<PAGE> 1
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 section 240.14a-11(c) or section 240.14a-12
United Vision Group, 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
---------------------------------------------------------------
[X] 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
UNITED VISION GROUP, INC.
2424 NORTH FEDERAL HIGHWAY, SUITE 362
BOCA RATON, FLORIDA 33431
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
We are pleased to invite you to attend the Annual Meeting of Stockholders
of United Vision Group, Inc. (the "Company"), to be held at 2424 North Federal
Highway, Boca Raton, Florida 33431 on October 7, 1996, at 10:00 a.m. (EDT), for
the purpose of considering and acting upon the following:
1. The election of five directors of the Company.
2. The approval of an amendment to the Company's Certificate of Incorporation
to change the Company's name to Apollo Eye Group, Inc.
3. The approval of an amendment to the Company's Certificate of Incorporation
to effect a one-for-five reverse stock split of the Company's Common
Stock.
4. The approval of a transaction between the Company and James R. Cook, M.D.,
a principal stockholder of the Company, in which $4,000,000 of debt to Dr.
Cook will be converted to 6,779,661 shares of Common Stock of the Company.
5. The approval of the Company's 1996 Stock Option Plan, as amended and
restated.
6. Such other matters as may properly come before the meeting.
Only stockholders of record at the close of business on September 3, 1996
are entitled to receive notice of, and to vote at, the meeting. Management, at
present, knows of no other business to be brought before the meeting.
By Order of The Board of Directors
James R. Cook, M.D.
Chairman
Boca Raton, Florida
September 3, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN AND DATE
THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES OR CANADA. PROXIES MAY BE
REVOKED BY WRITTEN NOTICE OF REVOCATION, THE SUBMISSION OF A LATER DATED PROXY,
OR ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE> 3
UNITED VISION GROUP, INC.
2424 NORTH FEDERAL HIGHWAY, SUITE 362
BOCA RATON, FLORIDA 33431
(407) 395-5402
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of United Vision Group, Inc. (the "Company") of
proxies to be voted at the Annual Meeting of Stockholders on October 7, 1996.
This Proxy Statement and the accompanying proxy card are first being mailed to
stockholders of the Company on or about September 9, 1996.
OUTSTANDING VOTING SECURITIES
The number of voting securities of the Company outstanding on September
3, 1996, the record date for the meeting, was 22,664,793 shares of common stock,
$0.001 par value per share (the "Common Stock"), each entitled to one vote,
owned by approximately 100 stockholders of record. A list of stockholders of the
Company may be examined at the offices of the Company at the address given
above.
PROXIES AND VOTING
The persons named as proxies were selected by the Board of Directors of
the Company (the "Board") and are directors or officers of the Company.
When the enclosed form of proxy is properly executed and returned, the
shares it represents will be voted as specified at the meeting. Any stockholder
giving a proxy has the power to revoke it at any time before it is voted by
giving written notice to the Company, by giving a later dated proxy indicating a
desire to vote differently or by appearing at the meeting and casting a ballot.
There are no rights of appraisal or similar rights of dissenting stockholders
with respect to any matter to be acted upon at the meeting.
The cost of solicitation of proxies will be paid by the Company. In
addition to the solicitation of proxies by use of the mails, solicitation may be
made by officers and regular employees of the Company by personal interview,
telephone and telegraph. Banks, brokerage houses and other custodians, nominees
or fiduciaries will be reimbursed for their reasonable expenses incurred in
forwarding soliciting material to their principals and in obtaining
authorizations for the execution of the proxies.
Under the Delaware General Corporation Law (the "DGCL") and the
Company's Certificate of Incorporation, the affirmative vote of a plurality of
the shares of Common Stock is sufficient for the election of directors.
Accordingly, the withholding of votes has no effect on the election of
directors. As to other matters, unless otherwise required by law or the
Company's Certificate of Incorporation, the affirmative vote of a majority of
the shares of Common Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote on a matter is required for approval. Under
applicable Delaware law, a stockholder who is represented at the Annual Meeting
by a limited proxy that withholds authority to vote on a particular proposal is
considered present at the meeting for purposes of determining the existence of a
quorum; the shares are not, however, counted as present or represented and
entitled to vote for purposes of determining whether the requisite vote on a
proposal is received. This may occur in the case of a "broker non-vote," where a
broker holding shares of the Company's Common Stock in its own name for the
benefit of its customers submits a proxy but does not have authority to vote the
shares on a particular proposal.
The proposals to amend the Certificate of Incorporation to change the
Company's name to Apollo Eye Group, Inc. and effect a one-for-five reverse stock
split require the affirmative vote of a majority of
<PAGE> 4
the outstanding shares of Common Stock. Accordingly, abstentions and broker
non-votes will have the same effect as "no" votes on these proposals.
The proposal to approve the Transaction between the Company and Dr.
Cook requires the affirmative vote of a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting and entitled to
vote thereon other than shares held by Dr. Cook. Accordingly, broker non-votes
will not affect the outcome of this proposal but abstentions will have the same
effect as a "no" vote. Pursuant to the DGCL, shares held by Dr. Cook may be
counted in determining the presence of a quorum at the Annual Meeting for
purposes of consideration of this resolution.
The proposal to approve the Company's 1996 Stock Option Plan requires
the affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting and entitled to vote
thereon. As to this matter, broker non-votes will not affect the outcome and
abstentions will have the same effect as "no" votes.
Votes at the meeting will be tabulated by financial management
employees of the Company. The Company has not established a procedure for
confidential voting.
THE BOARD OF DIRECTORS
Pursuant to the Delaware General Corporation Law, as implemented by the
Company's Certificate of Incorporation and By-Laws, all corporate powers are
exercised, and the Company's business, property and affairs are managed, by or
under the direction of the Board of Directors.
Directors of the Company are elected at the Annual Meeting of
Stockholders. Currently there are five directors, and the Board recommends that
the current five directors be reelected. The persons described below have been
nominated for election as directors to serve until the Annual Meeting in 1997 or
until their successors are elected and qualified. The Company's Common Stock has
no cumulative voting rights.
At the present time it is intended that proxies received by management
of the Company which contain no instructions to the contrary will be voted for
the nominees listed below. Management does not contemplate that any nominee will
be unable to serve but, if that contingency should occur, the persons named as
proxies reserve the right to substitute another person of their choice as a
director when voting at the Annual Meeting.
Set forth below is certain information with respect to each nominee.
The Board of Directors recommends a vote "FOR" each of the nominees.
JAMES R. COOK, M.D. Dr. Cook, age 53, has been Chairman and a director
of the Company since August 1995.
Dr. Cook received his B.S. in Chemistry, M.S. in Pharmacology and M.D.
degree all from the University of Illinois. His post graduate hospital clinical
experience includes a residency in ophthalmology from Washington University, St.
Louis, and the National Eye Institute (NEI), Bethesda, Maryland. Dr. Cook
entered the practice of ophthalmology in Huntington, West Virginia in 1971, and
is certified by the American Board of Ophthalmology.
Dr. Cook served as the medical director and then president of CILCO,
Inc. ("CILCO"), a manufacturer of intraocular lenses, viscoelastics and
ophthalmic instrumentation, from 1978 - 1986. CILCO was acquired by Rorer Group,
Inc. in 1981.
In 1986, Dr. Cook, along with Peter Molinaro, Jr. and others, purchased
IntraOptics, Inc., a start-up intraocular lens company ("IntraOptics"), from an
Australian publicly-held company. IntraOptics grew to over $20 million in
revenue by 1991 and was sold to Chiron Corporation ("Chiron") in early 1992.
Also
-2-
<PAGE> 5
during the 1986 - 1989 time frame, Dr. Cook served as the president of
Tullis-Cook and Co., Inc., the manager of a $44 million investment pool for
health care acquisitions and investments known as Tullis- Cook Capital Focus,
L.P. ("Tullis-Cook"). Dr. Cook remained with Chiron until late 1992, after which
he pursued the planning and development of Apollo Eye Associates which was
founded in 1994 and merged with the Company in 1995.
Dr. Cook has served on the boards of publicly-held companies in the
past including LifeCore, Inc., a biotechnology company based in Minneapolis;
Amerihealth, Inc., an Atlanta-based hospital management company subsequently
merged with Champion Healthcare; and Salvatori Ophthalmics, a Sarasota, Florida
maker and distributor of contact lenses.
J. RICHARD DAMRON, JR. Mr. Damron, age 47, has been a director of the
Company since August 1995 and has been the Company's Chief Financial Officer and
Treasurer since April 1996.
Mr. Damron received his B.B.A. in Accounting from Marshall University
in 1971 and became a certified public accountant in 1974. Mr. Damron practiced
public accounting in West Virginia from 1971 to 1980 during which time he
consulted with clients on financial planning and control engagements and managed
audits for businesses with $1 million to $50 million of revenue.
In 1980, Mr. Damron joined CILCO as Controller and Treasurer and was
promoted to Chief Financial Officer in 1981 when that company was acquired by
Rorer Group, Inc. In 1985 CILCO was acquired by CooperVision, Inc., and Mr.
Damron became Executive Vice President of Operations responsible for
manufacturing, research and development, regulatory affairs and quality
assurance. Along with these operating responsibilities, he had the added
responsibility of facility consolidation, process integration and
rationalization plans for operations.
In 1987, Mr. Damron joined Dr. Cook to become a partner in Tullis-Cook.
In this role he participated in raising $44 million of capital for investments
in health care companies. He was active in identifying investment opportunities,
negotiating transactions and financing and managing due diligence. Mr. Damron
held Board seats on portfolio investments including Benson Optical Company,
Salvatori Ophthalmics and IntraOptics. Mr. Damron left Tullis-Cook in 1990 to
join IntraOptics as Chief Financial Officer.
After IntraOptics was acquired by Chiron in January 1992, Mr. Damron
served as Senior Vice President and Chief Financial Office of Chiron Vision. In
July 1995 he became Senior Vice President of Mergers and Acquisitions for Chiron
Vision, a position which he held until joining the Company in April 1996.
PETER MOLINARO, JR. Mr. Molinaro, age 44, has been a director and
Executive Vice President of the Company since August 1995 and has been President
of Apollo Eye Associates, Inc., the Company's wholly owned optometric and
ophthalmic care subsidiary, since its formation in 1995.
Mr. Molinaro graduated from Marshall University in 1974 with a B.S.
Degree in Zoology, and went on to receive a M.S. Degree in Biological Science
(1975) and an M.B.A. in Management (1980) from the same institution.
In December 1977, Mr. Molinaro joined CILCO as Clinical Research
Coordinator responsible for establishing that company's regulatory affairs and
clinical research functions and ultimately became CILCO's Vice President of
Regulatory Affairs and Quality Assurance.
In 1986, Mr. Molinaro joined Dr. Cook as a founding shareholder in the
acquisition of IntraOptics. As a Senior Vice President of Sales and Marketing,
he developed the company's sales and marketing organizations including the
recruitment and training of its domestic sales force.
In the first full year after the merger of IntraOptics and Chiron
Ophthalmics, Mr. Molinaro served as Chiron IntraOptics' Senior Vice President of
Sales and Marketing, responsible for a $20 million expense budget, domestic and
world wide marketing and the domestic sales organizations. In October 1993, Mr.
-3-
<PAGE> 6
Molinaro left Chiron to work as a consultant and to pursue the development of
Apollo Eye Associates with Dr. Cook.
VINCENT C. MANOPOLI. Mr. Manopoli, age 41, has been a director and
Executive Vice President of the Company since August 1995 and has been President
of Apollo Eye Care Management Corporation, the Company's wholly owned managed
vision care subsidiary, since its formation in late 1995.
Mr. Manopoli received his B.A. in Chemistry from the University of
California, Irvine in 1977, an M.A. in Chemistry from California State
University, Fullerton in 1979, and a M.B.A. at the Peter Drucker School of
Management in Claremont, California in 1986. As part of his M.B.A. he completed
reimbursement and health care policy courses at Yale University in the Schools
of Management and Public Health.
Mr. Manopoli entered ophthalmology in 1980 as a research and
development engineer for CILCO. He was involved in the design and testing of
ultraviolet absorbing intraocular lenses and the development of prototype Yag
lasers utilized in cataract-related surgery by ophthalmologists. Mr. Manopoli
also served as a marketing product manager for diagnostic equipment.
In 1985, Mr. Manopoli founded the health care consulting firm,
Medricon, Inc., which was merged with Apollo Eye Associates, L.P. in July 1994.
Medricon specializes in Medicare and Medicaid policy and its work includes
coding reviews, fee schedule analyses, billing operations, payment/denial
analysis, accounts receivable analysis and operations analysis.
Mr. Manopoli was one of the founders of Metropolitan EyeCare Associates
("MECA") a network formed in the New York and Tri-State region to provide
ophthalmology services to HMO's in the region. Mr. Manopoli contributed to
initial business plan development, claims processing functions, strategic plans
and physician recruitment. Mr. Manopoli discontinued his association with MECA
in January 1994.
JOHN C. PRELAZ. Mr. Prelaz, age 37, has been a director of the Company
since May 1996.
Mr. Prelaz graduated with honors from Marshall University with a B.A.
in Marketing in 1982. From 1982 until 1988, Mr. Prelaz was a sales
representative for CILCO. In 1988, he became a sales manager with IntraOptics
and continued in sales with Chiron Vision after the acquisition of IntraOptics
by Chiron. Mr. Prelaz has over ten years of experience in ophthalmology practice
marketing. He is co- founder of Results Marketing, a company dedicated to
marketing ophthalmic practices. Mr. Prelaz was a limited partner of Apollo Eye
Associates, L.P., and served as a Director. He is currently employed as a
Regional Director for Chiron Vision with interest in ophthalmic surgical
innovations, practice marketing and managed care.
MEETINGS; COMMITTEES OF THE BOARD. The Board held three meetings in
1995. Currently, the Board does not have (and did not have during 1995) an
Audit, Compensation or Nominating Committee. Each incumbent director attended
more than seventy five percent of the meetings of the Board which he was
eligible to attend during 1995.
COMPENSATION OF DIRECTORS. Directors do not receive remuneration for
their services as directors but may be reimbursed for expenses incurred in
connection therewith, such as the cost of travel in connection with meetings of
the Board.
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO CHANGE NAME TO "APOLLO EYE GROUP, INC."
THE PROPOSAL. On August 1, 1996 the Board adopted a resolution to amend
Article 1 of the Company's Certificate of Incorporation to change the name of
the Company to "Apollo Eye Group, Inc." The Board believes that this name change
is in the best interests of the Company and its stockholders. On August 7, 1995,
Apollo Eye Associates, L.P., a Delaware limited partnership ("Apollo"), and
Apollo Eye
-4-
<PAGE> 7
Corporation, a Delaware corporation ("AEC") and the general partner of Apollo,
were merged into a wholly owned subsidiary of the Company (the "Merger"). At
that time, Apollo operated five practice locations under the name "Apollo Eye
Associates" and had spent significant resources developing the service mark
"Apollo Eye Associates" and a logo used in connection therewith. Since the
Merger, the Company has changed the name of seven practice locations previously
operated under the name "Family EyeCare Centers" to "Apollo Eye Associates." The
Company believes that it has and will continue to develop significant consumer
identification with the service mark "Apollo Eye Associates" and that the
Company will benefit from a marketing strategy using a uniform name and service
mark throughout the Company's lines of business.
VOTE REQUIRED. Approval of this amendment to the Certificate of
Incorporation requires the affirmative vote of a majority of the outstanding
shares of Common Stock. Each of Dr. Cook and Messrs. Damron, Manopoli, Molinaro
and Prelaz, who hold in the aggregate approximately 72% of the Company's
outstanding shares of Common Stock, has indicated his intention to vote in favor
of this proposal. Accordingly, it is expected that the Company's name will be
changed as proposed.
RESOLUTION. The Board of Directors intends to cause the following
resolution to be presented to stockholders for action at the Annual Meeting:
RESOLVED, that Article 1 of the Certificate of Incorporation of
the Company is hereby amended and restated in its entirety as
follows:
(1) The name of the corporation is:
Apollo Eye Group, Inc.
The Board of Directors recommends a vote "FOR" approval and adoption of
this amendment.
AMENDMENT TO CERTIFICATE OF INCORPORATION
TO AUTHORIZE REVERSE STOCK SPLIT
REASONS FOR THE PROPOSAL. The Board of Directors has adopted a
resolution approving an amendment to the Certificate of Incorporation of the
Company to effect a one-for-five reverse stock split of the Company's Common
Stock (the "Reverse Stock Split"). In June 1995 the Company's Common Stock was
delisted from the SmallCap Market of The Nasdaq Stock Market ("Nasdaq") due to
failure to meet certain listing requirements. Today the Company's Common Stock
is traded only in the "pink sheets" published by the National Quotation Bureau,
Inc., which generally is considered to be a less efficient market than Nasdaq.
Because the "pink sheets" are published daily, quotations do not represent the
real time electronic trading information provided by Nasdaq. In order to be
eligible for relisting on Nasdaq, the Company must have and maintain, among
other criteria, a minimum bid price per share of $3.00. The Company's Common
Stock has not traded above $3.00 per share since 1994, and the average of the
closing prices of the Common Stock over the twenty trading days prior to August
31 was $0.33 per share. Although the Company also currently does not meet
certain other criteria required for the relisting of the Common Stock on Nasdaq,
the Board believes that the Reverse Stock Split will help position the Company
for relisting if and when these criteria are met.
The effect of the Reverse Stock Split would be that the stockholders of
the Company who own five or more shares of Common Stock will receive one share
of new Common Stock for each five shares of Common Stock held at the time of the
Reverse Stock Split. In addition, in lieu of fractional shares of new Common
Stock, the Company will "round up" any factional shares of new Common Stock by
issuing a fraction of a share of new Common Stock to any stockholder who
otherwise would hold a fractional share so that each stockholder holds a whole
number of shares of Common Stock following the Reverse Stock Split.
Theoretically, the market price of the Company's Common Stock immediately
following the Reverse Stock Split should be approximately five times the market
price immediately prior to the Reverse Stock Split. However, there can be no
assurance as to any increase in the market price of the Common Stock
-5-
<PAGE> 8
as a result of the Reverse Stock Split. In addition, there can be no assurance
that the Company will satisfy the criteria for relisting on Nasdaq or for
listing on any other securities exchange.
The Board recognizes that reverse stock splits are commonly believed to
result in a decrease in the aggregate market capitalization of an issuer's
stock. However, the Board believes that this possible negative impact is
outweighed by the benefits of the greater marketability of the Company's Common
Stock if it qualifies for relisting on Nasdaq.
With the exception of the number of outstanding shares, the rights and
preferences of the shares of Common Stock before and after the Reverse Stock
Split will remain the same. If the Reverse Stock Split is effected, it is not
anticipated that the financial condition of the Company, the percentage
ownership of management, the number of stockholders of the Company or any other
aspect of the Company's business will change materially as a result.
The Reverse Stock Split will not alter the number of authorized shares
of Common Stock. The Company currently has 30,000,000 authorized shares of
Common Stock, of which 22,664,793 are issued and outstanding. On a pre-Reverse
Stock Split basis, 6,779,661 shares are proposed to be issued to Dr. Cook (see
"Authorization of Transaction with Dr. Cook"), 4,562,543 shares are reserved for
issuance pursuant to outstanding stock options and warrants and an additional
1,445,000 shares are to be reserved for issuance pursuant to the Company's 1996
Stock Option Plan (see "Approval of 1996 Stock Option Plan"). The number of
shares of Common Stock covered by the Company's stock option plans and its
outstanding stock options and warrants, as well as the exercise price per share
of such outstanding stock options and warrants, will be proportionately adjusted
upon consummation of the Reverse Stock Split. Giving effect to the Reverse Stock
Split, and assuming approval of the transaction with Dr. Cook and of the 1996
Stock Option Plan, the Company will have a total of 7,090,400 shares of Common
Stock issued and reserved for issuance and 22,909,600 authorized shares of
Common Stock which are unissued and unreserved. One effect of the Reverse Stock
Split, essentially, is to increase the number of shares of authorized Common
Stock available for issuance.
The Reverse Stock Split will not change the par value of shares of
Common Stock. However, under applicable Delaware law, the total capital of the
Company will not be reduced as a result of the Reverse Stock Split, even through
the aggregate par value of all issued and outstanding shares will be reduced to
one-fifth of the aggregate par value prior to the Reverse Stock Split.
Accordingly, the Reverse Stock Split will not increase surplus available for
dividends.
The Board considered reducing the number of shares of authorized Common
Stock in connection with the Reverse Stock Split but determined that the
availability of additional shares may be beneficial to the Company in the
future. The availability of additional authorized shares will allow the Board to
issue shares for corporate purposes, if appropriate opportunities should arise,
without further action by stockholders or the time delay involved in obtaining
stockholder approval (unless required by applicable law or regulation). Such
purposes could include effecting future acquisitions of other businesses or
meeting requirements for working capital or capital expenditures through the
issuance of shares. To the extent that any additional shares (or securities
convertible into common stock) may be issued on other than a pro rata basis to
current stockholders, the present ownership position of current stockholders may
be diluted. The Common Stock has no preemptive rights. In addition, if another
party should seek to acquire or take over control of the Company, and the Board
does not believe such transaction is in the best interest of the Company and its
stockholders, some or all of the authorized shares could be issued to another
party to try to block such transaction.
The Company does anticipate issuing up to $20,000,000 of Common Stock
in order to obtain further working capital. The Company also hopes to issue
Common Stock in order to effect future acquisitions although, at present, the
Company has no agreements for any such transactions.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion summarizes
certain federal income tax and Delaware state tax consequences and is based on
current law and is included for general information only. Stockholders should
consult their own tax advisors as to the federal, state, local and foreign tax
effects of the Reverse Stock Split in light of their individual circumstances.
Neither the receipt of shares of new Common
-6-
<PAGE> 9
Stock in exchange for existing Common Stock nor the issuance of a fractional
share of new Common Stock to round up to a whole number of shares will result in
recognition of gain or loss to the stockholder. The aggregate adjusted tax basis
of a stockholder's new Common Stock will be the same as the stockholder's
aggregate adjusted tax basis in the exchanged Common Stock. The holding period
of new Common Stock received in exchange for existing Common Stock will include
the stockholder's holding period in the exchanged Common Stock. No gain or loss
will be recognized by the Company upon the Reverse Stock Split.
EXCHANGE OF CERTIFICATES. If the proposed amendment is approved by the
stockholders, the Company will file an amendment to its Certificate of
Incorporation with the Delaware Secretary of State and the Reverse Stock Split
will become effective on the date of that filing (the "Effective Date"). The
Effective Date also will constitute the record date for identifying holders of
Common Stock to be notified of the Reverse Stock Split. As soon as practicable
after the Effective Date, stockholders will be notified and requested to
surrender the certificates representing their shares of existing Common Stock to
the Company's transfer agent, American Securities Transfer, Inc., in exchange
for certificates representing their shares of new Common Stock. Commencing with
the Effective Date, each certificate representing shares of exchanged Common
Stock will be deemed, for all corporate purposes, to evidence ownership of
shares of new Common Stock at the ratio of one share of new Common Stock for
five shares of exchanged Common Stock (rounded up for any fractional shares
resulting therefrom).
For the purposes of determining ownership of Common Stock, shares will
be considered to be held by the person in whose name those shares are registered
on the stock records of the Company, regardless of the beneficial ownership of
those shares.
No service charge will be payable by stockholders in connection with
the exchange of certificates, all expenses of which will be borne by the
Company.
VOTE REQUIRED. Approval of this amendment to the Certificate of
Incorporation requires the affirmative vote of a majority of the outstanding
shares of Common Stock. Each of Dr. Cook and Messrs. Damron, Manopoli, Molinaro
and Prelaz, who hold in the aggregate approximately 72% of the Company's
outstanding shares of Common Stock, has indicated his intention to vote in favor
of this proposal. Accordingly, it is expected that the Reverse Stock Split will
be effected.
The Reverse Stock Split would result in sufficient authorized but
unissued Common Stock to complete the Transaction (as defined below). See
"Authorization of Transaction with Dr. Cook." Accordingly, James R. Cook, M.D.,
Chairman and Chief Executive Officer of the Company, who beneficially owns
11,558,190 shares of Common Stock, or 51% of the Common Stock entitled to vote
at the meeting, is subject to a potential conflict of interest with respect to
the Reverse Stock Split.
RESOLUTION. The resolution which will be introduced at the Annual
Meeting seeking approval effecting the Reverse Stock Split is as follows:
RESOLVED, that Article 4 of the Certificate
of Incorporation of the Company is hereby
amended by adding the following new Section
B:
B. On the date of the filing of a Certificate
of Amendment to the Certificate of
Incorporation of the Corporation adding this
Section B (the "Effective Date"), the Common
Stock of the Corporation shall be reverse
split on a one-for-five basis so that each
share of Common Stock issued and outstanding
immediately prior to the Effective Date shall
automatically be converted into and
reclassified as one-fifth share of a share of
Common Stock (the "Reverse Split"). No
fractional shares shall be issued by the
Corporation as a result of the Reverse Split.
In lieu thereof, each stockholder whose
shares are not evenly divisible by five will
receive one whole share of Common Stock. As
soon as practicable following the Effective
Date, certificates for the shares of Common
Stock to be outstanding after the Reverse
Split shall be issued upon surrender of
-7-
<PAGE> 10
certificates representing existing shares of
Common Stock pursuant to procedures adopted
by the Corporation's Board of Directors.
The Board of Directors recommends a vote "FOR" approval and adoption of
this amendment.
AUTHORIZATION OF TRANSACTION WITH DR. COOK
THE TRANSACTION. During 1995, the Company incurred substantial losses
due to start-up operations and a large restructuring charge. Although the
Company's operations improved significantly during the first quarter of 1996,
the Company remains a net consumer of cash. See "Incorporation of Certain
Information by Reference." In order to help fund these operating losses, James
R. Cook, M.D., Chairman and Chief Executive Officer of the Company and the
Company's largest stockholder, provided loans to the Company totalling
$2,450,000 during late 1995 and early 1996. Despite the loans, the Company's
Board of Directors determined that further funding was needed by the Company.
Therefore, on March 27, 1996, the Board approved an agreement (the
"Transaction") with Dr. Cook to convert up to $4,000,000 in loans (or up to
$4,000,000 in loans and cash investment) to 6,779,661 shares of Common Stock at
a conversion price of $0.59 per share (on a pre-Reverse Stock Split basis). At
June 30, 1996, Dr. Cook's loans aggregated $4,050,000, of which $4,000,000 is
proposed to be converted to Common Stock. Through March 31, 1996 these loans
carried an interest rate of prime plus one and one-half percent; the interest
rate was reduced to prime effective April 1, 1996. All such shares would be
unregistered securities and Dr. Cook would not be granted registration rights
with respect thereto. The Transaction is subject to either approval by a
majority of shares held by disinterested stockholders (i.e., stockholders other
than Dr. Cook) present in person or represented by proxy at the meeting and
entitled to vote on this proposal or receipt of a fairness opinion from a
qualified, independent third party.
The terms and conditions of the Transaction were proposed by Dr. Cook
to the Board and considered by the Board in light of the lack of financing
alternatives available to the Company. The price for the shares to be acquired
by Dr. Cook was established by calculating the average closing price of Common
Stock for the twenty (20) consecutive trading days prior to March 27, 1996, the
date that Dr. Cook agreed to the Transaction, and discounting the average
closing price of $0.7385 per share of Common Stock by 20% owing to the fact that
the investment is sizable and that the shares are unregistered and, as such,
illiquid. The average of the closing prices of the Company's Common Stock over
the twenty consecutive trading days prior to August 31 was $0.33. Accordingly,
the purchase price used with respect to the transaction with Dr. Cook now
represents a 79% ($0.26 per Share) premium over the current average closing
price.
The Company currently does not have sufficient authorized but unissued
shares of Common Stock available to complete the Transaction. If the Reverse
Stock Split described above is approved, it will result in sufficient authorized
but unissued shares of Common Stock to complete the Transaction. If the Reverse
Stock Split is not approved, Dr. Cook has agreed to accept preferred stock
convertible into common stock and the Company will likely seek stockholder
approval of an increase in the number of authorized shares of Common Stock in
the future.
BACKGROUND OF AND REASONS FOR THE TRANSACTION. In the fourth quarter of
1995, the Company recorded a one-time restructuring expense of $1,576,079. This
restructuring charge included costs and expenses in connection with termination
of certain employment agreements (see "Executive Compensation and Other
Information -- Employment Agreements" below), the consolidation of optical
laboratory and production facilities, and the closure of three practice
locations and the Company's previous corporate headquarters. The Company also
recorded expenses of $566,254 in 1995 in connection with the accrual of
potential litigation costs, a write-down of investment securities and write-offs
related to certain software. As a result of these charges and of its operating
losses (which were partially offset by equity contributions), the Company's
equity decreased significantly in 1995 from $2,208,489 at December 31, 1994 to
$630,000 at December 31, 1995.
-8-
<PAGE> 11
The Company used net cash of $3,992,217 in operating activities and
$1,038,565 in investing activities, for a total net cash use of $5,030,782, in
1995. This was offset by a total of $5,025,745 of cash provided by financing
activities, including $800,000 of loans provided by Dr. Cook. During the first
quarter of 1996, the Company used net cash of $1,338,307 in operating
activities, which was offset by an additional $1,650,000 in loans from Dr. Cook.
Additional loans of $1,600,000 were provided by Dr. Cook during the second
quarter of 1996 and additional loans of $445,000 were provided by Dr. Cook
during the third quarter of 1996 through the date of this Proxy Statement.
As previously noted, the Company remains a net consumer of cash. It is
unclear exactly what magnitude of external cash will be required, but it is
likely that at least $1,750,000 of additional cash will be required for
operations during the remainder of 1996. Also, close to $2,000,000 of investment
is required to carry out leasehold improvements and capital equipment purchases
to improve several of the Company's practice locations and to allow the Company
to capitalize on its opportunities to provide medical and surgical eye care in
addition to the routine examinations traditionally provided in certain practice
locations. Additional practice location development or acquisition will require
cash. For the Company to grow at a rate consistent with the opportunities
afforded it, total financing in the $10-20 million range would be necessary.
The Board of Directors recommends approval of the Transaction which the
Board believes to be in the best interests of the Company and its stockholders.
The Board's recommendation is based upon (i) the reduction of the Company's debt
and the increase in stockholders' equity which will result from the Transaction,
(ii) the Board's view that the Transaction is fair, from a financial point of
view, to the Company and its stockholders, (iii) the future interest savings
which will result from conversion of Dr. Cook's debt to Common Stock ($13,437 of
interest was accrued in 1995 and $108,623 of additional interest accrued through
June 30, 1996), and (iv) the Board's view that, if the Transaction is not
approved and the Company does not obtain significant equity financing from other
sources, it is probable that substantial cutbacks in the Company's operations
and growth strategy will be required.
The conversion of Dr. Cook's debt to equity and the issuance of
additional shares to Dr. Cook will not result in dilution to shareholders other
than Dr. Cook.
CONFLICT OF INTEREST. Currently, Dr. Cook's holdings represent 51% of
the Company's outstanding shares of Common Stock and 42.5% of the outstanding
Common Stock on a fully diluted basis, assuming exercise of all options under
the Company's stock option plans. Giving effect to the issuance of 6,779,661
shares of Common Stock in the Transaction, Dr. Cook would hold 81% of the
outstanding Common Stock and 67.4% on a fully diluted basis. One effect of the
Transaction would be to increase Dr. Cook's shareholdings above 50% on a fully
diluted basis, which would give him the continued ability to elect all members
of the Company's Board of Directors and to approve most transactions requiring
stockholder approval even after the exercise of all currently outstanding
options.
As Chairman of the Board and Chief Executive Officer of the Company, as
well as the principal stockholder, Dr. Cook had a potential conflict of interest
with respect to negotiation of the Transaction. Accordingly, although he
participated in meetings of the Board of Directors of the Company at which the
Transaction was discussed and approved, Dr. Cook abstained from voting on the
resolution to approve the Transaction.
Section 144 of the DGCL provides the following:
No contract or transaction between a corporation
and one or more of its directors of officers . . .
shall be void or voidable solely for this reason .
. . if:
(1) the material facts as to his relationship
or interest and as to the contract or
transaction are disclosed or are known to the
board of directors or the committee, and the
board or committee in good faith authorizes
the contract or transaction by the
affirmative votes of a
-9-
<PAGE> 12
majority of the disinterested directors, even
though the disinterested directors be less
than a quorum; or
(2) the material facts as to his relationship
or interest and as to the contract or
transaction are disclosed or are known to the
shareholders entitled to vote thereon, and
the contract or transaction is specifically
approved in good faith by vote of the
shareholders . . .
Although the Transaction was unanimously approved by the Board of
Directors of the Company (with Dr. Cook abstaining), the Board determined to
condition the Transaction on either approval by the Company's stockholders other
than Dr. Cook or the receipt of a fairness opinion from a qualified, independent
third party. Given the Company's limited resources and the expense associated
with obtaining a fairness opinion from a qualified, independent third party, the
Board determined not to seek a fairness opinion from a third party. In the event
that the Transaction is not approved by the Company's stockholders, the Company
will retain the option to proceed with the Transaction based upon a fairness
opinion.
VOTE REQUIRED. Approval of the Transaction requires the affirmative
vote of a majority of the shares of Common Stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on the
Transaction, other than shares held by Dr. Cook.
RESOLUTION. The Board of Directors intends to cause the following
resolution to be presented to stockholders for action at the Annual Meeting:
RESOLVED, that the conversion of $4,000,000 of debt of
the Company to James R. Cook, M.D. to 6,779,661 shares
of Common Stock at a conversion price of $0.59 per
share (prior to any reverse split of the Company's
Common Stock) is hereby ratified and approved.
The Board of Directors recommends a vote "FOR" approval and adoption of
this resolution.
APPROVAL OF 1996 STOCK OPTION PLAN
THE PLAN. The United Vision Group, Inc. 1996 Stock Option Plan (the
"Plan") was adopted by the Company's Board of Directors as the 1995 Stock Option
Plan B on November 21, 1995, and was amended and restated as the 1996 Stock
Option Plan on June 7, 1996. The purposes of the Plan are to enable the Company
to compete successfully in retaining and attracting directors, employees and
advisors of outstanding ability, to stimulate the efforts of these persons
toward the Company's objectives and to encourage their ownership of the
Company's Common Stock, all with the long-term goal of increasing value for all
of the Company's stockholders.
The following is a summary of the Plan, as amended and restated, the
full text of which is set forth as Exhibit A to this Proxy Statement.
Up to 2,000,000 shares of the Company's Common Stock may be issued
pursuant to the Plan and on June 7, 1996 the Company granted options to acquire
an aggregate of 555,000 shares of Common Stock at $0.56 per share. The number of
shares issuable, as well as the number of shares subject to outstanding options
and the price of outstanding options, will be appropriately adjusted to give
effect to any change in the Common Stock as a result of any stock split or
dividend, combination or exchange of shares, recapitalization, reclassification
or similar event. Therefore, if the Reverse Stock Split is approved, the
-10-
<PAGE> 13
number of shares issuable under the Plan will be adjusted to 400,000, the number
of outstanding options would be decreased to 110,000 and the exercise price
thereof would be increased to $2.80.
The Plan is administered by the Board of Directors of the Company
which, in addition to administering and interpreting the Plan, has exclusive
authority, subject to the terms of the Plan, to select optionees, to determine
the number of shares for which an option is granted, to set an option's price
and term, to select the type of option and to establish all other terms and
conditions of an option, including restrictions on exercise. The Plan provides
that the Board may, under circumstances selected by it, waive or amend the terms
and conditions of, or accelerate the vesting of, an option. Board members are
not liable for actions and determinations made or taken in good faith with
respect to the Plan and, to the extent not prohibited by law, will be
indemnified by the Company for any liability or expenses incurred in this
connection.
Any employee or director of the Company or any of its subsidiaries may
be selected to participate in the Plan. Additionally, options may be granted
under the Plan to advisors and consultants, as defined ("advisors"), to the
Company. Both incentive stock options and nonqualified options may be granted to
employee-participants in the Plan. Non-employee directors and advisors may only
receive nonqualified option grants. Options for no more than 500,000 shares of
Common Stock may be granted to any eligible employee under the Plan during any
period of twelve consecutive months.
For a nonqualified option, the per share exercise price must be at
least 85% of the fair market value of a share of Common Stock on the date the
option is granted. For an incentive stock option, the per share exercise price
may not be less than 100% of the Common Stock's fair market value on the date of
grant. Additionally, no incentive stock option may be exercised after ten years
from the date of grant. If an optionee holds more than 10% of the Company's
shares, any incentive stock option granted to that person must have a price of
at least 110% of fair market value on the date of grant and may be for a term no
longer than five years. The aggregate fair market value (determined as of the
time of grant) of shares with respect to which incentive stock options are
exercisable for the first time by a holder in any year (under all plans of the
Company) may not exceed $100,000. Furthermore, an incentive stock option is not
transferrable except by the optionee's will or the laws of descent and
distribution and, during an optionee's lifetime, may only be exercised by the
optionee or the optionee's legal representative or guardian. Transfer of
nonqualified options is similarly restricted except under limited circumstances
or as permitted by the Board.
To the extent and under the conditions established by the Board, an
option's exercise price may be paid in cash, by the surrender of
previously-owned shares of Common Stock, by directing that shares otherwise
issuable upon the option's exercise be withheld as payment or by a combination
of the foregoing. If payment by the surrender or withholding of shares is
permitted, these shares are valued at their fair market value on the date
surrendered or withheld. Shares tendered or withheld as payment are available
for issuance under the Plan. For purposes of the Plan, fair market value means
the average of the closing bid and asked prices for the Common Stock. On August
31, 1996, the fair market value of the Company's Common Stock was $0.25 per
share.
If an optionee terminates employment with, or service as a director of,
the Company for any reason, any unexercisable option held by that optionee will
terminate. An exercisable option held by the optionee will generally terminate
on the earlier of (i) the option's full exercise, (ii) the expiration of the
option by its terms or (iii) the end of the three-month period following the
date of termination of employment. If, however, an optionee becomes disabled or
dies either while employed by, or serving as a director of, the Company or
within three months of termination of employment or service, a then-exercisable
option held by that optionee may be exercised at any time within one year after
the date of death or commencement of disability. An option granted to an advisor
to the Company terminates on
-11-
<PAGE> 14
the earlier of its full exercise or the option's expiration by its terms. The
Plan provides that, in its discretion, the Board may extend the Plan's periods
for option exercise.
The Board may amend or terminate the Plan at any time; however,
stockholder approval is required for an amendment if such approval is necessary
to maintain the Plan's compliance with the Internal Revenue Code (the "Code") or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). No Plan
amendment may alter or impair an outstanding option without the optionee's
consent. No option may be granted under the Plan subsequent to August 14, 2006.
The Plan provides that in the event any person becomes the "beneficial
owner" (as defined in Exchange Act Rule 13d-3) of more than 50% of the Company's
outstanding shares of Common Stock, or commences a tender offer which if
successful would result in the person becoming the beneficial owner of more than
50% of such shares, then all outstanding options will immediately become
exercisable. In the event of the execution of an agreement of reorganization,
merger or consolidation of the Company with another corporation in which the
Company is not to be the surviving corporation, or in the event of the execution
of an agreement of sale or transfer of all or substantially all the assets of
the Company, all outstanding options also will become immediately exercisable.
If the successor or transferee corporation does not obligate itself to continue
the Plan, both the Plan and the unexercised portion of all outstanding options
will terminate as of the effective time of any such transaction, except that, in
the event of such a transaction, an optionee who is subject to Section 16 of the
Exchange Act will be entitled to tender the optionee's options which are
unexercised immediately before the transaction to the Company and to receive a
cash payment equal to the difference between the aggregate "fair value" of the
shares of the Company's Common Stock subject to the holder's unexercised options
and the aggregate option price of those shares.
The Plan also provides that, if payments to an optionee by the Company
would constitute "excess parachute payments" under the Code, amounts payable in
accordance with the Plan's change of control provisions will be reduced so that
the employee is not subject to the 20% excise tax on the payment and the Company
is able to deduct the entire payment.
FEDERAL INCOME TAX AND ACCOUNTING CONSEQUENCES. It is intended that the
incentive stock options granted under the Plan will meet the requirements of ss.
422 of the Code, under which the optionee recognizes no income upon exercise of
the option and, if the stock purchased pursuant to the exercise of the option is
held for certain periods, the amount realized on sale or taxable exchange in
excess of the option price is generally treated as a long term capital gain. To
the extent individual optionees qualify for such tax treatment, the Company is
not entitled to a federal income tax deduction in connection with the grant or
exercise of the option. If stock acquired through the exercise of an incentive
stock option is disposed of before the expiration of the prescribed holding
periods, the lesser of (i) the difference between the option price and the fair
market value at the time of exercise or (ii) the difference between the option
price and the amount realized upon disposition of the stock is treated as
ordinary income to the optionee at the time of disposition and is allowed as a
deduction to the Company; any excess of the amount realized upon sale over the
fair market value at the time of exercise is generally treated as capital gain
to the optionee. An incentive stock option which is not granted, exercised or
held in accordance with Code ss. 422 is accorded tax treatment as a nonqualified
option.
In general, an optionee who exercises a nonqualified option realizes
taxable ordinary income and the Company is entitled to a deduction at the time
of exercise of the option in an amount equal to the excess of the fair market
value of the shares purchased at the time of such exercise over the option
price.
The proceeds of the sale of stock under the Plan constitute general
funds of the Company and may be used by it for any purpose. Under accounting
practices followed by the Company, neither the grant at fair market value nor
the exercise of an option under the Plan will result in any charge against the
-12-
<PAGE> 15
Company's earnings. The grant of options at a price less than 100% of fair
market value results in compensation expense to the Company.
OTHER MATTERS. As many as 150 individuals may be eligible to receive
option grants under the Plan. The Plan contains no limitation as to the maximum
number of participants. To date, options for a total of 555,000 shares of Common
Stock have been granted under the Plan. The recipients of, and numbers of shares
subject to, future grants under the Plan are not determinable at this time.
VOTE REQUIRED. Approval of the Plan requires the affirmative vote of a
majority of the shares of Common Stock present in person or represented by proxy
at the Annual Meeting and entitled to vote on the matter. Dr. Cook and Messrs.
Damron, Manopoli, Molinaro and Prelaz together hold approximately 72% of the
voting power of the outstanding shares of Common Stock, and each has indicated
his intention to vote in favor of this proposal. Accordingly, it is expected
that the Plan will be approved.
RESOLUTION. The Board of Directors intends to cause the following
resolution to be presented to stockholders for action at the Annual Meeting:
RESOLVED, that the United Vision Group, Inc. 1996
Stock Option Plan, be, and it hereby is, approved
and adopted by the stockholders of the Company.
The Board of Directors recommends a vote "FOR" approval and adoption of the
Plan.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE OFFICERS. The current executive officers of the Company are
Dr. Cook, Mr. Damron, Mr. Molinaro and Mr. Manopoli. Information about each is
given under the "Board of Directors." Officers of the Company are elected by,
and serve at the discretion of, the Board of Directors.
SUMMARY INFORMATION. The following table sets forth, for the fiscal
years indicated, total amounts of cash and certain other compensation paid by
the Company (including both United Vision Group and Apollo) to certain of its
executive officers for services to the Company and its subsidiaries in all
capacities. No other executive officers of the Company had cash compensation in
excess of $100,000 during 1995. Dr. Cook and the other listed executive officers
are sometimes referred to hereafter as the "named executive officers."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
-----------------------------------------------------------------------
Other
Annual Securities
Compen- Underlying All Other
Name and Bonus sation Options/SARs (#) Compensation
Principal Position Year Salary ($) ($) ($)(1) ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James R. Cook, M.D.(2)(3) 1995 $ 75,000 --- --- 417,406 ---
Chairman
</TABLE>
-13-
<PAGE> 16
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Jan H. Kaplan(4) 1995 $ 99,990 $ 50,000 --- 105,000 ---
President 1994 100,000 --- --- --- $737
1993 43,740 --- --- --- ---
Peter Molinaro, Jr.(2) 1995 $120,480 --- --- 933,029 ---
Executive Vice President
Karen Kaplan(4) 1995 $ 78,836 $ 50,000 --- 50,000 ---
Executive Vice President 1994 75,186 --- --- --- ---
1993 43,740 --- --- --- ---
Vincent C. Manopoli(2) 1995 $ 85,000 --- --- 227,427 ---
Executive Vice President
<FN>
- ----------------------------
(1) None, other than perquisites which did not exceed the lesser of $50,000 or
10% of salary and bonus for any named executive officer.
(2) Dr. Cook, Mr. Molinaro and Mr. Manopoli first became executive officers of
the Company during 1995.
(3) In 1995, $75,000 in salary was accrued but not paid.
(4) In 1994, Mr. Kaplan was entitled to receive $100,000 in salary pursuant to
his employment agreement with the Company; however, he contributed part of
his salary to Mrs. Kaplan and did not receive the full amount due under the
agreement. The amount actually received was $75,186, with the difference
having been allocated to Mrs. Kaplan. Mrs. Kaplan was entitled to a $50,000
salary in 1994, but received $75,186.
</TABLE>
STOCK OPTIONS. In addition to the proposed 1996 Stock Option Plan (see
"Approval of 1996 Stock Option Plan"), the Company has two existing plans
pursuant to which options for shares of Common Stock have been granted to
employees: the 1994 Stock Option Plan and the 1995 Stock Option Plan A. None of
the Plans provides for the grant of stock appreciation rights.
-14-
<PAGE> 17
During 1995 stock options were granted to the named executive officers
as follows:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Number of
Securities % of Total Options
Underlying Granted to Exercise or
Options Granted Employees in Fiscal Base Price
Name (#) Year ($/Share) Expiration Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James R. Cook, M.D. 417,406 14.8% $0.2926 August 6, 2000
Jan H. Kaplan 75,000 2.7% $0.3125 February 21, 2000
30,000 1.0% $0.3125 June 30, 2000
Peter Molinaro, Jr. 933,029 33.2% $0.266 August 6, 2005
Karen Kaplan 50,000 1.8% $0.3125 February 21, 2000
Vincent C. Manopoli 227,427 8.0% $0.266 August 6, 2005
</TABLE>
With respect to each named executive officer, the following table sets
forth information concerning unexercised options held at December 31, 1995. No
options were exercised during 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-the-
Value Realized ($) Underlying Unexercised Money Options at FY-End
Options at FY-End (#) ($)
(Market Price on
Shares Acquired on Exercise Less Exercisable/ Exercisable/
Name Exercise (#) Exercise Price) Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James R. Cook, M.D. --- --- 69,568/347,838 1,384/6,922
Jan H. Kaplan --- --- 75,000/0 0/0
30,000/0 0/0
Peter Molinaro, Jr. --- --- 169,151/763,878 7,866/35,520
Karen Kaplan --- --- 50,000/0 0/0
Vincent C. Manopoli --- --- 51,551/175,876 2,397/8,178
</TABLE>
EMPLOYMENT AGREEMENTS. Effective August 7, 1995, Mr. and Mrs. Kaplan
entered into employment agreements (the "Agreements") with the Company which
superseded and replaced their prior employment agreements with the Company. Each
Agreement had an initial four-year term and renewed automatically for successive
one-year terms thereafter unless notice was given by either party. Pursuant to
the Agreements, Mr. Kaplan initially was to continue as President of the Company
with an annual base salary of $140,000, and Mrs. Kaplan initially was to
continue as an Executive Vice President of the Company with an annual base
salary of $85,000. In addition, in lieu of the rights under their prior
employment agreements to receive a bonus based upon the Company's pre-tax income
in excess of certain target levels, the Company agreed to pay Mr. and Mrs.
Kaplan each a guaranteed cash bonus of $25,000 per quarter for
-15-
<PAGE> 18
eight consecutive quarters, beginning with the quarter ended September 30, 1995.
The Agreements also provided additional miscellaneous compensation in the form
of certain perquisites, including the use of automobiles and certain insurance
benefits.
On December 19, 1995 the Company announced that it was in the process of
terminating the employment of Mr. and Mrs. Kaplan and that the Kaplans and the
Company were working toward various agreements whereby the Kaplans would become
consultants to the Company. On March 23, 1996, the Kaplans entered into
Termination, Settlement and Mutual Release Agreements and Consulting Agreements
effective January 1, 1996, under the following terms:
1) Under the Termination, Settlement and Mutual Release Agreements, Mr.
Kaplan received a payment of $118,429, based upon his remaining
bonus amount of $150,000 less amounts and advances due to the
Company of $31,571, and Mrs. Kaplan received a payment of $50,166,
based upon her remaining bonus amount of $150,000 less $85,000 in
notes payable due to the Company and $14,833 of accrued interest
payable.
2) The Consulting Agreements provide for monthly payments to Mr. and
Mrs. Kaplan of $11,667 and $7,083, respectively, through August 3,
1999.
3) The Consulting Agreements provide for continuing payments of auto
leases and related expenses for both Mr. and Mrs. Kaplan through mid
year 1998.
4) Under the Consulting Agreements, Mr. and Mrs. Kaplan are limited
from competing with the Company, soliciting the business of the
Company or soliciting the Company's employees through August 3,
1999.
The Company does not expect to make significant use of the Kaplans under
the Consulting Agreements and has written off the projected expenses associated
with these agreements.
In connection with the Merger, Dr. Cook, Mr. Molinaro and Mr. Manopoli
entered into Employment Agreements with the Company to provide services as
Chairman and Executive Vice Presidents for annual salaries of $75,000, $125,000
and $85,000, respectively. These Employment Agreements are terminable by either
party upon 90 days written notice, with or without cause.
Robert M. Rubin, a director of the Company until August 1995, has an
employment agreement with the Company for a term of three years, expiring in
August 1998, at an annual salary of $50,000, which is terminable by the Company
only for cause (as defined). The Company has not called upon Mr. Rubin for
services and does not expect to do so; therefore, the remaining expense
associated with his employment agreement was taken as a restructuring charge in
1995.
CERTAIN TRANSACTIONS
On August 4, 1995, the Company exchanged all outstanding shares of its
Series A Preferred Stock for Common Stock at rate of six shares of Common Stock
for each share of Series A Preferred Stock, thereby issuing 410,238 shares to
Mark Glick, the brother of Karen Kaplan; 1,401,024 shares to Mr. Kaplan, and
1,248,858 shares to Mr. Rubin. The Series A Preferred Stock had a cumulative
dividend rate of 12% per annum, was not callable and was convertible at the
holder's option into Common Stock at the following rates: until December 31,
1994, one to one; through December 31, 1995, 1.22 to one; through December 31,
1996, two to one; and until December 31, 1977, four to one. If the Company had
not exchanged the Series A Preferred Stock for Common Stock, it would have been
obligated to pay cumulative dividends of $137,705 through December 31, 1997, at
which point the Series A Preferred Stock would have been convertible into Common
Stock at the rate of four to one. Thus, by issuing an additional 1,020,040
shares of Common Stock beyond the four to one conversion, the Company saved
approximately $186,000
-16-
<PAGE> 19
(consisting of $61,200 in accrued and unpaid dividends and approximately
$124,890 of future dividends, representing a present value of $137,705 of
cumulative dividends through December 31, 1997 using a discount rate of 8% per
annum). This represented approximately $0.1825 per common share, which was a
discount of $0.03547 per share from the average closing spread between the bid
and asked price for the Common Stock of $0.2179 per share for the twenty (20)
trading days prior to the exchange. The exchange rate of six to one was approved
by the Board of Directors of the Company prior to the Merger.
During the fourth quarter of 1995, Dr. Cook provided loans to the
Company in the amount of $800,000 in an effort to improve liquidity. These
stockholder loans carried an interest rate of prime plus one and one-half
percent through March 31, 1996 and prime from April 1, 1996 and thereafter; a
total of $13,437 of interest was accrued during 1995. Through July 31, 1996, the
total stockholder loans provided by Dr. Cook stood at $4,495,000, with
$1,650,000 provided during the first quarter, $1,600,000 provided during the
second quarter of 1996 and $445,000 during the third quarter of 1996 through the
date of this Proxy Statement. The additional loans also had an interest rate of
prime plus one and one-half percent through March 31, 1996. Effective April 1,
1996, the interest rate on all new and outstanding loans was reduced to prime.
An additional $108,623 of interest was accrued for the first six months of 1996.
See "Authorization of Transaction with Dr. Cook."
During 1995, the Company purchased marketing services and materials
from Results Marketing and Visual Communications, Inc., in the amount of
$210,505, which firm is owned in part by Mr. Prelaz. The Company believes that
the services and materials were purchased at fair market value and were
necessary for the conduct of the business of the Company.
In connection with the Merger, Dr. Cook, Mr. and Mrs. Kaplan and Mr.
Rubin entered into a Stockholders Voting Agreement, and the Company and Mr.
Kaplan entered into an Employment Agreement, pursuant to which (i) Mr. Kaplan
had the right to designate a director of the Company in replacement for Mr.
Rubin, who resigned from the Board of Directors in connection with the Merger,
(ii) if Mrs. Kaplan resigned or was removed from the Board of Directors during
the term of Mr. Kaplan's employment, Mr. Kaplan had the right to designate her
replacement, and (iii) under certain conditions, Dr. Cook agreed to vote in
favor of Mr. and Mrs. Kaplan's designees as directors. In conjunction with the
Termination, Settlement and Mutual Release Agreements (see "Executive
Compensation and Other Information -- Employment Agreements"), Mr. and Mrs.
Kaplan released their rights under these agreements.
PRINCIPAL STOCKHOLDERS AND
HOLDINGS OF MANAGEMENT
The following table sets forth, as of July 31, 1996, certain
information with regard to the beneficial ownership of the Company's Common
Stock by (i) each of the Company's stockholders known to hold more than 5% of
the outstanding shares of either class of stock, (ii) each director, nominee for
director and named executive officer, individually, and (iii) all directors and
executive officers of the Company as
-17-
<PAGE> 20
a group. All share numbers given are before the effect of the Reverse Stock
Split. See "Amendment to Certificate of Incorporation to Authorize Reverse Stock
Split."
<TABLE>
<CAPTION>
Name (1) Common Stock
-------- ------------
Percent
Shares (2) Of Class
---------- --------
<S> <C> <C>
James R. Cook, M.D. (3) 11,697,325 51.6
J. Richard Damron, Jr. 632,399 2.8
Vince C. Manopoli 356,529 1.6
Peter Molinaro, Jr. 2,075,980 9.2
John C. Prelaz 2,179,514 9.6
All current directors 16,941,747 74.7
and executive officers
as a group (5 persons)
Jan H. Kaplan (4) 1,706,024 7.5
Karen Kaplan(4)(5) 290,000 1.3
Robert M. Rubin 1,628,858 7.2
<FN>
(1) The address of (i) Dr. Cook and Messrs. Damron, Manopoli, Molinaro and
Prelaz is 2424 North Federal Highway, Suite 362, Boca Raton, Florida 33431,
(ii) Mr. and Mrs. Kaplan is 12049 N.W. 9 Court, Coral Springs, Florida 33071
and (iii) Mr. Rubin is 660 Kings Gate Circle, Delray Beach, Florida 33484.
(2) Includes shares of Common Stock which may be acquired upon the exercise of
presently exercisable stock options and options exercisable within sixty
(60) days after July 31, 1996, in the following amounts: Dr. Cook 139,135
shares; Mr. Damron, 52,306 shares; Mr. Manopoli, 75,809 shares; Mr.
Molinaro, 311,010 shares; Mr. Prelaz, 97,579 shares; all directors and
executive officers as a group, 675,839 shares; Mr. Kaplan 105,000 shares;
Mrs. Kaplan, 50,000 shares; and Mr. Rubin, 155,000 shares.
(3) Includes shares of Common Stock held in a corporation controlled by Dr.
Cook.
(4) Mr. and Mrs. Kaplan, who are husband and wife, each may be deemed to share
voting power over the shares owned by the other.
(5) Includes 3,500 shares of Common Stock held by Mrs. Kaplan for her children.
</TABLE>
CHANGE OF CONTROL. On August 7, 1995, pursuant to a Merger Agreement
dated August 4, 1995, Apollo and AEC were merged into Apollo Acquisition Corp.,
a Delaware corporation ("Acquisition") and a wholly owned subsidiary of the
Company. Acquisition was the surviving corporation in the Merger, with
-18-
<PAGE> 21
its name being changed to Apollo Eye Associates, Inc. As a result of the Merger,
the former limited partners of Apollo and the former stockholders of AEC
received in the aggregate 166,579.5924 shares of Series B Convertible Preferred
Stock of the Company.
Each share of Series B Convertible Preferred Stock was convertible
into 100 shares of Common Stock of the Company and all shares of Series B
Preferred Stock were converted into 16,657,959 shares of Common Stock in March
1996. As a result of the Merger and the conversion of the Series B Preferred
Stock, the former limited partners of Apollo and former stockholders of AEC hold
in the aggregate 16,657,959 shares of Common Stock representing 73.7% of the
voting power of the Company, of which Dr. Cook, a former limited partner of
Apollo and stockholder of AEC, holds 11,558,190 shares of Common Stock
representing 51% of the voting power of the Company. The former limited partners
of Apollo and stockholders of AEC also received in the aggregate options to
purchase an additional 2,412,541 shares of Common Stock pursuant to the
Company's 1995 Stock Option Plan A. Assuming vesting and exercise of these
options, and assuming vesting and exercise of options for an additional 400,000
shares of Common Stock granted under the Company's 1994 Stock Option Plan and
options for an additional 550,000 shares of Common Stock granted under the
Company's 1996 Stock Option Plan, the former limited partners of Apollo and
stockholders of AEC will hold in the aggregate 73.3% of the voting power of the
Company and Dr. Cook will hold 46% of the voting power of the Company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's equity securities, to file reports of
security ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than
ten-percent beneficial owners also are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file. Based upon a
review of copies of such forms and written representations from its executive
officers and directors, the Company believes that all Section 16(a) filing
requirements were complied with on a timely basis during and for 1995, except
that Messrs. Peter Molinaro, J. Richard Damron and Vincent C. Manopoli each
failed to file two Form 4's relating to three transactions, and James R. Cook,
Jr., M.D. failed to file one Form 4 relating to one transaction. All of these
transactions involved grants and forfeitures of options under the Company's 1995
Stock Option Plan A. All such Form 4's were filed in 1996.
INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants are selected by, and
serve subject to change by, the Board of Directors. The Board has voted to
appoint Coopers & Lybrand L.L.P., Certified Public Accountants ("Coopers &
Lybrand"), as independent public accountants of the Company for the year 1996.
Representatives of Coopers & Lybrand are expected to be present at the meeting,
with the opportunity to make a statement if they desire. Additionally, they will
be available to respond to appropriate questions from stockholders.
The firm of Coopers & Lybrand was engaged as the Company's principal
independent accountants on September 12, 1995. Previously, Feldman Radin & Co.,
P.C. ("Feldman Radin") had served the Company in this capacity. The decision to
dismiss Feldman Radin and to engage Coopers & Lybrand was made by the Board of
Directors of the Company.
-19-
<PAGE> 22
Feldman Radin had been engaged to audit the Company's financial
statements for more than the two most recent fiscal years preceding September
12, 1995. None of Feldman Radin's reports on the financial statements of the
Company for such two fiscal years contained an adverse opinion or a disclaimer
of opinion, and none was qualified or modified as to uncertainty, audit scope,
or accounting principles.
During fiscal years 1993 and 1994 and the subsequent interim period
preceding September 12, 1995, there were no disagreements between the Company
and Feldman Radin on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure ("disagreements"), which
disagreements, if not resolved to the satisfaction of Feldman Radin, would have
caused it to make reference to the subject matter of such disagreements in
connection with its report. The termination of Feldman Radin did not result from
any "disagreement." During the same period of time, no "event," as described in
Item 304(a)(1)(iv)(B) of Regulation S-B under the Exchange Act, occurred.
During fiscal years 1993 and 1994 and the subsequent interim period
prior to September 12, 1995, neither the Company nor anyone acting on its behalf
consulted Coopers & Lybrand regarding (i) either: the application of accounting
principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Company's financial statements,
where either a written report was provided to the Company or oral advice was
provided that Coopers & Lybrand concluded was an important factor considered by
the Company in reaching a decision as to the accounting, auditing or financial
reporting issue; or (ii) any matter that was either the subject of a
"disagreement" or an "event" as noted in the preceding paragraph.
1997 ANNUAL MEETING AND PROXY STATEMENT PROPOSALS
On August 28, 1996, the Board of Directors of the Company adopted
amended and restated Bylaws which changed the date of the Company's Annual
Meeting of Stockholders to the first Tuesday in June of each year or such other
date as may be set by the Board. Accordingly, it is currently anticipated that
the Company's 1997 Annual Meeting will be held on Tuesday, June 3, 1997.
Stockholder proposals will be considered for inclusion in the Proxy Statement
for the 1997 Annual Meeting if they are received by the Company before the close
of business on February 3, 1997.
OTHER BUSINESS
The Company is not aware of any business or matter which may properly
be presented at the meeting other than as discussed herein. However, if any
other matters do come before the meeting, or an adjournment thereof, it is
intended that the proxies will vote thereon in accordance with the
recommendation of the Board of Directors.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The following information is incorporated by reference from the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1995 and
Quarterly Reports on Form 10-QSB for the quarters ended March 31, 1996 and June
30, 1996, each of which are furnished with this Proxy Statement:
(i) United Vision Group, Inc. Combined and Consolidated Financial
Statements, and
(ii) Management's Discussion and Analysis of Financial Condition and
Results of Operations.
-20-
<PAGE> 23
EXHIBIT A
UNITED VISION GROUP, INC.
1996 Stock Option Plan
(as amended and restated effective June 7, 1996)
ARTICLE I
OBJECTIVES
1.1 The objectives of this Stock Option Plan (the "Plan") are to
enable United Vision Group, Inc. ("United Vision") to compete successfully in
retaining and attracting directors, employees and advisors of outstanding
ability, to stimulate the efforts of these persons toward United Vision's
objectives and to encourage their ownership of shares of United Vision's Common
Stock.
ARTICLE II
DEFINITIONS
2.1 For purposes of the Plan each of the following terms shall
have the definition which is attributed to it, unless another definition is
clearly indicated by a particular usage and context.
A. "ADVISOR" means any person who provides bona
fide advisory or consulting services to the Company
other than services in connection with the offer or
sale of securities in a capital-raising operation.
B. "BOARD" means the Board of Directors of United
Vision.
C. "CODE" means the Internal Revenue Code of 1986,
as amended. Reference to any Section of the Code
includes the provisions of that Section as it may be
amended or replaced by any other section(s) of like
intent and purpose and also includes any regulations
or rulings promulgated thereunder.
D. "COMPANY" means United Vision and any
subsidiary of United Vision, as the term "subsidiary"
is defined in Section 424(f) of the Code.
<PAGE> 24
E. "DISABILITY" means permanent and total
disability as defined in Section 22(e)(3) of the Code.
F. "EFFECTIVE DATE OF GRANT" means the date on
which, or such later date as of which, the Board makes
an award of an Option.
G. "ELIGIBLE EMPLOYEE" means any individual (other
than one who receives retirement benefits, stipends,
consulting fees, honorariums and the like) who
performs services for the Company and is included on
the regular payroll of the Company. A director of the
Company who does not otherwise qualify as an Eligible
Employee pursuant to the previous sentence shall
nonetheless be considered an Eligible Employee with
respect to the grant of Nonqualifed Stock Options.
H. "EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended.
I. "FAIR MARKET VALUE" means the last sale price
reported on The Nasdaq Stock Market, or on any stock
exchange on which the Shares are traded, on a
specified date or, if there are no reported sales on
such date, then the last reported sales price on the
next preceding day on which such a sale was
transacted. If the Shares are not then traded as
described in the preceding sentence, then the average
of the closing bid and asked prices on the specified
date or last preceding day on which bid and asked
prices were reported, or such other method as the
Board may select, shall be used in determining Fair
Market Value for a Share.
J. "INCENTIVE STOCK OPTION" shall have the same
meaning as is given to that term by Section 422 of the
Code.
K. "NONQUALIFIED STOCK OPTION" means any Option
other than an Incentive Stock Option.
L. "OPTION" means the right, subject to the terms
of this Plan and to such other terms and conditions as
the Board may establish, to purchase from United
Vision a stated number of Shares at a specified price.
M. "OPTION PRICE" means the purchase price per
Share subject to an Option. The Option Price shall not
be (i) less than 85% of the Fair Market Value of a
Share on the Effective Date of Grant in the case of a
Nonqualified Stock Option, except that no Nonqualified
Stock Option which is intended to
-2-
<PAGE> 25
result in compensation that qualifies for exclusion
from the deduction limitation of Code Section 162(m)
shall be granted with an Option Price of less than
100% of the Fair Market Value of a Share on the
Effective Date of Grant, or (ii) less than 100% of the
Fair Market Value of a Share on the Effective Date of
Grant in the case of an Incentive Stock Option, except
as otherwise provided in Section 8.1.
N. "SHARE" means one share of the Common Stock,
$.001 par value, of United Vision.
ARTICLE III
ADMINISTRATION
3.1 ADMINISTRATION. The Plan shall be administered by the Board.
Subject to and consistent with the provisions of the Plan, the Board shall
establish such rules and regulations as it deems necessary or appropriate for
the proper administration of the Plan, shall interpret the provisions of the
Plan, shall decide all questions of fact arising in the application of Plan
provisions and shall make such other determinations and take such actions in
connection with the Plan and the Options granted hereunder as it deems necessary
or advisable. At any time, or from time to time, the Board may appoint a
committee of at least two directors (the "Committee") to administer, or to
approve transactions pursuant to, the Plan. For the purpose of option grants to
and approval of other transactions with persons who are subject to Rule 16b-3
under the Exchange Act with respect to United Vision, each member of the
Committee shall be a "Non-Employee Director" as defined in Rule 16b-3. To the
extent that it is desired that compensation resulting from the grant of a
particular Option be excluded from the deduction limitation of Section 162(m) of
the Code, all directors comprising the Committee granting such Option also shall
be "outside directors" within the meaning of Code Section 162(m). In the event a
Committee is so appointed, it may carry out all of the functions of the Board
with respect to the Plan, except for amendments to or suspension or termination
of the Plan.
3.2 Except as specifically limited by the provisions of the
Plan, the Board shall have authority to:
A. Determine which Eligible Employees or Advisors
shall be granted Options;
B. Determine the number of Shares which may be
subject to each Option;
-3-
<PAGE> 26
C. Determine the term and the Option Price of each
Option;
D. Determine whether an Option is an Incentive
Stock Option or a Nonqualified Stock Option (except
that only Nonqualified Stock Options may be granted to
Advisors);
E. Determine the time or times when Options will
be granted; and
F. Determine all other terms and conditions of
each Option, including (but not limited to) the terms
of any Option agreement. The Board may, in its
discretion, determine as a condition of any Option
that a stated percentage of Shares covered by such
Option shall be exercisable in any one year or other
stated period of time. The Board may also waive or
amend the terms and conditions of, or accelerate the
vesting of, an Option under circumstances selected by
the Board.
3.3 Any action, decision, interpretation or determination by the
Board with respect to the application or administration of this Plan shall be
final and binding upon all persons, and need not be uniform with respect to its
determination of recipients, amount, timing, form, terms or provisions of
Options.
3.4 No member of the Board shall be liable for any action or
determination taken or made in good faith with respect to the Plan or any Option
granted hereunder and, to the extent not prohibited by applicable law, all
members shall be indemnified by the Company for any liability and expenses which
they may incur as a result of any claim or cause of action, or threatened claim
or cause of action, arising in connection with the administration of this Plan
or the grant of any Option hereunder.
ARTICLE IV
SHARES ISSUABLE
4.1 Except as provided in Article XI, the number of Shares which
may be issued under the Plan shall not exceed 2,000,000 Shares in the aggregate
and Options for no more than 500,000 Shares may be granted to any individual
Eligible Employee during any period of twelve (12) consecutive months. If any
Option expires or terminates for any reason without being completely exercised,
the Shares with respect to which such Option was not exercised may again be
subject to other Options. Shares tendered or withheld as payment for the Option
Price pursuant to Section 7.1 shall be available for issuance under the Plan.
The
-4-
<PAGE> 27
Board may make such other determinations regarding the counting of Shares issued
pursuant to the Plan as it deems necessary or advisable, provided that such
determinations shall be permitted by law.
ARTICLE V
GRANTING OF OPTIONS
5.1 Subject to the terms and conditions of the Plan, the Board
may, from time to time, grant Options to Eligible Employees or Advisors on such
terms and conditions as it shall determine. Subject to the restriction of
Section 3.2(D), more than one Option and more than one form of Option may be
granted to the same individual.
ARTICLE VI
EXERCISE OF OPTIONS
6.1 Any person entitled to exercise an Option may do so,
without the need for further approval pursuant to Exchange Act Rule 16b-3, in
whole or in part by delivering to United Vision, attention: Stock Option Plan
Administrator, at its principal office, a written notice of exercise. The
written notice shall specify the number of Shares for which an Option is being
exercised and shall be accompanied by full payment of the Option Price for the
Shares being purchased.
ARTICLE VII
PAYMENT OF OPTION PRICE
7.1 Subject to such administrative requirements as the Board
may impose, payment of the Option Price may be made, at the election of the
holder of an Option, in cash, by the tender of previously owned Shares, by
directing that a portion of the Shares to be issued upon exercise of the Option
be withheld by United Vision as payment (to the extent permitted by law) or by a
combination of the foregoing. If payment by the tender of previously owned
Shares or the withholding of Shares is permitted, the value of each Share shall
be deemed to be the Fair Market Value of a Share on the day the Shares are
tendered or withheld for payment. In the case of a tender of previously owned
Shares, this shall be the date on which the Shares, duly endorsed or accompanied
by a stock power duly endorsed for transfer to United Vision, are received by
United Vision. In the case of a withholding
-5-
<PAGE> 28
of Shares, this shall be the date on which a complete and correct notice of
exercise directing the withholding is received by United Vision. Notwithstanding
the foregoing, an Option's exercise price may also be paid pursuant to a
"cashless" exercise/sale procedure involving a simultaneous sale by a broker, in
which case the exercise date shall be the trade date, provided that proceeds of
such sale in full payment of the Option Price are received by United Vision on
such date.
ARTICLE VIII
INCENTIVE STOCK OPTIONS AND NONQUALIFIED STOCK OPTIONS
8.1 Any option designated as an Incentive Stock Option will be
subject to the general provisions applicable to all Options granted under the
Plan. In addition, an Incentive Stock Option shall be subject to the following
specific provisions:
A. No Incentive Stock Option may be exercised
after the expiration of ten years from the Effective
Date of Grant.
B. At the time the Incentive Stock Option is
granted, if the Eligible Employee owns, directly or
indirectly, stock representing more than 10% of the
total combined voting power of all classes of stock of
the Company then:
(i) The Option Price must equal at
least 110% of the Fair Market Value on the
Effective Date of Grant; and
(ii) The term of the Option shall
not be greater than five years from the
Effective Date of Grant.
C. The aggregate Fair Market Value (determined as
of the Effective Date of Grant) of the Shares with
respect to which Incentive Stock Options are
exercisable for the first time by any holder during
any calendar year (under all plans of the Company)
shall not exceed $100,000.
8.2 If any Option is not granted, exercised or held pursuant to
the provisions of Code Section 422, it will be considered to be a Nonqualified
Stock Option to the extent that any or all of the grant is in conflict with
those provisions.
-6-
<PAGE> 29
ARTICLE IX
TRANSFERABILITY OF OPTIONS
9.1 During the lifetime of an Eligible Employee or Advisor to
whom an Option has been granted, such Option is non-assignable and
non-transferable and may be exercised only by such individual or that
individual's legal representative or guardian, except that a Nonqualified Stock
Option may be transferred (A) pursuant to a "domestic relations order" as
defined in Section 414(p)(1)(B) of the Code or (B) under such other
circumstances and in accordance with such other terms and conditions as may be
established by the Board. In the event of the death of an Eligible Employee or
Advisor to whom an Option has been granted, the Option shall be transferable
pursuant to the holder's Will or by the laws of descent and distribution and may
thereafter be exercised by the transferee(s) as provided in Section 10.1(C).
ARTICLE X
TERMINATION OF OPTIONS
10.1 Unless earlier terminated pursuant to Article XIII, an
Option granted to an Eligible Employee will terminate as follows:
A. During the period of the Eligible Employee's
continuous employment with, or service as a director
of, the Company, the Option will terminate upon the
earlier of the date on which it has been fully
exercised, it expires by its terms or it is terminated
by the mutual agreement of the Company and the
Eligible Employee.
B. Upon termination of the Eligible Employee's
employment with, or service as a director of, the
Company for any reason any unexercisable Option shall
immediately terminate. Except as provided in Section
10.1(C), any Option which is exercisable on the date
of termination of employment, or service as a
director, will terminate upon the earlier of its full
exercise, the expiration of the Option by its terms or
the end of the three-month period following the date
of termination. For purposes of the Plan, a leave of
absence approved by the Company shall not be deemed to
be termination of employment.
-7-
<PAGE> 30
C. If an Eligible Employee to whom an Option was
granted dies or becomes subject to a Disability while
employed by, or serving as a director of, the Company
or within three months of termination of employment or
service as a director, for any reason, the Option may
be exercised at any time within one year after the
date of death or the commencement of Disability, to
the extent that the Eligible Employee shall have been
entitled to exercise it at the time of death or the
commencement of Disability, by the Eligible Employee
or the Eligible Employee's legal representative or
guardian or by the representative(s) of the Eligible
Employee's estate or the person(s) to whom the Option
may have been transferred by Will or by the laws of
descent and distribution.
10.2 An Option granted to an Advisor will terminate
upon the earlier of the full exercise of the Option or the expiration
of the Option by its terms.
10.3 The provisions of Section 10.1 and 10.2 above
shall apply irrespective of whether an Option has been transferred to
a person or entity other than the Eligible Employee or Advisor to whom
the Option was granted.
10.4 The Board, at its discretion, may extend the
periods for Option exercise set forth in this Article X.
ARTICLE XI
ADJUSTMENTS TO SHARES AND OPTION PRICE
11.1 The Board shall make appropriate adjustments in
the number of Shares available for issuance under the Plan, the number
of Shares subject to outstanding Options and the Option Price of
optioned Shares in order to give effect to changes in the Shares as a
result of any merger, consolidation, recapitalization,
reclassification, combination, stock dividend, stock split, or other
similar event. The determination as to the method and extent of such
adjustments shall be within the sole discretion of the Board.
-8-
<PAGE> 31
ARTICLE XII
AMENDMENT OR TERMINATION OF PLAN
12.1 The Board may at any time amend, suspend or terminate the
Plan; provided, however, that shareholder approval shall be required for any
amendment if such approval is required pursuant to the Code or the Exchange Act,
or any rule or regulation thereunder, as such may be in effect and be
interpreted from time to time.
12.2 No amendment to the Plan shall alter or impair any Option
granted under the Plan without the consent of the holder thereof.
ARTICLE XIII
CERTAIN EVENTS
13.1 In the event United Vision shall consolidate with, merge
into, or transfer all or substantially all of its assets to another corporation
or corporations (a "successor corporation"), such successor corporation may
obligate itself to continue this Plan and to assume all obligations under the
Plan. In the event that such successor corporation does not obligate itself to
continue this Plan as above provided, the Plan shall terminate effective upon
such consolidation, merger or transfer, and, except as provided in Section 13.4,
any Option previously granted hereunder shall terminate. If practical, United
Vision shall give each holder of an Option twenty (20) days prior notice of any
possible transaction which might terminate this Plan and the Options previously
granted hereunder.
13.2 In the event any person, by any means of purchase or
acquisition, becomes the "beneficial owner" (as defined in Exchange Act Rule
13d-3 as in effect on June 7, 1996) of more than 50% of the outstanding Shares
of United Vision, or commences a tender offer pursuant to Exchange Act
Regulation 14D (as in effect on June 7, 1996) which, if successful, would result
in such person becoming the beneficial owner of more than 50% of such Shares,
then all Options which are outstanding at the time of such event shall
immediately become exercisable in full.
13.3 In the event of the execution of an agreement of
reorganization, merger or consolidation of United Vision with one or more
corporations as a result of which United Vision is not to be the surviving
corporation (whether or not United Vision shall be dissolved or liquidated) or
the execution of an agreement of sale or transfer of all or substantially all of
the assets of United Vision, then all Options which are outstanding at the time
of such event shall immediately become exercisable in full.
-9-
<PAGE> 32
13.4 In the event of any of the transactions referred to in
Section 13.3 hereof, any holder of one or more Options who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to
United Vision shall be entitled to tender such Options to the Company and to
receive from the Company a payment of cash equal to the difference between the
aggregate "Fair Value" of Shares subject to the holder's Options which are
outstanding and not exercised immediately prior to the time of consummation of
the transaction and the aggregate Option Price of such Shares. For this purpose,
"Fair Value" shall mean the cash value per Share to be paid to shareholders
pursuant to such agreement, or if cash value is not to be paid, the highest Fair
Market Value of a Share during the 60-day period immediately preceding the date
of the consummation of the transaction. The foregoing payment under this Section
13.4 shall be made in lieu of and in full discharge of any and all obligations
of the Company in respect of all subject Options of the holder.
13.5 The grant of Options under the Plan shall in no way
affect the right of United Vision to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or assets.
13.6 Notwithstanding the foregoing, in the event the amounts
deemed payable under this Article XIII when added to all other payments to the
holder of an Option by the Company, would, if made, constitute Excess Parachute
Payments within the meaning of Sections 280G and 4999 of the Code, the amounts
deemed payable by the Company under this Article shall be reduced by the amount
deemed necessary to cause the holder to receive $1,000.00 less than three times
the holder's Base Amount (as that term is defined in Code Section 280G) from all
such payments to the holder from the Company. In the event the amount of the
payments exceeds the amount subsequently determined to have been due, the excess
benefits over three times the Base Amount shall constitute a loan by the Company
to the holder, payable on demand by the Company, with interest at a rate equal
to 120% of the applicable federal rate determined under Section 1274 of the
Code, compounded semi-annually.
ARTICLE XIV
EFFECTIVE DATE
14.1 This Plan shall become effective, as amended and
restated, on June 7, 1996. If not approved and adopted by the shareholders of
United Vision within twelve months after such date, all Incentive Stock Options
previously granted hereunder shall be deemed to be Nonqualified Stock Options.
No Option shall be granted pursuant to this Plan subsequent to June 6, 2006 or
subsequent to any earlier date as of which this Plan is terminated.
-10-
<PAGE> 33
ARTICLE XV
MISCELLANEOUS
15.1 Nothing contained in this Plan shall constitute the
granting of an Option. Each Option shall be represented by a written Option
agreement executed by both the Eligible Employee or Advisor and United Vision.
15.2 Certificates for Shares purchased through exercise of
Options will be issued in regular course after exercise of the Option and
payment therefor as called for by the terms of the Option. No person holding an
Option or entitled to exercise an Option granted under this Plan shall have any
rights or privileges of a shareholder of United Vision with respect to any
Shares issuable upon exercise of such Option until certificates representing
such Shares shall have been issued and delivered. No Option may be transferred,
and no Option shall be exercisable or Shares issued and delivered upon exercise
of an Option, unless and until United Vision has complied with any and all
applicable federal and state securities laws, listing requirements of any market
on which United Vision's Shares may then be traded and other requirements of
law. Any certificate representing Shares acquired upon exercise of an Option may
bear such legends as the Company deems advisable to assure compliance with all
applicable laws and regulations.
15.3 Nothing contained in this Plan or in any Option granted
pursuant to it shall confer upon any person any right to continue as a director
or employee of, or in any business relationship with, the Company or to
interfere in any way with the right of the Company to terminate a person's
status as a director or employee of, or the person's business relationship with,
the Company at any time. So long as a holder of an Option shall continue to be
an employee of the Company, the Option shall not be affected by any change of
the employee's duties or position.
15.4 This Plan shall be construed and administered in
accordance with and governed by the laws of the State of Delaware.
-11-
<PAGE> 34
UNITED VISION GROUP, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING
The undersigned hereby appoints James R. Cook, M.D. and J.
Richard Damron, Jr., and each of them, attorneys with the powers which the
undersigned would possess if personally present, including the power of
substitution, to vote all shares of the undersigned at the Annual Meeting of
Stockholders of United Vision Group, Inc. to be held at the
_______________________________________________________ on __________, 1996, at
_____ a.m. (EDT), and at any adjournments thereof:
1. Election of James R. Cook, M.D., J. Richard Damron, Jr., Vincent C.
Manopoli, Peter Molinaro, Jr. and John C. Prelaz as directors.
/ / FOR all nominees; / / WITHHELD from all nominees;
/ / For all nominees except as noted on line below:
EXCEPTIONS
--------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
2. / / FOR / / AGAINST / / ABSTAIN On the proposal to amend the Company's
Certificate of Incorporation to changes
its name to Apollo Eye Group, Inc.
3. / / FOR / / AGAINST / / ABSTAIN On the proposal to amend the Company's
Certificate of Incorporation to effect a one-for-
five reverse stock split.
4. / / FOR / / AGAINST / / ABSTAIN On the proposal to approve the conversion of
$4,000,000 of debt to James R. Cook, M.D., to
6,779,661 shares of common stock at a conversion
price of $0.59 per share.
5. / / FOR / / AGAINST / / ABSTAIN On the proposal to adopt the Company's 1996
Stock Option Plan, as amended and restated.
</TABLE>
The proxy will be voted on the above as specified. IF NO SPECIFICATION IS
MADE, THE PROXY SHALL BE VOTED "FOR" EACH OF THE PROPOSALS AND IN FAVOR OF THE
NOMINEES LISTED ABOVE.
Unless this sentence is stricken, as to any other matter which may properly
come before the meeting, or if any of said nominees are not available for
election, said attorneys shall vote in accordance with their best judgment.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
Please mark: I do / / do not / / plan to attend the meeting.
<PAGE> 35
Dated__________________________________, 1996
--------------------------------------------
--------------------------------------------
(Signature of Stockholder)
IMPORTANT: Please date and sign exactly as
name appears hereon. If shares are held jointly,
each stockholder named should sign. Executors,
administrators, trustees, etc. should so indicate
when signing. If the signer is a corporation,
please sign full corporate name by duly
authorized officer.
<PAGE> 36
[COOPERS & LYBRAND LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
United Vision Group, Inc. and subsidiaries
We have audited the accompanying combined balance sheet of United Vision Group,
Inc. and subsidiaries (the "Company") as of December 31, 1995 and the related
combined statements of operations, stockholders' equity and cash flows for the
year then ended. We have also audited the consolidated balance sheet of Apollo
Eye Associates, L.P. and subsidiary as of December 31, 1994 and the related
consolidated statements of operations, partners' capital and cash flows for the
period from July 1, 1994 (inception) to December 31, 1994. These financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of United Vision Group,
Inc. and subsidiaries as of December 31, 1995 and the combined results of their
operations and their cash flows for the year then ended and the consolidated
financial position of Apollo Eye Associates, L.P. and subsidiary as of December
31, 1994 and the consolidated results of their operations and their cash flows
for the period from July 1, 1994 (inception) to December 31, 1994 in conformity
with generally accepted accounting principles.
F-2
<PAGE> 37
As discussed in Note 1 to the financial statements, on August 7, 1995 Apollo
Associates, L.P. and Apollo Eye Corporation, its general partner (the
"Partnership") were merged into the Company's wholly owned subsidiary Apollo
Acquisition Corporation which was subsequently renamed Apollo Eye Associates,
Inc. (Apollo). The merger has been accounted for as a reverse acquisition,
whereby Apollo was deemed to be the acquiror for accounting purposes.
Accordingly, the consolidated financial statements of the period prior to
August 1, 1995 (the effective date of the merger) are those of Apollo and
differ from the combined financial statements of the Company and its
subsidiaries as previously reported for those periods.
/s/ Coopers & Lybrand L.L.P.
Atlanta, Georgia
March 29, 1996
F-3
