SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
LCA-Vision Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing fee (Check the appropriate box)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
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__________________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
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offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
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4) Date filed:
___________________________________ <PAGE>
LCA-VISION INC.
7840 Montgomery Road
Cincinnati, Ohio 45236
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 9, 1997
TO THE STOCKHOLDERS OF LCA-VISION INC.:
You are cordially invited to attend the Annual Meeting of the
Stockholders of LCA-Vision Inc. to be held on June 9, 1997 at 12:00
noon at The Queen City Club, 331 East Fourth Street, Cincinnati,
Ohio 45202, for the purpose of considering and acting on the
following:
1. Election of four directors to serve until the 1998 Annual
Meeting.
2. Transaction of such other business as may properly come before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on May 9, 1997 will
be entitled to vote at the meeting.
By Order of the Board of Directors
Sandra F.W. Joffe
Secretary
May 12, 1997
IMPORTANT
A Proxy Statement and proxy are submitted herewith. As a
stockholder, you are urged to complete and mail the proxy promptly
whether or not you plan to attend this Annual Meeting in person.
The enclosed envelope for return of proxy requires no postage if
mailed in the U.S.A. Stockholders attending the meeting may
personally vote on all matters which are considered in which event
their signed proxies are revoked. It is important that your shares
be voted. In order to avoid the additional expense to the Company
of further solicitation, we ask your cooperation in mailing your
proxy promptly.
<PAGE>
PROXY STATEMENT
LCA-VISION INC.
7840 Montgomery Road
Cincinnati, Ohio 45236
ANNUAL MEETING OF STOCKHOLDERS
June 9, 1997
INTRODUCTION
The enclosed form of proxy is being solicited on behalf of the Board
of Directors of LCA-Vision Inc. (also referred to as "LCA-Vision" or
the "Company") for the Annual Meeting of Stockholders to be held on
June 9, 1997. Each of the 19,599,237 shares of LCA-Vision Common
Stock, $.001 par value (the "Common Stock"), each of the 1,688
shares of LCA-Vision Class A Preferred Stock, $.001 par value (the
"Class A Preferred Stock") outstanding on May 9, 1997, the record
date of the meeting, is entitled to one vote on all matters coming
before the meeting. Only stockholders of record on the books of the
Company at the close of business on May 9, 1997 will be entitled to
vote at the meeting either in person or by proxy. Also outstanding
are 12.6 shares of LCA-Vision Interim Series Class B Preferred
Stock, $.001 par value which are presently nonvoting. This Proxy
Statement is being mailed to stockholders on or about May 12, 1997.
The shares represented by all properly executed proxies which are
sent to the Company will be voted as designated and each not
designated will be voted affirmatively. Each person granting a
proxy may revoke it by giving notice to the Company's Secretary in
writing or in open meeting at any time before it is voted. Proxies
will be solicited principally by mail, but may also be solicited by
directors, officers and other regular employees of the Company who
will receive no compensation therefor in addition to their regular
salaries. Brokers and others who hold stock in trust will be asked
to send proxy materials to the beneficial owners of the stock, and
the Company will reimburse them for their expenses. The expense of
soliciting proxies will be borne by the Company.
The Annual Report of the Company for the fiscal year ended December
31, 1996 is enclosed with this Proxy Statement.
ELECTION OF DIRECTORS
Four directors are to be elected to hold office until the 1998
Annual Meeting of Stockholders. It is the intention of the
individuals named in the proxy to vote for the election of only the
four nominees named. Only four directors will be elected. There
will remain one vacancy as a result of David M. Schneider's
resignation from the Board of Directors, which will be filled when
a suitable candidate has been identified. The Company is not
currently aware of any potential candidates who may be nominated at
or prior to the meeting, and in no event will the proxies solicited
hereby be voted for other than the four nominees named.
Nominees Stephen N. Joffe, M.D., Sandra F.W. Joffe, Craig P.R. Joffe
and John C. Hassan are currently serving as members of the Board of
Directors. While management has no reason to believe that any of
the nominees will, prior to the date of the meeting, refuse or be
unable to accept the nominations, should any nominee so refuse or
become unable to accept, the proxies will be voted for the election
of such substitute nominee, if any, as may be recommended by the
Board of Directors. Nominees receiving the four highest totals of
votes cast in the election will be elected as directors. Proxies in
the form solicited hereby which are returned to the Company will be
voted in favor of the four nominees specified above unless otherwise
instructed by the stockholders. Abstentions and shares not voted by
brokers and other entities holding shares on behalf of beneficial
owners will not be counted and will have no effect on the outcome of
the election.
Directors are elected annually and serve for one year terms.
Information with respect to each of the four nominees is as follows:
Stephen N. Joffe, M.D., MBChB, MD, FRCS (Edin.), FRCS (Glasg.), FCS
(S.A.), FACS, age 53, has been the President, Chief Executive
Officer and a director of the Company since July, 1995. He was the
founder of the Company's predecessor, Laser Centers of America, Inc.
("LCA"), and served as its Chairman of the Board and Chief Executive
Officer from its founding in 1985 through the date of its merger
into the Company in September, 1995. In addition, Dr. Joffe is an
Esteemed Professor of Surgery at the University of Cincinnati
Medical Center, a position he has held since 1990.
Sandra F.W. Joffe, age 53, has been the Treasurer, Secretary and a
director of the Company since July, 1995 and held the same positions
with LCA from its founding in 1985 through the date of its merger
into the Company in September, 1995.
Craig P.R. Joffe, age 24, has graduated from Harvard Law School and
has joined the law firm of Sullivan and Cromwell as an associate in
its London, England office.
John C. Hassan, age 54, has been President of Champion Printing,
Inc. since 1991. Previously, he was Vice President, Marketing of
the Drackett Company, a division of Bristol-Myers Squibb, from 1984
to 1990. He currently serves as Treasurer of Printing Industries of
Southern Ohio, and is a Board member of the Ohio Graphics Arts
Health Fund, the Camargo Club and serves on the United Way and Fine
Arts campaigns.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
In the fiscal year ended December 31, 1996, the Board of Directors
met on 8 occasions. Each incumbent director during the last fiscal
year attended 75% or more of the aggregate of (i) the total number
of meetings of the Board of Directors (held during the period for
which he or she has been a director) and (ii) the total number of
meetings held by all committees of the Board on which he or she
served (during the periods that he or she served).
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Under Section 13(d) of the Securities Exchange Act of 1934 and the
rules promulgated thereunder, a beneficial owner of a security is
any person who directly or indirectly has or shares voting power or
investment power over such security. Such beneficial owner under
this definition need not enjoy the economic benefit of such
securities. The following table sets forth information with respect
to the beneficial ownership of shares of Common Stock and Preferred
Stock as of May 9, 1997 of each executive officer, each director,
and each stockholder known to be the beneficial owner of 5% or more
of Common Stock or Preferred Stock, and all officers and directors
as a group.
<PAGE>
<TABLE>
<CAPTION>
Title of Class Name and Address of Amount and Nature Percent
Beneficial Owner(1) of Ownership of Class
- -------------- ------------------- ----------------- --------
<S> <C> <C> <C>
Common Stock Stephen N. Joffe, M.D. 17,731,912 90.47%
President and Director shares owned of
8750 Red Fox Lane record and
Cincinnati, Ohio 45243 beneficially(2)(3)
Class A Preferred Stock Stephen N. Joffe, M.D. 3,376 shares owned 51.00%
President and Director of record and
8750 Red Fox Lane beneficially
Cincinnati, Ohio 45243
Class B Preferred Stock Stephen N. Joffe, M.D. 11 shares owned 87.30%
President and Director of record and
8750 Red Fox Lane beneficially
Cincinnati, Ohio 45243
Common Stock Sandra F.W. Joffe 3,852,649 shares owned 19.66%
Secretary, Treasurer of record and
and Director beneficially (2)(3)
8750 Red Fox Lane
Cincinnati, Ohio 45243
Class B Preferred Stock Sandra F.W. Joffe 1.6 shares owned 12.70%
Secretary, Treasurer and of record and
Director beneficially
8750 Red Fox Lane
Cincinnati, Ohio 45243
Common Stock Craig P.R. Joffe 2,500,313 shares owned 12.76%
Director of record and
22 Bigelow Street #2B beneficially(2)
Cambridge, MA 02139
Common Stock John C. Hassan 75,000 shares owned .37%
Director of record and
7840 Montgomery Road beneficailly(4)
Cincinnati, Ohio 45236
Common Stock All directors and 18,248,537 shares(4) 90.81%
executive
officers as a group
(6 persons)
Class A Preferred Stock All directors and 3,376 shares owned 51.00%
executive officers of record and
as a group (6 persons) beneficially
Class B Preferred Stock All directors and 12.6 shares owned 100.00%
executive officers as of record and
a group (6 persons) beneficially
__________________________
<PAGE>
<FN>
(1) The persons named in the table have sole voting and investment
power with respect to all shares of common stock shown as
beneficially owned by them, subject to community property laws,
where applicable, and the information contained in other footnotes
to this table.
(2) Includes 5,000 shares which may be voted by Dr. Joffe as proxy
for Sandra F.W. Joffe and Craig P.R. Joffe. Sandra and Craig
Joffe's share totals set forth above include the shares under proxy.
(3) Includes 1,000 shares which are held jointly by Dr. Joffe and
Sandra F.W. Joffe.
(4) Includes 75,000 shares of Common Stock issuable to Mr. Hassan
upon the exercise of certain unexercised stock options.
(5) Includes a total of 496,500 shares of Common Stock which may be
acquired upon the exercise of certain unexercised outstanding stock
options.
</FN>
</TABLE>
Sandra F.W. Joffe, director, Secretary and Treasurer of the Company
is married to Dr. Joffe. Craig P.R. Joffe, a director of the
Company, is their son.
EXECUTIVE COMPENSATION
Summary
The following table summarizes, for the fiscal years indicated, all
annual compensation earned by or granted to the Company's Chief
Executive Officer and the only other executive officers whose
compensation exceeded $100,000 for all services rendered to the
Company in all capacities (the "named executives") during the last
fiscal year:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Long-Term
Compensation Compensation
Awards
Securities All
Name and Principal Underlying Other
Position Year Salary($) Bonus($) Options (#) Compensation($)
<S> <C> <C> <C> <C> <C>
Stephen N. Joffe, 1996 $198,000(1) -- -- $52,534(2)
President and 1995 $547,032(1) -- -- $60,672(2)
Chief Executive 1994 $605,000(1) -- -- $51,919(2)
Officer
Judith A. Crist, 1996 $109,400 -- 200,750 shs. --
Executive Vice- 1995 $ 94,600 $25,594 -- --
President, Operations
Gregory A. Livingston
Executive Vice
President of Planning
and Program
Development 1996 $103,800 -- 135,750 shs. --
_____________________________
<FN>
(1) Dr. Joffe as a stockholder of Laser Centers of America, Inc.
("LCA"), an S corporation, merged into the Company on September 29,
1995, received distributions from the Company. These distributions
were separate and discrete from the salary and other compensation
paid by the Company to Dr. Joffe and, accordingly, the amounts set
forth herein do not include S corporation distributions. See
"Certain Relationships and Related Transactions" herein.
(2) Includes for 1994, 1995 and 1996, respectively, $4,678, $5,845
and $5,845, which was a car allowance and $15,104, $14,139 and $778,
which were term life insurance and long-term disability premiums for
insurance benefitting named executive. Also includes for 1994,
1995, and 1996, respectively, $32,137, $40,688 and $45,911 placed in
a life insurance trust benefitting named executive.
</FN>
</TABLE>
Stock Options
The following table sets forth information regarding stock options
to the executive officers during 1996:
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
<CAPTION>
Number of % of Total
Securities Options Granted
Underlying to Employees Exercise
Options in Fiscal or Base Expiration
Name Granted(#)(1) Year Price $/sh Date
<S> <C> <C> <C> <C>
Judith A. Crist 750 Less than 1% $5.25 1/1/2006
200,000 10.2% $5.25 6/3/2006
Gregory A. 750 Less than 1% $5.25 1/1/2006
Livingston 135,000 6.9% $5.25 6/3/2006
________________________
<PAGE>
<FN>
(1) All such options first become excercisable as to 20% of the
shares covered after the end of the first year after the date of
grant, with 20% per year becoming exercisable for the succeeding
four years and are exercisable in full after the end of five years.
The option price is not adjustable over the 10-year term except due
to stock splits and similar occurrences affecting all outstanding
stock.
</FN>
</TABLE>
The following table sets forth information regarding stock options
exercised by executive officers during 1996 and the value of
unexercised in-the-money options held by the named parties as of
December 31, 1996:
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEARS AND FY-END OPTION VALUES
<CAPTION>
Shares Number of Securities Value of
Acquired on Value Underlying Unexercised Unexercised
Name Exercise (#) Realized ($) Options at FY-End In-the-Money Options
at FY-End ($)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Judith
A. Crist 0 0 0 200,750 0 0
Gregory A.
Livingston 0 0 0 135,750 0 0
/TABLE
<PAGE>
Director Compensation
The Company has no standard arrangements for compensation of
directors, except as provided in the LCA-Vision Directors'
Nondiscretionary Stock Option Plan, and all directors served and
continue to serve without compensation directly attributable to
their services. There are no non-standard compensation arrangements
with directors of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 1, 1995, the Company was a party, directly or
indirectly, to the following transactions with its current
directors, executive officers and principal stockholders (including
any of their associates or affiliates):
LCA previously was treated for federal income tax purposes as an S
corporation under Subchapter S of the Internal Revenue Code of 1986,
as amended (the "Code"). In 1995, prior to the merger with and
into LCA-Vision, LCA declared and paid to its two stockholders
distributions of $8,456,000, in cash, which constituted payments to
the stockholders of LCA's past earnings on which those stockholders
have already paid income taxes under Subchapter S of the Code.
Prior to the merger of LCA into the Company, Dr. and Mrs. Joffe,
utilizing a portion of the proceeds of their S corporation
distribution from LCA, agreed to lend a total of $4,390,772 to the
Company, receiving in return, two long term promissory notes for the
principal amount plus interest at a rate of 6.91% per annum. All
sums due to Dr. and Mrs. Joffe under the promissory notes are due
and payable in full upon the maturity of the promissory notes,
September 26, 2005. Any or all amounts due under the promissory
notes may be prepaid at any time, without penalty.
Dr. Joffe is the guarantor of approximately $11,080,000 in bank
loans to the Company, including a mortgage note in the amount of
$3,080,000 which remained outstanding at December 31, 1996, and a
working capital credit line of up to $8,000,000 on which $3,438,000
had been drawn at December 31, 1996. To date, Dr. Joffe has not
been compensated for these personal guarantees.
In May 1995, the Company acquired a 45% interest in the Surgery
Center of Georgia, LLC, Atlanta, Georgia ("SCG"). The transaction
was funded entirely by borrowings by SCG. The Company guaranteed a
portion of SCG's debt. The Company's principal stockholder acquired
another 35% interest in SCG in a similar fashion. In September
1995, the Company's 45% interest in SCG was distributed to the
principal stockholder. The Company remained as a guarantor on
approximately $2,200,000 of SCG's debt on a temporary basis after
the distribution, until the principal stockholder arranged the
elimination of the Company's guarantee prior to the end of 1995.
Dr. Joffe is the principal stockholder and majority owner of The LCA
Center for Surgery, Ltd., Cincinnati, Ohio, an Ohio limited
liability company ("The Cincinnati Surgery Center"), which was
organized in September, 1995. The Company does not hold an
investment in the Cincinnati Surgery Center. The Company has leased
to The Cincinnati Surgery Center, for a period of 20 years at an
annual rental of $190,000, a portion of its office building located
at 7840 Montgomery Road and also will provide to The Cincinnati
Surgery Center accounting, management and administrative services
pursuant to an Administrative Services Agreement for a fee of $5,000
per month.
LCA and Dr. Joffe previously owned all of the stock of LCA Canada,
Inc. ("LCA Canada") which owned 67% of the stock of the Toronto
Laservision Centre, Inc. (the "Centre"). LCA and Dr. Joffe
contributed their entire interest in LCA Canada to the Company in
exchange for nominal consideration. LCA-Vision renamed the
subsidiary LCA-Vision Canada, and on August 31, 1995 acquired the
remaining 33% of the stock of the Centre from certain unaffiliated
holders. Accordingly, the Centre is now a wholly-owned subsidiary
of the Company, through its subsidiary LCA-Vision Canada.
In November and December, 1996, Dr. Joffe entered into a debt
conversion transaction with the Company pursuant to which he
converted a total of $2,200,000 of the debt owed to him by the
Company into 11 shares of Interim Series Class B Preferred Stock.
Similarly, Mrs. Joffe converted a total of $321,672 of debt owed to
her into 1.6 shares of Interim Series Class B Preferred Stock.
Prior to July 1, 1997, the Interim Series Class B Preferred Stock is
automatically convertible into the same security, if any, which may
be issued to institutional investors in a private placement of
$10,000,000 or more on the same terms and conditions as the
institutional investors. From and after July 1, 1997, the Interim
Class B Preferred Stock is convertible into Common Stock at the then
current market price of Common Stock, at the option of the holders.
1998 STOCKHOLDER PROPOSALS
In order for any stockholder proposals for the 1998 Annual Meeting
of Stockholders to be eligible for inclusion at the meeting, they
must be received by the Secretary of the Company at 7840 Montgomery
Road, Cincinnati, Ohio 45236, prior to February 4, 1998.
OTHER MATTERS
The Board of Directors does not know of any other business to be
presented to the meeting and does not intend to bring other matters
before the meeting. However, if other matters properly come before
the meeting, it is intended that the persons named in the
accompanying proxy will vote thereon according to their best
judgment in the interests of the Company.
By Order of the Board of Directors
Sandra F.W. Joffe
Secretary
