pharmaceuticals/surgical segment. Ray-Ban, Revo, Wayfarer,
Arnette and Killer Loop are trademarks receiving substantial
consumer recognition in the eyewear segment. In the healthcare
segment, Miracle-Ear, Mirage 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
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 1998, the
company's research and development expenditures totaled $92
million, as compared to $67 million in 1997 and $75 million in
1996.
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 1998 and are not anticipated to be material for
1999 or 2000.
Year 2000 Software Compliance Information regarding the
identification and resolution of year 2000 data processing issues
is set forth on pages 35-36 of the Annual Report and such
information is incorporated herein by reference.
Number of Employees Bausch & Lomb employed approximately 15,000
persons as of December 26, 1998.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
Information as to sales and long-lived assets attributable to
U.S. and non-U.S. geographic regions is set forth on pages 31-32
and page 50 of the Annual Report and is incorporated herein by
reference.
ITEM 2. PROPERTIES
The principal manufacturing, distribution and production
facilities and other important physical properties of Bausch &
Lomb at March 1, 1999 are listed below and are grouped under the
principal operating segment to which they relate. Certain
properties relate to more than one segment. Except where
otherwise indicated by footnote, all properties shown are held in
fee and are not subject to major encumbrances.
Eyewear
Manufacturing Plants Distribution Centers
San Antonio, TX San Clemente, CA (2)
Guangzhou, China (2) San Antonio, TX
New Territories, Hong Kong (2) North Ryde, Australia (2)
Bhiwadi, India Guangzhou, China (2)
Waterford, Ireland (2) Mississauga, Ontario Canada (2)
Pederobba, Italy New Territories, Hong Kong (2)
Nuevo Laredo, Mexico (2) Hoofddorp, Netherlands (2)
Healthcare
Production Facilities
Hollister, CA (2) Maribyrnong, Australia (2)
Lebanon, CT Melbourne, Australia (2)
Preston, CT Woodend, Australia (2)
Storrs, CT Brussels, Belgium
Voluntown, CT St. Constant, Canada
Summerland Key, FL Prague, Czech Republic (2)
Colbert, GA (2) Margate, England
Eureka, IL West Sussex, England
Roanoke, IL Lyon, France
Windham, ME St. Aubin-les-Elbeuf, France
Southbridge, MA (2) St. Germain, France
West Brookfield, MA (2) Extertal, Germany
Wilmington, MA Kisslegg, Germany
Portage, MI Sulzfeld, Germany
O'Fallon, MO Budapest, Hungary (2)
Raleigh, NC Calco, Italy
Pittsfield, NH Atsugi, Japan
Newfield (Lakeview), NJ Hino, Japan
Stone Ridge (Kingston), NY Tskuba, Japan (2)
Troy, NY (2) Tuhuacan, Mexico
Malvern, PA (2) Someren, Netherlands
Charleston, SC (2) Barcelona, Spain (2)
Houston, TX Uppsala, Sweden (2)
Manufacturing Plants Distribution Centers
Golden Valley, MN (1) Preston, CT (2)
Kitchener, Ontario, Canada (2) Wilmington, MA (2)
Golden Valley, MN (1)
Pharmaceuticals/Surgical
Manufacturing Plants Distribution Centers
Claremont, CA (2) Tampa, FL
Irvine, CA (2) Earth City, MO (2)
Clearwater, FL Artarmon, Australia (2)
Tampa, FL Heidelberg, Germany (2)
St. Louis, MO Bracknell, United Kingdom (2)
Lyon, France (2)
Berlin, Germany
Munich, Germany (2)
Vision Care
Manufacturing Plants Distribution Centers
Sarasota, FL (1) Rochester, NY (Optics Center) (1) (2)
Wilmington, MA (2) Greenville, SC (20
Rochester, NY Lynchburg, VA (2)
(Optics Center) (1) (2) North Ryde, Australia (2)
Greenville, SC New Territories, Hong Kong (2)
Porto Alegre, Brazil Hoofddrop, Netherlands (2)
Beijing, China Mississauga, Ontario Canada (2)
Bhiwadi, India Livingston, Scotland (2)
Waterford, Ireland (2)
Milan, Italy
Livingston, Scotland (2)
Umsong-Gun (Seoul), South Korea
Barcelona, Spain
Madrid, Spain
Hastings, United Kingdom
Corporate Facilities
Rochester, NY
One Bausch & Lomb Place (1) (2)
Optics Center (1) (2)
1295 Scottsville Road (2)
(1) This facility is financed under a tax-exempt financing
arrangement
(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.
ITEM 3. LEGAL PROCEEDINGS
1. The company has stipulated to certification by a New York
State Supreme Court of a nationwide class of purchasers of
Sensitive Eyes Rewetting Drops, Boston Rewetting Drops, ReNu
Rewetting Drops and Bausch & Lomb Eye Wash between May 1, 1989
and June 30, 1995. This action arose out of matters commenced in
1994 and 1995 alleging that the company misled consumers in its
marketing and sale of those products. On April 21, 1998, the
court dismissed all of the plaintiffs' claims. The plaintiffs
have appealed this ruling.
2. In several actions, the company is defending its long-
standing policy of selling contact lenses only to licensed
professionals against claims that it was adopted in conspiracy
with others to eliminate alternate channels of trade from the
disposable contact lens market. These matters include (i) a
consolidated action in the United States District Court for the
Middle District of Florida filed in June 1994 by the Florida
Attorney General, and now includes claims by the attorneys
general for 21 other states, and (ii) individual actions pending
in California and Tennessee state courts. The company defends
its policy as a lawfully adopted means of ensuring 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 34, 37 and
62, respectively, of the Annual Report and the section entitled
"Outstanding Shares" on page 1 of the Proxy Statement are
incorporated herein by reference. The company's common stock is
traded on the New York Stock Exchange.
ITEM 6. SELECTED FINANCIAL DATA
The table entitled "Selected Financial Data" on page 62 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 25-36 of the
Annual Report is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The company, as a result of its global operating and financing
activities, is exposed to changes in interest rates and foreign
currency exchange rates that may adversely affect its results of
operations and financial position. In seeking to minimize the
risks and/or costs associated with such activities, the company
manages exposures to changes in interest rates and foreign
currency exchange rates primarily through its use of derivatives.
The company does not utilize financial instruments for trading or
other speculative purposes, nor does it utilize leveraged
financial instruments.
The company uses foreign currency forward contracts to hedge
foreign currency transactions and equity investments in non-U.S.
subsidiaries. Of the outstanding contracts for both 1998 and
1997, the foreign currencies purchased were primarily Irish
pounds, Singapore and Hong Kong dollars, and with respect to
1997, Swiss Francs. The foreign currencies sold for the same
periods were primarily German marks, Netherlands guilders and
Singapore dollars. The magnitude and nature of such hedging
activities are explained further in Note 14, "Financial
Instruments", on pages 57-58 of the Annual Report. A sensitivity
analysis to measure the potential impact that a change in foreign
currency exchange rates would have, net of hedging activity, on
the company's net income indicates that, based on its year-end
positions, if the U.S. dollar weakened against all foreign
currencies by 10%, the company would incur an after tax loss of
less than $1 million.
The company enters into interest rate swap and cap agreements to
effectively limit exposure to interest rate movements within the
parameters of its interest rate hedging policy. This policy
requires that interest rate exposure from floating-rate assets be
offset by a substantially similar amount of floating-rate
liabilities. Interest rate derivatives are used to readjust this
natural hedge position whenever it becomes unbalanced beyond
policy limits. For foreign currency denominated borrowing and
investing transactions, cross-currency interest rate swap
contracts are used, which, in addition to exchanging cash flows
derived from rates, exchange currencies at both inception and
termination of the contract. A sensitivity analysis to measure
the potential impact that a change in interest rates would have,
net of hedging activity, on the company's net income indicates
that a one percentage point increase in interest rates would
increase the company's net interest expense by $1.3 million.
Counterparties to the financial instruments discussed above
expose the company to credit risks to the extent of non-
performance. The credit ratings of the counterparties, which
consist of a diversified group of major financial institutions,
are regularly monitored and thus credit loss arising from
counterparty non-performance is not anticipated.
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" on pages 38-60, 61 and 37 of the Annual
Report, respectively, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Inapplicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF
BAUSCH & LOMB INCORPORATED
Information with respect to 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, 1999), 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 M. Chairman and Chief Executive Officer since
Carpenter (46) January 1999; Chief Executive Officer (1997-
1998); President and Chief Operating Officer
(1995-1996); Executive Vice President,
Global Business Manager, Eyewear (1995-
1996); President and Chief Executive
Officer, Reckitt & Coleman, Inc. (1994-
1995); President and Chief Operating
Officer, Reckitt and Coleman, Inc. (1992-
1994).
Carl E. Sassano President and Chief Operating Officer since
(49) January 1999; Executive Vice President and
President - Vision Care (1997-1998); 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, Polymer Technology
Corporation, a subsidiary of the company
(1992-1994).
Dwain L. Hahs (46) Executive Vice President and President -
Eyewear since April 1997; Senior Vice
President, International Operations (1996-
1997); Vice President and President Europe,
Middle East and Africa Division (1994-1996).
Daryl M. Dickson Senior Vice President, Human Resources since
(47) November 1996; Vice President Human
Resources (Foods group), Quaker Oats Company
(1993-1996).
Hakan S. Edstrom Senior Vice President,
(48) Surgical/Pharmaceutical since January 1999;
Vice President and President, Bausch & Lomb
Surgical (December 1997-December 1998);
President Hoefer Pharmacia Biotech, Inc.
(1997); Senior Vice President, Corporate
Ophthalmic Business Development, Pharmacia &
Upjohn, Inc. (1996-1997); President and
Chief Executive Officer, Pharmacia
Ophthalmics Inc. (1989-1996).
James C. Foster Senior Vice President since 1994 and
(48) President and Chief Executive Officer of
Charles River Laboratories, Inc., a
subsidiary of the company, since 1991; Vice
President (1991-1994).
Stephen C. Senior Vice President and Chief Financial
McCluski (46) Officer since 1995; Vice President and
Controller (1994); President, Outlook
Eyewear Company (1992-1994).
Thomas M. Senior Vice President and Chief Technical
Riedhammer (50) Officer since January 1999; Senior Vice
President and President, Worldwide
Pharmaceuticals (1998); Senior Vice
President and President, Worldwide
Pharmaceutical, Surgical, and Hearing Care
Products (1994-1998); Vice President (1993-
1994); President, Worldwide Pharmaceuticals
(1994).
Robert B. Stiles Senior Vice President and General Counsel
(49) since June 1997; Staff Vice President and
Assistant General Counsel (1994-1997);
Assistant General Counsel (1991-1994).
Robert D. Vice President and Chief Information Officer
Colangelo (39) since November 1997; Vice President and
Controller, Global Vision Care (1996-1997);
Vice President and Controller, Contact Lens
Division (1995-1996); General Manager,
Venezuela and Colombia (1992-1995).
Jurij Z. Kushner Vice President, Controller since 1995; Vice
(48) President, Operations, Personal Products
Division (1994-1995); Vice President and
Controller, Personal Products Division (1992-
1994).
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.
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 10-14, 15-17, 18-20, 2,
18 and 20 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 Directors and Executive Officers" in the Proxy
Statement on page 8-10 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 in Control Arrangements" on page 20 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 61
Balance Sheet at December 26, 1998 and 39
December 27, 1997
For the years ended December 26, 1998,
December 27, 1997 and December 28, 1996
Statement of Income 38
Statement of Cash Flows 40
Statement of Changes in Shareholder's Equity 41
Notes to Financial Statements 42-60
2. Filed herewith
Report of Independent Accountants
on Financial Statement Schedules Exhibit 23
For the years ended December 26, 1998,
December 27, 1997 and December 28, 1996:
SCHEDULE II-Valuation and Qualifying Accounts Page S-1
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
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)-v 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 24, 1999 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 24, 1999 By:/s/ William M. Carpenter
William M. Carpenter
Chairman and Chief Executive
Officer
Principal Financial Officer
Date: March 24, 1999 By:/s/ Stephen C. McCluski
Stephen C. McCluski
Senior Vice President and Chief
Financial Officer
Controller
Date: March 24, 1999 By:/s/ Jurij Z. Kushner
Jurij Z. Kushner,
Vice President and Controller
Directors
Franklin E. Agnew
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 24, 1999 By:/s/ Robert B. Stiles
Robert B. Stiles
Attorney-in-Fact
Bausch & Lomb Incorporated
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Reserves for Doubtful Accounts December 26, December 27, December 28,
1998 1997 1996
(Dollar amounts in thousands)
Balance at beginning of year $ 14,015 $ 13,278 $ 11,232
Activity for the year:
Provision charged to income 8,568 4,310 8,556
(Reductions)/additions
resulting from (divestiture)/
acquisition activity 9,868 68 (399)
Accounts written off (5,787) (5,179) (6,899)
Recoveries on accounts
previously written off 144 1,538 788
Balance at end of year $ 26,808 $ 14,015 $ 13,278
EXHIBIT INDEX
S-K Document
Item
601 No
(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 26, 1998 (filed as Exhibit (3)-a to the company's
Form 10-Q for the quarter ended September 26, 1998, File No.
1-4105, and incorporated herein by reference).
(4)-a See Exhibit (3)-a.
(4)-b See Exhibit (3)-b.
(4)-c See Exhibit (3)-c.
(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 Supplemental Indenture No. 1, dated May 13, 1998, between
the Company and Citibank N.A. (filed as Exhibit 3.1 to the
Company's Current Report on Form 8-K, dated July 24, 1998,
File No. 1-4105, and incorporated herein by reference).
(4)-f Supplemental Indenture No. 2, dated as of July 29, 1998,
between the Company and Citibank N.A. (filed as Exhibit 3.2
to the Company's Current Report on Form 8-K, dated July 24,
1998, 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
executive officers of the company (filed as Exhibit (10)-b
to the company's Annual Report on Form 10-K for the fiscal
year ended December 28, 1996, No. 1-4105, and incorporated
herein by reference).
(10)-c Amended and restated Supplemental Retirement Income Plan II
(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)-d 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)-e The 1982 Stock Incentive Plan (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)-f Amendment to the 1982 Stock Incentive Plan (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)-g Amendment to the 1982 Stock Incentive Plan (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)-h The 1987 Stock Incentive Plan (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)-i Amendment to the 1987 Stock Incentive Plan (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)-j Amendment to the 1987 Stock Incentive Plan (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)-k Amended and restated 1990 Stock Incentive Plan (filed as
Exhibit (10)-y to the company's Annual Report on form 10-K
for the fiscal year ended December 28, 1996, File No. 1-
4105, and incorporated herein by reference).
(10)-l Amended and restated Director Deferred Compensation Plan
(filed as Exhibit (10)-bb to the company's Annual Report on
Form 10-K for the fiscal year ended December 28, 1996, File
No. 1-4105, and incorporated herein by reference).
(10)-m Amended and restated Executive Deferred Compensation Plan
(filed as Exhibit (10)-cc to the company's Annual Report on
Form 10-K for the fiscal year ended December 28, 1996, File
No. 1-4105, and incorporated herein by reference).
(10)-n 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).
(10)-o Annual Retainer Stock Plan for Non-Employee Directors (filed
as Exhibit (10)-dd to the company's Annual Report on Form 10-
K for the fiscal year ended December 28, 1996, File No. 1-
4105, and incorporated herein by reference).
(10)-p Amended and restated Charles River Laboratories, Inc.
Executive Life Insurance / Supplemental Retirement Income
Plan (filed as Exhibit (10)-t to the company's Annual Report
on Form 10-K for the fiscal year ended December 27, 1997,
File No. 1-4105, and incorporated herein by reference).
(10)-q Agreement with William H. Waltrip (filed as Exhibit (10)-u
to the company's Annual Report on Form 10-K for the fiscal
year ended December 27, 1997, File No. 1-4105, and
incorporated herein by reference).
(10)-r Corporate Officer Separation Plan (filed as Exhibit (10)-v
to the company's Annual Report on Form 10-K for the fiscal
year ended December 27, 1997, File No. 1-4105, and
incorporated herein by reference).
(10)-s EVA Management Incentive Compensation Plan (filed as Exhibit
(10)-w to the company's Annual Report on Form 10-K for the
fiscal year ended December 27, 1997, File No. 1-4105, and
incorporated herein by reference).
(10)-t 1998 Amendment to the Bausch & Lomb Incorporated 1990 Stock
Incentive Plan (filed as Exhibit (10)-a to the company's
Form 10-Q for the quarter ended June 27, 1998, File No. 1-
4105, and incorporated herein by reference).
(10)-u Management Incentive Compensation Plan (filed as Exhibit
(10)-b to the company's Form 10-Q for the quarter ended June
27, 1998, File No. 1-4105, and incorporated herein by
reference).
(10)-v LTI Deferred Compensation Plan, as amended, effective
December 8, 1998 (filed herewith).
(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 1998 Annual Report to Shareholders for the
fiscal year ended December 26, 1998 (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).