SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities and
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] 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 Section 240.14a-11(c) or
Section 240.14a-12
LCA-VISION INC.
..................................................................
N/A
..................................................................
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction
applies:
N/A
...........................................................
2) Aggregate number of securities to which transaction
applies:
N/A
...........................................................
3) Per unit price of 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):
N/A
...........................................................
4) Proposed maximum aggregate value of transaction:
N/A
...........................................................
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
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...........................................................
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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...........................................................
4) Date Filed:
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...........................................................
<PAGE>
LCA-VISION INC.
7840 Montgomery Road
Cincinnati, Ohio 45236
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 10, 1999
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 May 10, 1999 at
10:00 a.m. 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 2000
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 March 29,
1999 will be entitled to vote at the meeting.
By Order of the Board of Directors
/s/Sandra F.W. Joffe
Sandra F.W. Joffe
Secretary
April 5, 1999
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
May 10, 1999
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 May 10, 1999. Each of the 45,168,500
shares of LCA-Vision Common Stock, $.001 par value (the "Common
Stock") and each of the 1,182 shares of LCA-Vision Class A
Preferred Stock, $.001 par value (the "Class A Preferred Stock")
outstanding on March 29, 1999, the record date of the meeting, is
entitled to one vote on all matters coming before the meeting.
Each of the 12.6 shares of Interim Series Class B Preferred Stock,
$.001 par value (the "Class B Preferred Stock") outstanding is
entitled to one vote for each share of Common Stock into which a
share of Class B Preferred Stock is convertible (a total of
835,621 shares of Common Stock). Only stockholders of record on
the books of the Company at the close of business on March 29,
1999 will be entitled to vote at the meeting either in person or
by proxy. This Proxy Statement is being mailed to stockholders on
or about April 5, 1999.
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, 1998 is enclosed with this Proxy Statement.
ELECTION OF DIRECTORS
Four directors are to be elected to hold office until the
2000 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. In
no event will the proxies solicited hereby be voted for other than
the four nominees named.
All of the nominees 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., age 56, is the Chairman of the Board
and Chief Executive Officer of the Company. He was the founder of
the Company's corporate predecessor, Laser Centers of America,
Inc. ("LCA") and served as its Chairman of the Board and Chief
Executive Officer from its founding in 1985 until its merger into
the Company in 1995. He also founded Surgical Laser Technologies,
Inc. in 1983 and served as its Chairman until January 1990. In
addition, Dr. Joffe is an Esteemed Professor of Surgery at the
University of Cincinnati Medical Center, a position he has held
since 1990. He was a full-time Professor of Surgery at the
University of Cincinnati Medical Center for nine years prior to
1990. He has held faculty appointments at the Universities of
London, Glasgow and Cincinnati and holds fellowships of the
American College of Surgeons and the Royal College of Surgeons of
Edinburgh and Glasgow.
John C. Hassan, age 56, is and has been the President of
Champion Printing, Inc. for more than five years. Previously, he
was Vice President, Marketing of the Drackett Company, a division
of Bristol-Meyers Squibb. 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
Greater Cincinnati United Way and Fine Arts campaigns. Mr. Hassan
received his undergraduate degree from Princeton University and
his M.B.A. from Dartmouth College.
William O. Coleman, age 70, formerly held positions at The
Procter & Gamble Company (1955 to 1989) that included General
Sales Manager, Vice President Food Products, Vice President
International/Latin America, and most recently, Vice President
Professional Affairs, Special Projects. Mr. Coleman continues to
serve as a Trustee of the Procter & Gamble Retirement Trusts. In
addition to his accomplishments professionally, Mr. Coleman also
has served as: General Chairman of the Greater Cincinnati United
Way Campaign; President of the Boys & Girl Clubs; Chairman of the
Dan Beard Council, Boy Scouts of America; Vice Chairman,
University of Cincinnati Foundation; and Director of the Greater
Cincinnati Foundation. A graduate of the University of Oklahoma
(B.B.A., Finance), Mr. Coleman served in the U.S. Navy in Korea.
John H. Gutfreund, age 69, is President of Gutfreund &
Company, Inc., a New York-based financial consulting firm that
specializes in advising select corporations and financial
institutions in the United States, Europe and Asia. Formerly, Mr.
Gutfreund was with Salomon Brothers from 1953 - 1991. He was:
Chairman of the Board and Chief Executive Officer, Salomon
Brothers Inc. (1981 - 1991); Co-Chairman, Phibro Corp. (1981 -
1983); Co-Chief Executive Officer, Phibro-Salomon Inc. (formerly
Phibro Corp.) 1983 - 1984; Chief Executive Officer, Phibro-Salomon
Inc. (1984 - 1986); Chairman, Chief Executive Officer, President,
Salomon Inc. (formerly Phibro-Salomon Inc.) 1986 - 1991. Mr.
Gutfreund is: Director, Baldwin Piano & Organ Company; Director,
Montefiore Medical Center, New York City and a Member of the
Executive Committee of the Board of Trustees and Finance and Real
Estate Committees; Member, Council on Foreign Relations; Member,
the Board of Trustees, New York Public Library, Astor, Lenox and
Tilden Foundations; Honorary Trustee, Oberlin (Ohio) College; and
Trustee, Arperture Foundation. He is past Vice Chairman of the
New York Stock Exchange (1985 - 1987); past Member, Board of
Directors, Securities Industry Association; past Chairman of the
Downtown Lower Manhattan Association; past President and Member of
the Board of Governors of the Bond Club of New York; and past
Member, The Trilateral Commission. A graduate of Oberlin College
(B.A., 1951), Mr. Gutfreund served in the U.S. Army in Korea in
1951 - 1953.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
In the fiscal year ended December 31, 1998, the Board of
Directors met on six 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). The Board of Directors has two standing committees, the
Audit Committee and the Compensation Committee.
The Audit Committee recommends to the entire Board of
Directors the independent auditors to be retained by the Company,
consults with the independent auditors with respect to their audit
plans, reviews their audit report and any management letters
issued by them, and consults with the independent auditors with
regard to financial reporting and the adequacy of internal
controls. The Audit Committee was established in 1997 and held
two meetings in 1998. Its membership consists solely of
independent directors. Its present members are Messrs. Coleman,
Gutfreund and Hassan.
The Compensation Committee recommends to the entire Board of
Directors the compensation arrangements for the Company's
executive officers and administers the Company's stock option
plans. The Compensation Committee was established in 1997 and
held two meetings in 1998. Its membership consists solely of
independent directors. Its present members are Messrs. Coleman
and Gutfreund.
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 March 29, 1999 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>
Name and Address of Amount and Nature Percent
Beneficial Owner Title of Class of Ownership(1) of Class
- --------------------- -------------- ----------------- --------
<S> <C> <C> <C>
Stephen N. Joffe, M.D., Common Stock 15,766,970 shares owned 34.27%
Chairman, CEO & Director of record and
Sandra F.W. Joffe, beneficially(2)
Secretary
8750 Red Fox Lane Class A Preferred Stock 844 shares owned of 50.0%
Cincinnati, Ohio 45243 record and beneficially
Class B Preferred Stock 12.6 shares owned of 100.0%
record and beneficially(3)
Summit Technology, Inc. Common Stock 7,164,361 shares owned 15.86%
21 Hickory Drive of record and beneficially
Waltham, MA 02154
Craig P.R. Joffe Common Stock 2,500,313 shares owned 5.54%
7840 Montgomery Road of record and beneficially
Cincinnati, Ohio 45236
William O. Coleman Common Stock 241,250 shares owned .53%
Director beneficially(4)
John H. Gutfreund Common Stock 126,900 shares owned of .28%
Director record and beneficially(5)
John C. Hassan Common Stock 154,500 shares owned of .34%
Director record and beneficially(6)
Larry P. Rapp Common Stock 265,500 shares owned of .58%
Chief Financial Officer record and beneficially(7)
& Treasurer
Thomas E. Wilson Common Stock 100,000 shares owned of .22%
President record and beneficially(8)
All directors and executive Common Stock 16,655,120 shares owned 35.68%
officers as a group of record and
(7 persons) beneficially (9)
Class A Preferred Stock 844 shares owned of 50.0%
record and beneficially
Class B Preferred Stock 12.6 shares owned of
record and beneficially 100.0%
__________________________
<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) Stephen N. Joffe, MD and Sandra F.W. Joffe are married to one another and each is
therefore deemed to be the beneficial owner of all shares owned by the other. The
total shown consists of 11,077,950 shares of Common Stock owned of record by Dr.
Joffe, 3,851,649 shares of Common Stock owned of record by Mrs. Joffe, 1,000 shares of
Common Stock owned of record by Dr. and Mrs. Joffe jointly, 750 shares of Common Stock
issuable to Mrs. Joffe in the event of her exercise of a currently exercisable stock
option, 728,955 shares of Common Stock issuable to Dr. Joffe in the event of
conversion (as of the record date) of 11 shares of Class B Preferred Stock owned by
him, and 106,666 shares of Common Stock issuable to Mrs. Joffe in the event of
conversion (as of the record date) of 1.6 shares of Class B Preferred Stock owned by
her.
(3) Includes 11 shares owned of record by Dr. Joffe and 1.6 shares owned of record by Mrs.
Joffe.
(4) Includes 165,000 shares owned of record by Mr. Coleman and 76,250 shares of Common
Stock issuable to Mr. Coleman upon the exercise of certain unexercised stock options.
(5) Includes 50,000 shares owned of record by Mr. Gutfreund, 650 shares owned of record by
him as custodian for his minor child, and 76,250 shares of Common Stock issuable to
Mr. Gutfreund upon the exercise of certain unexercised outstanding stock options.
(6) Includes 2,000 shares owned of record by Mr. Hassan and 152,500 outstanding shares of
Common Stock issuable to Mr. Hassan upon the exercise of certain unexercised stock
options.
(7) Includes 500 shares owned of record by Mr. Rapp and 265,000 shares of Common Stock
issuable to Mr. Rapp upon the exercise of certain unexercised outstanding stock
options.
(8) Includes 100,000 shares of common stock issuable to Mr. Wilson upon the exercise of
certain unexercised outstanding stock options.
(9) Consists of 15,148,749 shares owned of record directly or indirectly by such persons,
835,621 shares issuable upon conversion of Class B Preferred Stock owned by such
persons, and 670,750 shares issuable upon the exercise of stock options held directly
or indirectly by such persons.
</FN>
</TABLE>
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
During 1998, one of the Company's directors, William O.
Coleman, inadvertently filed a Form 4, reporting a purchase of
Common Stock, after the due date for such filing.
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 $100,000 for all services
rendered to the Company in all capacities (the "named executives")
during the last fiscal year:
<PAGE>
<TABLE>
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
------------------- ------------
Securities
Name and Principal Underlying All Other
Position Year Salary($) Bonus($) Options (#) Compensation ($)
- ------------------------- ----- --------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Stephen N. Joffe, 1998 $198,000 -- -- $50,031(1)
Chairman and 1997 $198,000 -- -- $55,009(1)
Chief Executive Officer 1996 $198,000 -- -- $52,534(1)
Thomas E. Wilson
President and Chief 1998 $105,000(2) -- 100,000 shs. --
Operating Officer
Larry P. Rapp, 1998 $133,800 -- 5,000 shs. $800(4)
Chief Financial Officer 1997 $114,975 -- -- --
and Treasurer 1996 $ 76,915(3) -- 200,000 shs. --
_____________________________
<FN>
(1) Includes for 1996, 1997, and 1998, respectively, $5,845, $7,468 and $3,508, which was
a car allowance and $778, $681 and $512, which were term life insurance and long-term
disability premiums for insurance benefitting named executive. Also includes for
1996, 1997 and 1998, respectively, $45,911, $46,860 and $46,011, respectively, placed
in a life insurance trust benefitting the named executive.
(2) Partial year salary. Mr. Wilson commenced his employment with the Company in May 1998
and became the President on December 7, 1998.
(3) Partial year salary. Mr. Rapp commenced his employment with the Company on April 15,
1996.
(4) Term life and long-term disability insurance premiums.
</FN>
/TABLE
<PAGE>
Stock Options
The following table sets forth information regarding stock
options granted to the named executives during 1998:
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
---------------------------
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Exercise or Price Appreciation for
Options Employees in Base Price Expiration Option Term
Name Granted #(1) Fiscal Year (2) ($/Sh.) Date 5% ($) 10% ($)
- ------------------ ------------ --------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Larry P. Rapp 5,000 .6% $0.875 1/8/08 4,072 6,484
_________________
<FN>
(1) Generally, all such options first become exercisable as to 50% of the shares covered
after the end of the first year after the date of grant and as to 50% of the shares
covered after the end of two years, and are exercisable in full thereafter until the
option expires. The option exercise price, generally, is not adjustable over the 10-
year term of the options except due to stock splits and similar occurrences affecting
all outstanding stock.
(2) The percentage shown in the above table reflects the ratio of the total options
granted to the named person during the fiscal year over the total options granted to
all employees during the fiscal year.
</FN>
</TABLE>
<TABLE>
The following table sets forth information regarding the value of
unexercised in-the-money options held by the named executives as of
December 31, 1998:
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEARS AND FY-END OPTION VALUES
<CAPTION>
Shares Number of Securities
Acquired Value Underlying Unexercised Value of Unexercised In-the-
on Realized Options at FY-End Money Options at FY-End ($)
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------- ----------- -------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Larry P. Rapp -- -- 80,000 125,000 15,000 23,438
_________________
</TABLE>
<PAGE>
REPORT ON REPRICING OF OPTIONS
It has always been the policy of the Board of Directors not
to reprice its outstanding employee stock options. However, 1998
was a particularly difficult year for the Company's long time
employees since most of them received options before the Company's
Common Stock became widely traded, resulting in option exercise
prices far above the current market prices for the stock. Most of
these exercise prices were so far from current market prices that
the options lost any usefulness as an employee retention tool.
Because of the potential for a serious attrition problem and as a
matter of fairness to loyal employees, in November 1998,
management asked the Compensation Committee to undertake a review
of the outstanding options which had been granted to the Company's
employees in prior years. The Committee determined that, under
all of the prevailing circumstances, most of the Company's
employees to whom options had been awarded in prior years held
their options at exercise prices that limited the options'
effectiveness as a tool for employee retention and as long-term
performance incentives.
After studying what other companies had recently done under
similar circumstances and considering various possible methods of
dealing with this problem, the Committee, and subsequently the
full Board of Directors, determined that the problem could only be
effectively addressed by means of an option repricing program
which would amend the outstanding options of certain employees
(but not directors or former employees) to reflect a more current
exercise price.
The repricing terms provided that the options of any current
employee (but not former employees and not directors) holding
options as of November 12, 1998 would be repriced to the current
market price, which was $1.1875 per share. Vesting schedules were
not revised. The expectation is that the opportunity to earn
compensation based on appreciation of the Company's Common Stock
from the repriced level will motivate employees to achieve
superior results over the long term, encourage key employees to
remain with the Company and compensate employees for work and
economic sacrifices made.
<PAGE>
<TABLE>
TEN-YEAR OPTION REPRICING
Length of
Original
Securities Option Term
Underlying Remaining at
Number of Market Price of Exercises Price Date of
Options Stock at Time of at time of New Exercise Repricing
Name Date Repriced Repricing ($) Repricing ($) Price ($) (years)
- ----------- ---- ----------- ---------------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Larry P. Rapp 11/12/98 62,500 1.1875 5.35 1.1875 7.5
11/12/98 137,500 1.1875 2.25 1.1875 8.0
</TABLE>
<PAGE>
Respectfully submitted
by the Compensation Committee:
/s/ John H. Gutfreund
/s/ William O. Coleman
John H. Gutfreund
William O. Coleman
<PAGE>
Director Compensation
Effective 1998, non-employee directors of the Company are
paid cash director's fees of $2,500 per calendar quarter plus
reimbursement of related out-of-pocket expenses. In addition, in
1998 directors were entitled to receive stock option grants under
the LCA-Vision Directors' Nondiscretionary Stock Option Plan.
Under this Plan, a nonemployee director received a grant of
options to purchase 75,000 shares of Common Stock upon his or her
election or appointment to the Board and is entitled thereafter to
an annual grant of options to purchase 1,250 shares. Beginning in
1999, this plan was replaced by the Company's 1998 Long-Term Stock
Incentive Plan which provides for initial grants of options to
purchase 75,000 shares and annual grants of options to purchase
12,500 shares.
CERTAIN TRANSACTIONS
Since January 1, 1997, 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):
In 1995, the Company borrowed a total of $4,391,000 from its
largest stockholders, Dr. and Mrs. Stephen N. Joffe. Dr. Joffe
was and remains the Company's Chief Executive Officer. The loans
were made under two promissory notes which specified an interest
rate of 6.91% per annum and a maturity date of September 26, 2005.
As of January 1, 1997, the total amount due under these notes,
including outstanding principal and accrued interest, was
$1,963,000. In August 1997, in connection with the Company's
acquisition of Refractive Centers International, Inc. from Summit
Technology, Inc., the Company and Dr. and Mrs. Joffe agreed to
amend the promissory notes to provide that the Company could not
make principal payments under the notes to Dr. and Mrs. Joffe in
any year unless for the prior fiscal year the Company's earnings
before taxes, amortization and depreciation net of capital
expenditures exceeded $1,000,000, and then payments could be made
only up to 25% of such excess. No payments were made under these
loans in 1997 or 1998, and as of December 31, 1998 the total
amount of principal and accrued interest due under these loans was
$2,068,000. In February 1999, Summit agreed to waive the payment
restriction which has prevented and payments under these notes in
1997 and 1998.
Prior to August 1997, Dr. Joffe was the guarantor of
approximately $11,080,000 in bank loans to the Company, including
a mortgage note in the amount of $3,080,000, and a working capital
credit line of up to $8,000,000. Dr. Joffe was not compensated
for these personal guarantees.
In 1998, the Company loaned Dr. and Mrs. Joffe a total of
$2,100,000. This loan bears interest at the rate of 8.5% per
annum collateralized with Dr. and Mrs. Joffe's pledge to the
Company of their rights under the notes documenting their loans to
the Company described above.
Dr. Joffe is the principal stockholder and majority owner of
The LCA Center for Surgery, Ltd. (the "Surgery Center"). The
Company does not hold an investment in the Surgery Center. During
1997 and approximately half of 1998, the Company leased a portion
of its headquarters building to the Surgery Center at an annual
rental of $190,000. In February 1997, the Company agreed to
forego rent in return for the Surgery Center providing to the
Company certain systems and processes for research and
development, for providing additional staffing, and for giving the
Company unlimited use of the leased premises for research,
testing, educational and other agreed purposes. In 1997, the
Company recorded rent, administrative and marketing income of
approximately $74,000 related to the Surgery Center.
In addition, in August 1997 the Company pledged to The Fifth
Third Bank ("Fifth Third") a $985,000 Certificate of Deposit
("CD") issued by Fifth Third as security for a $985,000 loan made
by Fifth Third to the Surgery Center. The Company pledged the CD
for up to 30 days while the Surgery Center arranged to replace the
CD as collateral for this loan. When Dr. Joffe's personal
guarantee of the prior Company facility with Fifth Third expired
in August 1997, he remained personally obligated to the Company
with respect to replacing the CD as collateral for Fifth Third's
loan to the Surgery Center. Dr. Joffe fulfilled this obligation to
the Company by pledging the required collateral, and the Company
is no longer obligated to Fifth Third with respect to the CD.
In June 1998, the Company purchased the leasehold
improvements that had been paid for by the Surgery Center for
their book value of approximately $872,000 and also advanced
approximately $576,000 to the Surgery Center which remained
outstanding as of December 31, 1998.
2000 ANNUAL MEETING
OF STOCKHOLDERS
In order for any stockholder proposals for the 2000 Annual
Meeting of Stockholders to be eligible for inclusion in the
Company's proxy statement relating to that meeting to be presented
for stockholder action at that meeting, they must be received by
the Secretary of the Company at 7840 Montgomery Road, Cincinnati,
Ohio 45236, prior to December 6, 1999. The form of proxy
distributed by the Company with respect to the 2000 Annual Meeting
of Stockholders may include discretionary authority to vote on any
matter which is presented to the stockholders at the meeting
(other than management) if the Company does not receive notice of
that matter at the above address prior to February 26, 2000.
<PAGE>
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
/s/ Sandra F. W. Joffe
Sandra F.W. Joffe
Secretary
1714 PS 98
PROXY CARD LCA-VISION INC.
7840 Montgomery Road
Cincinnati, Ohio 45236
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Stephen N. Joffe, M.D. and
Larry P. Rapp, and each of them, with full power of substitution,
as proxies to vote, as designated below, for and in the name of
the undersigned all shares of stock of LCA-Vision Inc. which the
undersigned is entitled to vote at the Annual Meeting of the
Stockholders of said Company scheduled to be held on May 10, 1999
at 10:00 a.m. at The Queen City Club, 331 East Fourth Street,
Cincinnati, Ohio 45202 or at any adjournment or recess thereof.
Please mark X in the appropriate box. The Board of Directors
recommends a FOR vote on each proposal.
1. ELECTION OF DIRECTORS. [ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY (except as marked to the contrary
below)
STEPHEN N. JOFFE, M.D., WILLIAM O. COLEMAN, JOHN H.
GUTFREUND and JOHN C. HASSAN
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write the nominee's name on the space
provided below)
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2. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting or any
adjournment thereof.
<PAGE>
(Continued from other side)
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction
is made, this proxy will be voted FOR the election of Directors.
ALL FORMER PROXIES ARE HEREBY REVOKED.
NUMBER OF SHARES ______________
_______________________________
(Signature of Stockholder)
_______________________________
(Signature of Stockholder)
(Please sign exactly as your name
appears hereon. All joint owners
should sign. When signing in a
fiduciary capacity or as a
corporate officer, please
give your full title as
such)
Dated: _______________, 1999
