<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1*)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
VISION TWENTY-ONE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
* This amendment relates solely to a change in the Company's expected
mail date in its Proxy Statement from June 10, 1999 to June 23,
1999.
<PAGE> 2
(VISION TWENTY-ONE LOGO)
(VISION TWENTY-ONE A DIFFERENT POINT OF VIEW.)
VISION TWENTY-ONE, INC.
7360 BRYAN DAIRY ROAD
LARGO, FLORIDA 33777
Date: June 23, 1999
Dear Stockholder:
You are cordially invited to attend the 1999 Annual Meeting (the "Meeting")
of stockholders of Vision Twenty-One, Inc. (the "Company"). The Meeting will be
held July 8, 1999 at 8:00 a.m., Eastern Daylight Savings Time, at the Tampa
Westshore Marriott, located at 1001 North Westshore Boulevard, Tampa, Florida
33607.
The Notice of the Meeting and the Proxy Statement on the following pages
cover the formal business of the Meeting, which includes the election of a
Director, a proposal to enact a stock purchase plan for the Company's employees
and a proposal to ratify the appointment of the Company's independent certified
public accountants. We will also report on the progress of the Company and
comment on matters of current interest.
It is important that your shares be represented at the Meeting. We ask that
you promptly sign, date and return the enclosed proxy card in the envelope
provided, even if you plan to attend the Meeting. Returning your proxy card to
us will not prevent you from voting in person at the Meeting if you are present
and choose to do so.
If your shares are held in street name by a brokerage firm, your broker
will supply you with a proxy to be returned to the brokerage firm. It is
important that you return the form to the brokerage firm as quickly as possible
so that the brokerage firm may vote your shares. You may not vote your shares in
person at the Meeting unless you obtain a power of attorney or legal proxy from
your broker authorizing you to vote the shares, and you present this power of
attorney or proxy at the Meeting.
Your Board of Directors and management look forward to greeting you
personally at the Meeting.
Sincerely,
/s/ Theodore N. Gillette
---------------------------------------------
THEODORE N. GILLETTE
Chairman of the Board and Chief Executive
Officer
<PAGE> 3
(VISION TWENTY-ONE LOGO)
(VISION TWENTY-ONE A DIFFERENT POINT OF VIEW LOGO)
VISION TWENTY-ONE, INC.
7360 BRYAN DAIRY ROAD
LARGO, FLORIDA 33777
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
Notice is hereby given that the annual meeting of stockholders of Vision
Twenty-One, Inc. (the "Company"), a Florida corporation, will be held at the
Tampa Westshore Marriott, located at 1001 North Westshore Boulevard, Tampa,
Florida 33607, on July 8, 1999 at 8:00 a.m., Eastern Daylight Savings Time (the
"Meeting") for the following purposes:
1. To re-elect one Director to serve until the Annual Meeting in 2002
and until his successors are elected and qualified or until his
earlier resignation, removal from office or death;
2. To consider and vote upon a proposal to enact a stock purchase plan
for the Company's employees;
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for fiscal year 1999; and
4. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Your attention is directed to the Proxy Statement accompanying this Notice
for a more complete description of the matters to be acted upon at the Meeting.
The 1998 Annual Report of the Company is also enclosed. Stockholders of record
at the close of business on Monday, May 31, 1999, are entitled to receive notice
of and to vote at the Meeting and any adjournment thereof.
All stockholders are cordially invited to attend the Meeting. Whether or
not you expect to attend, please sign and return the enclosed Proxy promptly in
the envelope provided to assure the presence of a quorum. You may revoke your
Proxy and vote in person at the Meeting if you desire. If your shares are held
in street name by a brokerage firm, your broker will supply you with a proxy to
be returned to the brokerage firm. It is important that you return the form to
the brokerage firm as quickly as possible so that the brokerage firm may vote
your shares. You may not vote your shares in person at the Meeting unless you
obtain a power of attorney or legal proxy from your broker authorizing you to
vote the shares, and you present this power of attorney or proxy at the Meeting.
Please note that attendance at the Meeting will be limited to stockholders
of the Company as of the record date (or their duly authorized representatives).
If your shares are held by a bank or broker, please bring to the Meeting your
bank or broker statement evidencing your beneficial ownership of Company stock.
By order of the Board of Directors
/s/ Richard L. Sanchez
----------------------------------------
RICHARD L. SANCHEZ
Secretary
Largo, Florida
June 23, 1999
<PAGE> 4
VISION TWENTY-ONE, INC.
7360 BRYAN DAIRY ROAD
LARGO, FLORIDA 33777
---------------------
PROXY STATEMENT
This Proxy Statement is furnished by the Board of Directors and management
of Vision Twenty-One, Inc. (the "Company") in connection with the solicitation
of proxies to be voted at the Company's 1999 Annual Meeting of Stockholders,
which will be held July 8, 1999, at 8:00 a.m., Eastern Daylight Savings Time, at
the Tampa Westshore Marriott, 1001 North Westshore Boulevard, Tampa, Florida
33607 (the "Meeting").
Any proxy delivered pursuant to this solicitation may be revoked, at the
option of the person executing the proxy, at any time before it is exercised by
delivering a signed revocation to the Company, by submitting a later-dated
proxy, or by attending the Meeting in person and casting a ballot. If proxies
are signed and returned without voting instructions, the shares represented by
the proxies will be voted as recommended by the Board of Directors.
The cost of soliciting proxies will be borne by the Company. In addition to
the use of the mails, proxies may be solicited personally or by telephone by
regular employees of the Company. The Company does not expect to pay any
compensation for the solicitation of proxies, but may reimburse brokers and
other persons holding stock in their names, or in the names of nominees, for
their expense in sending proxy materials to their principals and obtaining their
proxies. The approximate date on which this Proxy Statement and enclosed form of
proxy has been first mailed to stockholders is June 23, 1999.
The close of business on Monday, May 31, 1999 has been designated as the
record date for the determination of stockholders entitled to receive notice of
and to vote at the Meeting (the "Stockholders"). As of March 31, 1999,
15,070,468 shares of the Company's Common Stock were issued and outstanding.
Each Stockholder will be entitled to one vote for each share of Common Stock
registered in his or her name on the books of the Company as of the close of
business on Monday, May 31, 1999, on all matters that come before the Meeting.
1. ELECTION OF DIRECTORS
There are currently eight seats on the Board of Directors of the Company,
with no vacancies. The Board is divided into three classes of Directors serving
staggered three-year terms. Directors hold their positions until the annual
meeting of stockholders in the year in which their term expires and until their
respective successors are elected and qualified or until their earlier
resignation, removal from office or death. The term of office of two of the
Company's current eight Directors, Messrs. Richard L. Sanchez and Peter J.
Fontaine, will expire at the Meeting. Mr. Sanchez has expressed his desire not
to seek re-election to the Board of Directors in furtherance of the Company's
goal of achieving a greater mix of outside independent Directors. The Board of
Directors is considering candidates to fill the vacancy that will be created
upon the expiration of Mr. Sanchez's term. The Board of Directors recommends
that Mr. Fontaine be re-elected at the Meeting to hold office until the
Company's annual meeting in 2002 and until his successors shall be duly elected
and qualified or until his earlier resignation, removal from office or death.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR" THE
RE-ELECTION OF MR. FONTAINE AS DIRECTOR, TO SERVE THE TERM AS DESCRIBED ABOVE.
For further information on such nominee see "Management -- Directors and
Executive Officers" and "-- Security Ownership." The affirmative vote of holders
of a majority of the shares represented, in person or by proxy, and entitled to
vote at the Meeting is required to re-elect the nominee. Abstentions will be
counted toward the number of shares represented at the Meeting. Broker non-votes
will be disregarded. Stockholders may not vote cumulatively in the re-election
of Director. In the event the nominee should be unable to serve, which is not
anticipated, the proxy committee, which consists of Theodore N. Gillette and
Richard T. Welch, will vote for such other person or persons for the office of
Director as the Board of Directors may recommend.
<PAGE> 5
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth (i) the names and ages of the Directors and
executive officers of the Company and the positions they hold with the Company
and (ii) the names and ages of the nominees for Director listed herein.
Executive officers serve at the pleasure of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Theodore N. Gillette......... 45 Chairman of the Board, Chief Executive Officer, President
and Director(1)
Richard L. Sanchez........... 46 Executive Vice President, Secretary and Director
Richard T. Welch............. 47 Chief Financial Officer, Treasurer and Director(2)
Richard L. Lindstrom, M.D.... 51 Chief Medical Officer and Director
Robert P. Collins............ 45 Chief Operating Officer
Peter J. Fontaine............ 45 Director(1)(2)(3)
Bruce S. Maller.............. 45 Director
Jeffrey I. Katz, M.D......... 53 Director
Martin F. Stein.............. 62 Director(1)(2)
</TABLE>
- ---------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
(3) Director Currently Nominated for Re-Election.
THEODORE N. GILLETTE, CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER,
PRESIDENT AND DIRECTOR. Mr. Gillette has served as Chairman of the Board, Chief
Executive Officer, President, and Director of the Company since its inception.
Mr. Gillette has served as President and Director of the Company's wholly-owned
subsidiaries, Vision 21 Physician Practice Management Company and Vision 21
Managed Eyecare of Tampa Bay, Inc. since 1984 and 1993, respectively. He
obtained his Doctorate of Optometry from Southern California College of
Optometry in 1979 and his Bachelor of Science from Florida State University in
1975.
RICHARD L. SANCHEZ, EXECUTIVE VICE PRESIDENT, SECRETARY AND DIRECTOR. Mr.
Sanchez has served as Executive Vice President, Secretary and Director of the
Company since its inception. From 1993 until assuming his positions with the
Company, Mr. Sanchez was Vice President of Marketing and Administration of the
Company's wholly-owned subsidiary, Vision 21 Managed Eyecare of Tampa Bay, Inc.
Prior to November of 1992, Mr. Sanchez worked for Exxon Corporation for over 18
years in various management positions including divisional management
responsibility for over 300 employees and $600 million in revenues. Mr. Sanchez
obtained his Bachelor of Science in Chemistry from Florida State University in
1975. Mr. Sanchez has declined to seek re-election as a Director of the Company
in furtherance of the Company's goal of achieving a greater mix of outside
independent Directors.
RICHARD T. WELCH, CHIEF FINANCIAL OFFICER, TREASURER AND DIRECTOR. Mr.
Welch has served as Chief Financial Officer, Treasurer and Director of the
Company since August 1996. From December 1994 to March 1996, Mr. Welch served as
Executive Vice President of Finance and Administration, and as Vice Chairman of
the Board of Directors, of Sports & Recreation, Inc., a public company engaged
in the business of retail sporting goods and equipment sales generating over
$500 million in annual revenue, and from January 1992 to December 1994, he
served as its Chief Financial Officer and a Director from January 1992 to
December 1994. Mr. Welch is a certified public accountant and graduated from
Louisiana State University in 1973 with a Bachelor of Science in Management and
Accounting.
RICHARD L. LINDSTROM, M.D., CHIEF MEDICAL OFFICER AND DIRECTOR. Dr.
Lindstrom has served as Chief Medical Officer of the Company since September
1996 and has served as a director since January 1997. Since October 1989, Dr.
Lindstrom has maintained a private practice adjacent to the Phillips Eye
Institute in Minneapolis where he serves as the Medical Director for Research
and Teaching. Dr. Lindstrom holds 22 patents in ophthalmology and has given
numerous presentations throughout the world including 13 named
2
<PAGE> 6
lectures. He is active on multiple educational and advisory boards including
chief medical editor of Ocular Surgery News. He has co-authored two books,
published 50 chapters in other books and published over 300 articles in referred
journals. Dr. Lindstrom graduated from the University of Minnesota Medical
School in 1972 followed by a research residency and cornea fellowship at the
University of Minnesota, an Anterior Segment fellowship at Mary Shields Eye
Hospital in Dallas and a third fellowship in Glaucoma/Anterior Segment at
University Hospitals in Salt Lake City. Dr. Lindstrom has served as a Director
of Laser Vision Centers, Inc., a public company, since 1995.
ROBERT P. COLLINS, CHIEF OPERATING OFFICER. Mr. Collins has served as the
Chief Operating Officer of the Company since February 1999. Prior to joining the
Company, Mr. Collins served as President and CEO of Beacon Behavioral Health
Group, the ambulatory delivery subsidiary of Charter Behavioral Health Systems
("CBHS"), where he also served as the Senior Vice President of Strategic
Initiatives. CBHS is 50 percent owned by Magellan Health Services, Inc., a $1.5
billion company and the nations leading specialty managed care organization,
which also manages behavioral healthcare for approximately 61 million
individuals. Mr. Collins graduated from Rollins College, Winter Park, Florida in
1979 with a Bachelor of Science degree in Business Administration and Economics.
PETER J. FONTAINE, DIRECTOR. Mr. Fontaine has served as a Director of the
Company since July 1996. Mr. Fontaine is currently the Chairman of the Board of
Directors and Chief Executive Officer of Discount Auto Parts, Inc., a public
company engaged in the business of retail automotive replacement parts,
maintenance items and accessories for the DO-IT-YOURSELF ("DIY") consumer and
commercial sales. He has been employed by Discount Auto Parts, Inc. in various
capacities since 1975. Mr. Fontaine has served on the Board of Directors of
Discount Auto Parts, Inc. since 1996 and as its Chief Executive Officer since
1978. From 1994 to January 1997, Mr. Fontaine also served as its President.
BRUCE S. MALLER, DIRECTOR. Mr. Maller has served as a Director of Vision
Twenty-One since November 1996 and is a vision care consultant to the Company.
He is the founder of, and has been the President of, the BSM Consulting Group of
Incline Village, Nevada since 1978. BSM provides consulting services
predominantly in the fields of ophthalmology and cardiology to individual
physicians and corporate clients such as Allergan, Inc., Boston Scientific,
Columbia/HCA Healthcare, Inc. and Vision Twenty-One. Mr. Maller has served as a
Director of Gimbel Vision International, Inc., a public company since 1996. Mr.
Maller is a frequent lecturer for various medical societies, including the
American Academy of Ophthalmology and the American Society of Cataract and
Refractive Surgery. Mr. Maller also heads BSM Healthcare Publications, which
produces works related to the field of medical practice management. Mr. Maller
received his Bachelor of Arts degree from the University of Colorado in 1975.
JEFFREY KATZ, M.D., DIRECTOR. Dr. Katz has served as a Director of the
Company since January 1997. Dr. Katz has operated an ophthalmology practice at
the Eye Institute of Southern Arizona in Tucson since 1984. He also serves as a
clinical associate professor in the Department of Ophthalmology at the
University of Arizona in Tucson and is the past president of the Tucson
Ophthalmologic Society. Dr. Katz graduated from George Washington University
Medical School in 1972. He was chief of ophthalmic surgery at El Dorado Hospital
in Tucson and has served as the Medical Director for the Tucson Laboratory of
the Arizona Lions Eye Bank since 1978.
MARTIN F. STEIN, DIRECTOR. Mr. Stein has served as a Director of the
Company since October 1998. From 1979 until March 31,1998, Mr. Stein served as
Chairman and founder of Stein Drugs and EyeCare One Corporation, the parent
company of Stein Optical which operates 16 optometric retail locations in
Milwaukee, Wisconsin which was acquired by the Company. Stein Drugs was sold to
Walgreen Company in 1979. He is also a director of Northwestern Mutual Series
Fund, Inc., Mason Street Funds, Inc. and a Board member of Koss Corporation, a
public company.
Pursuant to the terms of the Company's Articles of Incorporation and
Bylaws, the Board of Directors has the power to set the number of directors. The
number of directors is presently set at eight members. The directors are divided
into three classes. Each director in a particular class is elected to serve a
three-year term or until his or her successor is duly elected and qualified. The
classes are staggered so that their terms expire in successive years resulting
in the election of only one class of directors each year. The Class I directors
are
3
<PAGE> 7
Messrs. Welch and Stein and Dr. Katz, the Class II directors are Messrs. Sanchez
and Fontaine, and the Class III directors are Drs. Gillette and Lindstrom and
Mr. Maller. The initial terms of the current Class II and Class III directors
will expire at the annual meeting of the stockholders of the Company in 1999 and
2000, respectively. The term of the current Class I Directors will expire in
2001. Mr. Sanchez has declined to seek re-election as a Director in furtherance
of the Company's goal of achieving a greater mix of outside independent
Directors. The Board of Directors is considering candidates to fill the vacancy
that will be left in Class II upon the expiration of Mr. Sanchez's term at the
conclusion of the meeting. Officers of the Company are appointed by the Board of
Directors and hold office until the first meeting of directors following the
annual meeting of stockholders and until their successors are appointed, subject
to the terms of any applicable employment agreement or to earlier removal by the
Board of Directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established two committees, the Audit and
Compensation Committees. The Company's two independent Directors are Messrs.
Peter J. Fontaine and Martin F. Stein. Messrs. Fontaine and Stein serve on the
Company's Audit and Compensation Committees. The Board of Directors does not
have a Nominating Committee. The entire Board of Directors functions as a
Nominating Committee, and the Board will consider written recommendations from
stockholders for nominations to the Board of Directors in accordance with the
procedures set forth in the By-Laws of the Company. There are no arrangements or
understandings between any Director or nominee and any other person concerning
service or nomination as a Director. The Board of Directors held four formal
meetings during 1998.
The Audit Committee held two meetings in 1998. The Audit Committee consists
of Director Richard T. Welch and the Company's two independent Directors,
Messrs. Fontaine and Stein. The Audit Committee recommends the appointment of
the independent public accountants of the Company, discusses and reviews the
scope and fees of the prospective annual audit and reviews the results thereof
with the independent public accountants, reviews and approves non-audit services
of the independent public accountants, reviews compliance with existing major
accounting and financial policies of the Company, reviews the adequacy of the
financial organization of the Company, reviews management's procedures and
policies relative to the adequacy of the Company's internal accounting controls
and compliance with federal and state laws relating to accounting practices, and
reviews and approves (with the concurrence of the majority of the disinterested
Directors of the Company) transactions, if any, with affiliated parties.
The Compensation Committee held two meetings in 1998. The Compensation
Committee consists of Director Theodore N. Gillette and the Company's two
independent Directors, Messrs. Fontaine and Stein. The Compensation Committee's
principal function is to make recommendations to the Board of Directors with
respect to the compensation and benefits to be paid to key executive officers,
and perform other duties prescribed by the Board with respect to employee stock
plans and benefit programs.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation (the "Articles") provide that a
Director will not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except: (i) for any
breach of duty of loyalty; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or knowing violations of laws; (iii) for
liability under the Florida Business Corporation Act (relating to certain
unlawful dividends, stock repurchases or stock redemptions); or (iv) for any
transaction from which the director derived any improper personal benefit. The
Company's Bylaws provide that the Company will indemnify each director and such
of the Company's officers, employees and agents as the Board of Directors shall
determine from time to time to the fullest extent provided by the Florida
Business Corporation Act.
The Company has entered into indemnification agreements (the
"Indemnification Agreements") with all of its directors and certain of its
officers. Similar Indemnification Agreements may from time to time be entered
into with additional officers of the Company or certain other employees or
agents of the Company. The Company is empowered under its Articles to purchase
and maintain insurance or furnish similar
4
<PAGE> 8
protection on behalf of any person who is required or permitted to indemnify and
the Company has acquired such insurance in connection with such individuals that
the Company believes is warranted.
DIRECTOR'S COMPENSATION
Directors are reimbursed for expenses in connection with attendance at
Board and Committee meetings. Directors who are not officers of the Company or
affiliates of major stockholders are paid $1,000 per meeting plus expenses. In
addition, non-employee directors may be awarded options under the Company's 1996
Stock Incentive Plan. During the year, non-employee directors were each awarded
options under the 1996 Stock Incentive Plan to purchase 3,000 shares of the
Company's Common Stock. Such options fully vest in one year from the date of
grant and are exercisable at $8.00 per share, which was the fair market value on
the grant date.
The Company entered into a five-year Advisory Agreement in 1996 with Mr.
Bruce S. Maller, a director of the Company (the "Advisory Agreement"), pursuant
to which Mr. Maller renders certain advisory services to the Company, including
the identification and integration of eye care practices and the provision of
assistance to the Company with its strategic planning, growth and development.
In consideration for such services, the Company issued to Mr. Maller 125,627
shares of Common Stock. A decreasing percentage of such shares are subject to
forfeiture in the event the Advisory Agreement is terminated "for cause" prior
to January 1, 2000. The shares issued to Mr. Maller pursuant to the Advisory
Agreement are subject to certain piggyback and demand registration rights. In
1995, the Company also entered into a five-year services agreement with the BSM
Consulting Group ("BSM"), a consulting company of which Mr. Maller is an
employee and the sole owner (the "BSM Services Agreement"), pursuant to which
BSM agreed to provide substantial consulting services to assist the Company with
its operational and management development. The fees payable to BSM for such
services were approximately $60,000 per month. Payments earned by BSM under the
BSM Services Agreement were approximately $720,000 in the year ended December
31, 1998.
The Company entered into a services agreement in 1996 with Dr. Richard L.
Lindstrom (the "Lindstrom Services Agreement"), a director of the Company,
pursuant to which Dr. Lindstrom provides certain consulting and advisory
services primarily related to assisting the Company in the identification and
integration of Affiliated Providers into the Company's managed eye care delivery
network and assistance in the development of Affiliated Provider practices. In
consideration for his services, Dr. Lindstrom is paid $60,000 annually, and
received 108,133 shares of Common Stock, of which 40% is non-forfeitable and the
remaining 60% is subject to forfeiture in various amounts if the Lindstrom
Services Agreement is terminated by the Company for cause or by Dr. Lindstrom
prior to August 31, 2000. The shares issued to Dr. Lindstrom pursuant to the
Lindstrom Services Agreement are subject to certain piggyback and demand
registration rights. Payments earned by Dr. Lindstrom under the Lindstrom
Services Agreement were $60,000 in the year ended December 31, 1998.
Effective May 1, 1998, the Company amended its existing business management
agreement with Lindstrom, Samuelson & Hardten Ophthalmology Associates, P.A.
(the "Practice") which Dr. Lindstrom, a director of the Company, is a
significant shareholder. The amendment extended the coverage of the existing
business management agreement to cover the refractive surgery business of the
Practice which was previously excluded. As consideration for the amendment, the
Company paid the Practice $1,550,000 in cash and the equivalent in $1.4 million
in Company common stock. In connection with the amendment, Dr. Lindstrom
received 77,093 shares of Company common stock and $834,000 in cash.
The Company entered into regional service agreements with the shareholders
of Midwest Eye Care Alliance, Inc. ("MECA"), which included Dr. Lindstrom,
following its acquisition by the Company on May 29, 1997 (collectively the
"Regional Agreements"). The Regional Agreements provide for Dr. Lindstrom and
the other former MECA Shareholders to render advisory services to the Company in
connection with identifying potential ophthalmology and optometry practices in
the Midwestern region of the United States for acquisition or affiliation and
assisting the Company in negotiating agreements with such practices in exchange
for specific cash compensation that varies among the Regional Agreements. Dr.
Lindstrom will receive a total of $40,000 per year for each of the three years
of his Regional Agreement.
5
<PAGE> 9
Effective March 31, 1998, the Company completed a merger with EyeCare One
and VIPA, in which Mr. Stein owns an interest, at a purchase price of 1,109,806
shares of Common Stock of the Company, of which Mr. Stein received 468,419
shares and the Stein 1998 Limited Partnership received 600 shares. The shares
are subject to certain registration rights.
See "Certain Transactions" for additional information on certain members of
management.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, officers and holders of more than 10% of the Company's Common Stock
to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of Common Stock and any other equity
securities of the Company. To the Company's knowledge, all such reports were
filed on a timely basis for 1998 except for the following: Mr. Jeffrey Katz
filed Form 4 four days late on July 14, 1998 related to his purchase of
additional shares; Dr. Lindstrom filed a Form 4 late on March 17, 1999 related
to the issuance of shares of common stock by the Company resulting from the
payment of contingent consideration to Dr. Lindstrom's practice; and Mr. Sanchez
filed a Form 4 late on March 17, 1999 related to the transfer of 15,000 shares
from the Sanchez Family Limited Partnership to the Richard and Sharon Sanchez
Foundation.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth, as of March 31, 1999, information as to the
beneficial ownership of the Company's Common Stock by (i) each person known to
the Company as having beneficial ownership of more than 5% of the Company's
Common Stock, (ii) each person serving the Company as a Director on such date
and each nominee for Director, (iii) each person serving the Company as an
executive officer on such date who qualifies as a "named executive officer" as
defined in Item 402(a)(3) of Regulation S-K under the Securities Exchange Act of
1934, and (iv) all of the Directors and executive officers of the Company as a
group.
SECURITY OWNERSHIP
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED(2) OWNED(2)
- --------------------------------------- ------------------- --------------------
<S> <C> <C>
Theodore N. Gillette(3)..................................... 2,013,558 13.3%
Gillette Family Limited Partnership(4)...................... 1,817,494 12.1
Richard L. Sanchez(5)....................................... 623,329 4.1
Martin F. Stein(6).......................................... 469,019 3.1
Peter J. Fontaine(7)........................................ 461,775 3.1
Richard L. Lindstrom, M.D.(8)............................... 448,290 3.0
Jeffrey I. Katz, M.D.(9).................................... 318,808 2.1
Bruce S. Maller(10)......................................... 277,664 1.8
Richard T. Welch(11)........................................ 92,000 *
Robert P. Collins........................................... -- --
All directors and executive officers as a group (9
persons).................................................. 4,704,443 31.0%
</TABLE>
- ---------------
* Less than one percent.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is 7360 Bryan Dairy Road, Largo, Florida 33777.
(2) Based on 15,070,468 shares of Common Stock outstanding (excluding certain
contingent shares held in escrow in conjunction with certain acquisitions).
Pursuant to the rules of the Securities and Exchange Commission (the
"Commission"), certain shares of Common Stock which a person has the right
to acquire within 60 days of the date hereof pursuant to the exercise of
stock options are deemed to be outstanding for the purpose of computing the
percentage ownership of such person but are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.
(3) Includes (a) the 1,817,494 shares owned by the Gillette Family Limited
Partnership over which Mr. Theodore Gillette has voting control as the sole
shareholder of the corporate general partner,
6
<PAGE> 10
(b) 9,077 shares owned by Gillette, Beiler & Associates, P.A. (c) 148,987
shares owned individually and (d) 38,000 shares owned by The Ted and Raena
Gillette Foundation, which Mr. Gillette has shared voting and investment
control.
(4) Shares are owned by the Gillette Family Limited Partnership, a Nevada
Limited Partnership, in which Dr. Theodore Gillette exercises voting and
investment control as the sole shareholder of the corporate general
partner.
(5) Represents 608,329 shares owned by the Sanchez Family Limited Partnership
over which Richard L. Sanchez has voting and investment control as the
majority shareholder of the corporate general partner and 15,000 shares
owned by the Richard and Sharon Sanchez Foundation, over which Mr. Sanchez
has shared voting and investment control.
(6) Includes 468,419 shares owned individually and 600 shares owned by the
Stein 1998 Limited Partnership.
(7) Represents 460,442 shares owned by the Fontaine Industries Limited
Partnership over which Peter Fontaine has voting and investment control and
1,333 shares issuable upon the exercise of stock options granted, pursuant
to the Company's 1996 Stock Incentive Plan, which have vested and are fully
exercisable.
(8) Includes 1,333 shares issuable upon the exercise of stock options granted
pursuant to the Company's 1996 Stock Incentive Plan, which have vested and
are fully exercisable.
(9) Includes 1,333 shares issuable upon the exercise of stock options granted
pursuant to the Company's 1996 Stock Incentive Plan, which have vested and
are fully exercisable and includes 69,169 shares held in escrow pending
conclusion of certain outstanding contingencies related to an ASC
acquisition.
(10) Includes 108,976 shares owned by BSM Investment, Ltd., over which Bruce
Maller has voting and investment control and 1,333 shares issuable upon the
exercise of stock options granted, pursuant to the Company's 1996 Stock
Incentive Plan, which have vested and are fully exercisable.
(11) Represents 10,000 shares owned individually and 82,000 shares issuable upon
the exercise of stock options granted pursuant to the Company's 1996 Stock
Incentive Plan, which have vested and are fully exercisable.
7
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
The following table is a summary of the compensation paid or accrued by the
Company for the last three fiscal years for services rendered in all capacities
to the Company by the Chief Executive Officer and each of the persons who
qualified as a "named executive officer" (as defined in Item 402(a)(3) of
Regulation S-K under the Securities Exchange Act of 1934) during fiscal year
1998 ("Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------- ------------
SECURITIES
UNDERLYING/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS COMPENSATION
- --------------------------- ---- -------- ------------ ------------
<S> <C> <C> <C> <C>
Theodore N. Gillette............................... 1996 $189,072 -- $ 8,200
Chief Executive Officer 1997 $220,000 -- $11,138
1998 $220,000 -- $15,062(1)
Richard L. Sanchez................................. 1996 $143,984 -- $ 5,700
Executive Vice President 1997 $180,000 -- $ 8,368
1998 $180,000 -- $15,169(2)
Richard T. Welch................................... 1996 $ 57,600(3) -- --
Chief Financial Officer 1997 $150,000 $70,000 --
1998 $180,000 -- $10,891(4)
</TABLE>
- ---------------
(1) Amounts for fiscal year 1998 represent an automobile allowance of $8,174 and
premiums paid by the Company for a life insurance policy of $6,888.
(2) Amounts for fiscal year 1998 represent an automobile allowance of $8,964,
premiums paid by the Company for a life insurance policy of $3,682 and the
Company's matching portion of 401K contributions of $2,523.
(3) Represents the salary earned by Mr. Welch for the portion of the year in
which he was employed by the Company.
(4) Amounts for fiscal year 1998 represent an automobile allowance of $8,298 and
the Company's matching portion of 401K contributions of $2,593.
EMPLOYMENT AGREEMENTS
Theodore N. Gillette and Richard L. Sanchez have each entered into
Employment Agreements with the Company (the "Employment Agreements"), pursuant
to which they have agreed to serve as the Company's Chief Executive Officer and
Executive Vice President, respectively. Each Employment Agreement is for a term
of five years ending on September 30, 2001 and is renewable for subsequent
one-year terms by mutual agreement of the parties. Mr. Gillette and Mr. Sanchez
will receive annual base salaries which are subject to review by the
Compensation Committee of the Board of Directors at annual intervals and may be
adjusted from time to time as the Compensation Committee deems to be
appropriate. Mr. Gillette and Mr. Sanchez are each eligible for annual incentive
bonuses, up to 50% of their annual base salary, in an amount to be determined by
the Compensation Committee to the extent that the Company achieves certain
performance measures set by the Committee. Mr. Gillette and Mr. Sanchez received
no increase in their base compensation and they each waived bonuses for fiscal
year 1998 in order that the Company's resources could be channeled toward the
Company's growth strategy. Mr. Gillette and Mr. Sanchez are also entitled to
receive stock options or other stock awards under the Company's Stock Incentive
Plan to the extent that the Compensation Committee determines such awards to be
appropriate. Each Employment Agreement provides that in the event that
employment is terminated by the Company other than (i) for cause, (ii) upon
death or disability, or (iii) upon voluntary termination by the employee, such
employee will be entitled to receive from the Company monthly payments equal to
one-twelfth of the employee's annual base salary for each month during the
remaining term of such Employment Agreement, but not less than twenty-four
months. In the event of a change in control (as defined in the Employment
Agreements), each Employment Agreement provides that if such employee's
employment is terminated other than for cause within twelve months following a
change of control of the Company, the Company shall pay such employee thirty-six
monthly
8
<PAGE> 12
payments of one-twelfth of the sum of such employee's base salary plus his
previous year's bonus. Each Employment Agreement also contains a covenant not to
compete with the Company for a period of twenty-four months following
termination of employment.
The Company and Richard T. Welch are parties to an Employment Agreement
(the "Employment Agreement"), pursuant to which Mr. Welch has agreed to serve as
Chief Financial Officer of the Company. The term of the Employment Agreement was
for two years and ended on August 31, 1998. It was automatically renewed by the
parties for one year ending on August 31, 1999, and is renewable for subsequent
one-year terms by mutual agreement of the parties. Under the Employment
Agreement, Mr. Welch will receive an annual base salary which is subject to
review by the Compensation Committee of the Board of Directors at annual
intervals and may be adjusted from time to time as the Compensation Committee
deems to be appropriate. Under the Employment Agreement, Mr. Welch has agreed to
devote his best efforts and substantially all of his business time and services
to the business and affairs of the Company. Mr. Welch will be eligible for
annual incentive bonuses, up to 50% of his annual base salary, in an amount to
be determined by the Compensation Committee of the Board of Directors to the
extent that the Company achieves certain performance measures set by the
Committee. Under the Employment Agreement, Mr. Welch received non-statutory
stock options to purchase 80,000 shares of Common Stock pursuant to the
Company's Stock Incentive Plan. The options are exercisable at a price of $3.11
per share and 64,000 shares became vested at the time of the Company's Initial
Public Offering on August 18, 1997. The remaining 16,000 shares vest pro rata on
an equal basis over a four-year period. Mr. Welch is also entitled to receive
such additional stock options or other stock awards under the Company's Stock
Incentive Plan to the extent the Compensation Committee determines such awards
to be appropriate. The Employment Agreement provides substantially similar terms
with respect to termination and changes in control as the employment agreements
with Mr. Gillette and Mr. Sanchez. The Employment Agreement also contains a
covenant not to compete with the Company for a period of twelve months following
termination of employment.
Stock Options
The Company has options outstanding under its 1996 Stock Incentive Plan
(the "Stock Incentive Plan"). Options granted are for the right to acquire the
Company's Common Stock. The following table provides information concerning the
aggregate share option exercises in 1998 and year-end option values for
unexercised stock options held by each of the Named Executive Officers. The
Company did not grant any stock options or stock appreciation rights during 1998
to any Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS AT OPTIONS AT
ACQUIRED DECEMBER 31, 1998 DECEMBER 31, 1998(2)
ON VALUE --------------------------- ------------------------------
NAME EXERCISE(1) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(3)
- ---- --------------- ----------------- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard T. Welch..... -- -- 82,000 68,000 $154,080 --
</TABLE>
- ---------------
(1) There were no options exercised during fiscal year 1998 by any Named
Executive Officer.
(2) Based upon the Company's closing stock price of $5.25 at December 31, 1998.
(3) The unexercisable portion of shares issuable pursuant to stock options were
not in-the-money at December 31, 1998.
The Stock Incentive Plan authorizes the Company to grant eligible officers,
employees, consultants and directors of the Company awards consisting of options
to purchase shares of Common Stock, stock appreciation rights, shares of
restricted stock or performance shares. The Compensation Committee has the
discretion to select the particular officers, employees and consultants who will
receive awards. On March 31, 1999, approximately 2,000 officers and employees of
the Company were eligible to participate. The particular terms of the stock
options and other awards granted to eligible employees will be established by
the Compensation Committee within the limitations set forth in the provisions of
the Stock Incentive Plan.
9
<PAGE> 13
Eligible employees and other participants generally are not required to provide
the Company with consideration for the awards (other than their services), but
stock options will require the optionees to pay an option exercise price based
on the fair market value of the shares of common stock at the time the grant of
the options was approved by the Compensation Committee. Stock options granted to
employees under the Stock Incentive Plan may be either Stock Options intended to
qualify as Incentive Stock Options under Section 422 of the Internal Revenue
Code or nonstatutory Stock Options which do not so qualify. Stock Options will
expire no later than the tenth anniversary of the date of grant and become
exercisable under such vesting schedules as may be established by the
Compensation Committee. Vesting of the awards granted under the Stock Incentive
Plan may be accelerated in the event of a change in corporate control, as
defined in and upon the terms of the Stock Incentive Plan. The Compensation
Committee has discretionary authority to accelerate the vesting of stock options
and other awards in any other circumstances it determines to be appropriate, and
the stock option agreements under the Stock Incentive Plan may provide for
accelerated vesting upon death, disability, and, in some cases, termination of
employment without cause.
The Stock Incentive Plan can be amended by the Board from time to time in
any manner the Board deems to be advisable, except that the Board must obtain
shareholder approval for amendments that require shareholder approval under the
federal tax or securities laws or the NASDAQ National Market System stock
exchange, including amendments to increase the aggregate number of shares
available for issuance under the Stock Incentive Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Company's Compensation Committee are Theodore N.
Gillette, Martin F. Stein and Peter Fontaine. Mr. Stein was appointed to the
Committee to replace the position vacated by the resignation of Herbert Pegues.
Neither Mr. Stein nor Mr. Fontaine has at any time been an officer of the
Company. On March 31, 1998, the Company completed a merger with EyeCare One
Corp. ("EyeCare One") and Vision Insurance Plan of America, Inc. ("VIPA").
EyeCare One was the parent company of Stein Optical which operates 16 optometric
retail locations in Milwaukee, Wisconsin. VIPA holds a single service insurance
license and delivers vision care benefits to approximately 19,000 patient lives
in Wisconsin. The Company issued 1,109,806 shares of common stock for all of the
outstanding common stock of EyeCare One and VIPA, valued at approximately $10.5
million at the time of the merger. Mr. Stein received his shares of common stock
of the Company as a shareholder of EyeCare One and VIPA. For information on his
ownership of the Company's common stock, see "Management -- Security Ownership."
The information contained in the following sections entitled "Report of the
Compensation Committee" and "Performance Graph" are not deemed to be "soliciting
material" or to be "filed" with the Commission or subject to Regulation A under
the Securities Act of 1933, or to the liabilities of Section 18 of the
Securities Exchange Act of 1934.
10
<PAGE> 14
REPORT OF THE COMPENSATION COMMITTEE
In accordance with rules adopted in 1992 by the Securities and Exchange
Commission, as amended in 1993, the Compensation Committee of the Board of
Directors of the Company, consisting of Directors Theodore N. Gillette, Peter
Fontaine and Martin F. Stein, as the members thereof (the "Committee") offer
this report regarding compensation policies for executive officers and the Chief
Executive Officer of the Company. The overall goal of the Committee is to
develop executive compensation policies and practices which are consistent with
and linked to the Company's business objectives which include the goal of
maximizing shareholder value over time. In structuring the compensation of
executive officers the Committee seeks to adhere to the following principles:
FIXED COMPENSATION: A significant portion of compensation is fixed
and is based upon employment agreements with such individuals taking into
consideration other similarly situated companies;
EQUITY BASED: The interests and focus of management should be aligned
with those of stockholders through the use of equity-based incentive awards
to link a portion of compensation to the Company's stock performance;
MANAGEMENT RETENTION: The Company's executive compensation should be
structured so as to attract and retain individuals who are capable of
leading the Company toward the achievement of its objectives; and
AT RISK: A portion of pay in most cases, should be linked to
achievement of performance goals by the Company.
These principles apply to compensation policies for all executive officers
of the Company. The Committee does not follow the principles in any particular
order, rather experience and judgment are applied in determining the appropriate
mix of compensation for each individual executive. Annual compensation for
executive officers is determined by the Committee, subject to the terms of any
applicable employment agreement negotiated between an officer and the Company.
During fiscal year 1998, the Company's Chief Executive Officer, Theodore N.
Gillette's annual compensation was based upon his employment agreement and was
principally fixed. Mr. Gillette opted not to receive any increase in his base
compensation and waived any annual bonus in order that the Company's resources
could be channeled toward the Company's growth strategy. The Committee did not
provide any incentive based compensation to the Chief Executive Officer in 1998
due primarily to the level of his beneficial ownership of Company stock. The
Chief Executive Officer's compensation in subsequent years will be based upon
the Committee's subjective evaluation of the Chief Executive Officer's
responsibilities, individual performance, growth of the Company, earnings of the
Company and increases in the cost of living. The Committee is not expected to
give particular weight to a specific factor or use a formula in determining any
bonus that may be paid to the Chief Executive Officer or any adjustment to his
annual salary or other long-term compensation awards.
During fiscal year 1998, the compensation for the Company's other executive
officers was set by the Committee pursuant to existing employment agreements.
Much of such compensation is based upon fixed salary. The Committee and Board
have and may continue in the future to grant officers of the Company stock
options when such grants are deemed appropriate. The Compensation Committee
expects that stock options so granted will be at exercise prices based upon the
fair market value of the Company's Common Stock on the date of grant. Cash
bonuses may be earned by certain executive officers based upon financial
performance standards established by the Committee or as set forth in their
employment agreement.
The Committee believes its executive compensation principles and policies
described above serve the interests of the Company and its shareholders.
Respectfully submitted,
The Compensation Committee
Theodore N. Gillette
Peter Fontaine
Martin F. Stein
11
<PAGE> 15
PERFORMANCE GRAPH
Rules promulgated by the SEC require that the Company include in this Proxy
Statement a line graph which compares the yearly percentage change over the past
five years in cumulative total stockholder return on the Common Stock with (i)
the performance of a broad equity market index, and (ii) the performance of a
published industry index or peer group index. As the Company did not consummate
its Initial Public Offering of Common Stock until August 18, 1997, there was no
active public market for the Company's Common Stock prior to that time. On
August 18, 1997, the opening price per share of the Company's Common Stock was
$10.00 and on such date the price closed at $9.50 per share. Accordingly, the
following graph compares the percentage change in the return on the Common Stock
for the period from August 18, 1997 to December 31, 1998 with the cumulative
total return on the Center for Research in Security Prices ("CRSP") Index for
the Nasdaq Stock Market (U.S. Companies) and the CRSP Index for Health Services
for the same period. The graph assumes the investment of $100 on August 18, 1997
and the reinvestment of any dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
FOR THE PERIOD AUGUST 18, 1997 TO DECEMBER 1998
AMONG VISION TWENTY-ONE, INC., CRSP NASDAQ U.S. INDEX AND
CRSP HEALTH SERVICES INDEX
<TABLE>
<CAPTION>
CRSP
NASDAQ
STOCK
VISION MARKET (U.S. CRSP HEALTH
MEASUREMENT PERIOD TWENTY-ONE, COMPANIES) SERVICES
(FISCAL YEAR COVERED) INC. INDEX INDEX
<S> <C> <C> <C>
08/18/97 100.0 100.0 100.0
09/30/97 150.0 105.1 109.4
12/31/97 102.8 98.5 98.3
03/31/98 130.6 115.2 107.9
06/30/98 70.8 118.4 98.0
09/30/98 77.1 107.2 74.2
12/31/98 58.3 138.7 84.3
</TABLE>
Note: The stock price performance shown on the graph above is not necessarily
indicative of future price performance.
12
<PAGE> 16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth herein briefly describes transactions since the
beginning of the Company's last fiscal year between the Company and its
directors, officers and 5% stockholders. These transactions have been approved a
majority of the Company's independent directors and were on terms no less
favorable to the Company than those that could be obtained from unaffiliated
parties.
Theodore Gillette, the Chief Executive Officer and a director of the
Company, owns a majority interest in Gillette, Beiler & Associates, #6965 P.A.
("G&A"), a Florida professional association located in Tampa, Florida and
engaged in the provision of optometry services. The Company earned fees of
approximately $1.4 million in the year-ended December 31, 1998 under its
Management Agreement with G & A.
Richard L. Lindstrom, M.D., a director of the Company, owns a majority
interest in Lindstrom, Samuelson and Hardten Ophthalmology Associates, P.A.
("Lindstrom P.A."), a professional association located in Minneapolis, Minnesota
and engaged in the provision of ophthalmology services. The Company earned fees
of approximately $655,000 in the year ended December 31, 1998 under its
Management Agreement with Lindstrom P.A.
Jeffrey I. Katz, M.D., a director of the Company, owns a 50% interest in
Vital Sight P.C. ("Vital Sight"), an Arizona professional corporation located in
Tucson, Arizona and engaged in the provision of ophthalmology services. The
Company earned fees of $442,000 in the year-ended December 31, 1998 under its
Management Agreement with Vital Sight.
The Company, the former shareholders of Eye Institute, including Dr. Katz,
and certain other related entities also closed in escrow an agreement dated as
of July 31, 1997 to transfer certain ASC assets from Vital Sight and such
shareholders' limited liability company to Vision 21 of Southern Arizona, Inc.
When all outstanding contingencies associated with the escrow have been
satisfied, the income associated with such ASC business shall be subject to the
business management fee. Until such time, however, the Company receives a fee
approximately equal to the business management fee. The Company received fees of
approximately $284,000 for the year ended December 31, 1998. The Company's
obligation to purchase the ASC business shall terminate if the outstanding
contingencies related to the escrow are not satisfied. As consideration for this
ASC transaction, Dr. Katz will be entitled, subject to post-closing adjustments,
to receive 69,169 shares of Common Stock.
2. PROPOSAL TO ADOPT EMPLOYEE STOCK PURCHASE PLAN
On October 19, 1998, the Board of Directors adopted, subject to the
approval of the shareholders, an Employee Stock Purchase Plan in order to
encourage Company employees to have an ownership interest in the Company. The
Employee Stock Purchase Plan is intended to provide employees of the Company and
its subsidiaries with an opportunity to acquire shares of the Company's Common
Stock at an advantageous price, with savings accumulated through payroll
deductions. The purpose of the Employer Stock Purchase Plan is to secure for the
Company and its shareholders the benefits inherent in employee stock ownership.
The Employee Stock Purchase Plan is administered by the Board of Directors.
Subject to adjustment upon changes in the capitalization of the Company, the
maximum number of shares of Common Stock available for purchase under the
Employee Stock Purchase Plan is 200,000 shares.
All employees of the Company and its subsidiaries who have been employed
for at least sixty (60) days as of the first day of any quarter are eligible to
participate in the Employee Stock Purchase Plan, provided that no employee will
be eligible if such employee: (i) owns immediately after any option to acquire
Common Stock pursuant to provisions of the Employee Stock Purchase Plan, stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of Company stock, (ii) is a member of the Board of Directors, or
an executive officer of the Company whose compensation must be reported in the
Company's proxy statements, or (iii) is an employee whose customary employment
is twenty hours or less per week, or whose customary employment is for not more
than five months in any calendar year.
The price to eligible employees for each share to be purchased under the
Employee Stock Purchase Plan is the lesser of: (i) eighty-five percent (85%) of
the Closing Market Price (as hereinafter defined) on the first
13
<PAGE> 17
day of any calendar quarter (the "Offering Date"), or (ii) eighty five percent
(85%) of the Closing Market Price (as hereinafter defined) on the first trading
day of the third calendar month following the immediately preceding Offering
Date (the "Purchase Date"). On each Purchase Date, payroll deductions made in
accordance with the Employee Stock Purchase Plan are applied to the purchase of
Common Stock from the Company. "Closing Market Price" means the last sale price
of the Common Stock as reported on the NASDAQ/National Market System (or any
other exchange or quotation system, if applicable) on the date specified; or if
no sales occurred on such day, at the last sale price reported for the Common
Stock; but if there should be any material alteration in the present system of
reporting sales prices of such Common Stock, or if such Common Stock should no
longer be listed on the NASDAQ/National Market System (or other exchange or
quotation system), or if the last sale price reported shall be on a date more
than 30 days from the date in question, the market value of the Common Stock as
of a particular date shall be determined in such a method as shall be specified
by the Employee Stock Purchase Plan.
A complete copy of the Employee Stock Purchase Plan is attached to this
Proxy Statement as Appendix A. The above discussion of the Employee Stock
Purchase Plan is qualified in its entirety by reference to Appendix A. The Board
believes that the adoption of the Employer Stock Purchase Plan is in the best
interest of the Company and its Shareholders.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR"
APPROVAL OF THE PROPOSED EMPLOYEE STOCK PURCHASE PLAN.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy at the meeting will be required for approval of
the proposed Employee Stock Purchase Plan.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
The Company has engaged the firm of Ernst & Young LLP, independent
certified public accountants, to report upon the financial statements included
in the Annual Report submitted herewith. A representative from said firm will be
in attendance at the Meeting, will have the opportunity to make a statement if
desired, and will be available to respond to any questions from those in
attendance. The Company has appointed Ernst & Young LLP to report upon its 1998
financial statements, subject to ratification of such appointment by the
Stockholders at the Meeting. Stockholder ratification of the Company's
independent certified public accountants is not required by the Company's
By-Laws or otherwise. The Board of Directors has elected to seek such
ratification as a matter of good corporate practice. If the Stockholders do not
ratify this appointment, other certified public accountants will be considered
by the Board of Directors upon recommendation of the Audit Committee.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMEND THAT YOU VOTE "FOR"
THE RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
4. OTHER BUSINESS
Management of the Company does not know of any other business that may be
presented at the Meeting. If any matter not described herein should be presented
for Stockholder action at the Meeting, the persons named in the enclosed Proxy
will vote the shares represented thereby in accordance with their best judgment.
STOCKHOLDER PROPOSALS FOR
PRESENTATION AT THE 2000 ANNUAL MEETING
Any stockholder intending to present a proposal at the 2000 Annual Meeting
in accordance with Rule 14a-8 under the Securities Exchange Act of 1934 for
inclusion in the Company's proxy materials for such meeting must, in addition to
meeting other applicable requirements under the rules and regulations of the
Securities and Exchange Commission, submit such proposal to Richard L. Sanchez,
Secretary, in writing no later than March 22, 2000.
14
<PAGE> 18
Other than in respect of a nominee for election to the Board of Directors,
the Company's Articles of Incorporation require certain advance notice to the
Company of a stockholder sponsored proposal submitted outside the processes of
Rule 14a-8. To be timely, such notice must be received at the principal
executive offices of the Company not less than 45 nor more than 60 days prior to
the meeting of stockholders; provided, however, that in the event that less than
55 days' notice or prior public disclosure of the date of the meeting is given
or made to the stockholders, notice by the stockholder in order to be timely
must be so received not later than the close of business on the tenth day
following the day on which such notice of the date of the annual meeting was
mailed or public disclosure of the date of the annual meeting was made,
whichever first occurs. A proposal submitted outside the processes of Rule 14a-8
is any shareholder proposal submitted for presentation at the 2000 Annual
Meeting but not submitted for inclusion in the Company's proxy statement. Under
Rule 14a-4(c)(1), if a proponent fails to notify the Company by the advance
notice date, then the management proxies will be permitted to use their
discretionary voting authority if such proposal is raised at the 2000 Annual
Meeting, without any discussion of the matter in the proxy statement.
The Company's By-Laws require certain advance notice to the Company of any
nominations by stockholders of persons to stand for election as directors at
stockholders' meetings. Notice of director nominations must be timely given in
writing to the Secretary of the Company prior to the meeting at which the
directors are to be elected. To be timely, such notice must be received at the
principal executive offices of the Company not less than 60 nor more than 90
days prior to the meeting of stockholders; provided, however, that in the event
that less than 70 days' notice or prior public disclosure of the date of the
meeting is given or made to the stockholders, notice by the stockholder in order
to be timely must be so received not later than the close of business on the
tenth day following the day on which such notice of the date of the annual
meeting was mailed or public disclosure of the date of the annual meeting was
made, whichever first occurs.
A stockholder's notice with respect to a director nomination must set forth
(i) certain information about the nominee, (ii) the consent of the nominee to
serve as a director if elected, (iii) the name and record address of the
nominating stockholder, (iv) the class or series and number of shares of the
Company which are beneficially owned by such stockholder, (v) a description of
all arrangements or understandings between such stockholder and each proposed
nominee and any other person pursuant to which the nominations are to be made,
(vi) a representation that such stockholder intends to appear in person or by
proxy at the meeting to nominate the persons named, and (vii) certain other
information.
The complete By-Law provisions and Articles of Incorporation governing
these requirements are available to any stockholder without charge upon request
from the Secretary of the Company.
By order of the Board of Directors
/s/ Richard L. Sanchez
-------------------------------------
RICHARD L. SANCHEZ
Secretary
Dated: June 23, 1999
15
<PAGE> 19
APPENDIX A
VISION TWENTY-ONE, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSES
The Vision Twenty-One, Inc. Employee Stock Purchase Plan (the "Plan") is
intended to provide employees of Vision Twenty-One, Inc., a Florida corporation
(the "Company") and its Subsidiaries with an opportunity to acquire shares of
the Company's Common Stock at an advantageous price, with savings accumulated
through payroll deductions. It is the intention of the Company that the Plan be
an "employee stock purchase plan" under Section 423 of the Code. The provisions
of the Plan shall, accordingly, be construed in a manner consistent with the
requirements of that section of the Code.
2. DEFINITIONS
A. "Agent" means the firm appointed by the Company's Board of Directors to
carry out the functions assigned to the Agent.
B. "Board of Directors" means the Company's Board of Directors.
C. "Closing Market Price" means the last sale price of the Common Stock as
reported on the NASDAQ/National Market System (or any other exchange or
quotation system, if applicable) on the date specified; or if no sales occurred
on such day, at the last sale price reported for the Common Stock; but if there
should be any material alteration in the present system of reporting sales
prices of such Common Stock, or if such Common Stock should no longer be listed
on the NASDAQ/ National Market System (or other exchange or quotation system),
or if the last sale price reported shall be on a date more than 30 days from the
date in question, the market value of the Common Stock as of a particular date
shall be determined in such a method as shall be specified by the Plan's Agent.
D. "Code" means the Internal Revenue Code of 1986, as amended.
E. "Common Stock" means the Company's common stock, par value $.001 per
share, as traded on the NASDAQ market.
F. "Compensation" means cash compensation before any payroll deductions for
taxes or any other purpose, paid by the Company or a Subsidiary to a Participant
in respect of the service of such Participant to the Company or a Subsidiary
during an Offering Period. This amount shall be deemed to include any amount
that the Participant has elected to defer for federal income tax purposes under
any 401(k) savings plan, cafeteria plan or deferred compensation plan maintained
by the Company or a Subsidiary. Compensation shall not include any amount paid
to the Participant that (i) is paid during an Offering Period under any employee
pension benefit plan (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"); (ii) is calculated as an
excess, incentive compensation or bonus amount; and (iii) except as otherwise
provided in the preceding sentence, is not included in the income of the
Participant for federal income tax purposes.
G. "Offering Date" means November 7, 1998, and the first day of any
calendar quarter thereafter.
H. "Offering Period" means the period from November 7, 1998 through
December 31, 1998, and thereafter, the three-month period commencing on any
Offering Date after the first Offering Date and ending on the Purchase Date that
next follows an Offering Date.
I. "Option" means the right of a Participant to acquire Common Stock
pursuant to Plan provisions.
J. "Participant" means an eligible employee who has authorized payroll
deductions for the purchase of Common Stock under the Plan and has an account
maintained by the Agent, containing shares of Common Stock and/or Proceeds.
K. "Proceeds" means the total amount of cash accumulated for the benefit of
a Participant during a single Offering Period, comprised of the aggregate of the
payroll deductions taken from the Participant's Compensation during such period
together with earnings thereon and dividends paid on shares of Common Stock
beneficially owned by the Participant.
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L. "Purchase Date" means the first trading day of the third calendar month
following the immediately preceding Offering Date.
M. "Subsidiary" means a corporation that is a subsidiary of the Company
within the meaning thereof as stated in Code Section 424(f). Each Subsidiary
shall participate in the Plan unless designated by the Board of Directors not to
participate.
N. "Trading Day" means any day that the principal stock exchange or other
national market upon which the Common Stock is traded is open for business.
O. "Year of Service" means a period of twelve consecutive months of
employment with the Company or any Subsidiary.
Wherever appropriate in this Plan the singular shall include the plural;
the masculine, the feminine; and vice versa.
3. ELIGIBILITY
All employees of the Company who have been employed for at least sixty (60)
days as of any Offering Date shall be eligible to participate in the Plan,
provided that no employee shall be eligible if such employee:
A. owns immediately after any Option is granted, stock possessing five
percent (5%) or more of the total combined voting power or value of all
classes of Company stock, applying the rules of Code Section 424(d) in
determining stock ownership,
B. is a member of the Board of Directors, or an executive officer of
the Company whose compensation must be reported in the Company's proxy
statements, or
C. is an employee whose customary employment is twenty hours or less
per week, or whose customary employment is for not more than five months in
any calendar year.
In addition, all employees of each Subsidiary shall be eligible to
participate in the Plan to the extent they satisfy the requirements set forth in
the preceding paragraph.
4. EMPLOYEE PARTICIPATION AND PAYROLL DEDUCTIONS
A. An eligible employee shall become a Participant in the Plan by
completing an Enrollment Form authorizing for the payroll deduction, together
with instructions to use the deductions to purchase shares of Common Stock under
the Plan. The Participant shall choose a deduction in a whole percentage from 1%
to 10%. As of each pay day during an Offering Period the Company will deduct the
specified amount from the Compensation payable to each Participant and transmit
these aggregate deductions to the Agent, with sufficient information to allow
the agent to account for each Participant's deductions and maintain each
Participant's Proceeds account. The Agent will cause each Participant's Proceeds
to be credited to his or her account under the Plan and invested in a money
market fund approved by the Company. The Agent will perform the record keeping
function under the Plan, assuring that each Participant's Proceeds are credited
with appropriate earnings. A Participant may not make any separate cash payment
into such account.
B. On each Offering Date, each Participant shall be granted the right to
purchase on the next Purchase Date such number of shares of Common Stock as may
be purchased by the Participant's Proceeds. No Participant, however, may be
granted the right to purchase shares of Common Stock under all such plans of the
Company where the accrual is at a rate that exceeds $25,000 of the Common
Stock's fair market value, determined at the time the option is granted, for any
one calendar year in which an option is outstanding for any part of the year.
C. A Participant may not increase or reduce, except to 0%, the amount of
payroll deductions during an Offering Period. A Participant shall be deemed to
have elected to purchase all shares able to be purchased with the Proceeds on
the applicable Purchase Date.
D. A Participant shall be deemed to have continued the most recent election
to participate in the Plan for the next Offering Period unless the Participant
notifies the Company or its agent on or before the twentieth (20th) day of the
month preceding the beginning of the next Offering Period that he or she elects
not to participate in the Plan for the next Offering Period. Such notice may not
be revoked. Similarly, a Participant may elect to increase or decrease the
amount of payroll deduction on or before the twentieth (20th) day of the
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<PAGE> 21
month preceding the beginning of the next Offering Period, such increase or
decrease to be effective at the beginning of the next Offering Period.
5. OPTION PRICE
The price to Participants for each share to be purchased on a Purchase Date
shall be the lesser of
A. eighty-five percent (85%) of the Closing Market Price on the
Offering Date, or
B. eighty-five percent (85%) of the Closing Market Price on the
Purchase Date.
6. METHOD OF PURCHASE
A. On each Purchase Date the Agent shall cause all Participants' Proceeds,
together with applicable Company contributions during the preceding Offering
Period, to be applied to the purchase of Common Stock from the Company.
B. As of the Purchase Date, the account of each Participant shall be
credited with a number of shares of Common Stock that were able to be purchased
with that Participant's Proceeds.
7. WITHDRAWALS
Prior to any Purchase Date, a Participant may give written notice to the
Company or its agent of an intent to withdraw the entire cash balance and
earnings accumulated during the Offering Period preceding the said Purchase
Date. The written notice shall effectuate a withdrawal only if the Agent has not
purchased shares for the account of the notifying Participant. Such withdrawal
will terminate the Participant's right to exercise any Options for that Offering
Period. A Participant who withdraws shall not participate again in the Plan
unless and until a new Enrollment/Change Form is filed.
8. TERMINATION OF EMPLOYMENT
As soon as administratively practicable after the termination of a
Participant's employment with the Company for any reason other than death, the
Participant's Proceeds accumulated during the Offering Period in which his
employment terminated will be refunded, and any shares of Common Stock held by
the Agent will be distributed in kind. As an alternative to the latter, the
terminated Participant may request that the Agent, at the Participant's expense,
sell the Common Stock in the account and forward the net proceeds to the
Participant.
9. RIGHTS AS A SHAREHOLDER; DIVIDENDS; HOLDING AND ISSUANCE OF SHARES
A. A Participant shall have no rights as a shareholder with respect to any
shares of Common Stock offered hereunder until completion of payment therefor.
Shares purchased pursuant to the Plan initially will be registered in the name
of the Agent as custodian for the account of the Participant entitled thereto.
In regard to shares paid for and in a Participant's account, the Participant
shall have all rights accruing to an owner of record of such shares, including
voting rights and the right to receive dividends.
B. The Agent shall receive the dividends payable on the shares in its
custody and shall credit to the Proceeds account of each Participant as
beneficial owner of a certain number of shares the amount of dividends
attributable thereto. In the event that the Participant has not authorized
payroll deductions during the Offering Period in which the Agent receives the
Participant's dividends, unless requested otherwise by the Participant on notice
from the Agent, the Agent shall re-establish a Proceeds account to contain these
dividends and earnings thereon. In the event that the Participant's shares have
been distributed when dividends are received, the Agent shall return said
dividends to the Common Stock's transfer agent for reissuance to the distributee
of the shares.
C. Until such time as the Plan has been approved by the Company's
shareholders, the stock certificates representing all of the shares purchased on
behalf of Participants under this Plan shall be retained by the Agent, and
Participants may not withdraw or sell such shares.
D. After the Plan has been approved by the Company's shareholders, the
stock certificate or certificates representing the shares purchased on behalf of
a Participant on a Purchase Date shall be retained by the Agent until such time
as the Participant may request the Agent in writing to distribute such shares to
the Participant. The Company and the Agent may establish such rules and
procedures as they, in their discretion, determine to
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<PAGE> 22
be necessary or desirable with respect to distributions of shares purchased
under this Plan, including any rules imposing limits on such distributions or
restricting the timing or frequency of such distributions they may determine to
be appropriate.
10. NONTRANSFERABILITY
Neither payroll deductions credited to the account of a Participant nor any
Options to purchase shares of common Stock under the Plan may be assigned,
transferred, or alienated, and Options must be exercised only by the Participant
during his or her lifetime.
11. BENEFICIARY DESIGNATION AND RIGHTS
A Participant may file with the Company's Manager of Benefits and
Compensation a written designation of beneficiary, or a revision thereof. In the
absence of such designation, or if the named beneficiary predeceased the
Participant, the Participant's estate shall be deemed to be the beneficiary. In
the event of the Participant's death, the Agent shall apply the Proceeds to the
purchase of shares on the Purchase Date, and deliver all the Common Stock held
for the deceased Participant to the beneficiary, together with any remaining
Proceeds, subject to the Agent's receipt of Participant's death certificate and
satisfactory evidence of the beneficiary's identity and acceptance of the Common
Stock and Proceeds. The beneficiary shall have no rights under the Plan during
the Participant's lifetime.
12. SHARES AUTHORIZED; CHANGE IN CORPORATE STRUCTURE AND CAPITALIZATION
A. Subject to adjustment upon changes in the capitalization of the Company,
the maximum number of shares of Common Stock which shall be made available for
purchase under the Plan is 200,000 shares. The shares of Common Stock purchased
under the Plan may, at the election of the Company, be authorized but unissued
treasury shares held by the Company, or shares of Common Stock purchased on the
open market by the Agent.
B. In the event of any change in the number of outstanding shares of Common
Stock by reason of a recapitalization, merger, consolidation, reorganization,
separation, liquidation, stock split, stock dividend, combination of shares, or
any other change in the corporate structure or shares of stock of the Company,
the Board of Directors will make an appropriate adjustment, in accordance with
applicable provisions of the Code and law, in the number and kind of shares
which may be offered under the Plan, both in the aggregate and as to each
Participant, the number of shares then subject to offerings theretofore made,
and the price of shares offered under the Plan.
C. If the Company shall not be the surviving corporation in any merger or
consolidation, or survives only as a subsidiary of another entity, or if the
Company is to be dissolved or liquidated, and unless a surviving corporation
assumes or substitutes new options within the meaning of Section 424(a) of the
Code, for all Options then outstanding under the Plan,
i. the Purchase Date for all Options then outstanding shall be
accelerated to a date fixed by the Board of Directors prior to the
effective date of such merger or consolidation or such dissolution or
liquidation and shall be deemed to be exercised, and
ii. upon such effective date any unexercised Options shall expire.
13. SECURITIES LAWS
The Plan is intended to comply with Rule 16b-3 of the Securities Act of
1934, and shall be interpreted therewith. The Company shall not be obligated to
issue any Common Stock pursuant to the Plan at any time when the shares have not
been registered under the Securities Act of 1933, as amended, and such other
state and federal laws, rules or regulations as the Company or the Board of
Directors deems applicable and, in the opinion of legal counsel for the Company,
there is no exemption from the registration requirements of such laws, rules or
regulations available for the issuance and sale of such shares. Further, all
Common Stock acquired pursuant to the Plan shall be subject to, and may be sold
only in a manner consistent with the Company's Confidentiality Policy and other
policies concerning compliance with securities laws and insider trading, as the
same may be amended from time to time.
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<PAGE> 23
14. ADMINISTRATION
A. The Plan shall be administered by the Board of Directors. The
interpretation and construction of any provision of the Plan, and the adoption
of rules for administering the Plan, shall be made by the Board of Directors.
Determinations made by the Board of Directors with respect to any matter or
provision contained in the Plan shall be final, conclusive and binding upon the
Company and all Participants, their beneficiaries and legal representatives. Any
rule adopted by the Board of Directors shall remain in full force and effect
unless and until amended or repealed by the Board of Directors.
B. The Board of Directors shall have the right to appoint the Agent and any
other entity or person, including Company employees, and to delegate to them
certain functions or services to be performed in connection with Plan
administration, and to name successors.
C. The Participant or beneficiary, as the case may be, shall bear all costs
and expenses associated with requests for the issuance of stock certificates,
the sale of Common Stock, and a Participant's withdrawal from the Plan.
D. The Agent will mail to each Participant's home address a quarterly
statement showing the number of shares of Common Stock held beneficially for the
Participant, the amount and derivation of cash in the Participant's Proceeds
account, and any purchases of shares in the Offering Period that closed during
the calendar quarter reflected in the statement.
E. If at any time the number of shares as to which Options have been
granted shall exceed the number of shares authorized for purchase under the Plan
on a certain Purchase Date, the number of shares which may be purchased by each
Participant shall be reduced proportionately. Payroll deductions not able to be
used shall remain in the Participant's Proceeds account.
15. AMENDMENT AND TERMINATION
The Board of Directors may at any time terminate or amend the Plan,
provided that no amendment may be made without approval of the shareholders of
the Company if such amendment would increase the number of shares which may be
available under the Plan, except by operation of Section 12 of the Plan, or
materially modify the requirements as to eligibility for participation in the
Plan.
16. NONGUARANTEE OF EMPLOYMENT
Neither eligibility to participate in, actual participation in, nor any
provision of the Plan shall be construed as giving any eligible employee or
Participant any employment right with the Company or a Subsidiary.
17. AGENT FOR SERVICE OF PROCESS
Legal process may be served upon the Manager of Benefits and Compensation,
Vision Twenty-One, Inc., 7360 Bryan Dairy Rd., Suite 200, Largo, FL 33777.
18. SHAREHOLDER APPROVAL
The effectiveness of this Plan is subject to its approval by the Company's
shareholders at the next Annual Meeting, or within a 12-month period after the
date the Plan is adopted by the Board of Directors. In the event shareholder
approval of this Plan is not obtained within this period, the Plan shall
terminate, all shares purchased under the Plan shall be returned to the Company,
and the Agent shall refund to each Participant any Proceeds accumulated for the
Participant and the current value of any shares of Common Stock then held by the
Agent on the Participant's behalf.
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<PAGE> 24
APPENDIX B
VISION TWENTY-ONE, INC.
7360 BRYAN DAIRY ROAD
LARGO, FLORIDA 33777
PROXY FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 8, 1999
The undersigned, having received notice of the Annual Meeting of Vision
Twenty-One, Inc. to be held at 8:00 a.m. (Eastern Time), on July 8, 1999 (the
"Meeting"), hereby designates and appoints Theodore N. Gillette and Richard L.
Sanchez, and either of them with authority to act without the other, as proxies
for the undersigned, with full power of substitution and resubstitution, to vote
all of the shares of Common Stock which the undersigned is entitled to vote at
the Meeting and at any adjournment thereof, such proxies being directed to vote
as specified on the reverse side.
In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the Meeting or any adjournment thereof.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF VISION
TWENTY-ONE, INC. AND WILL BE VOTED AS SPECIFIED. IF NOT OTHERWISE SPECIFIED, THE
ABOVE NAMED PROXIES WILL BE VOTED "FOR" PROPOSALS 1, 2 AND 3 AND IN ACCORDANCE
WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS ON ANY OTHER MATTERS THAT MAY
PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT THEREOF, PROVIDED
THAT THIS PROXY WILL NOT BE VOTED TO ELECT MORE THAN ONE DIRECTOR.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING MATTERS. PLEASE
MARK AN "X" IN ONE SPACE. TO BE EFFECTIVE, THIS PROXY MUST BE DEPOSITED AT THE
COMPANY'S TRANSFER AGENT NOT LATER THAN 48 HOURS BEFORE THE TIME APPOINTED FOR
THE MEETING. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
(Continued on the reverse side)
1. Proposal to re-elect the following nominee as Director: Peter J. Fontaine
<TABLE>
<S> <C> <C> <C>
[ FOR [ ] WITHHELD
]
</TABLE>
2. Proposal to approve the Employee Stock Purchase Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify Ernst & Young LLP as the Company's independent auditors
until the conclusion of the 2000 Annual Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
Dated: , 1998
----------------------
------------------------------
Signature
------------------------------
Signature if held jointly
IMPORTANT: Please sign exactly as your name appears on this proxy and mail
promptly in the enclosed envelope. If you sign as agent or in any other
capacity, please state the capacity in which you sign.
