SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
TLC Laser Eye Centers, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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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
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<PAGE>
TLC LASER EYE CENTERS INC.
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the annual and special meeting of the shareholders
(the "Meeting") of TLC Laser Eye Centers Inc. (the "Corporation") will be held
at News Theater, 98 The Esplanade, Toronto, Ontario, on October 26, 2000, at the
hour of 10:00 a.m. (Toronto time) for the following purposes:
1. to receive the financial statements of the Corporation for the fiscal year
ended May 31, 2000 together with the report of the auditors thereon;
2. to elect directors;
3. to consider and, if thought fit, to pass a resolution authorizing an
amendment to the Amended and Restated Share Option Plan (the "Plan")
increasing the number of common shares of the Corporation which may be
issued under the Plan;
4. to consider and, if thought fit, to pass a resolution authorizing an
amendment to the Plan allowing options to be granted under the Plan to
persons who provide ongoing marketing or promotional services to or
endorsements for the Corporation;
5. to consider and, if thought fit, to pass a resolution authorizing the
grant of options to Thomas G. O'Hare;
6. to appoint Ernst & Young as auditors of the Corporation for the ensuing
year and to authorize the directors to fix the remuneration to be paid to
the auditors; and
7. to transact such further business as may properly come before the Meeting
or any adjournment thereof.
The Corporation has fixed the close of business on September 15, 2000 as the
record date for determination of shareholders entitled to notice of, and to vote
at, the Meeting and at any adjournment thereof. The accompanying management
information circular provides additional information relating to the matters to
be dealt with at the Meeting and forms part of this notice.
DATED at Mississauga, Ontario, September 22, 2000.
By Order of the Board of Directors
Lloyd D. Fiorini
Secretary
If you are not able to be present at the Meeting, please exercise your right to
vote by signing and returning the enclosed form of proxy to CIBC Mellon Trust
Company, Proxy Dept., 200 Queen's Quay East, Unit #6, Toronto, Ontario M5A 4K9
so as to arrive not later than the close of business on October 24, 2000 or, if
the Meeting is adjourned, 48 hours (excluding Saturdays and holidays) before any
adjourned meeting.
<PAGE>
[LOGO]
TLC LASER EYE CENTERS INC.
MANAGEMENT INFORMATION CIRCULAR
GENERAL PROXY INFORMATION
Solicitation of Proxies
The information contained in this management information circular
("Circular") is furnished in connection with the solicitation of proxies to be
used at the annual and special meeting of shareholders (the "Meeting") of TLC
Laser Eye Centers Inc. (the "Corporation" or "TLC") to be held on October 26,
2000 at 10:00 a.m. (Toronto time) at News Theatre, 98 The Esplanade, Toronto,
Ontario, and at all adjournments thereof, for the purposes set forth in the
accompanying notice of meeting. It is expected that the solicitation will be
made primarily by mail but proxies may also be solicited personally by employees
of the Corporation, without additional remuneration. The Corporation will, if
requested, reimburse banks, brokerage houses and other custodians, nominees and
certain fiduciaries for their reasonable out-of-pocket expenses incurred in
connection with the distribution of proxy materials to their principals. The
solicitation of proxies by this circular is being made by or on behalf of the
management of the Corporation and the total cost of the solicitation will be
borne by the Corporation. The information contained herein is given as at
September 1, 2000, except where otherwise noted. This Circular and the
accompanying annual report to shareholders was first sent or given to
shareholders on or about September 22, 2000.
Appointment of Proxies
The persons named in the enclosed form of proxy are representatives of
management of the Corporation and are directors or officers of the Corporation.
A shareholder who wishes to appoint some other person (who need not be a
shareholder of the Corporation) to represent such shareholder at the Meeting may
do so by inserting such person's name in the blank space provided in the form of
proxy. To be valid, proxies must be deposited with the secretary of the
Corporation, c/o CIBC Mellon Trust Company, Proxy Dept., 200 Queen's Quay East,
Unit #6, Toronto, Ontario M5A 4K9 not later than the close of business on
October 24, 2000 or, if the Meeting is adjourned, 48 hours (excluding Saturdays
and holidays) before any adjourned meeting.
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Non-Registered Shareholders
Only registered shareholders or the persons they appoint as their proxies
are permitted to vote at the Meeting. However, in many cases, shares of the
Corporation beneficially owned by a person (a "Non-Registered Holder") are
registered either: (a) in the name of an intermediary (an "Intermediary") that
the Non-Registered Holder deals with in respect of the shares (Intermediaries
include, among others, banks, trust companies, securities dealers or brokers and
trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar
plans); or (b) in the name of a clearing agency (such as The Canadian Depository
for Securities Limited (or CDS)) of which the Intermediary is a participant. In
accordance with the requirements of National Policy Statement No. 41 of the
Canadian Securities Administrators, the Corporation has distributed copies of
the Notice, this Circular and the form of proxy (collectively, the "meeting
materials") to the clearing agencies and Intermediaries for onward distribution
to Non-Registered Holders of Common Shares.
Intermediaries are required to forward the meeting materials to
Non-Registered Holders unless a Non-Registered Holder has waived the right to
receive them. Very often, Intermediaries will use service companies to forward
the meeting materials to Non-Registered Holders. Generally, Non-Registered
Holders who have not waived the right to receive meeting materials will either:
(a) be given a form of proxy which has already been signed by the
Intermediary (typically by a facsimile, stamped signature), which is
restricted as to the number of shares beneficially owned by the
Non-Registered Holder but which is otherwise not completed. Because
the Intermediary has already signed the form of proxy, this form of
proxy is not required to be signed by the Non-Registered Holder when
submitting the proxy. In this case, the Non-Registered Holder who
wishes to submit a proxy should otherwise properly complete the form
of proxy and deliver it to the secretary of the Corporation as set
out above under "General Proxy Information - Appointment of
Proxies"; or
(b) more typically, be given a form of proxy which is not signed by the
Intermediary, and which, when properly completed and signed by the
Non-Registered Holder and returned to the Intermediary or its
service company, will constitute voting instructions (often called a
"proxy authorization form") which the Intermediary must follow.
Typically, the Non-Registered Holder will also be given a page of
instructions which contains a removable label containing a bar-code
and other information. In order for the form of proxy to validly
constitute a proxy authorization form, the Non-Registered Holder
must remove the label from the instructions and affix it to the form
of proxy, properly complete and sign the form of proxy and submit it
to the Intermediary or its service company in accordance with the
instructions of the Intermediary or its service company.
In either case, the purpose of this procedure is to permit Non-Registered
Holders to direct the voting of the shares which they beneficially own. Should a
Non-Registered Holder who receives either form of proxy wish to vote at the
Meeting in person, the Non-Registered Holder
<PAGE>
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should strike out the persons named in the proxy and insert the Non-Registered
Holder's name in the blank space provided. In either case, Non-Registered
Holders should carefully follow the instructions of their Intermediary,
including those regarding when and where the proxy or proxy authorization form
is to be delivered.
Revocation of Proxies
In addition to revocation in any other manner provided by law, a
shareholder who has given a proxy may revoke the proxy (a) by completing and
signing a proxy bearing a later date and depositing it as aforesaid; or (b) by
depositing an instrument in writing executed by the shareholder or the
shareholder's attorney authorized in writing (i) at the registered office of the
Corporation at any time up to and including the last business day preceding the
day of the Meeting, or any adjournment thereof, at which the proxy is to be
used, or (ii) with the chairman of the Meeting on the day of the Meeting or any
adjournment thereof.
A Non-Registered Holder may revoke a proxy authorization form (voting
instructions) or a waiver of the right to receive meeting materials and to vote
given to an Intermediary at any time by written notice to the Intermediary,
except that an Intermediary is not required to act on a revocation of a proxy
authorization form (voting instructions) or of a waiver of the right to receive
materials and to vote that is not received by the Intermediary at least seven
days prior to the Meeting.
Voting of Proxies
The management representatives designated in the enclosed form of proxy
will vote or withhold from voting the shares in respect of which they are
appointed by proxy on any ballot that may be called for in accordance with the
instructions of the shareholder as indicated on the proxy and, if the
shareholder specifies a choice with respect to any matter to be acted upon, the
shares will be voted accordingly. In the absence of such direction, such shares
will be voted by the management representatives as indicated under the headings
in this Circular. Votes cast by proxy or in person at the Meeting will be
tabulated by the judge of elections appointed for the Meeting. The judge of
elections will include Common Shares that are present and entitled to vote but
that are withheld from voting on a particular matter for purposes of determining
the presence of a quorum but not for purposes of determining the approval of any
matter submitted to stockholders for a vote. If a broker indicates on a proxy
that such broker does not have discretionary authority as to certain Common
Shares to vote on a particular matter, such shares will be considered as present
and not entitled to vote with respect to that matter.
The enclosed form of proxy confers discretionary authority upon the
management representatives designated therein with respect to amendments to or
variations of matters identified in the notice of meeting and with respect to
other matters which may properly come before the Meeting. At the date of this
Circular, the management of the Corporation knows of no such amendments,
variations or other matters.
<PAGE>
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VOTING SHARES AND RECORD DATE
On September 15, 2000, the Corporation had outstanding 37,746,196 common
shares (the "Common Shares"). Each registered holder of Common Shares of record
at the close of business on September 15, 2000, the record date established for
notice of the Meeting, will be entitled to one vote for each Common Share held
by such shareholder on all matters proposed to come before the Meeting, except
to the extent that such shareholder has transferred any Common Shares after the
record date and the transferee of such shares establishes ownership thereof and
demands, not later than 10 days before the Meeting, to be included in the list
of shareholders entitled to vote at the Meeting, in which case the transferee
will be entitled to vote such shares.
ELECTION OF DIRECTORS
The number of directors to be elected at the Meeting is seven. It is the
intention of the management representatives designated in the enclosed form of
proxy to vote the Common Shares in respect of which they are appointed for the
election as directors of the proposed nominees whose names are set out below,
unless the shareholder who has given such proxy has directed that the Common
Shares be withheld from voting. All such nominees have been directors since the
dates indicated below. Management does not contemplate that any of the proposed
nominees will be unable to serve as a director but, if that should occur for any
reason prior to the Meeting, the management representatives designated in the
enclosed form of proxy reserve the right to vote for another nominee at their
discretion. Each director elected will hold office until the next annual meeting
or until his successor is elected or appointed.
Information Regarding Nominees For Election As Directors
The following table sets out the name and municipality of residence of
each person proposed by management of the Corporation to be nominated for
election as a director, the position with the Corporation which each nominee
presently holds, the principal occupation of each nominee, and the date on which
each nominee was first elected or appointed director. See "Security Ownership of
Certain Beneficial Owners and Management" for the number of Common Shares that
are beneficially owned, directly or indirectly, or over which control or
direction is exercised by each nominee.
<TABLE>
<CAPTION>
Name and Municipality of Position with Corporation Principal Director
Residence Occupation Since
--------- ---------- -----
<S> <C> <C> <C>
Elias Vamvakas................ Chief Executive Officer and Officer of the Corporation May 1993
Richmond Hill, Ontario Chairman of the Board of
Directors
Dr. Jeffery J. Machat......... Director, Co-National Ophthalmologist May 1993
Richmond Hill, Ontario Medical Director
John F. Riegert............... Director Director June 1995
North York, Ontario
Howard J. Gourwitz............ Director(1)(2)(3) Attorney and June 1995
Bloomfield Hills, Michigan Counsellor-at-Law,
shareholder of Gourwitz
and Barr, P.C.
Dr. William David Sullins, Jr. Director (1)(2)(3) Optometrist June 1995
Athens, Tennessee
Thomas N. Davidson............ Nominee Director(4) Corporate Director Nominee
Terra Cotta, Ontario
Warren S. Rustand............. Director (2)(3)(5) Management Consultant October 1997
Tucson, Arizona
</TABLE>
<PAGE>
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-------------------------
(1) Member of the Corporation's Compensation Committee.
(2) Member of the Corporation's Corporate Governance Committee.
(3) Member of the Corporation's Audit Committee.
(4) If elected as a director, Mr. Davidson will replace Mr. James R. Connacher
as a member of the Corporation's Corporate Governance Committee.
(5) If elected as a director, Mr. Rustand will replace Mr. James R. Connacher
as a member of the Corporation's Compensation Committee.
Directors And Executive Officers
Elias Vamvakas (age 42) is the Chief Executive Officer and Chairman of the
Board of Directors of TLC. Prior to co-founding TLC in 1993, Mr. Vamvakas was
the President of E.A. Vamvakas Insurance Agencies Limited and the President of
the Creative Planning Financial Group of Companies.
Thomas G. O'Hare (age 48) was appointed the President and Chief Operating
Officer of TLC on August 7, 2000. Prior to joining TLC, Mr. O'Hare was Executive
Vice President, Operations and Development for Host Marriott Services
Corporation's North American airports, travel plazas and entertainment
facilities. Mr. O'Hare holds a B.A. in Hotel, Restaurant and Institutional
Management from Michigan State University. Mr. O'Hare also serves as an
Executive Committee Member of the Commonwealth Council of the State of Virginia.
Jeffery J. Machat, MD, (age 38) is the Co-National Medical Director of
TLC. Prior to co-founding TLC in 1993, Dr. Machat performed laser vision
correction at the Laser Eye Centre, the Toronto Laser Sight Centre, the Bochner
Eye Institute and the Windsor Laser Eye Institute. Dr. Machat received his Royal
College of Canada Certification in Ophthalmology in 1990. Dr. Machat was also
board certified by the American Academy of Ophthalmology in 1991 and is a member
of the American Society of Cataract and Refractive Surgeons and the
International Society of Refractive Surgery.
Thomas N. Davidson (age 60) has been Chairman of NuTech Precision Metals
Inc. and Chairman of Quarry Hill Group (a private investment holding company)
since 1986. Mr. Davidson is past Chairman of Hanson Chemical Inc., General Trust
and PCL Packaging Inc. He is on the board of several Canadian and U.S. public
companies and was recognized by the Financial Post as the Canadian Entrepreneur
of the year in 1979.
David C. Eldridge, OD, FAAO (age 46) is the Executive Vice President,
Clinical Affairs of TLC. Prior to joining TLC full-time in 1997, Dr. Eldridge
was an optometrist from 1978 to 1997 and was the first private practice
optometrist in the United States to perform laser eye surgery. He served as
President of the Oklahoma Chapter of the American Association of
<PAGE>
-6-
Optometry (AAO), President of the Oklahoma American Optometric Association
("OAOA"), member of the OAOA Board of Directors, Chairman of the OAOA Education
Committee, Oklahoma "Optometrist of the Year" in 1993 and is a charter member of
the OAOA Contact Lens Section. Dr. Eldridge is a Fellow of the American
Association of Optometry.
Howard J. Gourwitz (age 52) has been a director of TLC since June 1995.
Mr. Gourwitz has been a shareholder of the Southfield, Michigan law firm
Gourwitz and Barr, P.C. since January 1993. Mr. Gourwitz specializes in the
practice of corporate and tax law, estate and financial planning, and commercial
planning, real estate, sports and entertainment law.
Peter M. Hetz (age 51) was appointed Vice President of Human Resources of
TLC in 1999. From 1988 to 1999, Mr. Hetz was the Vice-President, Human Resources
for Chubb Security Canada Inc. From 1987 to 1988, Mr. Hetz served as Manager,
Employee Relations for NCR Canada Inc. From 1980 to 1987, Mr. Hetz served as
Manager, Labour Relations for the Bank of Montreal. Mr. Hetz was also Personnel
Management Consultant for the Montreal Catholic School Commission from 1969 to
1980.
Peter J. Kastelic, CA, (age 43) was appointed Chief Financial Officer and
Treasurer of TLC in July 1997. From 1994 to 1997, Mr. Kastelic served as Vice
President of Finance for the Potash Company of Canada. Prior to 1994, Mr.
Kastelic held the position of Vice President and Controller of Curragh Inc.,
which was a mining company listed on The Toronto Stock Exchange and New York
Stock Exchange.
Lloyd Fiorini, J.D., LL.M., (age 34) was appointed Secretary of TLC in
November 1999 and General Counsel of TLC in March 2000. Prior to joining TLC as
legal counsel in July 1998, Mr. Fiorini practiced law in the Washington, D.C.
offices of the law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Mr.
Fiorini's practice focused in the areas of health care fraud and abuse, health
care compliance and health care transactions. Mr. Fiorini received a Masters of
Law in Health Law from Loyola University School of Law - Chicago.
William P. Leonard (age 35) was appointed the Executive Vice President of
Operations for TLC in 1999. Previously, he served as Regional General Manager
for TLC. Prior to joining TLC in 1997, Mr. Leonard was a Site Manager of 20/20
Laser Centers, Inc. from 1995 to February 1997. From 1990 to 1995, Mr. Leonard
was a Territory Manager for Wesley Jessen Corporation, a division of
Schering-Plough Corp.
Henry Lynn (age 49) was appointed Executive Vice President, Information
Systems of TLC in March 1998. During 1994 Mr. Lynn was Vice President
Information Systems for Hawker Siddeley Canada, Inc. and from 1995 to March 1998
performed in that role for BeaconEye Inc. Prior to 1994, Mr. Lynn was Vice
President, Information Systems of Indal Ltd., a large diversified multi-plant
manufacturing organization.
John F. Riegert (age 71) has been a director of TLC since June 1995. Mr.
Riegert was the Secretary of TLC from 1995 until November 1999. Prior to joining
TLC, Mr. Riegert was the Chief Executive Officer of Crossroads Christian
Communications Inc., a national broadcasting company, from 1992 to 1995, a
private corporate consultant from 1991 to 1992, and
<PAGE>
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the Vice President and Secretary-Treasurer of the Canadian Bankers' Association
from 1969 to 1991.
Warren S. Rustand (age 57) has been a director of TLC since October 1997.
Mr. Rustand is currently the Managing General Partner of Harlingwood Capital
Partners, a San Diego-based company. Mr. Rustand was the Chairman and Chief
Executive Officer of Rural/Metro Corporation, a U.S. public company providing
ambulance and fire protection services, from 1996 to August 1998. Mr. Rustand
was Chairman and Chief Executive Officer of The Cambridge Company Ltd., a
merchant banking and management consulting company, from 1987 to 1997. From 1994
to 1997, Mr. Rustand was also the Chairman of 20/20 Laser Centers, Inc.
Rochelle E. Stenzler (age 46) was appointed the President of International
Operations for TLC in 1999. From 1997 to 1998, Ms. Stenzler served as the
President of Revlon Canada, Inc. From 1988 to 1997, Ms. Stenzler was with Pharma
Plus Drugmarts Ltd., Ontario's largest retail drug store chain, serving first as
the Senior Vice President of Operations from 1988 to 1992, and subsequently, as
the President and General Manager from 1992 to 1997.
William David Sullins, Jr., OD, (age 57) has been a director of TLC since
June 1995. Dr. Sullins has been the President and Chief of Clinical Services of
Athens Eye Care Clinic, P.C. since 1991. Dr. Sullins is a founding member and
distinguished practitioner of National Academies of Practice, a Fellow and
former member of the Admissions Committee of the American Academy of Optometry,
a Fellow and Admissions Chair of the Tennessee Academy of Optometry, Adjunct
Professor at the Southern College of Optometry, member Council on Optometric
Education, and Past President and former Chairman of the Board of Trustees of
the American Optometric Association. Dr. Sullins is a director of First Franklin
Bankshares, a financial holding company, and of First National Bank and Trust
Company. Dr. Sullins is a Fellow of the American Association of Optometry.
Madeline D. Walker (age 53) has been Executive Vice President since August
2000. From 1996 until July 2000, Ms. Walker served as the Chief Operating
Officer of TLC. Ms. Walker has been associated with TLC since 1993. Since 1990,
she has also been the President of Mainstay Human Resources Corporation, a
management consulting company.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the United States Securities Exchange Act of 1934, as
amended, requires the Corporation's directors, certain officers and persons who
own more than 10% of a registered class of the Corporation's equity securities
to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5
with the Securities and Exchange Commission (the "Commission"). Such, directors,
officers and 10% shareholders are also required by the Commission's rules to
furnish the Corporation with copies of all Section 16(a) reports they file. The
Corporation assists its directors and officers and preparing their Section 16(a)
reports. In fiscal 2000, the preparation of certain Section 16(a) reports was
delayed. As a result, a report on Form 4 for each of Mr. Vamvakas (the May 10,
2000 report), Mr. Gary F. Jonas (the February 10, 2000 report) and Ms. Walker
(the February 2, 2000 report) were filed late.
<PAGE>
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as at September 1, 2000, the security
ownership of the Corporation, directly and beneficially (including vested
options), by the directors, nominee directors and Named Executive Officers of
the Corporation (see "Executive Compensation"), the directors, nominee directors
and executive officers as a group, and each person who, to the knowledge of the
directors or officers of the Corporation, beneficially owns, directly or
indirectly, or exercises control or direction over Common Shares carrying more
than 5% of the voting rights attached to all outstanding Common Shares of the
Corporation (the "Principal Shareholders").
Name Number of Percentage of Class
---- Common -------------------
Shares(1)
---------
I.G. Investment Management............... 3,875,900 10%
Elias Vamvakas(2)........................ 3,869,908 10%
Dr. Jeffery J. Machat(3)................. 2,935,596 8%
TAL Investments Counsel Limited ......... 2,565,025 7%
RT Capital Management ................... 2,274,200 6%
David C. Eldridge (4) ................... 163,272 *
Gary F. Jonas (5) ....................... 108,714 *
James R. Connacher(6).................... 71,000 *
Dr. William David Sullins, Jr.(7)........ 53,900 *
Howard J. Gourwitz(8).................... 20,566 *
William P. Leonard (9) .................. 19,775 *
Warren S. Rustand(10).................... 18,208 *
John F. Riegert(11)...................... 17,500 *
Thomas N. Davidson....................... 0 -
All directors and officers as a group(12) 7,447,367 20%
-----------
* Less than 1%.
(1) Number represents Common Shares held and Common Shares underlying options
that are currently exercisable or exercisable within 60 days of September
1, 2000.
<PAGE>
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(2) Includes vested options for 533,273 shares. Shares owned by Mr. Vamvakas
are held directly as to 586,635 and indirectly as to 1,749,516 by WWJD
Corporation, a corporation wholly-owned by the Vamvakas Family Trust and
1,000,484 by Insight Capital Corp.
(3) Includes vested options for 75,207 shares. Shares owned by Dr. Machat are
held directly as to 22,889 and indirectly as to 2,837,500 by 1123562
Ontario Limited, a corporation wholly-owned by the Machat Family Trust.
(4) Includes vested options for 68,207 shares and 6,426 shares held indirectly
by Megan Eldridge.
(5) No vested options. Mr. Jonas left the Corporation on July 14, 2000 and by
the terms of the Corporation's share option plan, all of his unexercised
options, none of which had vested, expired.
(6) Includes vested options for 20,000 shares. Shares owned by Mr. Connacher
are held indirectly by 1039089 Ontario Inc.
(7) Includes vested options for 20,000 shares.
(8) Includes vested options for 20,000 shares. Excludes 234,702 Common Shares
owned by LNG Enterprises, Inc., of which Mr. Gourwitz is an associate (as
defined in the Securities Act (Ontario)).
(9) Includes vested options for 19,575 shares.
(10) Includes vested options for 15,000 shares.
(11) Includes vested options for 17,500 shares.
(12) Includes vested options for 922,137 shares. Excludes 234,702 shares owned
by LNG Enterprises, Inc.
<PAGE>
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth all compensation earned during the last
three completed fiscal years by the Chief Executive Officer and the
Corporation's four highest paid executive officers who were serving as executive
officers at the end of the financial year ended May 31, 2000 ("Fiscal 2000") and
whose annual salary and bonus exceeded C$100,000 in Fiscal 2000 (together, the
"Named Executive Officers"). In the table below, and elsewhere in this Circular,
references to "C$" shall mean Canadian dollars and references to "US$" shall
mean United States dollars.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Annual Long-Term
Compensation Compensation
------------ ------------
-------------------------------------------------------------------------------------------------------------------
Name and Principal Position ($) Salary Common Shares under
Fiscal $ June 1 - May ($) Bonus Option
Year Currency 31 June 1 - May 31 (#)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Elias Vamvakas, 1998 US 260,417 Nil Nil
Chief Executive Officer 1999 US 282,391 Nil 250,000(2)
2000 US 342,428 Nil Nil
-------------------------------------------------------------------------------------------------------------------
Dr. Jeffery J. Machat, 1998 C 773,4488(1) Nil 15,000(3)
Co-National Medical Director 1999 US 960,228(1) Nil 20,000(3)
2000 US 1,014,863(1) Nil Nil
-------------------------------------------------------------------------------------------------------------------
Gary F. Jonas, 1998 US 224,328 Nil 15,000(3)
Executive Vice-President, 1999 US 219,420 Nil Nil
Development 2000 US 219,420 Nil 2,500(4)
-------------------------------------------------------------------------------------------------------------------
David C. Eldridge 1998 US 126,122 Nil 15,000(3)
Executive Vice-President, 1999 US 172,054 Nil 20,000(3)
Clinical Affairs 2000 US 207,426 12,500 15,500(4)
-------------------------------------------------------------------------------------------------------------------
William P. Leonard 1999 US 118,890 60,000 15,750(3)
Vice-President, Operations 2000 US 149,904 70,913 10,500(4)
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Dr. Machat became an officer of the Corporation in January 1996. The
Corporation has reached an agreement in principle with Excimer Management
Corporation which corporation will make available to TLC the services of
Dr. Jeffery J. Machat as a consultant relating to the business of the
Corporation. Pursuant to such agreement in principle, Dr. Machat continues
in his capacity as Co-National Medical Director of TLC. The agreement
provides for an annual consulting fee in the amount of US$100,000 (which
is a decrease from the consulting fee of US$200,000 payable in the
calendar year 1999). Dr. Machat and the Corporation have also reached an
agreement in principle effective as of February 1, 2000 pursuant to which
he will perform excimer laser procedures at one or more of the
Corporation's clinics and will be entitled to receive a fee based on the
number and complexity of procedures he performs (see the description of
the agreement in principle under "- Employment Contracts"). These
agreements are similar to ones in effect for fiscal 1998 and 1999. In
order to comply with U.S. disclosure requirements, the procedure fees have
been included in the amount of salary compensation. Of the amounts set
forth above, for fiscal 1998 and 1999, $100,000, and for fiscal 2000,
approximately US$167,000, constitute the consulting fees paid by the
Corporation for Dr. Machat's services as Co-National Medical Director, and
the remainder constitutes procedure fees paid by patients for medical
services performed by Dr. Machat at TLC clinics.
(2) These are "bonus" options. Options to acquire 125,000 common shares vested
immediately and options to acquire 62,500 will vest on December 31, 2000,
provided that, prior to such date, (i) the Corporation achieves certain
financial results or (ii) the price of the Common Shares on The Toronto
Stock Exchange reaches certain levels. If neither of these conditions are
met on the specified date, the unvested options are forfeited. 62,500
options were forfeited on December 31, 1999.
(3) These options vest one year after the date granted.
(4) One quarter of these options will vest after each one year period from the
date of grant for four years.
<PAGE>
-11-
Options Granted During Fiscal 2000
The following table sets forth the individual grants of stock options for
Fiscal 2000 to the Named Executive Officers:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Common % of Total Exercise Market Value Value Under
Shares Options or Base of Common Black-Scholes
Under Granted to Price Shares Expiration Date Option
Options Employees Underlying Pricing
Name Granted Date of Grant in Fiscal Options on Model (2)
(#) (1) Year the Date of
Grant
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Elias Vamvakas - - - - - - -
------------------------------------------------------------------------------------------------------------------------------------
Jeffery J. Machat - - - - - - -
------------------------------------------------------------------------------------------------------------------------------------
Gary F. Jonas 2,000 December 1, 1999 0.37% US$18.69 US$18.69 December 1, 2004 US$20,820
500 September 17, 1999 0.09% US$23.66 US$23.66 September 1, 2004 US$6,585
------------------------------------------------------------------------------------------------------------------------------------
David C. Eldridge 15,000 December 1, 1999 2.79% US$18.69 US$18.69 December 1, 2004 US$156,160
500 September 17, 1999 0.09% US$23.66 US$23.66 September 1, 2004 US$6,585
------------------------------------------------------------------------------------------------------------------------------------
William P. Leonard 10,000 December 1, 1999 1.86% US$18.69 US$18.69 December 1, 2004 US$104,100
500 April 30, 2000 0.09% US$6.73 US$6.73 April 30, 2005 US$1,875
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) One quarter of all options granted vest on each of the first, second,
third and fourth anniversary of the grant of the options. All options
expire on the fifth anniversary of the grant of the options.
(2) Assumes: 7.5% risk-free rate of interest; dividend yield of 0%; volatility
71%; options mature in 5 years.
(3) Mr. Jonas left the Corporation on July 14, 2000 and by the terms of the
Corporations' share option plan, all of his unexercised options, none of
which had vested, expired.
<PAGE>
-12-
Aggregate Option Exercises During Fiscal 2000 and Fiscal Year-End Option Values
The following table sets forth all stock options exercised by the Named
Executive Officers of the Corporation, the total number of shares underlying
unexercised options of the Named Executive Officers and their dollar value at
the end of Fiscal 2000:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
Unexercised Options at Fiscal Value of Unexercised in-the-Money
Year-End Options at Fiscal Year-End (US$)
Note (1)
---------------------------------------------------------------------------------------------------------------------------------
Common Shares Aggregate Exercisable Unexerciseable Exercisable Unexerciseable
Acquired on Value
Name Exercise Realised
(#) (US$)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Elias Vamvakas - - 533,273 62,500 1,998,088 -
---------------------------------------------------------------------------------------------------------------------------------
Dr. Jeffery J. Machat - - 75,207 - 144,878 -
---------------------------------------------------------------------------------------------------------------------------------
Gary F. Jonas - - - 2,500 - -
---------------------------------------------------------------------------------------------------------------------------------
David C. Eldridge - - 67,707 15,500 255 -
---------------------------------------------------------------------------------------------------------------------------------
William P. Leonard - - 19,575 10,000 65 -
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Value is based upon the closing price of TLC's common shares on the NASDAQ
on May 31, 2000, which was US$7.625.
<PAGE>
-13-
Employment Contracts
Mr. Elias Vamvakas
The Corporation entered into an employment contract with Mr. Elias
Vamvakas on January 1, 1996. He is the Chief Executive Officer and Chairman of
the Board of Directors of the Corporation. This agreement was amended on August
14, 1998. The term of the amended agreement is five years commencing on January
1, 1996 with automatic one year renewals unless otherwise terminated by the
parties. During the initial year of the agreement, the base salary was
US$225,000, US$250,000 in the second year of the term, US$275,000 in the third
year, US$316,250 in the fourth year, and US$363,750 in the fifth year.
Thereafter, Mr. Vamvakas' base salary will be determined by the Board of
Directors but will never be less than the previous year's base salary plus
fifteen percent. Mr. Vamvakas' compensation also includes a discretionary annual
bonus as determined by the Board of Directors, provided that Mr. Vamvakas is not
entitled to receive a bonus in the fourth or fifth years of the contract.
Pursuant to the amendment to the contract, Mr. Vamvakas was granted
options to acquire an aggregate of 250,000 Common Shares at an exercise price of
C$20.75 (US$13.13). Options to acquire 125,000 common shares vested immediately
and options to acquire 62,500 will vest on December 31, 2000, provided that,
prior to such date, (i) the Corporation achieves certain financial results or
(ii) the price of the Common Shares on The Toronto Stock Exchange reaches
certain levels. If neither of these conditions are met on the specified date,
the unvested options are forfeited. Options to acquire 62,500 common shares were
forfeited on December 31, 1999.
Mr. Vamvakas' employment may be terminated for just cause (as defined in
the agreement). If terminated other than for just cause, Mr. Vamvakas will be
entitled to receive 24 months' base salary and bonus and shall be entitled to
exercise all share options granted but not otherwise exercisable or forfeited.
The agreement also contains non-competition and confidentiality covenants
for the benefit of the Corporation.
<PAGE>
-14-
Dr. Jeffery J. Machat
The Corporation has reached an agreement in principle with Excimer
Management Corporation which corporation will make available to TLC the services
of Dr. Jeffery J. Machat as a consultant relating to the business of the
Corporation. Pursuant to such agreement in principle, Dr. Machat continues in
his capacity as Co-National Medical Director of TLC for a period of three years
commencing on February 1, 2000. The agreement provides for an annual consulting
fee in the amount of US$100,000. Dr. Machat and the Corporation have also
reached an agreement in principle effective as of February 1, 2000 pursuant to
which he will perform excimer laser procedures at one or more of the
Corporation's clinics and will be entitled to receive a fee equal to the greater
of 15% of the procedure fee collected by TLC and US$300 per eye. In addition,
effective as of April 1, 2000, Dr. Machat will be paid US$4,800 per day for
complex case days (typically, 12 complex cases are performed by Dr. Machat each
complex case day). Dr. Machat and the Corporation have similarly reached an
agreement in principle with respect to Custom Lasik. Effective as of March
1,2000 for Custom Lasik cases, Dr. Machat pays TLC a facility access fee of
US$1,000 unless the case arose from TLC's marketing efforts, in which case Dr.
Machat pays TLC a facility access fee of US$1,500.
Dr. Machat's consulting agreement may be terminated for just cause. If
terminated other than for just cause, Dr. Machat will be entitled to receive an
amount equal to two times the annual consulting fee.
Dr. Machat's consulting agreement will contain non-competition and
confidentiality covenants for the benefit of the Corporation.
Definitive agreements reflecting the terms of the agreements in principle
with Dr. Machat are currently being finalized.
Gary F. Jonas
The Corporation entered into an employment contract with Mr. Gary Jonas
who was Executive Vice President, Development of the Corporation until July 14,
2000. The term of the agreement was five years commencing on September 1, 1997
with automatic one year renewals as agreed upon by the parties. During the
initial year of the agreement, the base salary was US$220,000, with an annual
review of salary during each year of the term. In fiscal 2000, Mr. Jonas no
longer participated in the Corporation's Stock Option Plan under the terms of
his contract. Mr. Jonas resigned on July 14, 2000.
Mr. Jonas' employment could have been terminated for cause. If terminated
other than for cause, Mr. Jonas would have been entitled to receive 6 months'
salary and would have been entitled to exercise all vested share options
granted. Mr. Jonas left the Corporation voluntarily on July 14, 2000.
The agreement also contains non-competition and confidentiality covenants
for the benefit of the Corporation.
<PAGE>
-15-
David C. Eldridge, O.D.
The Corporation has entered into an employment agreement with Dr. David
Eldridge who is Executive Vice President, Clinical Affairs of the Corporation.
The term of the agreement is three years commencing on September 1, 1999 with
automatic one year renewals unless otherwise terminated by the parties. The base
annual salary under the employment agreement is US$183,337, with an annual
review of salary increases by the Corporation based on the discretion of the
Board of Directors of the Corporation. Dr. Eldridge is also entitled to receive
options under the Corporation's Share Option Plan. Dr. Eldridge's compensation
also includes an annual bonus of up to 20% of his annual salary based on Dr.
Eldridge's personal performance and the financial performance of TLC as a whole.
Dr. Eldridge's employment may be terminated by TLC for just cause (as
defined in the agreement). If terminated for other than just cause, Dr. Eldridge
will be entitled to receive 12 months' base salary plus an additional month for
each year worked following December 10, 1998 to a maximum of six additional
months.
The agreement contains change of control provisions that provide, among
other things, that Dr. Eldridge may terminate his employment with the
Corporation for any reason within six months following a change of control and
would be entitled to 12 months base annual salary on termination.
The agreement also contains non-competition and confidentiality covenants
for the benefit of the Corporation.
William P. Leonard
The Corporation has entered into an employment contract with Mr. William
P. Leonard who is Executive Vice President, Operations of the Corporation. The
term of the agreement is three years commencing on June 1, 2000 with automatic
one year renewals unless otherwise terminated by the parties. The base annual
salary under the employment agreement is US$150,000, with an annual review of
salary increases by the Corporation based on the discretion of the Board of
Directors of the Corporation. Mr. Leonard is also entitled to receive options
under the Corporation's Share Option Plan. Mr. Leonard's compensation also
includes an annual bonus of up to 20% of his annual salary based on Mr.
Leonard's personal performance and the financial performance of TLC as a whole.
Mr. Leonard's employment may be terminated for just cause (as defined in
the agreement). If terminated for other than just cause, Mr. Leonard will be
entitled to receive 12 months' base salary plus an additional month for each
year worked following the third anniversary of the effective date of the
agreement to a maximum of six additional months.
The agreement contains change of control provisions that provide, among
other things, that Mr. Leonard may voluntarily terminate his employment with the
Corporation within six months following a change of control and would be
entitled to 12 months' base salary on termination.
<PAGE>
-16-
The agreement also contains non-competition, non-solicitation and
confidentiality covenants for the benefit of the Corporation.
Thomas G. O'Hare
The Corporation has entered into an employment agreement with Thomas G.
O'Hare who is President and Chief Operating Officer of the Corporation. The term
of the agreement is three years commencing on August 7, 2000 with automatic one
year renewals unless otherwise terminated by the parties. The annual base salary
under the employment agreement is US$325,000, with an annual review of salary
increase by the Corporation based on the discretion of the Board of Directors of
the Corporation. Mr. O'Hare is also entitled to receive options under the
Corporation's Share Option Plan after the third anniversary of the commencement
of his term of employment. Mr. O'Hare also received a signing bonus upon
entering into the agreement worth US$50,000. Mr. O'Hare's compensation includes
an annual bonus of up to 50% of his annual base salary based on Mr. O'Hare's
personal performance and the financial performance of TLC as a whole.
As an inducement to enter into his employment agreement with TLC, Mr.
O'Hare was granted options to acquire 250,000 Common Shares. One third of these
options will vest on each of the first, second and third anniversaries of the
commencement of the term of the agreement.
Mr. O'Hare's employment may be terminated for just cause (as defined in
the agreement). If terminated for other than just cause, Mr. O'Hare will be
entitled to continue to receive his annual salary for a period of 18 months,
less one half of any amount earned by Mr. O'Hare in other employment activities.
If during this 18 month period, Mr. O'Hare earns more than his base salary for a
consecutive 12 month period, Mr. O'Hare will be entitled to a lump sum equal to
50% of the remaining payments to be made under the termination provision.
The agreement also contains non-competition, non-solicitation and
confidentiality covenants for the benefit of the Corporation.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is composed of Dr.
Sullins, Mr. Gourwitz, and Mr. Connacher. None of the members of the
Compensation Committee is an officer, employee or former officer or employee of
the Corporation. Determination of the compensation of executive officers of each
of the subsidiaries of the Corporation is made by the entire Board of Directors
of each subsidiary. Dr. Sullins also serves as a member of the boards of
directors of one or more subsidiaries of the Corporation.
REPORT ON EXECUTIVE COMPENSATION
The Corporation's corporate philosophy on compensation is that
compensation should be tied to an individual's performance and to the
performance of the Corporation as a whole. TLC believes that executive officers
who make a substantial contribution to the long-term success of the Corporation
and its subsidiaries are entitled to participate in that success.
<PAGE>
-17-
The compensation of the Corporation's executive officers, including its
Named Executive Officers, is comprised of three components: (i) base salary;
(ii) cash bonuses; and (iii) long-term incentives in the form of stock options.
The Corporation does not have an executive pension plan.
TLC is an emerging corporation which was incorporated in 1993 and
consequently the Board of Directors has placed considerable emphasis upon the
incentive of stock options in determining executive compensation in order to
align the interests of the executive officers with the long-term interests of
the Corporation's shareholders.
The Corporation's amended and restated share option plan (the "Share
Option Plan") is administered by the Board of Directors. The purpose of the
Share Option Plan is to advance the interests of the Corporation by (i)
providing directors, officers, employees and other eligible persons with
additional incentive; (ii) encouraging stock ownership by eligible persons;
(iii) increasing the proprietary interests of eligible persons in the success of
the Corporation; (iv) encouraging eligible persons to remain with the
Corporation or its affiliates; and (v) attracting new employees, officers or
directors to the Corporation or its affiliates. In determining whether to grant
options and how many options to grant to eligible persons under the Share Option
Plan, consideration is given to each individual's past performance and
contribution to the Corporation as well as that individual's expected ability to
contribute to the Corporation in the future.
Compensation of Chief Executive Officer
During Fiscal 2000, Mr. Vamvakas, the Chief Executive Officer and Chairman
of the Board of Directors of TLC, continued to provide the leadership and
strategic direction that has enabled the Corporation to continue its expansion
throughout Canada and the United States.
The base compensation paid to Mr. Vamvakas during Fiscal 2000 was set by
his employment agreement described under " - Employment Contracts." See also
"Executive Compensation - Summary Compensation Table" and "-Employment
Contracts".
<PAGE>
-18-
The foregoing report is submitted by the Compensation Committee.
William David Sullins, Jr., OD James R. Connacher Howard J. Gourwitz
Compensation of Directors
Prior to October 2000, directors of the Corporation who are not executive
officers of the Corporation are entitled to receive an attendance fee of $350
(C$ for Canadian resident directors and US$ for U.S. resident directors) in
respect of each meeting attended. Non-executive members of the Board who are
chairpersons of Committees of the Board will also receive an annual fee of
$5,000 for their services (C$ for Canadian residents and US$ for U.S.
residents). In addition, directors are reimbursed for out-of-pocket expenses
incurred in connection with attending meetings of the Board of Directors and are
entitled to receive options under the Share Option Plan. On December 1, 1999,
non-executive members of the Board of Directors were each issued options to
acquire 5,000 Common Shares. The exercise price for the options granted to Mr.
Riegert is C$27.52 and the exercise price for the options granted to each of the
other directors is US$18.69.
After October 2000, directors who are not executive officers of the
Corporation will be entitled to receive an attendance fee of US$500 in respect
of each meeting attended as well as an annual fee of US$15,000 if taken in cash
or US$18,000 if taken in Common Shares. Non-executive members of the Board will
be reimbursed for out-of-pocket expenses incurred in connection with attending
meetings of the Board of Directors. In addition, directors will be entitled to
receive options to acquire between 2,000 and 5,000 Common Shares under the Share
Option Plan, depending on TLC's performance. The Chair of each of the Audit,
Compensation and Corporate Governance Committee will also receive an annual fee
of US$5,000.
<PAGE>
-19-
PERFORMANCE GRAPH
The following show the cumulative total shareholder return (assuming
reinvestment of dividends) over the last four fiscal years compared to the
cumulative total return on the TSE 300 Index and the Nasdaq Health Services
Stocks Index.
Cumulative Total Return on $100 Investment Assuming Dividends are Reinvested
May 31, 1996-May 31, 2000
[LINE CHART OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
5/31/1996 5/31/1997 5/31/1998 5/31/1999 5/31/2000
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TLC Laser Eye C$100 C$172.66 C$345.324 C$938.85 C$164.03
Centers Inc.
-----------------------------------------------------------------------------------------------------------------------
TSE 300 C$100 C$124.25 C$150.10 C$137.57 C$188.30
Composite
Index
-----------------------------------------------------------------------------------------------------------------------
Nasdaq Health US$100 US$82.86 US$84.83 US$72.60 US$61.20
Services Stocks
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-20-
STATEMENT OF CORPORATE GOVERNANCE POLICIES
The Board of Directors of TLC believes that strong corporate governance
practices are essential to the well-being of the Corporation and its
shareholders. Since March 1996, the Common Shares have been listed on The
Toronto Stock Exchange. The By-Laws of The Toronto Stock Exchange require that
this Statement of Corporate Governance Practices relate the corporate governance
practices of the Board of Directors to the "Guidelines for Improved Corporate
Governance" contained in the Final Report of The Toronto Stock Exchange
Committee on Corporate Governance in Canada (the "TSE Report"). A description of
the Corporation's corporate governance practices follows.
Mandate of the Board of Directors
The mandate of the Board of Directors is to supervise the management of
the business and affairs of the Corporation and to act with a view to the best
interests of the Corporation.
Composition of the Board of Directors
The Board of Directors is currently comprised of seven members.
Assuming the proposed nominees for election as directors are elected at
the Meeting, the Board of Directors believes that 5 directors are "unrelated"
directors and the remaining 2 are "related" directors, within the meaning of the
TSE Report. An "unrelated" director is a director who is independent of
management and is free from any interest and any business or other relationship
which could, or could reasonably be perceived to, materially interfere with the
director's ability to act with a view to the best interests of the Corporation,
other than interests and relationships arising from shareholding. The
Corporation does not have a significant shareholder, since there is no person
who has the ability to exercise a majority of the votes attached to the
outstanding shares of the Corporation for the election of directors. There were
ten meetings of the Board of Directors in Fiscal 2000. Dr. Machat attended five
of the ten meetings, and Mr. Connacher and Dr. Sullins attended nine of the ten
meetings. The other directors attended all of the meetings. In addition to
attending board and applicable committee meetings, the unrelated directors of
the Corporation meet regularly independent of management to discuss the business
and affairs of the Corporation.
Board Committees
The Board of Directors has established three committees. The following is
a brief description of each committee and its composition.
<PAGE>
-21-
The Audit Committee consists of three directors: Messrs. Gourwitz and
Rustand and Dr. Sullins, all of whom are unrelated directors. The Audit
Committee is responsible for the engagement of the Corporation's independent
auditors and reviews with them the scope and timing of their audit services and
any other services they are asked to perform, their report on the Corporation's
accounts following the completion of the audit and the Corporation's policies
and procedures with respect to internal accounting and financial controls. There
were 6 meetings of the Audit Committee relating to Fiscal 2000. Dr. Sullins
attended five of the six meetings. Messrs. Gourwitz and Rustand attended all of
the meetings.
The Compensation Committee consists of three directors: Messrs. Connacher
and Gourwitz, and Dr. Sullins, all of whom are unrelated directors. Mr. Rustand
will replace Mr. Connacher on the Compensation Committee in Fiscal 2001 to
ensure that the committee continues to consist of three unrelated directors. The
Compensation Committee is responsible for the development of compensation
policies and makes recommendations on compensation of executive officers to the
Corporate Governance Committee (see below) for approval of the Board of
Directors. There were no formal meetings of the Compensation Committee in Fiscal
2000, however, there were discussions and correspondence pertaining to the work
of the Compensation Committee during Fiscal 2000.
The Corporate Governance Committee consists of four directors: Messrs.
Connacher, Rustand and Gourwitz and Dr. Sullins, all of whom are unrelated
directors. If Mr. Davidson is elected at the Meeting, he will replace Mr.
Connacher on the Corporate Governance committee to ensure that the committee
continues to consist of four unrelated directors. The Corporate Governance
Committee is responsible to the Board of Directors with respect to developments
in the area of corporate governance, the practices of the Board, the nomination
of Directors and the delegation of work to other committees of the Board.
Although there were discussions and correspondence pertaining to the work of the
Corporate Governance Committee during Fiscal 2000, there were no meetings of the
Corporate Governance Committee relating to Fiscal 2000. The committee serves as
a nominating committee and will consider nominees for the Board of Directors
recommended by shareholders. Recommendations by shareholders should be submitted
to the Corporation's Secretary and should identify the recommended nominee by
name and provide detailed background information. Recommendations received by
May 31, 2001 will be considered by the committee for nomination at the 2001
annual meeting of shareholders.
Shareholder Communications
The Board of Directors places great emphasis on its communications with
shareholders. Shareholders receive timely dissemination of information and the
Corporation has procedures in place to permit and encourage feedback from its
shareholders. TLC's senior officers are available to shareholders and, through
its investor relations department, TLC seeks to provide clear and accessible
information about the results of the Corporation's business and its future
plans. TLC has established an investor web site on the Internet through which it
makes available press releases, financial statements, annual reports, trading
information and other information relevant to investors. Mr. Vamvakas may also
be contacted directly by investors through the Internet.
<PAGE>
-22-
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Corporation maintains directors' and officers' liability insurance.
Under this insurance coverage the insurer pays on behalf of the Corporation for
losses for which the Corporation indemnifies its directors and officers, and on
behalf of individual directors and officers for losses arising during the
performance of their duties for which they are not indemnified for the
Corporation. The policy limit is US$100,000,000 per policy term subject to a
deductible of US$100,000 per occurrence with respect to corporate indemnity
provisions and US$250,000 if the claim relates to securities law claims. The
total premium in respect of the directors' and officers' liability insurance for
Fiscal 2000 was approximately US$443,000. The insurance policy does not
distinguish between directors and officers as separate groups.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
There have been no material transactions in which an insider of TLC
has had a material interest since the commencement of Fiscal 2000.
Indebtedness of Directors, Executive Officers and Senior Officers
No officer, director, or employee, or former officer, director or employee
of the Corporation or any of its subsidiaries, or associate of any such officer,
director or employee is currently or has been indebted (other than routine
indebtedness) at any time during Fiscal 2000 to the Corporation or any of its
subsidiaries other than as disclosed below:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
Largest Amount Amount
Involvement of the Outstanding During year ended Outstanding as at
Name and Principal Position Corporation May 31, 2000 September 1, 1999
(C$) (C$)(1)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Madeline D. Walker Car Loan 16,498 --
Chief Operating Officer
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
-23-
APPOINTMENT OF AUDITORS
It is the intention of the management representatives designated in the
enclosed form of proxy to vote the shares in respect of which they are appointed
proxy in favour of a resolution appointing Ernst & Young, Toronto, Ontario, as
auditors of the Corporation, to hold office until the next annual meeting of
shareholders, and authorizing the directors to fix the remuneration to be paid
to the auditors, unless the shareholder who has given such proxy has directed
that the shares be withheld from voting in the appointment of auditors. Ernst &
Young have been auditors of the Corporation since 1997. If shareholders do not
approve the appointment of Ernst & Young, the Board of Directors will reconsider
their appointment. Representatives of Ernst & Young are expected to attend the
Meeting, will be provided with an opportunity to make a statement, should they
desire to do so, and will be available to respond to appropriate questions from
the shareholders.
AMENDMENTS TO THE SHARE OPTION PLAN
To Increase The Number of Shares Which May Be Issued Thereunder
At the Meeting, shareholders will be asked to pass a resolution
("Resolution Number 1") approving an amendment to the Corporation's Share Option
Plan to increase the number of shares which may be issued thereunder from
4,116,000 to 5,116,000. The new number will represent approximately 14% of the
Corporation's currently issued and outstanding shares. At September 1, 2000,
options to acquire 3,151,911 Common Shares remained outstanding and unexercised
under the Share Option Plan.
The Share Option Plan is administered by the Board of Directors. The
purpose of the Share Option Plan is to advance the interests of the Corporation
by (i) providing directors, officers, employees and other eligible persons with
additional incentive; (ii) encouraging stock ownership by eligible persons;
(iii) increasing the proprietary interests of eligible persons in the success of
the Corporation; (iv) encouraging eligible persons to remain with the
Corporation or its affiliates; and (v) attracting new employees, officers or
directors to the Corporation or its affiliates. In determining whether to grant
options and how many options to grant to eligible persons under the Share Option
Plan, consideration is given to each individual's past performance and
contribution to the Corporation as well as that individual's expected ability to
contribute to the Corporation in the future.
The purpose of this amendment is to ensure that there remains for issuance
under the Share Option Plan a sufficient number of options to allow the
Corporation to maintain its current policy of rewarding options as an
alternative to cash compensation, and as bonus remuneration, for all corporate
office employees and directors of the Corporation.
It is the intention of the management representatives designated in the
enclosed form of proxy to vote the shares in respect of which they are appointed
proxy in favour of Resolution Number 1, a copy of which is set out on Exhibit A
to this Circular, unless the shareholder who has given such proxy has directed
that the shares be otherwise voted.
<PAGE>
-24-
In order to be effective, Resolution Number 1 must be passed by a majority
of the votes cast at the Meeting, excluding votes attaching to shares
beneficially owned by insiders to whom options have been or may be granted under
the Share Option Plan and their associates. At September 1, 2000, 7,184,932
votes, being the votes attaching to Common Shares beneficially owned by insiders
and their associates, will not be counted for the purposes of determining
whether the level of shareholder approval required to amend the Share Option
Plan has been obtained.
To Add a New Category of Persons To Be Eligible To Receive Options Under The
Share Option Plan
At the Meeting, the Corporation will seek approval of a resolution
("Resolution Number 2") approving an amendment to the Share Option Plan to allow
options to be granted to a new category of persons described as those persons
who provide ongoing marketing or promotional services to or endorsements for the
Corporation. Presently, options under the Share Option Plan may only be granted
to directors, officers and employees of the Corporation
The purpose of this amendment is to ensure that the Corporation is able to
provide appropriate compensation to persons who engage in promotional and other
similar activities on behalf of the Corporation. This type of service provider
is very important to the Corporation's strategies of promoting broader public
acceptance of laser vision correction and developing a strong reputation and
brand recognition. Examples of individuals to whom options may be issued include
Tiger Woods and Se Ri Pak, who each provide endorsements for TLC under contract.
In order to be effective, Resolution Number 2 must be passed by a majority
of the votes cast at the Meeting. It is the intention of management
representatives designated in the enclosed form of proxy to vote the shares in
respect of which they are appointed proxy in favour of Share Option Resolution
Number 2, a copy of which is set out on Exhibit B to this Circular, unless the
shareholder who has given such proxy has directed that the shares be otherwise
voted.
GRANT OF INDUCEMENT OPTIONS TO THOMAS G. O'HARE
At the Meeting, shareholders will be asked to pass a resolution
("Resolution Number 3") confirming the grant of options to acquire 250,000
Common Shares (the "Inducement Options") to Thomas G. O'Hare at an exercise
price of US$6.625 pursuant to an employment agreement dated July 31, 2000. Mr.
O'Hare is the President and Chief Operating Officer of TLC. One third of the
Inducement Options will vest on each of the first, second and third
anniversaries of the commencement of the term of the employment agreement. As at
September 1, 2000, all of the Inducement Options remained unvested.
The purpose of the grant of the Inducement Options was to induce Mr.
O'Hare to accept the position of President and Chief Operating Officer of the
Corporation as well as to ensure that Mr. O'Hare is provided with appropriate
compensation that effectively aligns his interests with the long-term interests
of the Corporation's shareholders.
<PAGE>
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In order to be effective, Resolution Number 3 must be passed by a majority
of the votes cast at the Meeting. It is the intention of the management
representatives designated in the enclosed form of proxy to vote the shares in
respect of which they are appointed proxy in favour of Resolution Number 3, a
copy of which is set out on Exhibit C to this Circular, unless the shareholder
who has given such proxy has directed that the shares be otherwise voted.
OTHER BUSINESS
The Corporation knows of no other matter to come before the Meeting other
than the matters referred to in the notice of meeting.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the
Corporation's annual meeting of shareholders for Fiscal 2001 must be received by
the Corporation's principal office not later than July 1, 2001 for inclusion in
the proxy statement for that meeting.
AVAILABILITY OF DISCLOSURE DOCUMENTS
The Corporation will provide any person or company, upon request to its
Secretary, with a copy of:
(i) the most recent annual information form or Form 10-K of the
Corporation, together with a copy of any document or the
pertinent pages of any document incorporated therein by
reference;
(ii) the comparative financial statements of the Corporation for
the fiscal year ended May 31, 2000, together with the report
of the auditors thereon;
(iii) management's discussion and analysis of financial conditions
and results of operations for the fiscal year ended May 31,
2000;
(iv) the most recent annual report of the Corporation;
(v) the interim financial statements of the Corporation for the
periods subsequent to the end of its fiscal year; and
(vi) this Circular.
<PAGE>
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DIRECTORS' APPROVAL
The contents and sending of this Circular have been approved by the Board
of Directors of the Corporation.
By Order of the Board of Directors
/s/ Lloyd Fiorini
Lloyd Fiorini
General Counsel
Mississauga, Canada
September 22, 2000
<PAGE>
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EXHIBIT A
Resolution Number 1
Be it resolved that:
1. Section 1.5 of the Share Option Plan of the Corporation be and it is
hereby amended to increase the number of Common Shares which may be issued
under the Share Option Plan to 5,166,000; and
2. Any director or officer of the Corporation is hereby authorized and
directed for and in the name of and on behalf of the Corporation to do all
acts and things and execute, whether under the corporate seal of the
Corporation or otherwise and deliver or cause to be delivered all
documents and instruments as in the opinion of such director or officer
may be necessary or desirable to carry out the intent of this resolution.
<PAGE>
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EXHIBIT B
Resolution Number 2
Be it resolved that:
1. Subsections 1.4(d) of the Share Option Plan of the Corporation be and it
is hereby amended and subsection 1.4(j) of the Share Option Plan be and it
is hereby added to allow options to be granted to a new category of
persons described as those persons who provide ongoing marketing or
promotional services to or endorsements for the Corporation; and
2. Any director or officer of the Corporation is hereby authorized and
directed for and in the name of and on behalf of the Corporation to do all
acts and things and execute, whether under the corporate seal of the
Corporation or otherwise and deliver or cause to be delivered all
documents and instruments as in the opinion of such director or officer
may be necessary or desirable to carry out the intent of this resolution.
<PAGE>
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EXHIBIT C
Resolution Number 3
Be it resolved that:
1. The grant of options to acquire 250,000 Common Shares to Thomas G. O'Hare
pursuant to an employment agreement dated July 31, 2000 be and it is
hereby confirmed on the terms as described in the Corporation's Management
Information Circular dated September 22, 2000; and
2. Any director or officer of the Corporation is hereby authorized and
directed for and in the name of and on behalf of the Corporation to do all
acts and things and execute, whether under the corporate seal of the
Corporation or otherwise and deliver or cause to be delivered all
documents and instruments as in the opinion of such director or officer
may be necessary or desirable to carry out the intent of this resolution.
<PAGE>
TLC LASER EYE CENTERS INC.
PROXY
Annual and Special Meeting of Shareholders of
TLC LASER EYE CENTERS INC.
to be held on October 26, 2000
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
OF TLC LASER EYE CENTERS INC.
The undersigned shareholder of TLC Laser Eye Centers Inc. (the
"Corporation") hereby appoints Elias Vamvakas, President and a Director of the
Corporation, or, failing him, Lloyd D. Fiorini, Secretary of the Corporation,
or, failing him, Peter Kastelic, Chief Financial Officer of the Corporation, or
instead of any of the foregoing, ___________________________, as proxy of the
undersigned, to attend, vote and act for and on behalf of the undersigned at the
annual and special meeting of shareholders of the Corporation to be held on
October 26, 2000 and at all adjournments thereof, upon the following matters:
1. TO VOTE FOR |_|1 1 OR WITHHOLD |_| 2
or, if no specification is made, vote FOR the election of directors;
provided that the undersigned wishes to withhold vote for the following
directors:
_________________________________________________________________________
2. TO VOTE FOR |_|2 3 OR AGAINST |_| 4
or, if no specification is made, vote FOR a resolution authorizing an
amendment to the Amended and Restated Share Option Plan (the "Plan")
increasing the number of common shares of the Corporation which may be
issued under the Plan;
3. TO VOTE FOR |_|3 5 OR AGAINST |_|4 6
or, if no specification is made, vote FOR a resolution authorizing an
amendment to the Plan allowing options to be granted under the Plan to
persons who provide ongoing marketing or promotional services to or
endorsements for the Corporation;
4. TO VOTE FOR |_|5 7 OR AGAINST |_|6 8
or, if no specification is made, vote FOR a resolution authorizing the
grant of options to Thomas G. O'Hare;
5. TO VOTE FOR |_|7 9 OR WITHHOLD |_|8 10
or if no specification is made, vote FOR the continued appointment of
Ernst & Young as auditors of the Corporation and authorizing the
directors to fix the remuneration of the auditors; and
6. TO VOTE at the discretion of the proxy nominee on any amendments to the
foregoing and on such other business as may properly come before the
meeting or any adjournments thereof.
EXECUTED on the ___________________ day of _____________________, 2000
____________________________________ __________________________________
Number of Common Shares Signature of Shareholder
__________________________________
Name of Shareholder
(Please print clearly)
NOTES:
1. A shareholder has the right to appoint a person to represent the
shareholder at the meeting other than the management representatives
designated in this proxy. Such right may be exercised by inserting in the
space provided the name of the other person the shareholder wishes to
appoint. Such other person need not be a shareholder.
2. To be valid, this proxy must be signed and deposited with CIBC Mellon
Trust Company, Proxy Dept., 200 Queen's Quay East, Unit #6, Toronto,
Ontario M5A 4K9 not later than the close of business on October 24, 2000,
or, if the meeting is adjourned, 48 hours (excluding Saturdays and
holidays) before any adjourned meeting.
3. If an individual, please sign exactly as your shares are registered. If
the shareholder is a corporation, this proxy must be executed by a duly
authorized officer or attorney of the shareholder and, if the corporation
has a corporate seal, its corporate seal should be affixed. If the shares
are registered in the name of an executor, administrator or trustee,
please sign exactly as the shares are registered. If the shares are
registered in the name of the deceased or other shareholder, the
shareholder's name must be printed in the space provided, the proxy must
be signed by the legal representative with his name printed below his
signature and evidence of authority to sign on behalf of the shareholder
must be attached to this proxy.
<PAGE>
4. Reference is made to the accompanying notice and management information
circular for further information regarding completion and use of this
proxy and other information pertaining to the meeting. Before completing
this proxy, non-registered holders should carefully review the section in
the accompanying management information circular entitled "General Proxy
Information - Non-Registered Shareholders" and should carefully follow the
instructions of the securities dealer or other intermediary who sent this
proxy.
5. If this proxy is not dated in the space provided, it is deemed to bear the
date on which it is mailed by management of the Corporation.
6. If a share is held by two or more persons, any one of them present or
represented by proxy at a meeting of shareholders may, in the absence of
the other or others, vote in respect thereof, but if more than one of them
are present or represented by proxy, they shall vote together in respect
of each share so held.
