<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. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Laser Vision Centers, 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)(4) 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:
- --------------------------------------------------------------------------------
<PAGE> 2
LASER VISION CENTERS, INC.
540 MARYVILLE CENTRE DRIVE
SUITE 200
ST. LOUIS, MISSOURI 63141
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
ON MARCH 19, 1998
TO: The Shareholders of Laser Vision Centers, Inc.
The Annual Meeting of Shareholders of Laser Vision Centers, Inc. (the
"Company") will be held at the Laser Vision Center of St. Louis, 755 S. New
Ballas Road, Suite 170, St. Louis, Missouri 63141 on March 19, 1998 at 9:00
a.m. for the following purposes:
1. To elect six Directors for the ensuing year.
2. To approve the selection of Price Waterhouse LLP as the
Company's independent public accountants for the fiscal year ending
April 30, 1998.
3. To approve the addition of 300,000 shares to the Incentive Stock Option
Plan and 700,000 shares to the Non-Qualified Warrant Plan.
4. To transact any other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on January 19, 1998
as the record date for determining the shareholders entitled to receive notice
of and vote at the meeting. Your attention is directed to the accompanying
Proxy Statement for a description of the matters to be submitted for vote at
the meeting.
This Proxy Statement and the forms of proxy were first mailed to shareholders
on or about __________, 1998.
-1-
<PAGE> 3
SHAREHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE ASKED TO
VOTE, SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ENCLOSED STAMPED SELF-ADDRESSED ENVELOPE.
By order of the Board of Directors,
Robert W. May, Secretary
__________, 1998
St. Louis, Missouri
A copy of the Annual Report of the Company for the fiscal year ended April 30,
1997 is enclosed herewith.
-2-
<PAGE> 4
LASER VISION CENTERS, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Laser Vision Centers, Inc. (the "Company") of proxies
in the accompanying form, for use at the Annual Meeting of Shareholders of the
Company and at all adjournments thereof.
The holders of record of Common Stock at the close of business on January
19, 1998 (the "Record Date") may vote at the meeting. As of January 19, 1998,
there were outstanding 9,323,935 shares of Common Stock of the Company. On all
matters which will come before the meeting, each holder of common stock or his
proxy will be entitled to one vote for each share of Common Stock of which such
shareholders was the holder of record on the Record Date. The holders of a
majority of the outstanding shares of Common Stock constitute a quorum for the
transaction of business at the meeting.
VOTING OF PROXIES
Proxies may be revoked by the shareholders at any time prior to the voting
thereof by giving notice of revocation in writing to the Secretary of the
Company or by voting in person at the meeting.
The persons named in the enclosed form of proxy were selected by the Board
of Directors and, unless instructed to the contrary, will vote the shares
covered by such proxy for the election as directors of the nominees listed in
this proxy statement, and for the approval of Price Waterhouse LLP as the
Company's independent accountants for the fiscal year ending April 30, 1998,
and at their discretion on other matters that may come before the meeting. If
a nominee becomes unable to serve, an event which is not anticipated, the
proxies will be voted for a substitute nominee designated by the Board of
Directors. Directors will be elected on the basis of a plurality of votes
present and entitled to vote. All other matters will be decided by a majority
of votes cast. In instances where brokers are prohibited from exercising
discretionary authority for beneficial owners who have not returned proxies to
the brokers, those shares will not be included in the vote totals and,
therefore, will have no effect on the vote.
-3-
<PAGE> 5
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information
regarding beneficial ownership of the Company's common stock as of January 19,
1998 by (i) all those known by the Company to be beneficial owners of more than
5% of the Company's common stock, (ii) all of the Company's directors and (iii)
all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF
DIRECTORS, OFFICERS NUMBER OF SHARES COMMON SHARES
AND 5% SHAREHOLDERS BENEFICIALLY OWNED BENEFICIALLY OWNED
- -------------------------------------------------------------------------------
<S> <C> <C>
John J. Klobnak (1)
540 Maryville Centre Drive, Suite 200
St. Louis, Missouri 63141 603,823 6.16%
Alan F. Gillam (2)
540 Maryville Centre Drive, Suite 200
St. Louis, Missouri 63141 216,053 2.26%
Robert W. May (3)
540 Maryville Centre Drive, Suite 200
St. Louis, Missouri 63141 260,807 2.72%
Dr. Henry Simon (4)
20 Southampton Street
London WC2E 7QG England 1,674,321 17.94%
James M. Garvey (4)
One Beacon Street, Suite 4500
Boston, Massachusetts 02108 1,673,921 17.94%
Richard L. Lindstrom, M.D. (5)
710 East 24th Street
Minneapolis, Minnesota 55391 111,288 1.18%
Steven C. Straus (6)
640 Grandview Lane
Lake Forest, Illinois 60045 7,056 0.08%
All Directors and Executive Officers
as a Group, nine persons (7)(8) 3,179,942 29.76%
</TABLE>
Pursuant to the rules of the Securities and Exchange Commission, shares of
common stock which an individual or group has a right to acquire within sixty
(60) days pursuant to the exercise of options
-4-
<PAGE> 6
or warrants are deemed to be outstanding for the purpose of computing the
percentage of ownership of such individual or group, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of any other
person shown in the table.
(1) Includes presently exercisable options and warrants to purchase 478,917
shares of common stock granted to Mr. Klobnak by the Board of Directors
pursuant to the Company's Incentive Stock Option Plan, the Non-Qualified
Warrant Plan and other unregistered warrants. Mr. Klobnak also owns an
additional 112,500 common stock options and warrants which are not
presently exercisable. See "Executive Compensation - Stock Option Plan"
and "Executive Compensation - Employment Agreements."
(2) Includes presently exercisable warrants and options to purchase 216,000
shares of common stock granted to Mr. Gillam by the Board of Directors
pursuant to the Non-Qualified Warrant Plan, the Incentive Stock Option
Plan and other unregistered warrants.
(3) Includes presently exercisable warrants and options granted to Mr. May by
the Board of Directors to purchase 258,950 shares of common stock pursuant
to the Non-Qualified Warrant Plan, the Incentive Stock Option Plan and
other unregistered warrants. Mr. May also owns 75,000 warrants and
options which are not presently exercisable.
(4) Beneficial ownership established by virtue of membership on the Board of
Directors of the Company as the representative of Schroder Ventures Life
Sciences Advisors, Inc., an affiliate of the holders of 1,666,665 shares
of the Common Stock of the Company. Includes presently exercisable
options granted to Dr. Simon and to Mr. Garvey, respectively, by the Board
of Directors to purchase 6,656 shares of common stock each. Each also own
13,344 options which are not presently exercisable.
(5) Includes presently exercisable unregistered warrants and options granted
to Dr. Lindstrom by the Board of Directors to purchase 96,656 shares of
common stock, 6,823 shares of common stock he received as a stockholder of
Vision Correction, Inc., a Minneapolis-based company acquired by the
Company in August, 1995 and 3,609 restricted shares of common stock he
received as the Medical Director for the Company. Dr. Lindstrom also owns
33,344 unregistered warrants and options which are not presently
exercisable and, through a partnership, 157,593 options which are not
presently exercisable, and subject to the terms of the Refractive
Management Services Agreement with Lindstrom, Samuelson and Hardten
Ophthalmology Associates, P. A., will own 96,400 shares of common stock
which are contingently issuable in January 1999, but not currently
outstanding.
(6) Includes presently exercisable options to Mr. Straus by the Board of
Directors to purchase 6,656 shares of common stock. Mr. Straus also owns
13,344 options which are not presently exercisable.
(7) Included presently exercisable options and warrants to purchase an
aggregate of 1,029,042 shares of common stock granted to four executive
officers (two of which are also directors) of
-5-
<PAGE> 7
the Company. An additional 364,375 options and warrants to purchase
shares of common stock are owned but are not presently exercisable by
these executive officers. See "Executive Compensation - Stock Option
Plan" and "Executive Compensation - Employment Agreements."
(8) Includes presently exercisable options and warrants to purchase an
aggregate of 1,070,491 shares of common stock granted to directors, (two
of which are also executive officers of the Company). An additional
514,869 options and warrants to purchase shares of common stock are owned
but not presently exercisable by these directors.
As required by the Securities and Exchange Commission rules under Section
16 of the Securities and Exchange Act of 1934, the Company notes that during
the fiscal year ended April 30, 1997, all reports regarding transactions in the
Company's common stock were timely filed.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Six (6) individuals are to be elected at the Annual Meeting to serve as
directors until the next annual meeting and until the election and
qualification of their successors. Unless shareholder WITHHOLDS AUTHORITY, the
proxy holders will vote FOR the election of the persons named below. Although
the Board of Directors does not contemplate the possibility, in the event any
nominee is not a candidate or is unable to serve as director at the time of the
election, unless the shareholder withholds authority from voting, the proxies
will be voted for any nominee who shall be designated by the present Board of
Directors to fill such vacancy.
-6-
<PAGE> 8
The name and age of each of the six (6) nominees, his principal
occupation, the period during which such person has served as a director
together with the number of shares of Common Stock beneficially owned, directly
or indirectly, by each nominee and by all nominees and officers as a group and
the percentage of outstanding shares such ownership represents as of the close
of business on January 19, 1998 (according to information received by the
Company) as set out below:
IDENTIFICATION OF DIRECTORS
<TABLE>
<CAPTION>
Service Amount of Shares
as a and Nature of Percentage of
Director Beneficial Outstanding Shares (2)
Name of Nominee Age Principal Occupation Since Ownership (1)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John J. Klobnak 47 Director, 1989 603,823 6.16%
Chairman and
CEO
Robert W. May, Esq. 50 Director, 1992 260,807 2.72%
Vice Chairman
and Secretary
Dr. Henry Simon (3) 66 Director 1995 1,674,321 17.94%
James M. Garvey (3) 49 Director 1995 1,673,921 17.94%
Richard L. 50 Director 1995 111,288 1.18%
Lindstrom, M.D.
Steven C. Straus 41 Director 1996 7,056 0.08%
</TABLE>
NOTES:
(1) Unless otherwise indicated in a note, each nominee has a sole power to
vote, or dispose or direct the disposition of all shares owned by him.
(2) See footnotes 1, 3, 4, 5 and 6 under "OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT" for description of the Stock Options granted said
individuals and inclusion of warrants and options in share count.
(3) Beneficial ownership reflects relationship as officer, director or
affiliate of various Schroder funds and entities owning 1,666,665 shares
of Common Stock.
-7-
<PAGE> 9
CERTAIN BUSINESS RELATIONSHIPS
Dr. Henry Simon and James M. Garvey are both members of the Board of Directors
and employees of Schroder Ventures Life Sciences Advisors, Inc., an affiliate
of the holder of 1,666,665 shares of the Common Stock of the Company which
resulted from conversion of 100,000 shares of the Company's Convertible
Preferred Stock in June 1996.
IDENTIFICATION OF OFFICERS
<TABLE>
<CAPTION>
Expiration Served
Positions of as Officer
Name of Nominee Age Held Term Since
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Klobnak 47 Chief Executive Officer October 11, 1998 1989
Robert W. May, Esq. 50 Secretary and General
Counsel October 11, 1998 1993
B. Charles Bono III 49 Executive Vice President,
Chief Financial Officer &
Treasurer October 11, 1998 1992
James C. Wachtman 37 Chief Operating Officer - November 30, 1997 1996
North American Operations
</TABLE>
Set forth below is certain information concerning the nominees, directors and
executive officers.
JOHN J. KLOBNAK Mr. Klobnak has served as Chairman of the Board and Chief
Executive Officer of the Company since 1993. From 1990 to
1993, Mr. Klobnak served as the Company's President and
Chief Executive Officer. From 1986 to 1990, he served as
Chief Operating Officer and subsequently President of
MarketVision, a partnership acquired by the Company in
1990.
ROBERT W. MAY, ESQ. Mr. May joined the Company as its Vice-Chairman and
General Counsel in September 1993. Prior to joining the
Company as a full-time employee, Mr. May served as
Corporate Secretary and a director of the Company and was
a partner in the St. Louis, Missouri law firm of May and
Berne, the former general corporate counsel for the
Company, from 1985 until 1993.
-8-
<PAGE> 10
DR. HENRY SIMON Dr. Simon has served as a director of the Company since
November 1995. Since 1996, he has served as Chairman and
from 1993 to 1996 as CEO and Managing Partner of Schroder
Ventures International Life Sciences Advisers, a venture
capital advisory company. Dr. Simon has served as
Chairman of Mitel, Inc., a manufacturer of
telecommunications equipment and Shire Pharmaceutical
Group plc, a British company. Dr. Simon is currently a
director of Chiroscience plc and Micromass in the U.K.
JAMES M. GARVEY Mr. Garvey has served as a director of the Company since
November 1995. Mr. Garvey serves as Chief Executive
Officer and Managing Partner of Schroder Venturers Life
Sciences Advisors, a venture capital advisory company
which he joined in May of 1995. From 1989 to 1995, Mr.
Garvey was Director of Allstate Venture Capital, the $600
million venture capital division of Allstate Corporation
after initially directing Allstate Venture Capital's heath
care investment activity. Mr. Garvey is currently a
director of Allscrips Pharmaceutical and J&C Healthcare
and has served as director and Chairman of several public
and private healthcare companies.
RICHARD L.
LINDSTROM, M.D. Dr. Lindstrom has served as a director of the Company
since November 1995. Since 1979, Dr. Lindstrom has been
engaged in the private practice of ophthalmology and has
been the President of Lindstrom, Samuelson & Hardten
Ophthalmology Associates, P.A. since 1989. In 1989, Dr.
Lindstrom founded the Phillips Eye Institute Center for
Teaching & Research, an ophthalmic research and surgical
skill education facility, and he currently serves as the
Center's Medical Director. Dr. Lindstrom has served as an
Associate Director of the Minnesota Lions Eye Bank since
1987. From 1980 to 1989, he served as Professor of
Ophthalmology at the University of Minnesota. Dr.
Lindstrom received his M.D. and his B.A. degrees from the
University of Minnesota. Dr. Lindstrom is a director of
Vision Twenty-One, Inc.
STEVEN C. STRAUS Mr. Straus has served as a director of the Company since
January of 1996. He currently serves as the President and
Chief Operating Officer of Jordan Industries, Inc. Prior
to that, he served as Senior Vice President of the
Ambulatory Surgery Division of Columbia Healthcare the
world's largest for-profit health care provider. Mr.
Straus was employed in a similar capacity with Medical
Care America, Inc., from 1993 until Medical Care America
was merged into Columbia Healthcare Corporation in 1994.
From 1986 to 1993, Mr. Straus held various positions with
Baxter Healthcare Corporation and from 1978 to 1985 was
employed by American Hospital Supply Corporation.
CHARLES BONO III Mr. Bono joined the Company as Executive Vice President,
Chief Financial Officer and Treasurer in 1992. From 1980
to 1992, Mr. Bono was employed
-9-
<PAGE> 11
by Storz Instrument Company, a global marketer of
ophthalmic devices and pharmaceutical products, as Vice
President of Finance from 1987 to 1992.
JAMES C. WACHTMAN Mr. Wachtman joined the Company as Chief Operating Officer
- North American Operations effective May 30, 1996. From
1983 until he joined the Company, Mr. Wachtman was
employed by McGaw, Inc., a manufacturer of disposables for
home infusion, in various positions. Most recently, he
served as Vice President/Operations of CAPS, a hospital
pharmacy division of McGaw.
-10-
<PAGE> 12
DIRECTORS MEETINGS / COMMITTEES
During the twelve months ended April 30, 1997, the Board of Directors held a
total of six (6) meetings. All directors attended each of those meetings. In
addition, three (3) committees of the Board held the number of meetings
indicated:
<TABLE>
<CAPTION>
EXECUTIVE COMMITTEE
MEETINGS HELD LAST
FUNCTION BOARD MEMBERS FISCAL YEAR
- --------------------------------------------------------------------------
<S> <C> <C>
To approve or John J. Klobnak, James M.
disapprove Garvey and Robert W. May 2
expenditures by the (replaced Alan F. Gillam)
Company in excess of
$500,000 and all
material contracts
entered into by the
Company and also
shall have the power
to nominate all
slates of eligible
candidates from which
directors and
officers are chosen.
COMPENSATION COMMITTEE
MEETINGS HELD LAST
FUNCTION BOARD MEMBERS FISCAL YEAR
To establish, review
and modify all John J. Klobnak, Richard
compensation paid by L. Lindstrom, M.D., Dr.
the Company to its Henry Simon with Robert W. 2
directors, officers May to serve as an ex
and key employees. officio member
AUDIT COMMITTEE
MEETINGS HELD LAST
FUNCTION BOARD MEMBERS FISCAL YEAR
To review and oversee Richard L. Lindstrom, M.D.,
the finances of the M. Garvey with B. Charles 1
Company and to select Steven C. Straus and James
and monitor the Bono to serve as an ex
public accounting officio member
firm responsible for
maintaining and
auditing the finances
of the Company.
</TABLE>
PROPOSAL NO. 2 - APPROVAL OF ACCOUNTANTS
The Board of Directors has selected the firm of Price Waterhouse LLP,
independent certified public accountants, as independent auditor to examine the
financial statements for the fiscal year ended April 30, 1998. Price
Waterhouse LLP has been the Company's independent auditor for the past four
fiscal years. If the shareholders do not approve this selection, other
certified public accountants will be considered by the Board. The Company
expects a member of this firm to be present at the Annual Meeting.
-11-
<PAGE> 13
PROPOSAL NO. 3 - APPROVAL OF INCREASE IN SHARES
INCLUDED IN STOCK OPTION AND WARRANT PLANS
In 1990 the Company adopted an Incentive Stock Option Plan ("Option Plan")
and a Non-Qualified Stock Option Plan. In 1994, the Company adopted a
Non-Qualified Warrant Plan ("Warrant Plan"). The Company has added a
significant number of employees since moving to the operational phase after
approval of the excimer laser in the U.S. The Board of Directors considers the
grant of stock options and warrants an important incentive for employees and
consultants of the Company. The table below sets forth the number of shares of
common stock authorized, issued and available under the Option Plan and the
Warrant Plan. The Company is not requesting any addition to the Non-Qualified
Stock Option Plan at this time.
<TABLE>
Option Warrant
Plan Plan
------- ---------
<S> <C> <C>
Authorized 700,000 1,500,000
Issued 590,495 1,499,500
Available 109,505 500
</TABLE>
The Board of Directors is now recommending that the number of shares
authorized to be issued from each Plan be increased by the following amounts:
<TABLE>
<S> <C>
Option Plan 300,000
Warrant Plan 700,000
</TABLE>
-12-
<PAGE> 14
EXECUTIVE COMPENSATION
The following tables sets forth the compensation paid to five executive
officers earning total compensation at annual rates in excess of $100,000
during the fiscal year ended April 30, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
WARRANTS
NAME AND FISCAL AND
PRINCIPAL POSITION YEAR SALARY BONUS(B) OPTIONS
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Klobnak April, 1997 $196,800 $ 32,000 38,250(c)
Chief Executive Officer
April, 1996 $186,000(a) $124,330 0
April, 1995 $146,575 $ 56,835 25,000(e)
85,000(f)
Alan F. Gillam April, 1997 $190,700 $ 30,512 36,000(c)
President
April, 1996 $185,340(a) $123,890 0
April, 1995 $146,063 $ 56,636 25,000(e)
80,000(f)
Robert W. May April, 1997 $161,300 $ 25,808 33,750(c)
Secretary and General Counsel April, 1996 $156,710(a) $104,750 0
April, 1995 $123,880 $ 47,880 25,000(e)
75,000(f)
B. Charles Bono III April, 1997 $148,200 $ 23,712 22,500(c)
Executive Vice President,
Chief Financial Officer April, 1996 $143,950(a) $ 96,230 0
and Treasurer
April, 1995 $113,410 $ 43,975 15,000(e)
50,000(f)
James C. Wachtman April, 1997 $140,000(a1) $ 28,000 125,000(d)
Chief Operating Officer
</TABLE>
-13-
<PAGE> 15
(a) Annual compensation rate as of April 30, 1996, effective since October
11, 1995.
(a1) Effective annual rate since May 28, 1996.
(b) Earned during fiscal year, paid by the following May or June.
(c) Warrants with exercise price of $12.4375 per share.
(d) Consists of 10,000 incentive options, 40,000 warrants and 75,000
unregistered warrants initially issued at $12.50 each on May 30, 1996,
price adjusted to $7.625 each by Board of Directors at July 30, 1996
Board meeting .
(e) Warrants with exercise price of $7.75 per share.
(f) Unregistered warrants with exercise price of $9.00 per share.
WARRANT AND OPTION GRANTS LAST FISCAL YEAR
The following table shows information regarding each stock option or
warrant granted during fiscal 1996 to each of the named executive officers.
The potential realizable values that would exist for these options or warrants
are based on assumed rates of annual compound stock price appreciation of 5%
and 10% from the date of grant over the full term of the option as required by
SEC regulations. Actual gains, if any, on stock options and warrant exercises
are dependent on the future performance of the Common Stock.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF TOTAL VALUE AT ASSUMED
SHARES OPTIONS AND ANNUAL RATES OF
UNDERLYING WARRANTS STOCK PRICE
NAME OPTIONS AND GRANTED TO EXERCISE EXPIRATION APPRECIATION FOR
AND WARRANTS EMPLOYEES IN PRICE DATE OPTION TERM(2)
POSITION GRANTED(1) FISCAL YEAR PER SHARE 5% ($) / 10% ($)
<S> <C> <C> <C> <C> <C>
John J. Klobnak 38,250 9.24% $12.4375 May 9, 2001 $131,437/$290,441
Robert W. May 33,750 8.15% $12.4375 May 9, 2001 $115,974/$256,271
Alan F. Gillam 36,000 8.70% $12.4375 May 9, 2001 $123,705/$273,356
B. Charles Bono 22,500 5.43% $12.4375 May 9, 2001 $ 77,316/$170,847
James C. Wachtman 125,000 30.19% $ 7.625 May 29,2001 $263,331/$581,892
</TABLE>
(1) Options and warrants granted to employees under the 1994 Non-Qualified
Warrant Plan and the 1990 Incentive Stock Option Plan vest ratably over
periods from two to three years and are granted at prices equal to or
greater than the market price on the date of grant.
(2) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the SEC and, therefore, are not intended to
forecast possible future appreciation, if any, of the Company's stock
price.
-14-
<PAGE> 16
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SECURITIES VALUE OF
SHARES UNDERLYING UNEXERCISED
ACQUIRED UNEXERCISED OPTIONS AT IN-THE MONEY
UPON VALUE FY-END OPTIONS AT FY-END(1)
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Klobnak
Chief Executive
Officer 3,333 $24,581 422,292 / 19,125 $273,051 / $0
Alan F. Gillam
President 1,550 $8,331 346,200 / 24,250 $255,338 / $0
Robert W. May
Secretary and
General Counsel 1,300 $3,413 210,825 / 23,125 $31,750 / $0
B. Charles Bono III
Exec Vice President,
CFO and Treasurer 1,650 $9,900 137,600 / 11,250 $10,106 / $0
James C. Wachtman
Executive Vice
President and COO 0 $0 55, 208 / 69,792 $0 / $0
</TABLE>
(1) Calculated using a $6.375 closing price per share of the Company's common
stock as reported by Nasdaq on April 30, 1997.
Employment Agreements
During fiscal 1996, the Company entered into three-year contracts with
John J. Klobnak, Alan F. Gillam, Robert W. May and B. Charles Bono III. These
contracts provide for base salaries and the potential payment of certain
bonuses conditioned upon certain objectives and/or increases in the price of
the Company's Common Stock. On May 28, 1996, the Company entered into an
eighteen month employment agreement with James C. Wachtman to serve as Chief
Operating Officer - North American Operations. This Agreement was
automatically extended for an additional one year term on December 1, 1997.
During fiscal 1997, 1996 and 1995, $140,000, $449,000 and $205,000
respectively, were provided for these bonuses. Under these contracts,
termination of employment by the Company without cause will result in payment
by the Company to the Employee of the total compensation due for the remainder
of the term of the contract or eighteen months of compensation (12 months in the
case of Mr. Wachtman), whichever is greater. Termination of employment by the
employee under certain limited circumstances will result in the payment by the
Company to the Employee of the total compensation due for the remainder of the
term of the contract or two year's compensation, whichever is greater. On May
30, 1997, Mr.Gillam's employment by the Company was terminated. Mr. Gillam
subsequently received taxable compensation of $298,652, including accrued
vacation, pursuant to his Employment Agreement.
-15-
<PAGE> 17
COMPENSATION COMMITTEE INTERLOCK AND INSIDER
PARTICIPATION IN COMPENSATION DECISION
During the last completed fiscal year, John J. Klobnak, Dr. Henry Simon
and Richard L. Lindstrom, M.D. served as members of the Compensation Committee
of the Company's Board of Directors. During that fiscal year, Mr. Klobnak
served as Chief Executive Officer of the Company. Mr. Klobnak has previously
served as the Company's President. During the last fiscal year, Dr. Henry
Simon was an employee of Schroder Ventures Life Sciences Advisors, Inc., an
affiliate of the holder of 1,666,665 shares of Common Stock of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") consists of the following
non-employee members of the Board of Directors: Richard L. Lindstrom, M.D. and
Dr. Henry Simon. John J. Klobnak, Chairman and CEO also serves on the
Committee and Robert W. May, Vice Chairman, Secretary and General Counsel
serves as an ex-officio member. The Committee determines and maintains the
Company's executive compensation policies and objectives and administers the
Company's Stock Option Plan.
The objectives of the Committee are to attract and retain highly talented
and productive executives, to provide incentives for superior performance and
to align the interests of the executive officers with the interest of the
Company's stockholders.
The Company's executive compensation program combines cash compensation
with long-term incentive compensation, consisting of stock option and warrant
grants to attract, motivate and maintain its executive officers. In addition,
each executive is included in the Company's benefit plan which includes health,
dental, life and disability insurance and which is offered to all employees of
the Company.
Cash compensation consists of base salary and annual bonus programs. When
setting base salary levels, including the base salary level for the Chief
Executive Officer, the Committee considers the individual's salary history,
experience, performance and contribution to the management team. Also
considered is the performance of the Company and its progress towards
implementing its business plan of becoming a fully integrated provider of
refractive services. The Committee also considers salaries of executives in
other companies of similar size and industry, as well as the competitive market
conditions, for the purpose of determining base salaries necessary to recruit
and retain highly talented and productive executives. The Committee intends to
target base salary levels of the Company's executive officers, including the
Company's Chief Executive Officer, to such comparable companies.
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<PAGE> 18
Cash bonuses are awarded to executives principally as a mechanism to
recognize and reward individual achievements. For the fiscal year ended April
30, 1996, the cash bonuses awarded to executives was based solely on the
increase in the Company's stock price during that year. For subsequent years,
the Committee has established guidelines for awarding cash bonuses based on
such factors as individual achievements, achievement of the Company's business
plan and increase, if any, in the price of the Company's common stock.
The Committee believes that stock option and warrant grants (1) align
executive interest with stockholder interest by creating a direct link between
compensation and stockholder return; (2) assure that executives maintain a
significant long-term interest in the Company's success; (3) help retain key
executives in a competitive market; and (4) allow the Company to conserve cash
by reducing cash bonuses. Option and warrant grants are made from time to time
to executives and other employees whose contributions have or will have a
significant impact on the Company's long-term performance. The Company's
determination of whether option and warrant grants are appropriate each year is
based upon individual performance measures established for each individual
officer, including the Company's Chief Executive Officer. Generally, option
and warrant grants to executive officers vest over periods of two to three
years and expire five years from the date of grant.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF
DIRECTORS.
JOHN J. KLOBNAK
DR. HENRY SIMON
RICHARD L. LINDSTROM, M.D.
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<PAGE> 19
PERFORMANCE GRAPH
The graph below compares the performance of Laser Vision Centers, Inc.'s
common stock with that of the Nasdaq Non-Financial Stocks Total Return Index (a
broad equity market index) and the Nasdaq Health Services Stocks Total Return
Index (a published industry index). The comparison of total return on
investment (change in period end stock price plus reinvested dividends) for
each of the fiscal years assumes that $100 was invested on April 30, 1992 in
each of LaserVision Centers, Inc.'s common stock, the Nasdaq Non-Financial
Stocks Group and the Nasdaq Health Services Stocks Group. The graph lines
merely connect fiscal year-end dates and do not reflect any fluctuations
between those dates. The stock price performance shown on the graph is not
necessarily indicative of future price performance.
<TABLE>
<CAPTION>
4/92 4/93 4/94 4/95 4/96 4/97
------ ----- ----- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C>
LVCI $100.00 $79.25 $55.79 $132.08 $215.09 $96.23
Nasdaq Non-Financial Stocks $100.00 $110.18 $123.20 $143.14 $204.52 $207.88
Nasdaq Health Services Stocks $100.00 $104.20 $131.93 $134.33 $209.96 $162.66
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Under the terms of the Convertible Preferred Stock Purchase Agreement
dated October 11, 1995, the Company pays to Schroder Ventures Life Sciences
Advisors, Inc. the annual sum of $100,000, in quarterly installments, for
consulting and advisory services to the Company. Schroder Ventures Life
Sciences Advisors, Inc. is an affiliate of Schroder Ventures International Life
Sciences Fund, the owner of 17.88% of the Company's Common Stock. James M.
Garvey, Director, is the Managing Partner of Schroder Ventures Life Sciences
Advisors, Inc.
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<PAGE> 20
The Company's European subsidiary, LVC (Europe) Limited also pays Schroder
Ventures Life Science Advisors, Inc. ("Schroder") the sum of $40,000 per year
for consulting and advisory services rendered to it by an employee of Schroder
in the United Kingdom. This payment was authorized by a unanimous vote of the
Board of Directors on July 30, 1996, from which vote Dr. Simon and Mr. Garvey
abstained and was terminated by mutual agreement as of December 31, 1997.
Effective January 1, 1997, the Company entered into a Refractive
Management Services Agreement and other related agreements with Lindstrom,
Samuelson & Hardten Ophthalmology Associates, P.A., of which Richard L.
Lindstrom, M.D., is a principal shareholder. Dr. Lindstrom is a director of
the Company, as well as the Company's Medical Director and a paid consultant to
the Company.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder proposal intended to be presented at the Company's next
annual meeting of stockholders must be received by the Company at its office in
St. Louis, Missouri, on or before June 1, 1998 in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting.
EXPENSES OF SOLICITATION
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by regular employees
of the Company, either personally or by telephone, facsimile or express
delivery services. The Company does not expect to pay any compensation for the
solicitation of proxies, but may reimburse brokers and other persons holding
shares in their name or in the names of nominees for expenses in sending proxy
materials to beneficial owners and obtaining proxies from such owners.
OTHER MATTERS
The Notice of Annual Meeting of Shareholders, Proxy Form and a copy of the
Company's Annual Report for the year ended April 30, 1997 are enclosed with
this Proxy Statement.
The Board of Directors does not intend to bring any matters before the
meeting other than as stated in this proxy statement, and is not aware that any
other matters will be presented for action at the meeting. If any other
matters come before the meeting, the persons named in the judgment, pursuant to
the discretionary authority granted by the proxy. The cost of preparing,
assembling and mailing the proxy material will be borne by the Company.
All properly executed proxies delivered pursuant to this solicitation and
not revoked will be voted at the meeting in accordance with the directions
given. In voting by proxy in regard to the election of six directors to serve
until the 1998 Annual Meeting of Stockholders, stockholders may vote in favor
of all nominees or withhold their votes as to all nominees or withhold their
votes as to specific nominees. With respect to the approval of the selection
of Price Waterhouse LLP, stockholders may
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<PAGE> 21
vote in favor of the item or against the item or may abstain from voting.
Stockholders should specify their choices on the enclosed proxy. If no specific
instructions are given with respect to the matters to be acted upon, the shares
represented by the proxy will be voted FOR the election of all directors and
FOR the proposal to ratify and approve the appointment of independent accounts.
Respectfully submitted,
/s/ Robert W. May
--------------------------------
Robert W. May
A copy of the Company's Annual Report is provided to you concurrently with this
Proxy Statement. The Company will provide you at your request copies of its
Annual Report on Form 10-K and any exhibits to that Annual Report upon your
payment of the Company's costs incurred in providing any such copies.
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<PAGE> 22
PROXY FORM
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF LASER VISION CENTERS, INC.
The undersigned Shareholder of Laser Vision Centers, Inc., (the
"Company") hereby appoints John J. Klobnak and Robert W. May or either of them
(with full power to act alone and to designate substitutes) Proxies of the
undersigned, with authority to vote and act with respect to all shares of
common stock of the Corporation which the undersigned would be entitled to vote
at the Annual Meeting of the Shareholders to be held on March 19, 1998 at 9:00
a.m., at the Laser Vision Center of St. Louis, 755 South New Ballas Road, Suite
170, St. Louis, Missouri 63141, and any adjournments thereof, with all the
powers the undersigned would possess if personally present, upon matters noted
below and upon such other matters as may properly come before the meeting. The
shares represented by this Proxy shall be voted as follows:
1. TO ELECT as Directors: John J. Klobnak, Robert W. May, Richard L. Lindstrom,
M.D., Dr. Henry Simon, James M. Garvey and Steven C. Straus.
[ ] FOR all the foregoing nominees.
[ ] WITHHOLD AUTHORITY to vote for all the foregoing nominees.
NOTE: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME. UNLESS AUTHORITY TO VOTE FOR ALL OF THE
FOREGOING NOMINEES IS WITHHELD, THIS PROXY WILL BE DEEMED TO CONFER
AUTHORITY TO VOTE FOR EVERY NOMINEE WHOSE NAME IS NOT STRUCK.
2. TO RATIFY the appointment of Price Waterhouse LLP as the Independent
Certified Public Accountant for the purpose of conducing an annual audit.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IF ANY OTHER BUSINESS IS TRANSACTED AT SAID MEETING, THIS PROXY SHALL BE VOTED
IN ACCORDANCE WITH THE BEST JUDGMENT OF THE HOLDERS OF THE PROXIES. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSITIONS. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF LASER VISION CENTERS,
INC., AND MAY BE REVOKED PRIOR.
3. TO APPROVE the additon of 300,000 shares to the Incentive Stock Option
Plan and 700,000 shares to the Non-Qualified Warrant Plan.
FOR AGAINST ABSTAIN
NOTE: Signature(s) should follow exactly the name(s) on the
stock certificates, Executor, administrator, trustee or
guardian should sign as such. If more than one trustee, all
should sign. ALL JOINT OWNERS SHOULD SIGN.
DATED:_____________________ ______________________________
Signature(s) of Shareholder(s)
______________________________
Signature(s) of Shareholder(s)
Number of Shares:________________________
