<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:
[ ] 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.
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)(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
LASER VISION CENTERS, INC.
540 MARYVILLE CENTRE DRIVE
SUITE 200
ST. LOUIS, MISSOURI 63141
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
ON NOVEMBER 10, 2000
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 Marriott West, 660 Maryville Centre Drive, St.
Louis, Missouri 63141 on November 10, 2000 at 9:00 a.m. for the following
purposes:
1. To elect five Directors for the ensuing year.
2. To approve the selection of PricewaterhouseCoopers LLP as the
Company's independent public accountants for the fiscal year
ending April 30, 2001.
3. To approve the Laser Vision Centers, Inc. 2000 Incentive Stock
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 September 29,
2000 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 October 9, 2000.
<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
October 9, 2000
St. Louis, Missouri
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" or
"LaserVision") 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
September 29, 2000 (the "Record Date") may vote at the meeting. As of September
29, 2000, there were outstanding 25,330,991 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 a shareholder 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 PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending April 30, 2001, and
for approval of the Laser Vision Centers, Inc. 2000 Incentive Stock Plan, 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.
Whether or not you are able to attend the Annual Meeting, you are urged
to complete and return the enclosed proxy. All valid proxies received prior to
the meeting will be voted. If you specify a choice with respect to any item by
marking the appropriate box on the proxy, the shares will be voted in accordance
with that specification. If no specification is made, the shares will be voted
for Proposals 1, 2, and 3, and, in the proxy holders' discretion, as to other
matters that may properly come before the Annual Meeting. If a broker indicates
on the enclosed proxy or its substitute that the broker does not have
discretionary authority as to certain shares to vote on a particular matter
(broker non-votes), those shares will not be considered as present with respect
to that matter.
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 LaserVision's Common Stock as of October
10, 2000 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 our directors and (iii) all
directors and executive officers of LaserVision as a group.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS
NUMBER PERCENTAGE OF AND OPTIONS WARRANTS AND OPTIONS
OF SHARES COMMON SHARES BENEFICIALLY NOT PRESENTLY
DIRECTORS, EXECUTIVE OFFICERS BENEFICIALLY BENEFICIALLY OWNED EXERCISABLE
AND 5% SHAREHOLDERS OWNED OWNED (IN TOTAL) OR IN TOTAL
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Klobnak
540 Maryville Centre Dr., Suite 200
St. Louis, Missouri 63141 1,047,847 4.2% 845,250 331,250
-------------------------------------------------------------------------------------------------------------------------------
James C. Wachtman
540 Maryville Centre Dr., Suite 200
St. Louis, Missouri 63141 732,330 3.0% 715,750 321,250
-------------------------------------------------------------------------------------------------------------------------------
Robert W. May
540 Maryville Centre Dr., Suite 200
St. Louis, Missouri 63141 550,383 2.3% 526,202 198,750
-------------------------------------------------------------------------------------------------------------------------------
B. Charles Bono
540 Maryville Centre Dr., Suite 200
St. Louis, Missouri 63141 461,281 1.9% 418,452 198,750
-------------------------------------------------------------------------------------------------------------------------------
James B. Tiffany
10860 Nesbitt Avenue South
Bloomington, MN 55436 36,083 0.2% 36,083 113,917
-------------------------------------------------------------------------------------------------------------------------------
James M. Garvey
60 State Street, Suite 3650
Boston, Massachusetts 02109 43,181 0.2% 41,981 36,377
-------------------------------------------------------------------------------------------------------------------------------
Richard L. Lindstrom, M.D.
710 East 24th Street
Minneapolis, Minnesota 55391 320,357 1.3% 256,957 63,043
-------------------------------------------------------------------------------------------------------------------------------
Steven C. Straus
1751 Lake Cook Road, Suite 550
Deerfield, IL 60015 43,645 0.2% 43,645 36,377
-------------------------------------------------------------------------------------------------------------------------------
All Officers and Directors
as a Group, eight persons (1)(2) 3,235,107 12.1% 2,884,410 1,299,714
-------------------------------------------------------------------------------------------------------------------------------
</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 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. Total
Number of Shares Beneficially Owned takes into account the possible
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<PAGE> 6
exercise of the outstanding options and warrants which are presently exercisable
(Warrants and Options) and the vested Laser Vision stock in the 401(k) plan.
(1) Includes presently exercisable options and warrants to purchase an
aggregate of 2,541,827 shares of Common Stock granted to five executive
officers (two of which are also directors) of Laser Vision. An additional
1,163,917 options and warrants to purchase shares of Common Stock are
owned but are not presently exercisable by these executive officers.
(2) Includes presently exercisable options and warrants to purchase an
aggregate of 1,714,035 shares of Common Stock granted to directors (two
of which are also executive officers of Laser Vision). An additional
665,797 options and warrants to purchase shares of Common Stock are owned
but not presently exercisable by these directors or their affiliates.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As required by the Securities and Exchange Commission rules under Section
16 of the Securities and Exchange Act of 1934, we note that during the fiscal
year ended April 30, 2000, all reports regarding transactions in Laser Vision's
Common Stock were timely filed.
PROPOSAL NO. 1-- ELECTION OF DIRECTORS
Five (5) 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 a 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.
5
<PAGE> 7
The name and age of each of the five (5) nominees, his principal position
and offices within the Company, 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 October 10, 2000 (according to information received
by the Company) as set out below:
<TABLE>
<CAPTION>
IDENTIFICATION OF DIRECTORS
-------------------------------------------------------------------------------------------------------------------------------
Service Amount of Shares Percentage of
as a and Nature of Outstanding
Principal Director Beneficial Shares (2)
Name of Officer Age Position Since Ownership (1)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John J. Klobnak 49 Director,
Chairman and 1989 1,047,847 4.2%
CEO
-------------------------------------------------------------------------------------------------------------------------------
Robert W. May, Esq. 53 Director, Vice
Chairman, 1992 550,383 2.3%
Secretary and
General Counsel
-------------------------------------------------------------------------------------------------------------------------------
James M. Garvey 53 Director 1995 43,181 0.2%
-------------------------------------------------------------------------------------------------------------------------------
Richard L. 53 Director 1995 256,957 1.3%
Lindstrom, M.D.
-------------------------------------------------------------------------------------------------------------------------------
Steven C. Straus 44 Director 1996 43,645 0.2%
-------------------------------------------------------------------------------------------------------------------------------
</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 and 2 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.
6
<PAGE> 8
CERTAIN BUSINESS RELATIONSHIPS
Dr. Lindstrom is one of Laser Vision's Medical Directors and President of
Minnesota Eye Consultants, a Laser Vision customer.
IDENTIFICATION OF OFFICERS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
Expiration Served
Positions of As Officer
Name of Officer Age Held Term Since
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Klobnak 49 Chief Executive Officer 2000 1989
-------------------------------------------------------------------------------------------------------------------------------
Robert W. May, Esq. 53 Secretary and General
Counsel 2000 1993
-------------------------------------------------------------------------------------------------------------------------------
B. Charles Bono III 52 Executive Vice President, Chief
Financial Officer & Treasurer 2000 1992
-------------------------------------------------------------------------------------------------------------------------------
James C. Wachtman 40 President and 2000 1996
Chief Operating Officer
-------------------------------------------------------------------------------------------------------------------------------
</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 engaged in the
private practice of law in St. Louis, Missouri from 1985 to
1993.
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 venture capital
division of Allstate Corporation after initially directing
Allstate Venture Capital's heath care investment activity.
Mr. Garvey is
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<PAGE> 9
currently a director of JCN Healthcare, Medcareers, Inc.,
Medcentral, Inc., Mednova Ltd. And Orthovita, Inc. He has
previously 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 Minnesota Eye Consultants P.A. or its
predecessor 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. He is a medical
advisor for several medical device and pharmaceutical
manufacturers and is on the Board of Directors of Vision
21, Incorporated. From 1980 to 1989, he served as Professor
of Ophthalmology at the University of Minnesota. Dr.
Lindstrom received his M.D., B.S. and B.A. degrees from the
University of Minnesota.
STEVEN C. STRAUS Mr. Straus has served as a director of the Company since
January 1996. He is currently an independent health care
consultant. From 1998 to September 2000, he served as the
President and Chief Operating Officer of Jordan
Industries, Inc. Healthcare Products Group. Prior to 1998,
he was Senior Vice President of the Ambulatory Surgery
Division of Columbia Healthcare (now HCA--The Healthcare
Company) and 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.
B. 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 by Storz Instrument Company, a
global marketer of ophthalmic devices and pharmaceutical
products, serving as Vice President of Finance from 1987 to
1992.
JAMES C. WACHTMAN Mr. Wachtman joined the Company as Chief Operating Officer
--North American Operations in May 1996 and was named
President in September 1998. 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.
JAMES B. TIFFANY Mr. Tiffany joined LaserVision in January 1999 as Vice
President of Sales, and is now Vice President and General
Manager of Midwest Surgical Services, Inc., the Company's
mobile cataract subsidiary. For the prior thirteen years,
Mr. Tiffany held a number of positions with Storz
Instrument Company and Bausch and Lomb Surgical. While with
Storz, Mr. Tiffany served as Director of Marketing and Vice
President of Sales and Marketing. During 1998, he served as
Vice President of
8
<PAGE> 10
Commercial Operations for the U.S., Canada and Latin
America for Bausch and Lomb Surgical.
DIRECTORS MEETINGS / COMMITTEES
During the twelve months ended April 30, 2000, 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 disapprove expenditures by the Company in John J. Klobnak, James M. Garvey
excess of $500,000 and all material contracts entered into by and Robert W. May
the Company and also shall have the power to nominate all 2
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 compensation paid by the John J. Klobnak, Richard L.
Company to its directors, officers and key employees. Lindstrom, M.D., James M. Garvey,
with Robert W. May to serve as an ex 2
officio member
---------------------------------------------------------------------------------------------------------------------------
AUDIT COMMITTEE
---------------------------------------------------------------------------------------------------------------------------
MEETINGS
HELD LAST
FUNCTION BOARD MEMBERS FISCAL YEAR
---------------------------------------------------------------------------------------------------------------------------
To review and oversee the finances of the Company and to Steven C. Straus and James M. Garvey
select and monitor the public accounting firm responsible for with B. Charles Bono to serve as an ex 2
maintaining and auditing the finances of the Company. officio member
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Non-employee directors who have no other affiliation with the Company are paid
$2,500 for attendance at each Board of Directors meeting. All non-employee
directors are reimbursed for out-of-pocket expenses incurred in connection with
the attending Board of Directors meetings.
PROPOSAL NO. 2 -- APPROVAL OF ACCOUNTANTS
The Board of Directors has selected the firm of PricewaterhouseCoopers
LLP, independent certified public accountants, as independent auditor to examine
the financial statements for the fiscal year ended April 30, 2001.
PricewaterhouseCoopers LLP has been the Company's independent auditor for the
past seven fiscal
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<PAGE> 11
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.
PROPOSAL NO. 3 -- APPROVAL OF LASER VISION CENTERS, INC.
2000 INCENTIVE STOCK PLAN
The Laser Vision Centers, Inc. 2000 Incentive Stock Plan (the
"Incentive Stock Plan") seeks to encourage key employees, directors and service
providers of the Company and its subsidiaries to acquire Common Stock or to
receive monetary payments based on the value of Common Stock upon the
achievement of certain goals that are mutually advantageous to the Company and
its stockholders, on the one hand, and to such individuals, on the other, and
thus provide an incentive to contribute to the success of the Company and align
the interests of such individuals with the interests of the stockholders of the
Company.
The Incentive Stock Plan will be administered by a committee of
two or more directors appointed by the Board of Directors (for purposes of the
Incentive Stock Plan, the group administering the Incentive Stock Plan is
referred to as the "Administrator"). The Administrator is authorized in its sole
discretion to determine the individuals to whom the benefits will be granted, to
grant benefits, to establish the timing, pricing, amount and other terms and
conditions of such grants, to interpret and administer the Incentive Stock Plan,
to prescribe, amend and rescind rules and regulations relating to the Incentive
Stock Plan and to make all other determinations necessary or advisable for the
administration of the Incentive Stock Plan to the extent not contrary to the
express provisions of the Incentive Stock Plan.
The complete text of the Incentive Stock Plan is set forth in
Exhibit A to this Proxy Statement. The following summary of the Incentive Stock
Plan is subject to the provisions contained in the complete text.
DESCRIPTION OF PLAN
Under the terms of the Incentive Stock Plan, key employees,
directors and service providers of the Company and its subsidiaries as
determined in the sole discretion of the Administrator will be eligible to
receive (a) stock appreciation rights ("SARs"), (b) restricted shares of Common
Stock ("Restricted Stock"), (c) performance awards ("Performance Awards"), (d)
stock options ("Stock Options") exercisable into shares of Common Stock which
may or may not qualify as incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code") (options so
qualifying are hereinafter referred to as "Incentive Stock Options") and (e)
stock units ("Stock Units"). The total number of shares of Common Stock to be
issuable under the Incentive Stock Plan is not to exceed 2,000,000 shares,
subject to adjustment in the event of any change in the outstanding shares of
such stock by reason of a stock dividend, stock split, recapitalization, merger,
consolidation or similar change. As of September 11, 2000, the market value of
the 2,000,000 shares reserved for issuance under the Incentive Stock Plan was
$11,750,000. As of September 11, 2000, there are approximately 280 employees, 5
directors and 10 service providers who are eligible to participate in the
Incentive Stock Plan. As of September 11, 2000, a total of 986,000 options have
been granted under the Incentive Stock Plan at an average exercise price of
$4.80. If all outstanding options were exercised, the Company would receive a
total of $4,732,118.
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<PAGE> 12
STOCK APPRECIATION RIGHTS. The Administrator may grant SARs
giving the holder thereof a right to receive, at the time of surrender, a
payment equal to the difference between the fair market value of such stock on
the date of surrender of the SAR and the exercise price of the SAR established
by the Administrator at the time of grant, subject to any limitation imposed by
the Administrator in its sole discretion. In the Administrator's discretion, the
value of a SAR may be paid in cash or Common Stock, or a combination thereof. A
SAR may be granted either independent of, or in conjunction with, any Stock
Option. If granted in conjunction with a Stock Option, at the discretion of the
Administrator, a SAR may either be surrendered (a) in lieu of the exercise of
such Stock Option, (b) in conjunction with the exercise of such Stock Option or
(c) upon expiration of such Stock Option. The term of any SAR shall be
established by the Administrator, but in no event shall a SAR be exercisable
after ten years from the date of grant.
RESTRICTED STOCK. The Administrator may issue shares of Common
Stock either as a stock bonus or at a purchase price of less than fair market
value, subject to the restrictions or conditions specified by the Administrator
at the time of grant. In addition to any other restrictions or conditions that
may be imposed on the Restricted Stock, shares of Restricted Stock may not be
sold or disposed of for a period of six months after the date of grant. During
the period of restriction, holders of Restricted Stock shall be entitled to
receive all dividends and other distributions made in respect of such stock and
to vote such stock without limitation.
PERFORMANCE AWARDS. The Administrator may grant Performance
Awards consisting of shares of Common Stock, monetary units payable in cash or a
combination thereof. These grants would result in the issuance, without payment
therefor, of Common Stock or the payment of cash upon the achievement of certain
pre-established performance criteria (such as return on average total capital
employed, earnings per share or increases in share price) during a specified
performance period not to exceed five years. The participating employee will
have no right to receive dividends on or to vote any shares subject to
Performance Awards until the award is actually earned and the shares are issued.
In the event that a person who is required to file reports under Section 16 of
the Securities Exchange Act of 1934 receives a Performance Award that includes
shares of Common Stock, such shares received may not be disposed of by such
person until six months following the date of issuance.
STOCK OPTIONS. Stock Options granted under the Incentive Stock
Plan shall entitle the holder to purchase Common Stock at a purchase price
established by the Administrator, which price shall not be less than 100% of the
fair market value of Common Stock on the date of grant (110% if the optionee
owns stock possessing more than 10% of the combined voting power of all owners
of stock of the Company or a subsidiary) in the case of Incentive Stock Options
and at any price determined by the Administrator in the case of all other
options. The Administrator shall determine the term of such Stock Options and
the times at, and conditions under which, such Stock Options will become
exercisable. The maximum term of an Incentive Stock Option shall be ten years
(five years if the optionee owns stock possessing more than 10% of the combined
voting power of all owners of stock of the Company or a subsidiary) from the
date of the grant. No Incentive Stock Option shall be awarded after the date
preceding the tenth anniversary of the effective date of the Incentive Stock
Plan.
There is no maximum or minimum number of shares for which a Stock
Option may be granted; however, for any employee, the aggregate fair market
value of Common Stock subject to qualifying Incentive Stock Options that are
exercisable for the first time in any calendar year may not exceed $100,000 or
such other maximum applicable to Incentive Stock Options as may be in effect
from time to time under the Code. Incentive Stock Options shall be granted only
to employees of the Company and designated subsidiaries.
STOCK UNITS. The Administrator may issue Stock Units representing
the right to receive shares of Common Stock at a designated time in the future,
subject to the terms and conditions as established by the
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<PAGE> 13
Administrator in its sole discretion. A holder of Stock Units generally does not
have the rights of a stockholder until receipt of the Common Stock, but, in the
Administrator's sole discretion, may receive payments in cash or adjustments in
the number of Stock Units equivalent to the dividends the holder would have
received if the holder had been the owner of shares of Common Stock instead of
Stock Units.
The Board may terminate the Incentive Stock Plan at any time and
from time to time and may amend or modify the Incentive Stock Plan; provided,
however, that no such action of the Board may, without the approval of the
stockholders of the Company, (a) increase the total amount of stock or the
amount or type of benefit that may be issued under the Incentive Stock Plan, (b)
modify the requirements as to eligibility for benefits, or (c) reduce the amount
of any existing benefit or change the terms or conditions thereof without the
participating employee's consent.
In the event of a "Change of Control" (as defined below) of the
Company, all outstanding SARs and Stock Options shall become fully vested and
exercisable and any restrictions on Restricted Stock shall lapse. A "Change of
Control" is defined as any of the following: (a) the acquisition by any person
of 15% or more of either the outstanding Common Stock or the combined voting
power of the Common Stock entitled to vote for the election of directors; (b)
the incumbent directors at the time of approval of the Incentive Stock Plan, or
any subsequent directors whose election or nomination was approved by a majority
of the then incumbent directors, cease to constitute a majority of the Board of
Directors; (c) approval by the stockholders of a reorganization, merger or
consolidation of the Company under certain circumstances; or (d) approval by the
stockholders of a liquidation or dissolution or a sale of substantially all of
the assets of the Company under certain circumstances.
NEW PLAN BENEFITS
The following table sets forth the number of stock options that
the Board of Directors granted pursuant to the Incentive Stock Plan to (i) each
of the executive officers, (ii) all of the executive officers as a group, (iii)
all directors who are not executive officers as a group and (iv) all employees,
including all current officers who are not executive officers, as a group:
<TABLE>
<CAPTION>
NUMBER OF OPTIONS
NAME AND POSITION GRANTED EXERCISE PRICE
----------------- ----------------- --------------
<S> <C> <C>
John J. Klobnak, CEO 150,000 $4.813
James C. Wachtman, President 150,000 $4.813
Robert W. May, General Counsel 90,000 $4.813
B. Charles Bono, CFO & Treasurer 90,000 $4.813
All executive officers as a group 480,000 $4.813
Directors not executive officers 30,000 $4.813
Employees not executive officers 414,000 $4.813
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES
No income will be realized by a participating officer or employee
on the grant of an Incentive Stock Option or a Stock Option which is not an
incentive stock option ("non-qualified option"), the grant of a SAR, the award
of Restricted Stock or the award of Stock Units, and the Company will not be
entitled to a deduction at such time. If a holder exercises an Incentive Stock
Option and does not dispose of the shares acquired within two years from the
date of the grant, or within one year from the date of exercise of the option,
no income will be realized by the holder at the time of exercise. The Company
will not be entitled to a
12
<PAGE> 14
deduction by reason of the exercise. If a holder disposes of the shares acquired
pursuant to an Incentive Stock Option within two years from the date of grant of
the option or within one year from the date of exercise of the option, the
holder will realize ordinary income at the time of disposition equal the excess,
if any, of the lesser of (a) the amount realized on the disposition or (b) the
fair market value of the shares on the date of exercise, over the holder's basis
in the shares. The Company generally will be entitled to a deduction in an
amount equal to such income in the year of the disqualifying disposition.
Upon the exercise of a non-qualified Stock Option or the
surrender of a SAR, the excess, if any, of the fair market value of the stock on
the date of exercise over the purchase price or base price, as the case may be,
is ordinary income to the holder as of the date of exercise. The Company
generally will be entitled to a deduction equal to such excess amount in the
year of exercise.
Subject to a voluntary election by the holder under Section 83(b)
of the Code, a holder will realize income as a result of the award of Restricted
Stock at the time the restrictions expire on such shares. An election pursuant
to Section 83(b) of the Code would have the effect of causing the holder to
realize income in the year in which such award was granted. The amount of income
realized will be the difference between the fair market value of the shares on
the date such restrictions expire (or on the date of issuance of the shares, in
the event of a Section 83(b) election) over the purchase price, if any, of such
shares. The Company generally will be entitled to a deduction equal to the
income realized in the year in which the holder is required to report such
income.
An employee will realize income as a result of a Performance
Award at the time the award is issued or paid. The amount of income realized by
the participant will be equal to the fair market value of the shares on the date
of issuance, in the case of a stock award, and to the amount of the cash paid,
in the event of a cash award. The Company will be entitled to a corresponding
deduction equal to the income realized in the year of such issuance or payment.
An employee will realize income as a result of an award of Stock
Units at the time shares of Common Stock are issued in an amount equal to the
fair market value of such shares at that time. The Company will be entitled to a
corresponding deduction equal to the income realized in the year of such
issuance.
13
<PAGE> 15
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to the Company's
Chief Executive Officer and each of the other four most highly compensated
executive officers during the fiscal year ended April 30, 2000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
WARRANTS
NAME AND FISCAL AND
PRINCIPAL POSITION YEAR SALARY BONUS(B) OTHER (C) OPTIONS
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John J. Klobnak April 2000 $270,000 $124,564 $5,000 450,000 (d)
Chief Executive Officer
April 1999 $228,025 $208,189 $5,000 200,000 (f)
April 1998 $202,700 $144,999 $4,750 300,000 (h)
-------------------------------------------------------------------------------------------------------------------------
James C. Wachtman April 2000 $250,000 $113,199 $5,000 450,000 (d)
President and
Chief Operating Officer April 1999 $200,000 $150,714 $5,000 160,000 (f)
April 1998 $160,000 $ 96,746 $4,750 220,000 (h)
-------------------------------------------------------------------------------------------------------------------------
Robert W. May April 2000 $220,000 $ 78,859 $5,000 270,000 (d)
Secretary and
General Counsel April 1999 $186,975 $114,354 $5,000 120,000 (f)
April 1998 $166,200 $ 85,185 $4,750 200,000 (h)
-------------------------------------------------------------------------------------------------------------------------
B. Charles Bono III April 2000 $200,000 $ 73,305 $5,000 270,000 (d)
Executive Vice
President, Chief April 1999 $171,800 $106,279 $5,000 120,000 (f)
Financial Officer
and Treasurer April 1998 $152,700 $ 79,743 $4,750 200,000 (h)
-------------------------------------------------------------------------------------------------------------------------
James B. Tiffany April 2000 $163,000 $ 40,000 $ 5,000 35,000 (e)
V.P. and General
Manager -- MSS April 1999 $155,000(a1) $ 10,000 $ 0 80,000 (g)
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 16
(a) Annual compensation rate as of April 30th of fiscal year.
(a1) Effective since January 18, 1999.
(b) Earned during fiscal year but paid in the following fiscal year.
(c) Laser Vision matching contribution to 401(k) plan.
(d) Two-thirds with exercise price of $27.531/per share, one-third with
exercise price of $8.875/per share.
(e) Warrants with exercise price of $8.875/per share.
(f) Warrants and options with exercise price of $4.50 per share.
(g) Warrants and options with exercise price of $9.00 per share.
(h) Warrants with exercise price of $3.719 per share.
WARRANT AND OPTION GRANTS LAST FISCAL YEAR
The following table shows information regarding each stock option or
warrant granted during fiscal 2000 to each of the named executive officers.
Actual gains, if any, on stock options and warrant exercises are dependent on
the future performance of the Common Stock.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
PERCENT OF TOTAL
NAME OPTIONS AND WARRANTS EXERCISE EXPIRATION
AND NUMBER OF OPTIONS GRANTED TO EMPLOYEES PRICE DATE/GRANT DATE
POSITION AND WARRANTS IN FISCAL YEAR PER SHARE VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John J. Klobnak 300,000 23.7% $27.531 June 2004
Chief Executive Officer $3,147,000
150,000 $ 8.875 October 2004
$549,000
----------------------------------------------------------------------------------------------------------------------------
James C. Wachtman 300,000 23.7% $27.531 June 2004
President and Chief Operating $3,147,000
Officer 150,000 $ 8.875 October 2004
$549,000
----------------------------------------------------------------------------------------------------------------------------
Robert W. May 180,000 14.2% $27.531 June 2004
Secretary and General Counsel $1,888,200
90,000 $ 8.875 October 2004
$329,400
----------------------------------------------------------------------------------------------------------------------------
B. Charles Bono 180,000 14.2% $27.531 June 2004
Exec. V.P., CFO and $1,888,200
Treasurer 90,000 $ 8.875 October 2004
$329,400
----------------------------------------------------------------------------------------------------------------------------
James B. Tiffany 40,000 2.1% $ 8.875 October 2004
V.P. and General Manager -- MSS $146,400
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The warrants have a five year term and vest ratably over three years
(except for the $27.531 warrants which vest over two years). The exercisability
of these warrants may accelerate in the event of a change in control of the
Company. The Black-Scholes option pricing model was used to determine the value
of options and warrants issued as of the grant date using the following
assumptions, dividend yield -- none, 5% to 5.9% risk free rate of return, 56% to
60% volatility, and expected time of exercise -- thirty months. The grant date
15
<PAGE> 17
values do not take into account risk factors such as non-transferability and
limits on exercisability. The ultimate value of a stock warrant or option will
depend on the market value of Laser Vision's stock at a future date and could
vary significantly from the theoretical Black-Sholes value.
AGGREGATED OPTION/WARRANT EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/WARRANT VALUES
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
OPTIONS AND WARRANTS AT FISCAL YEAR END
-----------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNDERLYING UNEXERCISED IN-THE MONEY
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John J. Klobnak 220,000 $4,950,618 589,000 / 437,500 $77,344 / $25,781
------------------------------------------------------------------------------------------------------------------------------------
James C. Wachtman 139,000 $2,418,100 478,500 / 386,500 $70,679 / $18,906
------------------------------------------------------------------------------------------------------------------------------------
Robert W. May 219,948 $4,738,651 367,452 / 267,500 $43,011 / $17,188
------------------------------------------------------------------------------------------------------------------------------------
B. Charles Bono III 207,708 $3,564,054 259,792 / 267,500 $27,500 / $17,188
------------------------------------------------------------------------------------------------------------------------------------
James B. Tiffany N/A N/A 32,750 / 87,250 $ 0 / $ 0
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The value of the unexercised in-the-money options and warrants was
calculated using the $4.063 closing price per share of our Common Stock on April
30, 2000 minus the exercise price.
OPTION AND WARRANT REPRICINGS
None during the year ended April 30, 2000
Employment Agreements
In June 1999 the Company extended the employment agreements with John J.
Klobnak, James C. Wachtman, Robert W. May and B. Charles Bono III for three
years. 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. 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 three year's compensation, 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 three year's compensation, whichever is
greater.
16
<PAGE> 18
AUDIT COMMITTEE CHARTER
PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to assist
the Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including, by
overviewing the financial reports and financial information provided by the
Company to any governmental or regulatory body, the public or other users
thereof, the Company's systems of internal accounting and financial controls and
the annual independent audit of the Company's financial statements.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose. The Board and the Committee
are in place to represent the Company's shareholders; accordingly, the outside
auditor is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual
basis and recommend any proposed charges for Board approval.
MEMBERSHIP
The Committee shall be comprised of not less than three members of the
Board (by June 1, 2001), and the Committee's composition will meet the
requirements of the Audit Committee Policy of the NASD.
Accordingly, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with
the exercise of their independence from management and the
Company; and
2. Who are financially literate or who become financially literate
within a reasonable period of time after appointment to the
Committee. In addition, at least one member of the Committee will
have accounting or related financial management expertise.
The Chief Financial Officer of the Company will attend Committee meetings
as a non-voting consultant to the Committee.
KEY RESPONSIBILITIES
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management, as well as the outside auditors, have more time, knowledge and more
detailed information on the Company than do Committee members; consequently, in
carrying out its oversight responsibilities, the Committee is not providing
17
<PAGE> 19
any expert or special assurance as to the Company's financial statements or any
professional certification as to the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
- The Committee shall review with management and the outside auditors:
(1) the scope of the audit plan and the estimated fees, (2) the audited
financial statements to be included in the Company's Annual Report on Form 10-K
prior to the Company's filing of the Form 10-K and, (3) the matters required to
be discussed by Statement of Auditing Standards ("SAS") No. 61.
- As a whole, or through the Committee chair, the Committee shall review
with the outside auditors the Company's interim financial results to be included
in the Company's quarterly reports to be filed with Securities and Exchange
Commission and the matters required to be discussed by SAS No. 61 prior to the
Company's filing of the Form 10-Q.
- The Committee shall discuss with management and the outside auditors
the quality and adequacy of the Company's internal controls.
- The Committee shall:
- request from the outside auditors annually, a formal
written statement delineating all relationships between the
auditor and the Company consistent with Independence
Standards Board Standard Number 1;
- discuss with the outside auditors any such disclosed
relationships and their impact on the outside auditor's
independence; and
- recommend that the Board take appropriate action to oversee
the independence of the outside auditor.
- The Committee, subject to any action that may be taken by the full
Board, shall have the ultimate authority and responsibility to nominate for
shareholder approval, evaluate and, where appropriate, replace the outside
auditor.
- The Committee shall report on such Committee meetings to the Board at
the next earliest opportunity.
OTHER MATTERS
The outside auditor/independent accountant is free to contact the Committee at
any time to discuss any matter that the outside auditor/independent accountant
believes should be brought to the attention of the Committee.
18
<PAGE> 20
COMPENSATION COMMITTEE INTERLOCK AND INSIDER
PARTICIPATION IN COMPENSATION DECISION
During the last completed fiscal year, John J. Klobnak, James M. Garvey
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.
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
James M. Garvey. 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.
Cash bonuses are awarded to executives principally as a mechanism to
recognize and reward individual achievements. 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
19
<PAGE> 21
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
RICHARD L. LINDSTROM, M.D.
JAMES M. GARVEY
20
<PAGE> 22
PERFORMANCE GRAPH
The graph below compares the performance of Laser Vision Centers, Inc.'s
Common Stock with that of the Nasdaq Health Services Stocks Total Return Index
(a published industry index), and the Nasdaq U.S. stocks (broad equity market
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, 1995 in each of LaserVision Centers, Inc.'s Common
Stock, the Nasdaq Health Services Stocks Group and the Nasdaq U.S. stocks. 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.
[LINE GRAPH]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
4/30/95 4/30/96 4/30/97 4/30/98 4/30/99 4/30/00
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
100 163 73 154 481 93 Laser Vision
------------------------------------------------------------------------------------------------------------------------
100 106 138 139 93 88 Nasdaq Health Services Stocks
------------------------------------------------------------------------------------------------------------------------
100 138 164 225 229 372 Nasdaq U.S. Stocks
------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 23
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Effective May 1, 1998 and January 1, 1999, the Company entered into
Agreements with Minnesota Eye Consultants, of which Richard L. Lindstrom, M.D.,
is a principal shareholder. Dr. Lindstrom was and remains a paid consultant to
Midwest Surgical Services, Inc., the cataract services subsidiary acquired on
December 4, 1998. 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, 2001 in order to be considered for
inclusion in the Company's Proxy Statement and form of proxy relating to such
meeting. Stockholder proposals which do not appear in the Proxy Statement may be
considered at the Company's next annual meeting of stockholders only if notice
of the proposal is received by the Company at its office in St. Louis, Missouri
on or before July 15, 2001.
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 will 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, 2000 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 five directors to serve
until the 2001 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
PricewaterhouseCoopers LLP, stockholders may 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
22
<PAGE> 24
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 accountant and any other proposals requiring approval and
ratification.
Respectfully submitted,
----------------------------
Robert W. May
A copy of the Company's Annual Report is provided to you concurrently with this
Proxy Statement and includes a copy of its Annual Report on Form 10-K. At your
request, the Company will provide you copies of any exhibits to the Form 10-K
upon your payment of the Company's costs incurred in providing any such copies.
23
<PAGE> 25
EXHIBIT A
LASER VISION CENTERS, INC.
2000 INCENTIVE STOCK PLAN
1. PURPOSE. The purpose of the Laser Vision Centers, Inc.
("Corporation") Incentive Stock Plan ("Plan") is to encourage key employees,
directors and service providers of the Corporation and such subsidiaries of the
Corporation as the Administrator designates, to acquire Common Stock of the
Corporation or to receive monetary payments based on the value of such stock or
based upon achieving certain goals on a basis mutually advantageous to such
individuals and the Corporation and thus provide an incentive to contribute to
the success of the Corporation and align the interests of key employees,
directors and service providers with the interests of the shareholders of the
Corporation.
2. ADMINISTRATION. The Plan shall be administered by a committee of
two or more directors, which the Board of Directors shall appoint
("Administrator"). The directors appointed to the committee shall be
"disinterested persons" as defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 ("1934 Act") or any successor regulations.
The authority to select persons eligible to participate in the
Plan, to grant Benefits in accordance with the Plan, and to establish the
timing, pricing, amount and other terms and conditions of such grants (which
need not be uniform with respect to the various Participants or with respect to
different grants to the same Participant), may be exercised by the Administrator
in its sole discretion.
Subject to the provisions of the Plan, the Administrator shall have
exclusive authority to interpret and administer the Plan, to establish
appropriate rules relating to the Plan, to delegate some or all of its authority
under the Plan and to take all such steps and make all such determinations in
connection with the Plan and the Benefits granted pursuant to the Plan as it may
deem necessary or advisable.
The Board of Directors in its discretion may delegate and assign
specified duties and authority of the Administrator to any other committee and
retain the other duties and authority of the Administrator to itself. Also, the
Board of Directors in its discretion may appoint a separate committee of outside
directors to make awards that satisfy the requirements of Section 162(m) of the
Internal Revenue Code.
3. SHARES RESERVED UNDER THE PLAN. Subject to the provisions of
Section 12 (relating to adjustment for changes in capital stock) the maximum
number of shares that may be issued under this Plan shall not exceed in the
aggregate 2,000,000 shares of Common Stock of the Corporation, which may be
authorized but unissued or treasury shares.
As used in this Section 3, the term "Plan Maximum" shall refer to
the number of shares of Common Stock of the Corporation that are available for
grant of awards pursuant to the Plan. Stock underlying outstanding options,
stock appreciation rights, or performance awards will reduce the Plan Maximum
while such options, stock appreciation rights or performance awards are
outstanding. Shares underlying expired, canceled or forfeited options, stock
appreciation rights or performance awards shall be added back to the Plan
Maximum. When the exercise price of stock options is paid by delivery of shares
of Common Stock of the Corporation, or if the Administrator approves the
withholding of shares from a distribution in payment of the
24
<PAGE> 26
exercise price, the Plan Maximum shall be reduced by the net (rather than the
gross) number of shares issued pursuant to such exercise, regardless of the
number of shares surrendered or withheld in payment. If the Administrator
approves the payment of cash to an optionee equal to the difference between the
fair market value and the exercise price of stock subject to an option, or if a
stock appreciation right is exercised for cash or a performance award is paid in
cash the Plan Maximum shall be increased by the number of shares with respect to
which such payment is applicable. Restricted stock issued pursuant to the Plan
will reduce the Plan Maximum while outstanding even while subject to
restrictions. Shares of restricted stock shall be added back to the Plan Maximum
if such restricted stock is forfeited.
4. PARTICIPANTS. Participants will consist of such officers, key
employees, directors and service providers of the Corporation or any designated
subsidiary as the Administrator in its sole discretion shall determine.
Designation of a Participant in any year shall not require the Administrator to
designate such person to receive a Benefit in any other year or to receive the
same type or amount of Benefit as granted to the Participant in any other year
or as granted to any other Participant in any year. The Administrator shall
consider such factors as it deems pertinent in selecting Participants and in
determining the type and amount of their respective Benefits.
5. TYPES OF BENEFITS. The following Benefits may be granted under the
Plan: (a) stock appreciation rights ("SARs"); (b) restricted stock ("Restricted
Stock"); (c) performance awards ("Performance Awards"); (d) incentive stock
options ("ISOs"); (e) nonqualified stock options ("NQSOs"); and (f) Stock Units,
all as described below ("Benefits").
The Administrator may (a) award Benefits in the alternative so that
acceptance of or exercise of one Benefit cancels the right of a Participant to
another and (b) award Benefits in any combination or combinations and subject to
any condition or conditions consistent with the terms of the Plan that the
Administrator in its sole discretion shall determine.
6. STOCK APPRECIATION RIGHTS. A SAR is the right to receive all or a
portion of the difference between the fair market value of a share of Common
Stock at the time of exercise of the SAR and the exercise price of the SAR
established by the Administrator, subject to such terms and conditions set forth
in a SAR agreement as may be established by the Administrator in its sole
discretion. At the discretion of the Administrator, SARs may be exercised (a) in
lieu of exercise of an option, (b) in conjunction with the exercise of an
option, (c) upon lapse of an option, (d) independent of an option or (e) each of
the above in connection with a previously awarded option under the Plan. If the
option referred to in (a), (b) or (c) above qualified as an ISO pursuant to
Section 422 of the Internal Revenue Code of 1986 ("Code"), the related SAR shall
comply with the applicable provisions of the Code and the regulations issued
thereunder. At the time of grant, the Administrator may establish, in its sole
discretion, a maximum amount per share which will be payable upon exercise of a
SAR, and may impose conditions on exercise of a SAR. At the discretion of the
Administrator, payment for SARs may be made in cash or shares of Common Stock of
the Corporation, or in a combination thereof. SARs will be exercisable not later
than ten years after the date they are granted and will expire in accordance
with the terms established by the Administrator.
7. RESTRICTED STOCK. Restricted Stock is Common Stock of the
Corporation issued or transferred under the Plan (other than upon exercise of
stock options or as Performance Awards) at any purchase price less than the fair
market value thereof on the date of issuance or transfer, or as a bonus, subject
to such terms and
25
<PAGE> 27
conditions set forth in a Restricted Stock agreement as may be established by
the Administrator in its sole discretion. In the case of any Restricted Stock:
(a) The purchase price, if any, will be determined by the
Administrator.
(b) The period of restriction shall be established by the
Administrator for any grants of Restricted Stock;
(c) Restricted Stock may be subject to (i) restrictions on the
sale or other disposition thereof; (ii) rights of the Corporation to reacquire
such Restricted Stock at the purchase price, if any, originally paid therefor
upon termination of the employee's employment within specified periods; (iii)
representation by the recipient that he or she intends to acquire Restricted
Stock for investment and not for resale; and (iv) such other restrictions,
conditions and terms as the Administrator deems appropriate.
(d) The Participant shall be entitled to all dividends paid with
respect to Restricted Stock during the period of restriction and shall not be
required to return any such dividends to the Corporation in the event of the
forfeiture of the Restricted Stock.
(e) The Participant shall be entitled to vote the Restricted Stock
during the period of restriction.
(f) The Administrator shall determine whether Restricted Stock is
to be delivered to the Participant with an appropriate legend imprinted on the
certificate or if the shares are to be issued in the name of a nominee or
deposited in escrow pending removal of the restrictions.
8. PERFORMANCE AWARDS. Performance Awards are Common Stock of the
Corporation, monetary units or some combination thereof, to be issued without
any payment therefor, in the event that certain performance goals established by
the Administrator are achieved over a period of time designated by the
Administrator, but not in any event more than five years. The goals established
by the Administrator may include return on average total capital employed,
earnings per share, increases in share price or such other goals as may be
established by the Administrator. In the event the minimum corporate goal is not
achieved at the conclusion of the period, no payment shall be made to the
Participant. Actual payment of the award earned shall be in cash or in Common
Stock of the Corporation or in a combination of both, as the Administrator in
its sole discretion determines. If Common Stock of the Corporation is used, the
Participant shall not have the right to vote and receive dividends until the
goals are achieved and the actual shares are issued.
9. INCENTIVE STOCK OPTIONS. ISOs are stock options to purchase shares
of Common Stock at not less than 100% of the fair market value of the shares on
the date the option is granted (110% if the optionee owns stock possessing more
than 10% of the combined voting power of all owners of stock of the Corporation
or a subsidiary), subject to such terms and conditions set forth in an option
agreement as may be established by the Administrator in its sole discretion that
conform to the requirements of Section 422 of the Code. Said purchase price may
be paid (a) by check or (b), in the discretion of the Administrator, by the
delivery of shares of Common Stock of the Corporation then owned by the
Participant, or (c), in the discretion of the Administrator, by a combination of
any of the foregoing, in the manner provided in the option agreement. The
aggregate fair market value (determined as of the time an option is granted) of
the stock with respect to which
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ISOs are exercisable for the first time by an optionee during any calendar year
(under all option plans of the Corporation and its subsidiary corporations)
shall not exceed $100,000.00 or such other maximum applicable to ISOs as may be
in effect from time to time under the Code. ISOs shall be granted only to
employees of the Corporation and designated subsidiaries. The maximum term of an
ISO shall be ten years from the date it was granted (five years if the optionee
owns more than 10% of the total combined voting power of all classes of stock of
the Corporation or a subsidiary). No ISO shall be awarded after the date
preceding the tenth anniversary of the effective date of the Plan.
10. NONQUALIFIED STOCK OPTIONS. NQSOs are nonqualified stock options to
purchase shares of Common Stock at purchase prices established by the
Administrator on the date the options are granted, subject to such terms and
conditions set forth in an option agreement as may be established by the
Administrator in its sole discretion. The purchase price may be paid (a) by
check or (b), in the discretion of the Administrator, by the delivery of shares
of Common Stock of the Corporation then owned by the Participant, or (c), in the
discretion of the Administrator, by a combination of any of the foregoing, in
the manner provided in the option agreement. NQSOs shall be exercisable no later
than ten years after the date they are granted.
11. STOCK UNITS. A Stock Unit represents the right to receive a share
of Common Stock from the Corporation at a designated time in the future, subject
to such terms and conditions set forth in a Stock Unit agreement as may be
established by the Administrator in its sole discretion. The Participant
generally does not have the rights of a shareholder until receipt of the Common
Stock. The Administrator may in its discretion provide for payments in cash, or
adjustment in the number of Stock Units, equivalent to the dividends the
Participant would have received if the Participant had been the owner of shares
of Common Stock instead of the Stock Units.
12. ADJUSTMENT PROVISIONS.
(a) If the Corporation shall at any time change the number of
issued shares of Common Stock without new consideration to the Corporation (such
as by stock dividends or stock splits), the total number of shares reserved for
issuance under this Plan and the number of shares covered by each outstanding
Benefit shall be adjusted so that the aggregate consideration payable to the
Corporation, if any, and the value of each such Benefit shall not be changed.
Benefits may also contain provisions for their continuation or for other
equitable adjustments after changes in the Common Stock resulting from
reorganization, sale, merger, consolidation, issuance of stock rights or
warrants, or similar occurrence.
(b) Notwithstanding any other provision of this Plan, and without
affecting the number of shares reserved or available hereunder, the Board of
Directors may authorize the issuance or assumption of Benefits in connection
with any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate.
13. CHANGE IN CONTROL. Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change in Control of the Corporation, as
defined below, all outstanding SARs, ISOs and NQSOs shall be immediately fully
vested and exercisable and any restrictions on Restricted Stock issued under the
Plan shall lapse.
"Change in Control" means:
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(a) The acquisition by any individual, entity or group, or a
Person (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
of ownership of 15% or more of either (i) the then outstanding shares of Common
Stock of the Corporation ("Outstanding Corporation Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors
("Outstanding Corporation Voting Securities"); provided, however, such an
acquisition of ownership of 15% or more but less than 25% of Outstanding
Corporation Common Stock or Outstanding Corporation Voting Securities with the
prior approval of the Board of Directors of the Corporation shall not result in
a Change in Control within the meaning of this subparagraph (a);
(b) Individuals who, as of the date of approval of the Plan by
the Board of Directors of the Corporation, constitute the Board of Directors of
the Corporation ("Incumbent Board") cease for any reason to constitute at least
a majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Corporation's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board; or
(c) Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (i) more than 50% of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities immediately prior to such
reorganization, merger or consolidation, in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger or
consolidation of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities, as the case may be, (ii) no Person beneficially
owns, directly or indirectly, 15% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then outstanding
voting securities of such corporation, entitled to vote generally in the
election of directors (provided, however, such 15% threshold may be increased up
to 25% by the Board of Directors of the Corporation prior to such approval by
the stockholders) and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement providing for such reorganization, merger or
consolidation; or
(d) Approval by the stockholders of the Corporation of (i) a
complete liquidation or dissolution of the Corporation or (ii) the sale or other
disposition of all or substantially all of the assets of the Corporation, other
than to a corporation, with respect to which following such sale or other
disposition, (1) more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally
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<PAGE> 30
in the election for directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities immediately prior to such sale or
other disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities, as the
case may be, (2) no person beneficially owns, directly or indirectly, 15% or
more of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors (provided, however, such 15% threshold may be increased up to 25% by
the Board of Directors of the Corporation prior to such approval by the
stockholders) and (3) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board providing for such
sale or other disposition of assets of the Corporation.
14. NONTRANSFERABILITY. Each Benefit granted under the Plan shall not
be transferable otherwise than by will or the laws of descent and distribution;
provided, however, NQSOs granted under the Plan may be transferred, without
consideration, to a Permitted Transferee (as defined below). Benefits granted
under the Plan shall be exercisable, during the Participant's lifetime, only by
the Participant or a Permitted Transferee. In the event of the death of a
Participant, exercise or payment shall be made only:
(a) By or to the Permitted Transferee, executor or administrator
of the estate of the deceased Participant or the person or persons to whom the
deceased Participant's rights under the Benefit shall pass by will or the laws
of descent and distribution; and
(b) To the extent that the deceased Participant or the Permitted
Transferee, as the case may be, was entitled thereto at the date of his death.
For purposes of this Section 14, "Permitted Transferee" shall include (i) one or
more members of the Participant's family, (ii) one or more trusts for the
benefit of the Participant and/or one or more members of the Participant's
family, or (iii) one or more partnerships (general or limited), corporations,
limited liability companies or other entities in which the aggregate interests
of the Participant and members of the Participant's family exceed 80% of all
interests. For this purpose, the Participant's family shall include only the
Participant's spouse, children and grandchildren.
15. TAXES. The Corporation shall be entitled to withhold the amount of
any tax attributable to any amounts payable or shares deliverable under the Plan
after giving the person entitled to receive such payment or delivery notice as
far in advance as practicable, and the Corporation may defer making payment or
delivery as to any Benefit if any such tax is payable until indemnified to its
satisfaction. The person entitled to any such delivery may, by notice to the
Corporation at the time the requirement for such delivery is first established,
elect to have such withholding satisfied by a reduction of the number of shares
otherwise so deliverable, such reduction to be calculated based on a closing
market price on the date of such notice.
16. TENURE. A Participant's right, if any, to continue to serve the
Corporation and its subsidiaries as an officer, employee, or otherwise, shall
not be enlarged or otherwise affected by his or her designation as a Participant
under the Plan.
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<PAGE> 31
17. RULES OF CONSTRUCTION. The terms of the Plan shall be constructed
in accordance with the laws of the State of Missouri; provided that the terms of
the Plan as they relate to ISOs shall be construed first in accordance with the
meaning under and in a manner that will result in the Plan satisfying the
requirements of the provisions of the Code governing incentive stock options.
18. DURATION, AMENDMENT AND TERMINATION. No Benefit shall be granted
more than ten years after the date of adoption of this Plan; provided, however,
that the terms and conditions applicable to any Benefit granted within such
period may thereafter be amended or modified by mutual agreement between the
Corporation and the Participant or such other person as may then have an
interest therein. Also, by mutual agreement between the Corporation and a
Participant hereunder, stock options or other Benefits may be granted to such
Participant in substitution and exchange for, and in cancellation of, any
Benefits previously granted such Participant under this Plan.
The Board of Directors may amend the Plan from time to time or
terminate the Plan at any time. However, no action authorized by this paragraph
shall reduce the amount of any existing Benefit or change the terms and
conditions thereof without the Participant's consent. No amendment of the Plan
shall, without approval of the stockholders of the Corporation, (a) increase the
total number of shares which may be issued under the Plan or increase the amount
or type of Benefits that may be granted under the Plan; or (b) modify the
requirements as to eligibility for Benefits under the Plan.
18. EFFECTIVE DATE. This Plan shall become effective as of the date it
is adopted by the Board of Directors of the Corporation subject only to approval
by the holders of a majority of the outstanding voting stock of the Corporation
within twelve months before or after the adoption of the Plan by the Board of
Directors.
The undersigned hereby certifies that this Plan was adopted by the
Board of Directors of the Corporation at its meeting on March 7, 2000.
By:
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Title:
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Date:
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PROXY ELECTION 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 November 10, 2000 at 9:00 a.m., at the
Marriott West, 660 Maryville Centre Drive, 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., 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 PricewaterhouseCoopers LLP as the
Independent Certified Public Accountant for the purpose of conducting an
annual audit.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. TO APPROVE the Laser Vision Centers, Inc. 2000 Incentive Stock Plan.
[ ] 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
<PAGE> 33
BEHALF OF THE BOARD OF DIRECTORS OF LASER VISION CENTERS, INC., AND MAY
BE REVOKED PRIOR TO ITS EXERCISE.
NOTE: SIGNATURE(S) SHOULD FOLLOW EXACTLY THE NAME(S) ON THE STOCK
CERTIFICATES. EXECUTOR, ADMINISTRATION, TRUSTEE OR GUARDIAN SHOULD
SIGN AS SUCH. IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. ALL JOINT
OWNERS MUST SIGN.
DATED:
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Signature(s) of Shareholder(s)
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Name (Printed)
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Signature(s) of Shareholder(s)
----------------------------------------
Name (Printed)
Address:
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City, State, Zip
Number of Shares Voted:
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