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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
General Form for Registration of Securities
Of Small Business Issuers Pursuant to Section 12(b) or 12(g) of
the Securities Exchange Act of 1934
EYE CARE INTERNATIONAL, INC.
(Name of Small Business Issuer in its Charter)
Delaware
(State or other jurisdiction 59-3206480
of incorporation or organization) (IRS Employer Identification No.)
1511 North Westshore Boulevard, Suite 925
Tampa, Florida 33607
(Address of principal executive offices) (Zip Code)
(813) 289-5552
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $.001 par value
(Title of Class)
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Item 1. Description of Business.
Our Business
We market memberships in a comprehensive national non-insurance based
quality discount eye care/eyewear plan. The memberships entitle plan
participants to obtain eye care service and products from our network of
providers at significantly reduced rates.
We believe that we are the only national discount vision network with
ophthalmologists who have agreed to discount all of their medical services, as
well as the nation's largest optometric discount vision network. This would make
ECI the only national discount vision network which combines ophthalmology
services provided by medical doctors with optometric products and services
provided by optometrists, opticians and optical locations. Our network has
providers in all fifty states at over 11,000 locations, and is comprised of over
1,600 ophthalmologic practices and nearly 10,000 optometric, optician and
optical locations. The composition of our optometric network is both large chain
companies and a wide variety of boutiques and specialty shops. Most other
discount vision networks only offer discounts on optometric products and
services.
By offering a full range of eye care/eyewear services, members of our
vision care plan are able to obtain a comprehensive eye care service package,
including elective cosmetic surgical procedures such as lasik surgery, photo
refractive keratectomy, radial keratotomy, CO2 laser skin resurfacing and other
laser surgeries, performed by ophthalmologists. These procedures are
traditionally not covered by insurance or Medicare and are generally quite
expensive. ECI members can obtain these and all other procedures from our
providers at discounts that typically range from 20% to 68%. ECI providers offer
eyewear products to our members at nationally listed wholesale prices, plus a
$30 to $50 dispensing fee. This generally creates a savings in the range of 40%
to 60% off retail prices. We also offer a mail order program through which
members of our vision care network may order replacement contact lenses and
designer or non-designer sunglasses at nationally listed wholesale prices.
Our Target Market
We market our vision care plan to corporations, large sales
organizations and affinity groups. We are involved in all stages of product
development from training individual sales agents to the design and
implementation of a specific marketing program at the corporate and affinity
group level. These organizations can either purchase our vision care plan for,
or offer it to, their employees as a supplement to existing health care
insurance plans or other employee benefit programs or as a stand-alone benefit.
Sponsors of healthcare programs, including other discount vision plans, may
access our vision care network for a fee. This is a particularly significant
aspect of our marketing plan due to the national scope of our network and the
ophthalmology services offered.
Our History
We are a Delaware corporation incorporated on May 31, 1994, and a
successor by merger to Eye Care International, Inc., a Florida corporation. Our
principal executive offices are at 1511 North Westshore Boulevard, Suite 925,
Tampa, Florida 33607 and our telephone number is (813) 289-5552.
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Industry Overview
Approximately $20 billion is spent on eye care products and services each year
in the United States.
o Approximately $11 billion is spent on eyeglasses
o Approximately $2 billion is spent on contact lenses.
o Approximately $4 billion is spent on eye examinations and related
services
o Approximately $3 billion represents the costs of related surgical
procedures performed by ophthalmologists.
Ophthalmologists (eye M.D.'s) perform more than three million surgical
procedures in the United States annually.
Eye care products and services in the United States are delivered
through a fragmented system of providers composed of approximately 10,500 Board
certified ophthalmologists, 31,000 optometrists and 65,000 opticians.
o Opticians make and adjust eyewear using prescriptions supplied by
optometrists or ophthalmologists
o Optometrists specialize in examination, diagnosis and treatment
of conditions of the vision system, including fitting and
prescribing contact lenses
o Ophthalmologists are medical doctors who have at least three years
of hospital-based training in the diagnosis and medical and
surgical treatment of eye disorders
The optical dispensing industry in the United States is highly
fragmented with the top 100 optical chains accounting for less than 27% of total
retail sales in 1995. The retail optical industry is consolidating and will
continue to consolidate. Concerns about accelerating healthcare costs have
resulted in the increasing prominence of managed care in the eye care industry.
However, concerns about the quality of care received under managed care programs
and patient access have similarly created a renewed interest in fees for
services based programs. Concerns about costs of these programs and services
remain, thus giving rise to a type of fee for services programs.
Most optometric locations offer basic eye care services, including eye
examinations and contact lens fittings in order to increase sales. This has had
a significant impact on the number of individuals who have begun to use
optometrists, instead of ophthalmologists, for general eye care.
While approximately 90% of general health maintenance organizations
cover routine eye examinations, fewer than 15% cover corrective lenses and none
effectively cover cosmetic-type surgeries, including lasik, photo refractive
keratectomy, radial keratotomy, C02 laser skin resurfacing and other laser
procedures. Comprehensive eyecare/eyewear benefit programs are generally not
offered as an employee benefit.
We have designed our plan to be suitable as a stand-alone product, as a
supplement to existing insurance programs or within existing insured/indemnity
corporate programs currently being offered by insurance companies, as well as
packagers of insurance-type programs, such as health maintenance organizations
and preferred provider organizations. Our plan is particularly attractive to
sellers of health care insurance and packagers of broad-based health care
programs, since we provide substantial national coverage
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and the only discount network combining ophthalmology with optometric products
and services. Because of the availability of ophthalmology services under our
plan and the fee structure agreed to by our M.D. providers, by accessing the ECI
network, costs otherwise being incurred by insurance companies, health
maintenance and preferred provider organizations and self-insured entities can
be substantially reduced. Furthermore, since our discount vision plan is not
insurance based, it may be added to existing health care benefits packages.
Market
In 1995, approximately 157 million of the 263 million people in the
United States needed, but only 96 million people wore, some form of corrective
eyewear. Therefore, there are approximately 60 million people who need
corrective lenses but do not have them. We estimate that in excess of 90% of all
American families have a member who wears some form of glasses, prescription
and/or non-prescription. The market for corrective eyewear has grown steadily
and the demographic trends of an aging population are expected to generate
increased demand for corrective eyewear and optical services. As "baby boomers"
move further into the 40-64 age bracket, the market for eye wear and eyecare is
expected to expand significantly. This is the age group when most people
experience presbyopia, difficulty in reading small print. Treatment for diseases
predominantly affecting elderly patients such as cataracts and glaucoma, as well
as eyewear designed to appeal to mature customers, also is increasing. People
over the age of 40 typically require more complex lenses and more expensive
prescriptions than younger people. In addition, the increasing use of video
display terminals in the workplace has created a further need for eyecare and
eyewear. Consequently, the aging of the "baby boom" generation and technology
driven advances in the workplace are expected to further expand the size of the
optical industry.
U.S. Population Needing Some Form of Vision Correction
(in Millions)
<TABLE>
<CAPTION>
Percentage of
Number of People Population
1995 Wearing Wearing
Age Population Corrective Lens Corrective Lenses
----- ------------- ------------------ -------------------
<S> <C> <C> <C>
0-14 57.5 8.9 15%
15-24 35.9 15.0 42%
25-44 83.4 52.4 63%
45-64 52.2 49.6 95%
65 and over 33.6 31.2 93%
----- ----- ----
Total 262.6 157.1 60%
===== ===== ====
</TABLE>
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Our Vision Plan
Our vision plan offers members the following services and products:
o One free eye exam, annually, for prescription glasses
(contact lens exam excluded) per membership at
participating provider locations.
o Network ophthalmologists offer discounts to members of up
to 68% for eye examinations and medical and surgical
procedures.
Procedures typically covered by Medicare ("coded") are discounted to 20%
below the allowed Medicare rate. For example, a physician's usual and customary
fee for cataract surgery may be $2,500. Medicare may allow only $1,000. An
ophthalmologist participating in our vision network would, thus, charge our
member only $800 as full payment, resulting in a $1,700 savings, or 68% less
than the usual and customary rate. It is important to understand that although
our physicians utilize the Medicare fee structure for determining the fee to be
charged to our members, that fee structure is applied only to non-Medicare
members. It is not applicable to members who may be otherwise Medicare eligible.
Procedures not coded by Medicare, such as lasik, photo refractive keratectomy,
radial keratotomy, C02 laser skin resurfacing and other laser surgeries, are
discounted to 20% below the physician's usual and customary fee.
o Network optical locations and other dispensers of eyewear
offer discounts of up to 60% off of the retail price of
prescription glasses. Network optical locations dispense
prescription eyeglasses and safety glasses at the
nationally listed wholesale price, plus a dispensing fee
of $30 to $50, depending upon the complexity of the
lenses; contact lenses (other than disposable brands) and
sunglasses at prices 20% below retail; and sundry eyewear
products at 30% below retail.
o Through our mail-order program, members can purchase
replacement contact lenses, sunglasses, including most
national and designer brands such as Revo, Ray-Ban,
Serengeti and Bolle', and safety glasses at wholesale
prices, plus a small shipping and handling fee.
o We maintain a 24-hour toll-free customer service line and
a database of a member's prescription, that allows us to
transmit a member's prescription to any network provider,
at any time, in case of an emergency.
o Members have unlimited access to all providers in the
network and their services and products.
o We do not have any exclusions for pre-existing conditions,
or restrictions on a member's purchase selections, and we
do not require members to complete forms when purchasing
services or goods.
o We guarantee members that as long as they use our plan in
good faith during the year, they will save at least the
cost of their membership. If they do not realize the
savings, we will refund the difference.
o We offer our members an unconditional, 30-day money-back
satisfaction guarantee.
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Each person in a participating member's immediate family also is
entitled to the benefits offered by the plan upon presentation of a membership
card bearing our name or logo. One membership card is provided to each family
enrolled in the plan. Additional membership cards will be furnished, upon
request, to family members for a small processing fee for each additional card.
Providers
We believe we are the only national vision care network that offers its
members access to ophthalmologists who discount all of their services. Our
network includes over 1,600 ophthalmic practices, and almost all of our
participating ophthalmologists are either Board certified or Board eligible for
certification. Approximately 20% of all Board certified ophthalmologists in the
United States are part of our network, and most of these ophthalmologists have
agreed to not join any other national discount vision plan. Ophthalmologists
participating in our network discount their usual and customary fees by 20% for
procedures not coded by Medicare, while Medicare coded procedures are discounted
to 20% off the Medicare allowable rate. This may result in savings as high as
68%.
Our plan has nearly 10,000 optometric, optician and optical locations
composed of both large chain companies and a wide variety of boutiques and
specialty shops.
Marketing
Over the first two and one-half to three years of operation we
concentrated our efforts on the development of our vision care network, in
particularly, the establishment of the first national discount network of
ophthalmologists who would agree to discounts on all of their services. We made
little to no effort to market the "combined" network until such time as we
believed we had achieved material coverage in all 50 states. Once we believed
this to have been accomplished, we commenced the marketing of our plan to a
select number of employer organizations, including major corporations and small
to medium-sized business entities. During that period, our objective was to
demonstrate the market acceptability of our plan and to establish relationships
with large national sales and benefit consulting organizations, insurance
companies, health maintenance and preferred provider organizations and third
party administrators.
It was, and remains, our belief that once we could establish market
acceptability of our plan, it would automatically be marketed primarily through
health care consultants and other organizations marketing health care programs
at retail and, to a much lesser extent, our own sales efforts. We believe this
strategy has proven, and will continue to prove, itself to be effective,
especially in view of our continued unique position in the vision care industry
as not only being easily "affordable" at both a wholesale and retail price
level, but also as a result of our continued position as the only national
discount vision plan combining the services of ophthalmologists with optometric
providers.
Through the marketing vehicles described above, the ECI plan is
marketed, directly and indirectly, to businesses, affinity groups, individuals
and packagers of other health care programs. It may be offered as a supplement
to already existing forms of health care coverage or may be purchased on a
free-standing basis. A corporation or individual need not have insurance
coverage to access our plan. Additionally, by combining our plan as a supplement
to an existing health insurance or indemnity program, the plan may provide our
customer with a new form of profit center, while, at the same time, keeping
their existing program affordable and effective for plan members. Also, by
reason of the breadth of our provider network, our plan can usually match all of
the geographic requirements of any national insurance program and certainly
meets the needs of migratory populations, such as retirees. We believe this
makes our plan particularly attractive to large health care insurance companies,
health maintenance and, preferred provider organizations and other packagers of
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various health programs who market their health care programs over a large
geographical area. Our plan is currently being so marketed by several such
entities that have commenced marketing our plan through their own sales forces.
As part of our marketing efforts, we work closely with our customers'
internal benefits departments on the design and implementation of a specific
marketing program. Once the "sale" is made, we generally receive from our
customer a computer disk with all of the pertinent personnel information (name,
social security or identification number and address) of the employees/members
and/or retirees that will be covered by the plan. We are then able to upload all
of this information and within approximately ten business days, send out
customized "Welcome Packs" which outline the benefits of the plan, as well as a
list of providers in the new member's zip code. The "Welcome Pack" also includes
a personalized ECI membership card, listing the member's name, identification
number and plan expiration date. Depending on the requirements of the client, we
either send the "Welcome Packs" directly to the individuals, or bulk ship them
to a designated location.
When marketed as a stand-alone product, we maintain two pricing
structures: an individual/ family annual membership price of $39.95; and a
corporate/affinity group annual membership price of $28. We have a "sliding
scale" purchase price ranging from $16 to $28, in order to provide discounts to
large quantity purchasers of our plan. Additionally, we maintain a "private
label" pricing structure. When our plan is sold through an existing insurance
agency or packager, the insurance agency or packager incurs practically no
additional overhead. This enhances the attractiveness of our plan to such
selling entities, providing them with a relatively inexpensive vehicle for
establishing an internal profit center with a product that fills an otherwise
overlooked need in health care. There are no record keeping burdens on
corporate/affinity group clients. We handle all clerical administrative
functions.
We intend to strengthen and broaden our overall marketing efforts by:
o establishing a dedicated regional support staff that will work
directly with our independent sales agents, corporate/affinity
accounts and marketing partners to facilitate and encourage sale
of our vision plan
o instituting targeted public relations campaigns on both national
and local levels
o enhancing promotional support programs, including image promotion
and sales incentives
o establishing and maintaining, through personnel and computer
software programs, the capability of functioning as a third party
administrator, either through the establishment of a wholly-owned
subsidiary or otherwise.
We have retained the services of a public relations firm to increase
public awareness of our network. In addition, Clark Marcus, our president, has
made a number of speaking appearances, published various articles in health care
magazines and participated as a guest speaker on several nationally broadcasted
radio talk shows, all of which serve to bring our company to the forefront of
both the ultimate consumer and corporate/affinity group health care managers.
Competition
We are not aware of any other national entity that offers a
non-insurance based, discount eye care/eyewear program which has, as an integral
part of the program, ophthalmologists who have agreed to discount all of their
services to members. There are currently a number of national non-insurance
based discount eyewear programs, but to our knowledge, no program offers the
national eye care feature of our discount vision plan. On a general level, we
compete in the highly competitive field of health care service
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against established organizations, including health maintenance and preferred
provider organizations that provide group health care on a discount basis to
their members. These organizations are insurance related, and individuals must
therefore be members of the insured group to participate in discounts. Although
these types of organizations may represent competition, they also represent a
viable market for the sale of our vision care plan, since our vision care plan
can be sold as a supplement to an insurance program, or may be used to decrease
these entities' costs through utilization of our lower price structure with our
ophthalmological providers and our serving as a third party administrator. To a
lesser extent, we compete against individual ophthalmologists who do not offer
discounts to their patients but who may have a loyal patient base. Our success
in the marketplace will depend, in part, upon our ability to attract and retain
a large number of ophthalmologists in our network.
Although other entities offer discount vision programs, we are not
aware of any that maintain a national medical network of ophthalmologists who
discount all of their services. The following entities offer vision programs
that compete with the ECI plan:
o Vision Service Plan, Inc. offers an optometric insurance-based
program.
o Cole National Corp. owns or operates optical locations located at
JC Penney, Sears, Montgomery Ward and Pearle, Inc.
o MemberWorks, a packager of various affinity programs having in the
aggregate over 4 million members, offers a discount vision plan
(optometric only) which, until recently, was serviced by Cole
National Corp. and Outlook Vision. We are the vision eye
care/eyewear provider for various MemberWorks private label
programs.
o Spectera, Inc., a health care insurer, offers a discount vision
benefit as part of its benefit programs.
Although ECI competes with these and other entities, as part of our
marketing strategy we seek to attract our competitors as customers since our
program includes ophthalmologists who discount all of their services
substantially below Medicare allowable rates which are usually substantially
below the rates that our competitors are able to negotiate. As an indication of
the effectiveness of ECI's marketing strategy, although we continue to compete
with those entities described above, we have recently entered into relationships
with both MemberWorks and Spectera which gives those entities access to ECI's
network, in whole or in part, to service their accounts, thus making those
entities ECI's customers. We expect this trend to continue and, indeed,
accelerate since these entities continue to compete not only against ECI but
themselves as well, and now, at least some of them can promote the fact that
they too, are in a position to offer discounts on ophthalmology services. ECI
receives "access fees" as a result of the establishment of these relationships.
Notwithstanding the fact that ECI now services, in whole or in part,
some of its vision care competitors, ECI believes it has a number of competitive
advantages over all other vision care plans.
o We offer the only national discount eye care/eyewear network that
combines ophthalmologic and optometric services on a discount
fee-for-service basis. No other national discount program offers a
full range of ophthalmologic services, all of which are
discounted. All of our participating ophthalmologists contract
exclusively with us and agree not to provide their services to any
other national, non-insurance based, discount fee-for-service
network.
o All ECI programs carry with it one eye exam at no additional cost,
per family membership.
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o Our network is the largest national discount vision network in
the U.S.
o We maintain a nationally recognized fee schedule for both
ophthalmologic and optometric services and products.
o We offer a discount on traditionally non-covered surgical
procedures such as Lasik, PRK, radial keratotomy, C02 laser skin
resurfacing surgery and other laser surgeries.
o We market to major insurance companies, health maintenance and
preferred provider organizations, which may offer our vision plan
as part of, or as a supplement to, their existing programs.
o Our network is not dependent on any one or several retail chains.
The nationwide breadth and density of our network provides members
with the convenience of having a provider nearby, and protects
both our members and us from loss of service because of retail
closures.
o We do not require that our corporate customers attain minimum
employee participation to implement the plan.
o We have a mail-order program for replacement contact lenses and
sunglasses at wholesale prices.
o We have exclusive contracts directly with 100% of our
ophthalmologists and approximately 65% of the optometric locations
in our network. This direct contact has a positive impact on our
ability to handle customer grievances.
Medical Advisory Board
We have organized a panel of prominent physicians to serve as our
Medical Advisory Board. Members of this panel periodically report on new
developments in ophthalmologic treatment. All members of the Medical Advisory
Board have served since inception.
Ira A. Abrahamson, M.D. is an Associate Professor of Ophthalmology and Assistant
Clinical Professor of Family Medicine at the University of Cincinnati College of
Medicine, Cincinnati, Ohio. He received his medical degree from the University
of Cincinnati School of Medicine and performed his Ophthalmology residency in
Chicago at the Illinois Eye and Ear Infirmary and at Cook County Hospital. Dr.
Abrahamson has been on several Ophthalmic Editorial boards and has been a member
of the editorial advisory board of the American Family Physician Journal since
1974. He has authored more than 95 scientific publications and four textbooks.
Dr. Abrahamson specializes in cataract and anterior segment surgery. Dr.
Abrahamson also serves as special consultant to the Company.
Leo D. Bores, M.D. received his medical degree from Wayne State University,
College of Medicine and completed his ophthalmologic residency at Detroit
Medical Center. He is a Fellow of the American Academy of Ophthalmology,
founding member and past-President of the Keratorefractive Society, and has
served as Chairman of several educational and scientific committees, as well as
being a member of the International Society for Refractive Keratoplasty, and
American Society for Cataract and Refractive Surgery. Dr. Bores has lectured,
written and taught extensively both in this country and abroad. He has authored
in excess of thirty papers and books. Dr. Bores is the founder of and practices
at the Bores Eye Institute in Scottsdale, Arizona.
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Warren D. Cross, M.D. graduated from the University of Southern California,
attended Baylor College of Medicine and did his residency in eye surgery at the
University of Texas Medical Branch, Houston. He has been Chief of Staff at the
institute of Eye Surgery, Houston, Texas, since 1984. Dr. Cross has been
performing refractive surgery since 1979 and has done over 14,000 cases. He also
speaks and teaches at numerous professional meetings and courses on both
cataract and refractive surgery. He authored the "Complications of Radial
Keratotomy" chapters in two surgical test books.
David B. Davis, M.D. received his medical degree from the University of Texas,
Medical Branch, Galveston, Texas, and performed his ophthalmology residency at
the United States Naval Hospital. Dr. Davis has served on numerous elected and
appointed boards, including the International Committee for standards of
Ophthalmic Devices and Instruments, American Society of Cataract and Refractive
Surgery; Board of Directors, American College of Eye Surgeons; International
Scientific Advisory Board, American Society of Cataract and Refractive Surgery.
He is a member of numerous professional organizations and also participates in
extensive speaking engagements. Dr. Davis practices medical surgery at the
Davis/Mandel Eye Center in Hayward, California.
Robert H. Marmer, M.D. received his medical degree from the University Autonoma
de Guadalajara and completed his ophthalmic residency program at the Mayo Clinic
in Rochester, Minnesota. Prior to beginning his private practice in Atlanta,
Georgia, he served as a Professor of Ophthalmology at Ahmadubello University in
Kaduna and Zaria, Nigeria, West Africa. Dr. Marmer was the first surgeon to
introduce and perform Radial Keratotomy surgery in Georgia. Dr. Marmer is a
member of numerous professional associations, including the American Academy of
Ophthalmology, the American College of Eye Surgeons and the International
Association for Ocular Surgeons. He has been the official team ophthalmologist
for the NBA Atlanta Hawks for over 15 years, and is the official team
ophthalmologist of the International Hockey League Atlanta Knights.
Lee T. Nordan, M.D. received his medical degree from the University of New
Mexico School of Medicine, Albuquerque, New Mexico, and did his ophthalmic
residency at West Virginia University Hospital, Morgantown, West Virginia. Dr.
Nordan serves on numerous professional boards including the Scientific Advisory
Board, American Society of Cataract and Refractive surgery, and the Board of
Directors of the International Society of Refractive Keratoplasty. He has
authored numerous scientific publications and is in private practice in La
Jolla, California.
Spencer P. Thornton, M.D. earned his medical degree from the Bowman Gray School
of Medicine of Wake Forest University, Winston-Salem, SC, and completed his
residency in Ophthalmology at Vanderbilt University School of Medicine,
Nashville, TN. Dr. Thornton is certified by the American Board of Ophthalmology,
Fellow of the American Academy of Ophthalmology, Fellow of the American College
of Surgeons, and is President of the Board of Directors of the American Society
of Cataract and Refractive Surgery and serves as Chairman of the International
Committee of Standards and Quality Control for Ophthalmic Instruments and
Devices. Dr. Thornton has served on several publication editorial boards, has
co-authored and been a contributor to twelve textbooks on ophthalmic surgery and
is the author of more than 100 published papers on cataract and refractive
surgery. He has lectured in 27 countries and been adjunct or guest professor in
universities in ten countries. Dr. Thornton is a member of the Board of Visitors
of Baylor University and Director of the Thornton Eye Surgery Center in
Nashville, Tennessee. Dr. Thornton also serves as special consultant to the
Company.
Special Consultants
Herbert Gould, M.D., In addition to advising us on new developments in the field
of ophthalmology, Dr. Gould writes a regular column in a number of publications
throughout the United States directed toward the senior market. This is through
arrangements made by ECI as part of our marketing efforts. Dr. Gould is
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widely recognized throughout the United States as a pioneer in the delivery of
refractive surgery and aesthetic laser treatment and training. He currently is
President of the New York Keratorefractive Society and is past-President of the
New York Intraocular Lenses Society. Dr. Gould was also awarded the Bronze Medal
of the Cannes Film Festival for his film on intraocular transplantation. He has
performed over 6,000 refractive procedures, trained hundreds of physicians in
the refinement of the procedures and is considered a leader in his field. Dr.
Gould serves as Special Consultant to the Company and is active in a number of
the Company's promotional marketing activities.
Philip J. Shelton, M.D., J.D.,F.A.C.S., F.C.L.M., practices both ophthalmology
and law in West Hartford, CT. He received his medical degree from New York
University and completed his ophthalmology training at the Mount Sinai Hospital
in New York City. He earned his J.D. degree from the University of Connecticut
School of Law. Dr. Shelton has authored numerous publications and lectures
internationally on managed care and other medical legal topics. He is presently
Assistant Clinical Professor at the University of Connecticut Medical School, a
guest professor at Yale University, and a lecturer in ophthalmology at Tufts
University. Dr. Shelton is certified by the American Board of Ophthalmology and
specializes in the treatment of cataracts and glaucoma. One of the first
ophthalmologists in the Hartford area to implant intraocular lenses, Dr. Shelton
has always been at the forefront of his field. Dr. Shelton is President of the
New York Intraocular Lens Implant Society and has served as an officer of
several professional organizations. He is on the Board of Governors of the
American College of Legal Medicine and was a founding director, as well as past
Chairman and past President, of ConnectiCare, one of the State's largest HMO's.
Employees
As of September 1, 1999, we had twelve full-time employees, including
two in sales and marketing, and eleven in customer service and administration.
Year 2000
We have conducted a review to identify, evaluate and implement changes
to computer systems and applications necessary to achieve a year 2000 date
conversion with no effect on customers or disruption to business operations. We
also will be communicating with suppliers, financial institutions and others
with which we conduct business to coordinate year 2000 conversions. The total
cost of compliance and its effect on our future results of operations will be
determined as a part of this project. Based on initial review, the total cost is
not expected to have a material effect on our results of operation or financial
statements. However, there can be no assurance that the systems of other
companies on which we may rely will be timely converted or that such failure to
convert by another company would not have an adverse effect on our systems.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion and analysis of our financial condition and
results of operation should be read in conjunction with the Financial Statements
and Notes thereto included elsewhere in this Form 10-SB.
Results of Operations
Six Months Ended June 30, 1999 as Compared to Six Months Ended June 30, 1998
Sales. Sales for the six months ending June 30, 1999, of $196,358 were nearly
$56,000, or 22%, less than the $251,948 recorded during the same time period in
1998. This decrease was primarily due to 100% of the revenues of a three-year
contract being recorded in 1998.
Selling, General and Administrative Expenses. Selling, General & Administrative
expenses of $1,076,977 were approximately $192,000, or about 15%, lower than the
$1,268,351 for the first six months of 1998. A $158,000 decline in commission
expenses, as well as a $41,000 decline in telephone expenses and a $86,000
decline in professional/consulting fees, was partially offset by an $85,000
increase in payroll and related employee expenses.
Commissions declined because fewer equity dollars, upon which commissions are
paid, were raised in the first six months of 1999 as compared to the same period
in 1998.
Telephone expenses decreased because lower rates were negotiated in early 1999
and allowed credits were used to offset 1999 charges.
Consulting/Professional expenses declined mainly due to an extraordinary level
of legal activity in early 1998, and fewer consulting activities in the first
six months of 1999.
Payroll and employee expenses increased because of the addition of 4 employees
in late 1998 and early 1999.
Interest Income. Interest income of $6,648 was about $16,000 lower than in the
first six months of 1998. As a result of the company conducting a private equity
placement in late 1997 and 1998, the company maintained a cash balance
significantly higher in 1998 than in the current year and was thus able to
invest more principal in interest bearing securities.
Interest Expense. During the first six months of 1999, interest expense of
$2,667 was nearly the same as in the first six months of 1998.
Depreciation and Amortization Expense. Since no major depreciable assets were
added or retired during the year, depreciation and amortization expense of
$109,759 was nearly the same as in the first six months of 1998.
Year Ended December 31, 1998 As Compared to Year Ended December 31, 1997
Sales. Sales for the year ended December 31, 1998 decreased by $168,000, or 21%,
to $637,941 from $806,249 for the year ended December 31, 1997. This decrease
was primarily due to reduced sales of approximately $75,000 by one of our
clients who packages and sells a discount multi-health care program that
includes ECI as the vision care provider and the loss of another account which
contributed nearly $104,000 to the company's revenues in 1997.
12
<PAGE>
Selling, General and Administrative Expenses. Selling, General & Administrative
expenses of $2,772,858 were $1,193,895 higher than the $1,578,963 for the year
1997. This rise is mainly due to increases in commission expenses of $162,000,
consulting expenses of $394,000, payroll expenses of $390,000, employee travel
expenses of $79,000 and advertising expenses of $54,000.
Commission expenses rose primarily because of a change of the commission
structure and the mix of sales by agents, and consulting expenses increased
mainly because of the company contracting with corporate and financial
consultants. Payroll and employee travel expenses increased due to the expansion
of the corporate/sales staff and increases in officer salaries. In 1998 the
company also increased its advertising expenses by attending more health care
and provider conventions.
Interest Income. Interest income of $51,705 was over $47,000 higher than in
1997. As a result of the company conducting a private equity placement in late
1997 and 1998, the company maintained a cash balance significantly higher than
in the prior year and was thus able to invest more principal in interest bearing
securities.
Interest Expense. Interest expense decreased from $96,627 in 1997 to $5,833 in
1998. In 1996 and early 1997 the company had received debt funding which was
later converted into equity. As a result of this conversion the company
eliminated virtually all of its debt service.
Depreciation and Amortization Expense. In 1996 and 1997 the company incurred
expenditures for the purpose of raising operating capital. These expenditures
were deferred and recorded as organizational expenses. In 1998 the company
started amortizing these deferred expenditures over a five-year period and
recorded a total amortization expense of $171,745 in 1998.
Other Income. In 1997 the company recorded proceeds from lawsuits of $130,000 as
other income. These proceeds generally arose from two suits, one for trademark
infringement, and the other for breach of contract.
Liquidity and Capital Resources
Since inception, the Company's expenses has consistently exceeded its revenues.
Operations have primarily been funded from the issuance of debt and equity
securities aggregating approximately $6.4 million. All debt and related
interest, except for $50,000, was converted into equity in 1997.
The Company used cash from operating activities of approximately $2.4 million
and $1.0 million in 1998 and 1997, respectively.
Item 3. Description of Property.
Our executive offices, which consist of approximately 4,400 square
feet, are located in Tampa, Florida. Our lease expires on July 31, 2003 and
provides for a current annual rental rate of $87,576.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information concerning the beneficial
ownership of our common stock as of September 1, 1999 by (i) each stockholder
known by us to be a beneficial owner of more than five percent of the
outstanding common stock; (ii) each director and executive officer whose
compensation for 1998 was in excess of $100,000; and (iii) all directors and
officers as a group.
13
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percentage of Common Stock
Ownership (1) Beneficially Owned (2)
--------------------------- --------------------------
Class A Class B
Common Common
Name Stock Stock
- ----- -------- ---------
<S> <C> <C> <C>
Clark Marcus (3) 75,000 474,100 6.1%
Eva Katzman (3) - 268,600(4) 3.0%
Sharon Kay Ray (3) 23,000 198,200 2.5%
Richard Abrahamson, MD(3) 72,740 181,800 2.8%
James L. Koenig (3) 24,000 130,000 1.7%
Robert G. Veligdan,DDS(3) 62,500 - *
William Koch (3) - 25,000 *
Steven Handwerger(3) 5,000 - *
All officers and directors 262,240 1,009,100 14.1%
as a group (9 persons)
</TABLE>
- ------------
* Less than 1%
(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated, subject to community
property laws, where applicable. For purposes of this table, a person
or group of persons is deemed to beneficially own any shares that such
person has the right to acquire within 60 days after September 1, 1999.
(2) Calculated as a percentage of the total number of shares of common
stock issued and outstanding without respect to voting power. Each
share of class B common stock is entitled to five votes per share, as
compared to one vote per share of class A common stock. For purposes of
computing the percentage of outstanding shares held by each person or
group of persons named above on September 1, 1999, any shares, which
such person or group of persons has the right to acquire within 60 days
after such date is deemed to be outstanding for the purpose of
computing the percentage ownership of such person. As of September 1,
1999, we had 7,632,604 shares of class A common stock outstanding and
1,377,700 shares of class B common stock outstanding, or a total of
9,010,304 shares of common stock outstanding.
(3) Address is c/o Eye Care International, Inc., 1511 North Westshore
Boulevard, Suite 925, Tampa, Florida 33607.
(4) Includes 193,600 shares of Class B common stock owned personally by
Mrs. Katzman and 75,000 shares of Class B common stock held in trust
the minor children of Jerry Katzman, M.D., formerly an officer and
director. Dr. Katzman disclaims beneficial ownership or control over
all of said shares.
14
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons
The following is a list of our directors, executive officers and key employees:
<TABLE>
<CAPTION>
Name Age Position
- ----- ----- --------
<S> <C> <C>
Clark A. Marcus 57 Chairman, President, Chief Executive
Officer and Director
James L. Koenig 52 Senior Vice President, Chief Financial
Officer, Secretary and Director
Richard Abrahamson, M.D. 38 Director
William Koch, M.D. 59 Director
Robert Veligdan, M.D. 50 Director
Steven Handwerger 57 Director
Sharon Kay Ray 41 Director
- -------------
</TABLE>
Clark A. Marcus, one of our founders, has served as Chairman of the Board and
Chief Executive Officer since September 1993. He also has served as President
since February 1996. Mr. Marcus has been a practicing attorney since 1968 and
was senior partner in the New York law firms of Victor & Marcus and Marcus &
Marcus.
James L. Koenig has been Sr. Vice President, Chief Financial Officer and a
member of our Board of Directors since February 1996. He initially joined us as
an independent sales agent in December 1994. Prior to joining us, he worked in
various accounting/management capacities primarily in the utilities industry.
From 1984 to November 1994, Mr. Koenig was employed by Tampa Electric Company in
various executive capacities ranging from Assistant Controller to Director of
Audit Services and Director of Regulatory Affairs.
Richard Abrahamson, M.D., one of our founders, has been a member of our Board of
Directors since August 1995 . Dr. Abrahamson also serves as a member of our
Medical Screening Committee. Since July 1992, Dr. Abrahamson has operated a
private ophthalmology practice specializing in diseases and surgery of the eye.
Dr. Abrahamson advises us on credentials of ophthalmologists, expansion of our
network and sometimes interacts with network providers.
William H. Koch, M.D., a member of our Board of Directors since February 1996,
has been a psychiatrist and child development specialist since 1974. He is the
Founder and Director of Parent and Child Services, Inc., New York City; The
Parent and Child Consultation Services, New York City; and the "School for
Parents." He is a former member of the faculty of the College of Physicians and
Surgeons, New York City, and Special Consultant to Child Protective Services,
New York City. Dr. Koch also is an author, lecturer and consultant.
Robert Veligdan, D.M.D., a member of our Board of Directors since May 1994, has
been a Professor and Instructor at Columbia University since 1977 and lectures
on numerous topics relative to dentistry. He is also a staff member at Columbia
University Hospital. He has operated a private dentistry practice since 1975.
15
<PAGE>
Dr. Veligdan is a member of numerous professional associations including the
American Dental Association, the staff of Columbia University S.D.O.S., Academy
of Oral Rehabilitation, Academy of General Dentistry and the International
Congress of Oral Implantologists. He advises the Company on general matters
including a possible discount dental program.
Steven Handwerger, a member of our Board of Directors since February 1996, has
been employed by Halmode Apparel (a division of Kellwood) since December 1996,
where he is in charge of merchandising and sales for the Plaza South Division.
From December 1991 through December 1996, he was President of Santa Fe
Enterprises, a dress manufacturer.
Sharon Kay Ray has, since March 1989, served as regional marketing
representative for Novo Nordis Pharmaceuticals, a multi-national pharmaceutical
company and served as a special marketing consultant for a number of public and
non-public corporations. She is a co-founder of the Company and designer of the
Company's initial marketing program. Ms. Ray is a director of the Company and
has served since inception as special consultant to the Company without
compensation.
All our directors hold office until the next annual meeting of
stockholders or until their successors are duly elected and qualified, and all
executive officers hold office at the discretion of the Board of Directors.
Item 6. Executive Compensation
The following table sets forth the compensation paid to, earned by or accrued
for our Chief Executive Officer and each of our other executive officer for whom
more than $100,000 was paid or accrued as compensation for the years ended
December 31, 1998 and 1997 (collectively, the "Named Executive Officers"):
Annual Compensation
<TABLE>
<CAPTION>
Cash
Name and Principal Position Year Compensation Other Compensation
- --------------------------- ---- ------------ ------------------
<S> <C> <C> <C>
Clark Marcus 1998 $213,745 $81,241(1)
Chief Executive Officer and President 1997 $128,933 $89,034(1)
James L. Koenig 1998 $154,341 $20,200(2)
Sr. Vice President, Chief Financial 1997 $113,702
Officer and Secretary
(1) Includes legal retainer fees, auto allowance, life insurance premium and
child care.
(2) Includes auto allowance and life insurance premium.
</TABLE>
Employment Agreements
Clark Marcus serves as our Chief Executive Officer pursuant to an employment
agreement which expires in September 2002. The agreement provides for a salary
of $150,000 per annum, increased by an amount equal to the greater of fifteen
percent (15%) of the prior year's salary or the increase in the consumer price
index for the Tampa, Florida area, plus a bonus beginning at three percent (3%)
of our pre-tax profits in any year that our revenues exceed $1 million and
increasing up to seven percent (7%) of our pre-tax profits in any year that our
16
<PAGE>
revenues exceed $4 million. His salary for the fiscal year ending December 31,
1999 is $241,546. If Mr. Marcus' employment is terminated within 12 months
following a change in control, Mr. Marcus will receive his salary, bonus and
additional compensation for a period equal to the greater of the remainder of
the term of the employment agreement or 3 years.
James L. Koenig serves as our Senior Vice President and Chief Financial
Officer pursuant to an employment agreement which expires in February 2001. The
agreement provides for a salary of $125,000 per annum, increased by an amount
equal to the greater of ten percent (10%) of the prior year's salary or the
increase in the consumer price index for the Tampa, Florida area, plus a bonus
of three percent (3%) of our pre-tax profits in any year that our revenues
exceed $1 million. His salary for the fiscal year ending December 31, 1999 is
$199,650. If Mr. Koenig's employment is terminated within 12 months following a
change in control, Mr. Koenig will receive his salary, bonus and additional
compensation for a period equal to the greater of the remainder of the term of
the employment agreement or 3 years.
Stock Options
No stock options have been granted to Messrs. Marcus or Koenig.
Stock Option Plan
Our Board of Directors has adopted, and in May 1997 our stockholders
approved, the Eye Care International, Inc. 1997 Stock Option Plan. The stock
option plan is to be administered by the Board of Directors or a committee of
the Board. Pursuant to the plan, options to purchase 500,000 shares of class A
common stock may be granted to directors, employees (including officers) and
consultants.
The plan authorizes the issuance of incentive stock options, as defined
in Section 422 (b) of the Internal Revenue Code of 1986, as amended,
non-qualified stock options and stock appreciation rights ("SARs", and together
with ISOs and NQSOS, "Options"). Consultants and directors who are not also
employees are eligible for grants of only non-qualified stock options or
non-qualified stock options in tandem with stock appreciation rights. The
exercise price of each incentive stock option may not be less than 100% of the
fair market value of the class A common stock at the time of grant, except that
in the case of a grant to an employee who owns 10% or more of our outstanding
stock or outstanding stock of a subsidiary or parent of our company, the
exercise price may not be less than 110% of the fair market value on the date of
grant. The aggregate fair market value of the shares covered by incentive stock
options, or incentive stock options in tandem with stock appreciation rights,
granted under the plan that become exercisable by a participant in the plan for
the first time in any calendar year is subject to a $100,000 limitation. The
exercise price of each non-qualified stock option, or non-qualified stock option
in tandem with a stock appreciation right, is determined by the Board of
Directors or committee, in its discretion, but may in no event be less than 85 %
of the fair market value of a share of class A common stock at the time of
grant.
Subject to the provisions of the plan, the Board of Directors, or the
committee, has the authority to determine the individuals to whom the stock
options are to be granted, the number of shares to be covered by each option,
the type of option, the exercise period, the restrictions, if any, on the
exercise of the option, the terms for payment of the exercise price and other
terms and conditions. No option granted under the stock option plan shall have
an expiration date late than 10 years from the date of grant, and if an
incentive stock option, or a stock appreciation right in tandem with an
incentive stock option, is granted to a person owning 10% or more of our
outstanding stock or the outstanding stock of a subsidiary or of our parent,
such incentive stock option shall not be exercisable after the expiration of
five years from the date of grant. A stock appreciation right may be
17
<PAGE>
exercised at any time during the exercise period of the incentive stock option
or non-qualified stock option with which it is granted in tandem and prior to
the exercise of such incentive stock option or non-qualified stock option.
Payments by holders of options upon exercise of any option may be made (as
determined by the Board of Directors or the committee) in cash, by delivery of
shares of common stock or such other form of payment as may be permitted under
the plan.
No options have been granted under the plan.
Item 7. Certain Relationships and Related Transactions
We pay Clark Marcus, our President and Chief Executive Officer, a
retainer of $5,000 per month for legal services.
Item 8. Description of Securities.
Common Stock
We are authorized to issue an aggregate of 30,000,000 shares of common
stock, par value $.001 per share, 20,000,000 of which are designated as class A
common stock and 10,000,000 of which are designated as class B common stock. As
of September 1, 1999, 7,632,604 shares of class A common stock and 1,377,700
shares of class B common stock were outstanding.
Voting. Holders of class A common stock are entitled to one vote per
share on all matters upon which stockholders are entitled to vote, including the
election of directors. Holders of class B common stock are entitled to five (5)
votes per share on all matters upon which stockholders are entitled to vote,
including the election of directors. Holders of the shares of class A common
stock and class B common stock vote together as a single class on all matters.
Class A common stock and class B common stock are otherwise identical in all
other respects. Holders of our common stock do not have subscription, redemption
or preemptive rights.
Dividends. Subject to the rights of holders of preferred stock, holders
of class A common stock and class B common stock are entitled to receive
dividends when, as and if declared by the Board of Directors. We do not expect
to pay dividends on our common stock in the foreseeable future, and intend to
retain earnings, if any, to finance our operations.
Liquidation. Subject to the rights of holders of preferred stock,
holders of common stock are entitled to share ratably in our assets legally
available for distribution to holders of common stock in the event of the
liquidation, dissolution or winding up of the company.
Conversion. Shares of class B common stock will upon transfer by the
initial holder of the class B common stock automatically be converted into one
share of class A common stock.
18
<PAGE>
Warrants
As of September 1, 1999, 482,500 shares of common stock were reserved
for issuance upon exercise of outstanding warrants, at an exercise price of
$1.00, which expire at various dates ranging from January 17, 2001 through April
23, 2002. The warrants were issued in connection with various note offerings.
Preferred Stock
We are authorized to issue up to 10,000,000 shares of "blank check"
preferred stock with such designations, rights and preferences as may be
determined from time to time by our Board of Directors. Accordingly, the Board
of Directors is empowered, without further stockholder approval, to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
that could decrease the amount of earnings and assets available for distribution
to holders of common stock or adversely affect the voting power or other rights
of the holders of our common stock. In the event of issuance, the preferred
stock could be utilized. under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of our company. No
shares of preferred stock are outstanding, we have no present intention to issue
any shares of preferred stock.
PART II
Item 1. Market Price of And Dividends on The Registrant's Common Equity And
Other Shareholder Matters.
Market Information
Our class A common stock is traded on the OTC Bulletin Board under the
symbol "EYCR". Set forth below are the high and low bid and asked prices for our
class A common stock on the OTC Bulletin Board for each quarter since the
beginning of 1998. These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not represent actual transactions.
Bid Price Asked Price
------------------ -----------------------
Quarter Ended High Low High Low
------------- ----- ------ ------ ------
March 31, 1998.............. 5.375 2.25 6.25 3.00
June 30, 1998 .............. 5.00 2.00 5.00 2.00
September 30, 1998.......... 3.375 1.6875 4.1875 1.75
December 31, 1998........... 3.25 1.25 3.25 1.3750
March 31, 1999.............. 2.125 0.75 2.375 0.8125
June 30, 1999 .............. 1.0625 0.50 1.125 0.50
September 30, 1999.......... 0.73 0.25 0.8125 0.40
On October 11, 1999 the closing bid price of one share of our class A
common stock on the OTC Bulletin Board was $0.50.
As of September 30, 1999 there were 177 holders of record of our class
A common stock.
19
<PAGE>
Dividends
The payment of dividends is within the discretion of our Board of
Directors and depends in part upon our earnings, capital requirements and
financial condition. We have never paid any dividends on our class A common
stock and we do not anticipate paying such dividends in the foreseeable future.
We intend to retain earnings, if any, to finance our operations.
Item 2. Litigation
We are not a party any litigation, that if adversely determined, would
have a material adverse effect on our business.
Item 3. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
None
Item 4. Recent Sales of Unregistered Securities.
Since January 1, 1997, the Registrant has sold an aggregate of
6,065,290 shares of class A common stock for a purchase price of $1.00 per share
to a total of 105 accredited investors, including 2,184,290 shares issued in
payment of the principal amount of, and accrued interest on, outstanding
promissory notes. The issuance of those shares was exempt from the registration
requirements of the Securities under Rule 506 of Regulation D and Section 4(2)
of the Securities Act. There were no underwriters involved in the transactions
and there were no underwriting discounts or commissions paid in connection
therewith. The purchasers of securities in each such transaction represented
their intention to acquire the securities for investment only and not with a
view to or for sale in connection with any distribution thereof and appropriate
legends were affixed to the certificates for the securities issued in such
transactions. All purchasers of securities in each such transaction had adequate
access to information about the Registrant, and were sophisticated investors.
Item 5. Indemnification of Directors and Officers.
Article VI of the Registrant's by-laws provides that a director or
officer shall be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement (provided such settlement is
approved in advance by the Registrant) in connection with certain actions, suits
or proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation - a "derivative action") if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. A similar standard of care is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
an action, except that no person who has been adjudged to be liable to the
Registrant shall be entitled to indemnification unless a court determines that
despite such adjudication of liability but in view of all of the circumstances
of the case, the person seeking indemnification is fairly and reasonably
entitled to be indemnified for such expenses as the court deems proper.
Article 6.5 of the Registrant's by-laws further provides that directors
and officers are entitled to be paid by the Registrant the expenses incurred in
defending the proceedings specified above in advance of their final disposition,
provided that such payment will only be made upon delivery to the Registrant by
the indemnified party of an undertaking to repay all amounts so advanced if it
is ultimately determined that the person receiving such payments is not entitled
to be indemnified.
Article 6.4 of the Registrant's by-laws provides that a person
indemnified under Article VI of the by-laws may contest any determination that a
director, officer, employee or agent has not met the applicable standard of
conduct set forth in the by-laws by petitioning a court of competent
jurisdiction.
Article 6.6 of the Registrant's by-laws provides that the right to
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred in the Article will not
20
<PAGE>
be exclusive of any other right which any person may have or acquire under the
by-laws, or any statute or agreement, or otherwise.
Finally, Article 6.7 of the Registrant's by-laws provides that the
Registrant may maintain insurance, at its expense, to reimburse itself and
directors and officers of the Registrant and of its direct and indirect
subsidiaries against any expense, liability or loss, whether or not the
Registrant would have the power to indemnify such persons against such expense,
liability or loss under the provisions of Article VI of the by-laws. The
Registrant has applied for such insurance, and expects to have such insurance in
effect on the date this Registration Statement is declared effective by the
Securities and Exchange Commission.
Article II of the Registrant's certificate of incorporation eliminates
the personal liability of the Registrant's directors to the Registrant or its
stockholders for monetary damages for breach of their fiduciary duties as a
director to the fullest extent provided by Delaware law. Section 102(b) (7) of
the DGCL provides for the elimination off such personal liability, except for
liability, (i) for any breach of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived any improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers or
persons controlling the Registrant pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
<PAGE>
PART F/S
Index to Consolidated Financial Statements
<TABLE>
<CAPTION>
<S> <C>
Independent Auditor's Reports for the Years
Ended December 31, 1998 and 1997..............................................................F - 1
Consolidated Balance Sheet at December 31, 1998........................................................F - 2
Consolidated Statement of Income and Retained Earnings
for the Years Ended December 31, 1998 and 1997................................................F - 3
Consolidated Statement of Cash Flows for the Years Ended
December 31, 1998 and 1997....................................................................F - 4
Notes to Consolidated Financial Statements for the Years Ended December 31, 1998 and 1997..............F - 5
Consolidated Balance Sheet (Unaudited) at June 30, 1999 and 1998.......................................F - 8
Consolidated Statement of Income and Retained Earnings (Unaudited) for the
Six Months Ended June 30, 1999 and 1998.......................................................F - 9
Consolidated Statement of Cash Flows (Unaudited) for the Six Months Ended June 30, 1999 and 1998.......F - 10
</TABLE>
<PAGE>
PHILIP J. ELENIDIS & COMPANY CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Eye Care International, Inc.
Tampa, Florida
We have audited the accompanying consolidated balance sheet of Eye
Care International, Inc. and Subsidiary as of December 31, 1998 and 1997 and
the related consolidated statements of income and retained earnings and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Eye Care
International, Inc. and Subsidiary as of December 31, 1998 and December 31,
1997 and the results of its operations and cash flows for the years then ended
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note E to the
financial statements, the Company has suffered recurring losses from operations
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note E. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Yonkers, New York
April 30, 1999
/s/ Philip J. Elenidis & Company
<TABLE>
<S> <C> <C> <C>
984 NORTH BROADWAY YONKERS, NEW YORK 10701 PHONE 914-965-1002 FAX 914-965-8214
</TABLE>
F-1
<PAGE>
EYE CARE INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
ASSETS
December 31,
1998
----
Current assets
Cash $ 658,742
Accounts receivable 168,481
Miscellaneous receivables and advances 148,301
-----------
975,524
Fixed assets - net of accumulated
depreciation 89,582
Other assets
Organization expense - net of
accumulated amortization 749,433
-----------
Total assets $ 1,814,539
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued expenses and taxes payable $ 24,633
Notes payable 50,000
-----------
74,633
-----------
Stockholders' equity
Capital stock
- 30,000,000 shares of $.01 par
value common stock authorized:
8,503,804 shares issued and
outstanding 85,038
- 10,000,000 shares of $.01 par
value preferred stock authorized:
Paid in capital 5,840,798
Retained earnings (4,185,930)
-----------
1,739,906
-----------
Total liabilities and
stockholders' equity $ 1,814,539
===========
The accompanying auditor's report and notes are an integral part
of these financial statements.
F-2
<PAGE>
EYE CARE INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
For the years ended December 31,
1998 1997
---- ----
Revenue
Membership fees $ 637,941 $ 806,249
Interest 51,705 4,651
------------- -------------
689,646 810,900
General and administrative expenses 2,772,858 1,578,963
Interest 5,833 96,627
Depreciation and amortization 208,722 17,559
------------- ------------
2,987,413 1,693,149
------------ ----------
Net loss from operations (2,297,767) (882,249)
Other income - proceeds from lawsuit 5,000 130,000
-------------- ------------
Net loss (2,292,767) (752,249)
Retained earnings - January 1, (1,893,163) (1,140,912)
------------- -----------
Retained earnings - December 31, $ (4,185,930) $ (1,893,161)
============= =============
The accompanying auditor's report and notes are an integral part
of these financial statements.
F-3
<PAGE>
EYE CARE INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the years ended December 31,
1998 1997
---- ----
Cash flow from operating activities
Net loss $ (2,292,767) $ (752,249)
Adjustment to reconcile net income
to net cash provided by operating activities 208,722 17,559
Changes in operating assets and liabilities
Decrease in accounts receivables 146,737 (315,218)
Increase in miscellaneous receivables
and advances (116,545) 21,714
Decrease in accrued expenses and taxes
payable (115,330) (147,367)
------------- -----------
Net cash provided by operating activities (2,169,183) (1,175,561)
Cash flow from investing activities
Purchase of fixed assets (65,933) (4,832)
Cash flow from financing activities
Decrease in notes payable - - 0 - (1,234,500)
Proceeds from sale of common stock 2,466,599 2,589,838
------------- -----------
Net cash provided by financing activities 2,466,599 1,355,338
------------- -----------
Increase in cash 231,483 174,945
Cash - January 1, 427,259 252,314
------------- -----------
Cash - December 31, $ 658,742 $ 427,259
============= ===========
Supplemental disclosures
Interest paid $ 5,833 $ 93,894
============= ===========
Income taxes paid $ -0- $ -0-
============= ===========
The accompanying auditor's report and notes are an integral part
of these financial statements.
F-4
<PAGE>
EYE CARE INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note A - NATURE OF THE ORGANIZATION
Eye Care International, Inc. and Subsidiary (the Company) markets
vision care benefit plans and enhancements to plans provided by others. The
Company's benefit plans and plan enhancements afford its member/subscribers,
and those of its plan sponsors (employers, associations, etc.) and other
licensed organizations, the opportunity to obtain discounted services from its
national network of ophthalmic physicians. Through contractual arrangements
with others, the Company's plans also provide its member/subscribers with
access to providers of eye wear and other benefits on a discounted basis.
The Company's principal operating revenues consist of annual fees
charged to participating physicians and user fees charged either directly to
its member/subscribers, or indirectly through plan sponsors or through
licensing arrangements with providers of other benefit plans in exchange for
access by their member/subscribers to the Company's network of ophthalmologists
on a similarly discounted basis.
Note B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, National Vision Services, Inc. All
significant intercompany transactions and balances have been eliminated in
consolidation.
2. Revenue Recognition
Membership fees are recognized in full at the time of subscription
because the Company's services are substantially completed at that time.
License royalties, however, can neither be determined nor estimated until
reported to the Company by the selling organization and are subject to possible
subsequent audit by the Company at its option under the terms of the related
agreement. Accordingly, depending on the timeliness and accuracy of royalty
reports received (which are presently beyond the Company's control), royalty
income is not recognized in the Company's financial statements until reported
by licensees, which may be in periods later than those in which they were
earned and subject to adjustment in subsequent periods.
F-5
<PAGE>
EYE CARE INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997
3. Fixed Assets and Depreciation
Fixed assets are recorded at cost. Depreciation of fixed assets is
recorded using accelerated and straight line methods over the estimated useful
lives of the related assets.
4. Income Taxes
Income taxes are to be provided for the tax effects of transactions
reported in the financial statements. Provisions will be made for deferred
income taxes, which result from timing differences between expenses and income
as reported for financial statement purposes and their deductibility or
exclusion for income tax purposes, when appropriate.
Note C - INCOME TAXES
Substantially all of the Company's retained earnings deficit will be available
as an operating loss carry forward to reduce future income tax obligations as
may be incurred through the year 2012. However, because of the Company's
relatively short operating history, the potential tax benefit of this loss has
been valued at zero in the financial statements and will remain so until
realized or until the criterion in Financial Accounting Standards Board
Statement No. 109. Accounting for Income Taxes, for recognition of a deferred
tax asset has been met.
Note D - COMMITMENTS AND CONTINGENCIES
The Company leases its present offices under an operating lease
expiring on July 31, 2003 with an option to renew for one year. Rent expense for
the year amounted to $54,416. Future minimum rental commitments at December 31,
1998 are as follows:
1999 $ 87,576
2000 92,048
2001 96,523
2002 100,992
2003 42,855
----------
$ 419,994
==========
F-6
<PAGE>
EYE CARE INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note E - GOING CONCERN
As shown in the accompanying financial statements, the Company has incurred
substantial losses from operations. Management believes that the Company will
generate significant new business in the future and also be able to sell shares
of its capital stock to outsiders beginning in January, 1999. Absent an
increase in revenue or the sale of shares of stock, there may be uncertainty
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
F-7
<PAGE>
EYE CARE INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
As of June 30,
ASSETS
1999 1998
---- ----
(Unaudited)
Current assets
Cash $ 206,829 $1,672,860
Accounts receivable 24,106 0
Miscellaneous receivables
and advances 338,272 338,957
---------- ----------
569,207 2,011,817
Fixed assets - net of
accumulated depreciation 75,975 54,695
Other assets
Organization expense - net of
accumulated amortization 655,754 843,112
---------- ----------
Total assets $1,300,936 $2,909,624
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued expenses and taxes payable $ 54,927 $ 44,799
Notes payable 50,000 50,000
---------- ----------
104,927 94,799
---------- ----------
Stockholders' equity
Capital stock 89,703 61,973
Paid in capital 6,278,633 5,746,681
Retained earnings (5,172,327) (2,993,829)
---------- ----------
1,196,009 2,814,825
---------- ----------
Total liabilities and stockholders' equity $1,300,936 $2,909,624
========== ==========
F-8
<PAGE>
EYE CARE INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
For the Six Months Ended June 30,
1999 1998
---- ----
(Unaudited)
Revenue
Memberships $ 196,358 $251,947
Interest 6,648 22,840
----------- ----------
203,006 274,787
General and administrative expenses 1,076,977 1,268,351
Interest 2,667 4,500
Depreciation and amortization 109,759 102,604
----------- ----------
1,189,403 1,375,455
----------- ----------
Net Loss (986,397) (1,100,668)
Retained earnings - January 1 (4,185,930) (1,893,161)
----------- ----------
Retained earnings - June 30, ($5,172,327) (2,993,829)
=========== ==========
F-9
<PAGE>
EYE CARE INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Six Months Ended
June 30,
--------
1999 1998
---- ----
(Unaudited)
Cash flow from operating activities
Net loss $(986,397) $(1,100,668)
Adjustment to reconcile net income
to net cash provided by operating activities 109,788 77,714
Changes in operating assets and liabilities
Decrease in accounts receivables 144,375 89,314
Increase in miscellaneous receivables
and advances (189,971) (41,406)
Increase/(Decrease) in accrued expenses
and taxes payable 30,264 (95,166)
-------- -----------
Net cash provided by operating activities (891,941) (1,070,212)
Cash flow from investing activities
Purchases of fixed assets (2,472) (33,605)
Cash flow from financing activities
Decrease in notes payable -0- -0-
Proceeds from sale of common stock 442,500 2,349,418
--------- -----------
Net cash provided by financing activities 442,500 2,349,418
Increase/(Decrease) in cash (451,913) 1,245,601
Cash - January 1, 658,742 427,259
--------- -----------
Cash - End of Period $ 206,829 $ 1,672,860
========= ===========
Supplemental disclosures
Interest paid $ 2,667 $ 4,500
========= ===========
Income taxes paid $ -0- $ -0-
========= ===========
F-10
<PAGE>
PART III
Item 1. Index to Exhibits.
Exhibit No. Exhibit
3.1 Certificate of Incorporation, as amended.
3.2 By-laws
10.1 1997 Stock Option Plan
10.2 Employment Agreement with Clark Marcus.
10.3 Employment Agreement with James L. Koenig
21.1 Subsidiaries
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
EYE CARE INTERNATIONAL, INC.
By: /s/ Clark Marcus
--------------------------------------
Clark Marcus
Chief Executive Officer and President
<PAGE>
State of Delaware
Office of the Secretary of State
"I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "EYE CARE INTERNATIONAL, INC.". FILED IN THIS OFFICE ON THE
THIRTY-FIRST DAY OF MAY, A.D. 1994, AT 4:30 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNTY RECORDER OF DEEDS FOR RECORDING.
William T. Quillen, Secretary of State
2406920 8100
944097618
7136443
AUTHENTICATION:
DATE: 6-01-94
<PAGE>
CERTIFICATE OF INCORPORATION
OF
EYE CARE INTERNATIONAL, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions and subject to the requirements of the
laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware
Code and the acts amendatory thereof and supplemental thereto, and known,
identified, and referred to as the "General Corporation Law of the State of
Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is Eye Care International, Inc.
SECOND: The address, including street, number, city and county of the
registered office of the corporation in the State of Delaware is 32 Lockerman
Square, Suite L-100, City of Dover 19901, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware at such address is
The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purposes to be conducted and
promoted by the corporation, which shall be in addition to the authority of the
corporation to conduct any lawful business, to promote any lawful purpose and
to engage in any lawful act or activity for which corporations; may be
organized under the General Corporation Law of the State of Delaware, are as
follows:
To purchase, receive, take by grant, gift, devise, bequest, or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use, and
otherwise deal in and with real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer, or otherwise
dispose of, or mortgage or pledge, all or any of its property and assets, or
any interest therein, wherever situated.
To apply for, register, obtain, purchase, lease, take licenses in
respect of or otherwise acquire, and to hold, own, use, operate, develop,
enjoy, turn to account, grant licenses and immunities in respect of,
manufacture under and to introduce, sell, assign mortgage, pledge, or otherwise
dispose of, and, in any manner deal with and contract with reference to:
(a) inventions, devices, formulae, processes, and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes, copyrights,
designs, and similar rights, trade-marks, trade names, trade symbols, and other
indications of origin and ownership granted by or recognized under the laws of
the United States of America, the District of Columbia, any state or
subdivision thereof, and any commonwealth, territory, possession, dependency,
colony, agency or instrumentality of the United states of America and of any
foreign country, and all rights connected therewith or appertaining thereunto;
1
<PAGE>
(c) franchises, licenses, grants, and concessions.
To guarantee, purchase, take, receive, subscribe for, and otherwise
acquire, own, hold, use, and otherwise employ, sell, lease, exchange, transfer,
and otherwise dispose of, mortgage, lend, pledge, and otherwise deal in and
with, securities (which term, for the purpose of this Article THIRD, includes,
without limitation of the generality thereof, any shares of stock, bonds,
debentures, notes, mortgages, other obligations, and any certificates,
receipts, or other instruments representing rights to receive, purchase, or
subscribe for the same, or representing any other rights or interests therein
or in any property or assets) of any persons, domestic and foreign firms,
associations, and corporations, and of any government or agency or
instrumentality thereof; to make payment therefore in any lawful manner; and,
while owner of any such securities, to exercise any and all rights, powers, and
privileges in respect thereof, including the right to vote.
To make, enter into, perform, and carry out contracts of every kind
and description with any person, firm, association, corporation, or government
or agency or instrumentality thereof.
To acquire by purchase, exchange, or otherwise, all, or any part of,
or any interest in, the properties, assets, business, and good will of any one
or more persons, firm, associations, or corporations heretofore or hereafter
engaged in any business for which a corporation may now or hereafter be
organized under the laws of the State of Delaware; to pay for the same in cash,
property, or its own or other securities; to hold, operate, reorganize,
liquidate, sell, or in any manner dispose of the whole or any part thereof; and
in connection therewith, to assume or guarantee performance of any liabilities,
obligations, or contracts of such persons, firms, associations, or
corporations, and to conduct the whole or any part of any business thus
acquired.
To lend money in furtherance of its corporate purposes and to invest
and reinvest its funds from time to time to such extent, to such persons,
firms, associations, corporations, governments or agencies or instrumentalities
thereof, and an such terms and on such security, if any, as the Board of
Directors of the corporation may determine.
To make contracts of guaranty and suretyship of all kinds and endorse
or guarantee the payment of principal, interest, or dividends upon, and to
guarantee the performance of sinking fund or other obligations of, any
securities, and to guarantee in any way permitted by law the performance of any
of the contracts or other undertakings in which the corporation may otherwise
be or become interested, of any person, firm, association, corporation,
government or agency or instrumentality thereof, or of any other combination,
organization, or entity whatsoever.
To borrow money without limit as to amount and at such rates of
interest as it may determine; from time to time to issue and sell its own
securities, including its shares of stock, notes, bonds, debentures, and other
obligations, in such amounts, on such terms and conditions, for such purposes
and for such prices, now or hereafter permitted by the laws of the State of
Delaware and by this certificate of incorporation, as the Board of Directors of
the corporation may determine; and to secure any of its obligations by
mortgage, pledge, or other encumbrance of all or any of its property,
franchises, and income.
2
<PAGE>
To be a promoter or manager of other corporations of any type or kind;
and to participate with others in any corporation, partnership, limited
partnership, joint venture, or other association of any kind or in any
transaction, undertaking, or arrangement which the corporation would have power
to conduct by itself, whether or not such participation involves sharing or
delegation of control with or to others.
To draw, make, accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds, debentures; and other
negotiable or transferable instruments and evidences of indebtedness whether
secured by mortgage or otherwise, as well as to secure the same by mortgage or
otherwise, so far as may be permitted by the laws of the State of Delaware.
To purchase, receive, take, reacquire, or otherwise acquire, own and
hold, sell, lend, exchange, reissue, transfer, or otherwise dispose of, pledge,
use, cancel, and otherwise deal in and with its own shares and its other
securities from time to time to such an extent and in such manner and upon such
terms as the Board of Directors of the corporation shall determine; provided
that the corporation shall not use its funds or property for the purchase of
its own shares of capital stock when its capital is impaired or when such use
would cause any impairment of its capital, except to the extent permitted by
law.
To organize, as an incorporator, or cause to be organized under the
laws of the State of Delaware, or of any other State of the United States of
America, or of the District of Columbia, or of any commonwealth, territory,
dependency, colony, possession, agency, or instrumentality of the United States
of America, or of any foreign country, a corporation or corporations for the
purpose of conducting and promoting any business or purpose for which
corporations may be organized, and to dissolve, wind up, liquidate, merge, or
consolidate any such corporation or corporations or to cause the same to be
dissolved, wound up, liquidated, merged, or consolidated.
To conduct its business, promote its purposes, and carry on its
operations in any and all of its branches and maintain offices both within and
without the State of Delaware, in any and all States of the United States of
America, in the District of Columbia, and in any or all commonwealths,
territories, dependencies, colonies, possessions, agencies, or
instrumentalities of the United States of America and of foreign governments.
To promote and exercise all or any part of the foregoing purposes and
powers in any and all parts or the world, and to conduct its business in all or
any of its branches as principal, agent, broker, factor, contractor, and in any
other lawful capacity, either alone or through or in conjunction with any
corporations, associations, partnerships, firms, trustees, syndicates,
individuals, organizations, and other entities in any part of the world, and,
in conducting its business and promoting any of its purposes, to maintain
offices, branches, and agencies in any part of the world, to make and perform
any contracts and to do any acts and things, and to carry on any business, and
to exercise any powers and privileges suitable, convenient, or proper for the
conduct, promotion, and attainment of any of the business and purposes herein
specified or which at any time may be incidental thereto or may appear
conducive to or expedient for the accomplishment of any of such business and
purposes and which might be engaged in or carried on by a corporation
incorporated or organized under the General Corporation Law of the State of
Delaware, and to have
3
<PAGE>
and exercise all of the powers conferred by the laws of the State of Delaware
upon corporations incorporated or organized under the General Corporation Law
of the State of Delaware.
The foregoing provisions of this Article THIRD shall be construed both
as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes and powers shall not be held to
limit or restrict in any manner the purposes and powers of the corporation, and
the purposes and powers herein specified shall, except when otherwise provided
in this Article THIRD, be in no wise limited or restricted by reference to, or
inference from, the terms of any provision of this or any other Article of this
certificate of incorporation; provided, that the corporation shall not conduct
any business, promote any purpose, or exercise any power or privilege within or
without the State of Delaware which, under the laws thereof , the corporation
may not lawfully conduct, promote, or exercise.
FOURTH: The total number of common shares of stock which the
corporation shall have authority to issue is 30 million; 20 million of which is
Common A Stock and 10 million of which is Common B Stock with the par value of
each is .001 dollars. The total number of preferred stock is 10 million with
the par value of .001 dollars.
FIFTH: The name and the mailing address of the incorporator are as
follows:
NAME MAILING ADDRESS
---- ---------------
Ann M. Jones One Biscayne Tower
2 S. Biscayne Blvd., Suite 1810
Miami, Florida 33131
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of S 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for this
corporation under the provisions of S 279 of Title 8 of the Delaware Code order
a meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this corporation, as the case may be, to be summoned
in such manner as the said court directs. If a majority in number representing
three fourths in value of the creditors or class of creditors, and/or of the
stockholder or class of stockholders of this corporation as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
4
<PAGE>
EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation, and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further
provided:
1. The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
by, or in the manner provided in the ByLaws. The phrase "whole Board" and the
phrase "total number of directors" shall be deemed to have the same meaning, to
wit, the total number of directors which the corporation would have if there
were no vacancies. No election of directors need be by written ballot.
2. After the original or other ByLaws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provisions of S 109 of the General Corporation Law of the State of Delaware,
and, after the corporation has received any payment for any of its stock, the
power to adopt, amend, or repeal the ByLaws of the corporation may be exercised
by the Board of Directors of the corporation; provided, however, that any
provision for the classification of directors of the corporation for staggered
terms pursuant to the provision of subsection (d) of S 141 of the General
Corporation Law of the State of Delaware shall be set forth in an initial ByLaw
or in a ByLaw adopted by the stockholders entitled to vote of the corporation
unless provisions for such classification shall be set forth in this
certificate of incorporation.
3. Whenever the corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof to
notice of, and the right to vote at, any meeting of stockholders. Whenever the
corporation shall be authorized to issue more than one class of stock, no
outstanding share of any Class of stock which is denied voting power under the
provisions of the certificate of incorporation shall entitle the holder thereof
to the right to vote at any meeting of stockholders except as the provisions of
paragraph (2) of subsection (b) of S 242 of the General Corporation Law of the
State of Delaware shall otherwise require; provided, that no share of any such
class which is otherwise denied voting power shall entitle the holder thereof
to vote upon the increase or decrease in the number of authorized shares of
said class.
NINTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by the provisions of
paragraph (7) of subsection (b) of S 102 of the General Corporation Law of the
state of Delaware, as the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted by the
provisions of S 145 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
of the expenses, liabilities, or other matters referred to in or covered by
said section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any ByLaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person.
5
<PAGE>
ELEVENTH: From time to time any of the provisions of this certificate
of incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on May 31, 1994
Ann M. Jones, Incorporator
6
<PAGE>
State of Delaware
Office of the Secretary of State
"I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "EYE CARE INTERNATIONAL, INC.", FILED IN THIS OFFICE ON THE
THIRTIETH DAY OF DECEMBER, A.D. 1994, AT 9 O'CLOCK A.M.
A CERT1FIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNTY RECORDER OF DEEDS FOR RECORDING.
2406920 9100
Edward J. Freel, Secretary of State
AUTHENTICATION:
7361191
DATE: 01 03 95
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 12/30/1994
9442GOS13 - 2406920
1
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
EYE CARE INTERNATIONAL, INC.
Eye Care International, Inc., a corporation organized and existing
under the General Corporation Laws of the State of Delaware (the
"Corporation"), does hereby certify:
FIRST: That the Board of Directors of the Corporation by unanimous
written consent in writing, duly adopted resolutions setting forth the proposed
amendments to the Certificate of Incorporation of the Corporation and calling
for the submission of the proposed amendments to a vote of the stockholders of
the Corporation for their approval and adoption. The resolutions setting forth
the proposed amendments are as follows:
"RESOLVED, that the Corporation amend its certificate of incorporation
so that:
"4. (a) The total number of shares which the Corporation is authorized to issue
shall be Forty Million (40, 000, 000) shares of which Twenty Million (20, 000,
000) shares shall be designated as Class A common stock with a par value of one
Tenth of One Cent ($.001) per share, Ten Million (10,000,000) shares shall be
designated as Class B common stock with a par value of One Tenth of One Cent
($.001) per share and the remaining Ten Million (10,000,000) shares shall be
Preferred Stock with a par value of One Cent ($.001) per share.
(b) Each share of Class A common stock shall be entitled to one vote
per share on all matters required by law to be submitted to a vote of the
holders of the common shares, and each share of Class B common stock shall be
entitled to vote at the rate of five (5) votes per share on all matters
required by law to be submitted to a vote of the holders of the common shares.
Holders of the shares of Class A common stock and Class B common stock shall
vote together on all matters except as may otherwise be required under the
Delaware General Corporation Law. The rights of the shares of Class A common
stock and Class B common stock otherwise shall be identical in all respects.
Each share of Class B common stock is convertible into one share of Class A
common stock at any time at the option of the holder thereof. Upon the transfer
of any shares of Class B common stock by the initial holders thereof, each of
said shares, without any action on the part of the holders thereof,
automatically shall be converted into one share of Class A common stock on the
stock record books of the Corporation.
(c) The Corporation is authorized issue the shares of preferred stock
from time to time in one or more series with such designations, relative
rights, preferences, limitations or qualifications as shall be fixed by the
Board of Directors in the resolution or resolutions providing for the issue of
such shares. The Board of Directors is expressly authorized to adopt such
resolution or resolutions providing for the issue of such shares from time to
time as the Board of Directors, in its discretion may deem desirable."
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SECOND: That the holders of a majority of the outstanding shares of
common stock of the Corporation did, by a written consent in accordance with
Section 228 of the Delaware General Corporation Law, duly adopt said amendments
proposed by the Board of Directors.
THIRD: These amendments were duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Laws.
IN WITNESS WHEREOF, the undersigned has caused its corporate
seal to be affixed hereto and this Certificate to be executed by its President
and attested by its Assistant Secretary, this 20th day of December, 1994.
Attest: Eye Care International, Inc.
By: /s/ Clark Marcus
--------------------
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CORRECTED CERTIFICATE OF AMENDMENT OF
EYE CARE INTERNATIONAL, INC.
EYE CARE INTERNATIONAL., INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
does hereby certify:
1. A Certificate of Amendment was filed with the Secretary of State of
the State of Delaware on December 30, 1994 which contains an inaccurate record
of the corporate action taken therein, and said Certificate requires correction
as permitted by subsection (f) of Section 103 of the General Corporation Law of
the State of Delaware.
2. This Certificate of Correction is to correct an inconsistency
between the words and immediately following parenthetical numerical expression
of the par value of the Preferred Stock in the last sentence of paragraph (a)
of Article 4. The par value of the Preferred Stock is one tenth of one cent
($.001) per share.
3. The Certificate in corrected form is as follows:
"4. (a) The total number of shares which the Corporation is
authorized to issue shall be Forty Million (40,000,000) shares of which Twenty
Million (20,000,000) shares shall be designated as Class A common stock, with
a par value of One Tenth of One Cent ($.001 ) per share, Ten Million
(10,000,000) shares shall be designated as Class B common stock with a par
value of One Tenth of One Cent ($.001) per share and the remaining Ten Million
(10,000.,000) shares shall be Preferred Stock with a par value of One Tenth of
One Cent ($. 001 ) per share. "
EYE CARE INTERNATIONAL, INC. has caused this Corrected Certificate of
Amendment to be signed by (Clark Marcus, its authorized officer, this
day of June, 1997.
By: /s/ Clark Marcus
----------------------------------
Name: Clark Marcus
Title: Chief Executive Officer and President
<PAGE>
BY-LAWS
OF
EYE CARE INTERNATIONAL, INC.
1. MEETINGS OF STOCKHOLDERS
1. 1 Annual Meeting. An annual meeting of stockholders shall be held
for the election of directors at such date, time and place, either within or
without the State of Delaware, as may be designated by resolution of the Board
of Directors (the "Board") from time to time. Any other proper business may be
transacted at the annual meeting.
1. 2 Special Meetings. Special meetings of the stockholders may be
called at any time by resolution of the Board or by the Chairman of the Board,
the Chief Executive Officer, the President or upon the written request of
holders of not less than 25% of the outstanding shares of the voting stock of
the Corporation, and such special meetings may be held either within or without
the State of Delaware.
1. 3 Notice of Meetings. Written notice of each meeting of
stockholders shall be given to each stockholder entitled to vote at the
meeting, personally or by mail, not less than 10 nor more than 60 days before
the meeting and shall state the time and place of the meeting, and unless it is
the annual meeting, shall state the purposes for which it is called. If mailed,
notice shall be considered given when mailed to a stockholder at his address on
the Corporation's records.
1. 4 Adjournments. Any meeting of stockholders, annual or special,
may adjourn from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than 30
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting.
1. 5 Quorum. Except as provided by law, the Certificate of
Incorporation or these By-laws, at each meeting of stockholders, the presence
in person or by proxy of the holders of a majority of the issued and
outstanding shares of stock entitled to vote shall constitute a quorum for the
transaction of any business. In the absence of a quorum, holders of a majority
of the shares of stock entitled to vote present in person or by proxy, or, if
no stockholders are present, any officer entitled to preside at or to act as
secretary of the meeting, may adjourn the meeting from time to time in the
manner provided in Section 1.4 of these By-laws until a quorum is present.
1. 6 Organization. Meetings of stockholders shall be presided over by
the Chairman of the Board, or in his absence, the Vice Chairman of the Board,
or in his absence, by the Chief Executive Officer, or in his absence, by the
President, or in the absence of the foregoing persons by a chairman designated
by the Board of Directors, or in the absence of such designation by a chairman
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chosen at the meeting. The Secretary shall act as secretary of the meeting, but
in his absence the chairman of the meeting may appoint any person to act as
secretary of the meeting.
1. 7 Voting; Proxies. Each stockholder of record entitled to vote at
any meeting of stockholders shall be entitled to one vote for every share
registered in his name, except as otherwise provided in the Certificate of
Incorporation or any certificate of designation authorizing the creation of any
series or class of stock of the Corporation filed with the Secretary of State
pursuant to Section 151 of the Delaware General Corporation Law. Corporate
action to be taken by stockholder vote, other than the election of directors,
shall be authorized by a majority of the votes cast at a meeting of
stockholders, except as otherwise provided by law, Section 1.10 of these
By-laws, or in the Certificate of Incorporation or any certificate of
designation authorizing the creation of any series or class of stock of the
Corporation filed with the Secretary of State pursuant to Section 151 of the
Delaware General Corporation Law. Directors shall be elected in the manner
provided in Section 2.1 of these By-laws. Unless required by statute or the
Certificate of Incorporation, or ordered by the chairman of the meeting, voting
need not be by written ballot. Each stockholder entitled to vote at any meeting
of stockholders or express consent to or dissent from corporate action in
writing without a meeting may authorize another person to act for him by proxy.
Every proxy must be signed by the stockholder or his attorney-in-fact. No proxy
shall be valid after three years from its date unless it provides otherwise. A
duly executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A stockholder may revoke any proxy which is
not irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date with the Secretary of the Corporation.
1. 8 Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled
to receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board and which record
date: (1) in the case of determination of stockholders entitled to vote at any
meeting of stockholders or adjournment thereof, shall, unless otherwise
required by law, not be more than 60 nor less than 10 days before the date of
such meeting; (2) in the case determination of stockholders entitled to express
consent to corporate action in writing without a meeting, shall not be more
than 10 days from the date upon which the resolution fixing the record date is
adopted by the Board; and (3) in the case of any other action, shall not be
more than 60 days prior to such other action. If no record date is fixed, (1)
the record date for determining stockholders entitled to notice of or to vote
at a meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; (2) the record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting when no prior action
of the Board is required by law shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the corporation in accordance with applicable law, or, if prior
action by the Board is required by law, shall be at the close of business on
the day on which the Board adopts the resolution taking such prior action; and
(3) the record date for determining stockholders for any other purpose shall be
at the close of business on
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the day on which the Board adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
1. 9 List of Stockholders. Not less than 10 days prior to the date of
any meeting of stockholders, the Secretary of the corporation shall prepare a
complete list of stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of each stockholder and the number
of shares registered in his name. For a period of not less than 10 days prior
to the meeting, the list shall be available during ordinary business hours for
inspection by any stockholder for any purpose germane to the meeting. During
this period, the list shall be kept either (a) at a place within the city where
the meeting is to be held, if that place shall have been specified in the
notice of meeting, or (b) if not so specified, at the place where the meeting
is to be held. The list also shall be available for inspection by stockholders
at the time and place of the meeting.
1. 10 Action by Consent without a Meeting. Unless otherwise provided
in the Certificate of Incorporation, any action required or permitted to be
taken at any annual or special meeting of stockholders of the Corporation may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voting. Prompt notice of
the taking of any such action shall be given to those stockholders who did not
consent in writing.
1. 11 Inspectors. The Board may, in advance of any meeting of
stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If the inspectors shall not be so appointed or if any of
them shall fail to appear or act, the chairman of the meeting may, and at the
request of any stockholder entitled to vote thereat shall, appoint inspectors.
Each inspector, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and the voting
power of each, the number of shares represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the chairman
of the meeting or any stockholder entitled to vote thereat, the inspectors
shall make a report in writing of any challenge, request or matter determined
by them and shall execute a certificate of any fact found by them. Inspectors
may, but need not, be stockholders.
2. BOARD OF DIRECTORS
2. 1 Number, Qualification, Election and Term of Directors. The
business of the Corporation shall be managed by the Board of Directors. The
Board of Directors shall consist of not more than eight nor less than three
directors, as fixed from time to time by resolution of the Board, except that
the number of directors constituting the Board may be less than three provided
the number of directors is not less than the number of stockholders. The number
of directors may be changed by
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a resolution of a majority of the directors then in office or by the
stockholders, but no decrease may shorten the term of any incumbent director.
Directors shall be elected at each annual meeting of stockholders by a
plurality of the votes cast and shall hold office until the election and
qualification of their respective successors, or if earlier, their death,
resignation or removal in accordance with the provisions of Section 2.9 of
these By-laws, or as otherwise provided by law or the Certificate of
Incorporation.
2. 2 Quorum and Manner of Acting. A majority of the directors then in
office shall constitute a quorum for the transaction of business at any
meeting, except as provided in Section 2.7 of these By-laws. In the absence of
a quorum, a majority of the directors present may adjourn any meeting from time
to time until a quorum is present. Action of the Board shall be authorized by
the vote of a majority of the directors present at the time of the vote if
there is a quorum, unless otherwise provided by law, these By-laws or the
Certificate of Incorporation.
2. 3 Annual and Regular Meetings. Annual meetings of the Board for
the election of officers and consideration of other matters may be held either
within or without the State of Delaware and shall be held either (a) without
notice immediately after the annual meeting of stockholders and at the same
place, or (b) as soon as practicable after the annual meeting of stockholders,
on notice as provided in Section 2.5 of these By-laws. Regular meetings of the
Board may be held without notice at such times and places as the Board
determines. If the day fixed for the regular meeting is a legal holiday, the
meeting shall be held on the next business day.
2. 4 Special Meetings. Special meetings of the Board may be held at
any time and place within or without the State of Delaware whenever called by
the Chairman of the Board, the Vice Chairman of the Board, the Chief Executive
Officer, the President or by a majority of the directors. Only business related
to the purposes set forth in the notice of meeting may be transacted at a
special meeting.
2. 5 Notice of Meetings. Notice of the time and place of each special
meeting of the Board, and of each annual meeting not held immediately after the
annual meeting of stockholders and at the same place, shall be given to each
director by mailing it to him at his residence or usual place of business at
least three days before the meeting, or by delivering, telephoning or faxing it
to him at least 24 hours before the meeting. Notice of a special meeting shall
also state the purpose or purposes for which the meeting is called. Notice of
any adjourned meeting need not be given, other than by announcement at the
meeting at which the adjournment is taken.
2. 6 Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, or in his absence, the Vice
Chairman of the Board, or in his absence, the Chief Executive officer, or in
his absence, the President, or in their absence by a chairman chosen at the
meeting. The Secretary shall act as secretary of the meeting, but in his
absence the chairman of the meeting may appoint any person to act as secretary
of the meeting.
2. 7 Board or Committee Action without a Meeting. Any action required
or permitted to be taken by the Board or by any committee of the Board may be
taken without a meeting if all of the members of the Board or the committee
consent in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents by the members of the Board or the
committee shall be filed with the minutes of the proceedings of the Board or of
the committee.
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2. 8 Participation in Board or Committee Meetings by Conference
Telephone. Any or all members of the Board or of any committee of the Board may
participate in a meeting of the Board or of the committee by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at the meeting.
2. 9 Resignation and Removal of Directors. Any director may resign at
any time by delivering his resignation in writing to the Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive Officer, the President or
the Secretary of the Corporation, to take effect at the time specified in the
resignation, and the acceptance of a resignation, unless required by its terms,
shall not be necessary to make it effective. Except as otherwise provided by
law or in the Certificate of Incorporation, any or all of the directors may be
removed at any time, either with or without cause, by vote of a majority of the
shares then entitled to vote for the election of directors.
2. 10 Vacancies. Any vacancy in the Board, including one created by
an increase in the number of directors, may be filled by a majority vote of the
remaining directors, although such majority is less than a quorum, or by a
plurality of the votes cast at a meeting of the stockholders, and each director
so elected shall hold office until the expiration of the term of the director
whom he has replaced or until his successor is elected and qualified.
2. 11 Compensation. Directors shall receive such compensation as the
Board determines, together with reimbursement of their reasonable expenses in
connection with the performance of their duties. A director also may be paid
for serving the Corporation, its affiliates or subsidiaries in other
capacities.
3. COMMITTEES
3. 1 Executive Committee. The Board, by resolution adopted by a
majority of the entire Board, may designate an Executive Committee of one or
more directors which shall have all the powers and authority of the Board,
except as otherwise provided in the resolution, Section 141(c) of the Delaware
General Corporation Law, or any other applicable law. The members of the
Executive Committee shall serve at the pleasure of the Board. All action of the
Executive Committee shall be reported to the Board at its next meeting.
3. 2 Other Committees. The Board, by resolution adopted by a majority
of the entire Board, may designate other committees of the Board of one or more
directors, which shall serve at the Board's pleasure and have such powers and
duties as the Board determines, subject to the limitations set forth in Section
141(c) of the Delaware General Corporation Law.
3. 3 Rules Applicable to Committees. The Board may designate one or
more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the absence
or disqualification of any member of a committee, the member or members present
at a meeting of the committee and not disqualified, whether or not a quorum,
may unanimously appoint another director to act at the meeting in place of the
absent or disqualified member. All action of the committee shall be reported to
the Board at its next
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meeting. Each committee shall adopt rules of procedure and shall meet as
provided by those rules or by resolutions of the Board.
4. OFFICERS
4. 1 Executive Officers. The executive officers of the Corporation
shall consist of the Chairman of the Board, the Chief Executive Officer, the
President, one or more Vice Presidents (one or more of whom may be designated
Executive Vice President or Senior Vice President), the Chief Financial
Officer, a Secretary and a Treasurer. Any two or more offices may be held by
the same person.
4. 2 Election; Term of Office. The executive officers of the
Corporation shall be elected annually by the Board, and each such officer shall
hold office until the next annual meeting of the Board and until the election
of his successor, or his earlier death, resignation or removal in accordance
with the provisions of Section 4.4 of these By-laws.
4. 3 Subordinate Officers. The Board may appoint subordinate officers
(including assistant secretaries and assistant treasurers), agents or
employees, each of whom shall hold office for such period and have such powers
and duties as the Board determines. The Board may delegate to any executive
officer or to any committee the power to appoint and define the powers and
duties of any subordinate officers, agents or employees. The Board may require
any officer, agent or employee to give security for the faithful performance of
his duties.
4. 4 Resignation and Removal of Officers. Any officer may resign at
any time by delivering his resignation in writing to the Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive Officer, the President or
the Secretary of the Corporation, to take effect at the time specified in the
resignation, and the acceptance of such resignation, unless required by its
terms, shall not be necessary to make it effective. Any officer appointed by
the Board or appointed by an executive officer or by a committee may be removed
by the Board either with or without cause, and in the case of an officer
appointed by an executive officer or by a committee, by the officer or
committee who appointed him or by the Chairman of the Board, the Vice Chairman
of the Board, the Chief Executive Officer or the President.
4. 5 Vacancies. A vacancy in any office may be filled for the
unexpired term in the manner prescribed in Sections 4.2 and 4.3 of these
By-laws for election or appointment to the office.
4. 6 Chairman of the Board. The Chairman of the Board of the
Corporation shall preside at all meetings of the Board and of the stockholders
and shall have such other powers and duties as the Board assigns to him.
4. 7 Chief Executive Officer. The Chief Executive Officer of the
Corporation shall supervise and direct the business and affairs of the
Corporation, subject to the control of the Board, and shall have such other
powers and duties as the Board assigns to him.
4 .8 President. The President of the Corporation shall, subject to
the direction of the Chief Executive Officer and the control of the Board,
direct and manage the day-to-day business activities
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and general affairs of the Corporation, and shall have such other powers and
duties as the Board assigns to him.
4. 9 Vice-President. Each vice president shall have such powers and
duties as the Board or the Chairman of the Board, the Chief Executive Officer
or the President assigns to him.
4. 10 Secretary. The Secretary shall be the secretary of, and keep
the minutes of, all meetings of the Board and of the stockholders, shall be
responsible for giving notice of all meetings of stockholders and of the Board,
and shall keep the seal and, when authorized by the Board, apply it to any
instrument requiring it. Subject to the control of the Board, he shall have
such powers and duties as the Board, the Chairman of the Board or the President
assigns to him. In the absence of the Secretary from any meeting, the minutes
shall be kept by the person appointed for that purpose by the presiding
officer.
4. 11 Chief Financial Officer. The Chief Financial Officer of the
Corporation shall be the principal financial and accounting officer of the
Corporation, and shall have primary responsibility for the Corporation's books
and accounts. Subject to the control of the Board, he shall have such other
powers and duties as the Board, the Chairman of the Board, the Chief Executive
Officer or the President assigns to him.
4. 12 Treasurer. The Treasurer of the Corporation shall have custody
of the corporate funds and securities and, subject to the control of the Board,
shall have such other powers and duties as the Board, the Chairman of the
Board, the Chief Executive Officer, the President or the Chief Financial
Officer assigns to him.
4. 13 Salaries. The Board may fix the officers' salaries, if any, or
it may authorize the Chairman of the Board or the President to fix the salary
of any other officer.
5. SHARES
5. 1 Certificates. The Corporation's shares shall be represented by
certificates in the form approved by the Board. Each certificate shall be
signed by the Chairman of the Board, the Vice Chairman of the Board, the Chief
Executive Officer, the President or a Vice President and by the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Secretary, and shall be
sealed with the Corporation's seal or a facsimile of the seal. Any or all of
the signatures on the certificate may be a facsimile.
5. 2 Transfers. Shares shall be transferable only on the
Corporation's books, upon surrender of the certificate for the shares, properly
endorsed.
5. 3 Lost, Stolen or Destroyed Certificates. The Corporation may
issue a new certificate of stock in the place of any certificate theretofore
issued by it, alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of any lost, stolen or destroyed certificate,
or his legal representative, to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
any new certificate.
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6. MISCELLANEOUS
6. 1 Seal. The corporate seal shall bear the Corporation's name and
the year and state in which it was incorporated.
6. 2 Fiscal Year. The Board, by resolution, may determine the
Corporation's fiscal year. Until changed by the Board, the Corporation's
fiscal year shall be the calendar year.
6. 3 Waiver of Notice of Meetings of Stockholders, Directors and
Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at the meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business transacted at, nor the purpose of, any regular
or special meeting of the stockholders, directors, or members of a committee of
directors need be specified in any written waiver of notice.
6. 4 Interested Directors; Quorum. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership or association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board or committee thereof which authorizes
the contract or transaction, or solely because his or their votes are counted
for such purpose, 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
or the committee, and the Board or the committee in good faith authorizes the
contract or transaction by the affirmative votes of a 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 stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (3) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approve or ratified by the Board, a committee thereof, or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board or of a committee which authorizes the
contract or the transaction.
6. 5 Voting of Shares in other Corporations. Shares in other
corporations which are held by the Corporation may be represented and voted by
the Chairman of the Board, the Chief Executive Officer, the President or a Vice
President of the Corporation or by proxy or proxies appointed by any one of
them. The Board may, however, appoint some other person to vote the shares.
6. 6 Amendments. These By-laws may be amended or repealed, and new
By-laws may be adopted, by the Board, subject to compliance with Section 2.2 of
these By-Laws, but the stockholders may adopt additional By-laws and may amend
and repeal any By-laws whether adopted by them or otherwise.
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EYE CARE INTERNATIONAL INC.
1997 STOCK OPTION PLAN
1. Purposes.
The EYE CARE INTERNATIONAL, INC. 1997 STOCK OPTION PLAN (the "Plan")
is intended to provide the employees, directors, independent contractors and
consultants of Eye Care International, Inc, (the "Company") and/or any
subsidiary or parent thereof with an added incentive to commence and/or
continue their services to the Company and to induce them to exert their
maximum efforts toward the Company's success. By thus encouraging employees,
directors, independent contractors and consultants and promoting their
continued association with the Company, the Plan may be expected to benefit the
Company and its stockholders, The Plan allows the Company to grant Incentive
Stock options ("ISO's") (as defined in Section 422(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), Non-Qualified Stock Options ("NQSO's")
not intended to qualify under Section 422(b) of the Code and Stock Appreciation
Rights ("SAR's") (collectively the "Options"). The vesting of one or more
Options granted hereunder may be based on the attainment of specified
performance goals of the participant or the performance of the Company, one or
more subsidiaries, parent and/or division of one or more of the above.
2. Shares Subject to the Plan.
The total number of shares of Class A Common Stock of the Company,
$.001 par value per share, that may be subject to Options granted under the
Plan shall be seven hundred fifty thousand (750,000) in the aggregate, subject
to adjustment as provided in Paragraph 8 of the Plan, however, the grant of an
ISO to an employee together with a tandem SAR or any NQSO to an employee
together with a tandem SAK shall only require one share of Class A Common Stock
available subject to the Plan to satisfy such joint Option, The Company shall
at all times while the Plan is in force reserve such number of shares of Class
A Common Stock as will be sufficient to satisfy the requirement of outstanding
Options granted under the Plan. In the event any Option granted under the Plan
shall expire or terminate for any reason without having been exercised in full
or shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available for granting of
Options under the Plan.
3. Eligibility.
All employees of the Company or of a "subsidiary" or "parent" of the
Company, as the quoted terms are defined within Section 424 of the Code are
eligible to receive ISO's or ISO's in tandem with SAR's (provided the SAR meets
the requirements set forth in Temp. Reg. Section 14a. 422A-1, A-39 (a) through
(e) inclusive). ISO's or ISO's in tandem with SAR's (provided the SAR meets the
requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a) through (e)
inclusive) may be granted from time to time under the Plan to one or more
employees of the Company or of a "subsidiary" or "parent" of the Company, as
the quoted terms are defined within Section 424 of the Code. An Officer is an
employee for the above purposes. However, a director of the Company who is not
otherwise an employee is not deemed an employee for such purposes. NQSO's and
NQSO's in tandem with SAR's may be granted from time to time under the Plan to
one or more employees of the Company, Officers, members of the Board of
Directors, independent contractors, consultants
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and other individuals who are not employees of but are involved in the
continuing development and success of the Company and/or of a subsidiary of the
Company, including persons who have previously been granted Options under the
Plan.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company as such Board of Directors may be composed from time to time and/or by
a Stock Option Committee or Compensation Committee (the "Committee") which
shall be comprised of solely of at least two Outside Directors (as such term is
defined in regulations promulgated from time to time with respect to Section
162(m)(4)(C)(i) of the Code) appointed by such Board of Directors of the
Company. As and to the extent authorized by the Board of Directors of the
Company, the Committee may exercise the power and authority vested in the Board
of Directors under the Plan. Within the limits of the express provisions of the
Plan, the Board of Directors or Committee shall have the authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, Options shall be granted, the character of such Options (whether ISO's,
NQSO's, and/or SAR's in tandem with NQSO's, and/or SAR's in tandem with ISO's)
and the number of shares of Class A Common Stock to be subject to each Option,
the manner and form in which the optionee can tender payment upon the exercise
of his Option, and to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
Option agreements that may be entered into in connection with Options (which
need not be identical), subject to the limitation that agreements granting
ISO's must be consistent with the requirements for the ISO's being qualified as
"incentive stock options" as provided in Section 422 of the Code, and to make
all other determinations and take all other actions necessary or advisable for
the administration of the Plan. In making such determinations, the Board of
Directors and/or the Committee may take into account the nature of the services
rendered by such individuals, their present and potential contributions to the
Company's success, and such other factors as the Board of Directors and/or the
Committee, in its discretion, shall deem relevant. The Board of Directors'
and/or the Committee's determinations on the matters referred to in this
Paragraph shall be conclusive.
(b) Notwithstanding anything contained herein to the contrary, at
anytime during the period the Company's Class A Common Stock is registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the " 1934
Act), the Committee, if one has been appointed to administer all or part of the
Plan, shall have the exclusive right to grant Options to Covered Employees as
defined under Section 162(m)(3) of the Code (generally executive officers
subject to Section 16 of the 1934 Act) and set forth the terms and conditions
thereof With respect to persons subject to Section 16 of the 1934 Act,
transactions under the Plan are intended, to the extent possible, comply with
all applicable conditions of Rule 16b-3, as amended from time to time, (and its
successor provisions, if any) under the 1934 Act and Section 162(m)(4)(C) of
the Code of 1986, as amended. To the extent any provision of the Plan or action
by the Board of Directors or Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the Board
of Directors and/or such Committee.
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5. Terms of Options.
Within the limits of the express provisions of the Plan, the Board of
Directors or the Committee may grant either ISO's or NQSO's or SAR's in tandem
with NQSO's or SAR's in tandem with ISO's. An ISO or an NQSO enables the
optionee to purchase from the Company, at any time during a specified exercise
period, a specified number of shares of Class A Common Stock at a specified
price (the "Option Price"). The optionee, if granted a SAR in tandem with a
NQSO or ISO, may receive from the Company, in lieu, of exercising his option to
purchase shares pursuant to his NQSO or ISO, at one of the certain specified
times during the exercise period of the NQSO or ISO as set by the Board of
Directors or the Committee, the excess of the fair market value upon such
exercise (as determined in accordance with subparagraph (b) of this Paragraph
5) of one share of Class A Common Stock over the Option Price per share
specified upon grant of the NQSO or ISO/SAR multiplied by the number of shares
of Class A Common Stock covered by the SAR so exercised. The character and
terms of each Option granted under the Plan shall be determined by the Board of
Directors and/or the Committee consistent with the provisions of the Plan,
including the following:
(a) An Option granted under the Plan must be granted within 10 years
from the date the Plan is adopted, or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.
(b) The Option Price of the shares of Class A Common Stock subject to
each ISO and each SAR issued in tandem with an ISO shall not be less than the
fair market value of such shares of Class A Common Stock at the time such ISO
is granted. Such fair market value shall be determined by the Board of
Directors and, if the shares of Class A Common Stock are listed on a national
securities exchange or traded on the over-the-counter market, the fair market
value shall be the closing price on such exchange, or the mean of the closing
bid and asked prices of the shares of Class A Common Stock on the
over-the-counter market, as reported by the Nasdaq Stock Market, the National
Association of Securities Dealers OTC Bulletin Board or the National Quotation
Bureau, Inc., as the case may be, on the day on which the Option is granted or,
if there is no closing price or bid or asked price on that day, the closing
price or mean of the closing bid and asked prices on the most recent day
preceding the day on which the Option is granted for which such prices are
available. If an ISO or SAR in tandem with an ISO is granted to any individual
who, immediately before the ISO is to be granted, owns (directly or through
attribution) more than 10% of the total combined voting power of all classes of
capital stock of the Company or a subsidiary or parent of the Company, the
Option Price of the shares of Class A Common Stock subject to such ISO shall
not be less than 110% of the fair market value per share of the shares of Class
A Common Stock at the time such ISO is granted.
(c) The Option Price of the shares of Class A Common Stock subject to
an NQSO or an SAR in tandem with a NQSO granted pursuant to the Plan shall be
determined by the Board of Directors or the Committee, in its sole discretion,
but in no event less than 85% of the fair market value per share of the shares
of Class A Common Stock at the time of grant.
(d) In no event shall any Option granted under the Plan have an
expiration date later than 10 years from the date of its grant, and all Options
granted under the Plan shall be subject to earlier termination as expressly
provided in Paragraph 6 hereof. If an ISO or an SAR in tandem with
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an ISO is granted to any individual who, immediately before the ISO is granted,
owns (directly or through attribution) more that 10% of the total combined
voting power of all classes of capital stock of the Company or of a subsidiary
or parent of the Company, such ISO shall by its terms expire and shall not be
exercisable after the expiration of five (5) years from the date of its grant.
(e) An SAR may be exercised at any time during the exercise period of
the ISO or NQSO with which it is granted in tandem and prior to the exercise of
such ISO or NQSO. Notwithstanding the foregoing, the Board of Directors and/or
the Committee shall in their discretion determine from time to time the terms
and conditions of SAR's to be granted, which terms may vary from the
afore-described conditions, and which terms shall be set forth in a written
stock option agreement evidencing the SAR granted in tandem with the ISO or
NQSO. The exercise of an SAR granted in tandem with an ISO or NQSO shall be
deemed to cancel such number of shares subject to the unexercised Option as
were subject to the exercised SAR. The Board of Directors or the Committee has
the discretion to alter the terms of the SARS if necessary to comply with
Federal or state securities law. Amounts to be paid by the Company in
connection with an SAR may, in the Board of Director's or the Committee's
discretion, be made in cash, Class A Common Stock or a combination thereof.
(f) An Option granted under the Plan shall become exercisable, in
whole at any time or in part from time to time, but in no event may an Option
(i) be exercised as to less than one hundred (100) shares of Class A Common
Stock at any one time, or the remaining shares of Class A Common Stock covered
by the Option if less than one hundred (100), and (ii) except with respect to
performance based Options, become fully exercisable more than five years from
the date of its grant nor shall less than 20% of the Option become exercisable
in any of the first five years of the Option, if not terminated as provided in
Section 6 hereof. The Board of Directors or the Committee, if applicable,
shall, in the event it so elects in its sole discretion, set one or more
performance standards with respect to one or more Options upon which vesting is
conditioned (which performance standards may vary among the Options).
(g) An Option granted under the Plan shall be exercised by the
delivery by the holder thereof to the Company at its principal office (to the
attention of the Secretary) of written notice of the number of full shares of
Class A Common Stock with respect to which the option is being exercised,
accompanied by payment in full, which payment at the option of the optionee
shall be in the form of (i) cash or certified or bank check payable to the
order of the Company, of the Option Price of such shares of Class A Common
Stock, or, (ii) if permitted by the Committee or the Board of Directors, as
determined by the Committee or the Board of Directors in its sole discretion at
the time of the grant of the Option with respect to an ISO and at or prior to
the time of exercise with respect to a NQSO, by the delivery of shares of Class
A Common Stock having a fair market value equal to the Option Price or the
delivery of an interest-bearing promissory note having an original principal
balance equal to the Option Price and an interest rate not below the rate which
would result in imputed interest under the Code (provided., in order to qualify
as an ISO, more than one year shall have passed since the date of grant and one
year from the date of exercise), or (iii) at the option of the Committee or the
Board of Directors, determined by the Committee or the Board of Directors in
its sole discretion at the time of the grant of the Option with respect to an
ISO and at or prior to the time of exercise with respect to a NQSO, by a
combination of cash, promissory note and/or such shares of Class A Common Stock
(subject to the restriction above) held by the employee that have a fair market
value together with such cash and principal amount of any
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promissory note that shall equal the Option Price, and, in the case of a NQSO,
at the discretion of the Committee or Board of Directors by having the Company
withhold from the shares of Class A Common Stock to be issued upon exercise of
the Option that number of shares having a fair market value equal to the
exercise price and/or the tax withholding amount due, or otherwise provide for
withholding as set forth in Paragraph 9(c) hereof, or in the event an employee
is granted an ISO or NQSO in tandem with an SAR and desires to exercise such
SAR, such written notice shall so state such intention. To the extent allowed
by applicable Federal and state securities laws, the Option Price may also be
paid in full by a broker-dealer to whom the optionee has submitted an exercise
notice consisting of a fully endorsed Option, or through any other medium of
payment as the Board of Directors and/or the Committee, in its discretion,
shall authorize.
(h) The holder of an Option shall have none of the rights of a
stockholder with respect to the shares of Class A Common Stock covered by such
holder's Option until such shares of Class A Common Stock shall be issued to
such holder upon the exercise of the Option.
(i) All ISO's or SAR's in tandem with ISO's granted under the Plan
shall not be transferable otherwise than by will or the laws of descent and
distribution and may be exercised during the lifetime of the holder thereof only
by the holder. The Board or the Committee, in its sole discretion, shall
determine whether an Option other than an ISO or SAR in tandem with an ISO shall
be transferable. No Option granted under the Plan shall be subject to execution,
attachment or other process.
(j) The aggregate fair market value, determined as of the time any ISO
or SAR in tandem with an ISO is granted and in the manner provided for by
Subparagraph (b) of this Paragraph 5, of the shares of Class A Common Stock
with respect to which ISO's granted under the Plan are exercisable for the
first time during any calendar year and under incentive stock options
qualifying as such in accordance with Section 422 of the Code granted under any
other incentive stock option plan maintained by the Company or its parent or
subsidiary corporations, shall not exceed $100,000. Any grant of Options in
excess of such amount shall be deemed a grant of a NQSO.
(k) Notwithstanding anything contained herein to the contrary, an SAR
which was granted in tandem with an ISO shall (i) expire no later than the
expiration of the underlying ISO; (ii) be for no more than 100% of the spread
at the time the SAR is exercised; (iii) shall only be transferable when the
underlying ISO is transferable, (iv) only be exercised when the underlying ISO
is eligible to be exercised; and (v) only be exercisable when there is a
positive spread.
(l) In no event shall an employee be granted Options for more than
150,000 shares of Class A Common Stock during any calendar year period;
provided, however, that the limitation set forth in this Section 5(l) shall be
subject to adjustment as provided in Section 8 herein.
6. Death or Termination of Employment/Consulting Relationship.
(a) Except as provided herein, or otherwise determined by the Board of
Directors or the Committee in its sole discretion, upon termination of
employment with the Company voluntarily by the employee or termination of a
consulting relationship with the Company prior to the termination of the term
thereof, a holder of an Option under the Plan may exercise such Options to the
extent such Options were exercisable as of the date of termination at any time
within thirty
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(30) days after termination, subject to the provisions of Subparagraph (d) of
this Paragraph 6. Except as provided herein, or otherwise determined by the
Board of Directors or the Committee in its sole discretion, if such employment
or consulting relationship, shall terminate for any reason other than death,
voluntary termination by the employee or for cause, then such Options may be
exercised at anytime within three (3) months after such termination.
Notwithstanding anything contained herein to the contrary, unless otherwise
determined by the Board of Directors or the Committee in its sole discretion,
any options granted hereunder to an Optionee and then outstanding shall
immediately terminate in the event the Optionee is terminated for cause, and
the other provisions of this Section 6 shall not be applicable thereto. For
purposes of this Section 6, termination for cause shall be deemed the decision
of the Company, in its sole discretion, that Optionee has not adequately
performed the services for which he/she/it was hired.
(b) If the holder of an Option granted under the Plan dies (i) while
employed by the Company or a subsidiary or parent corporation or while
providing consulting services to the Company or a subsidiary or parent
corporation or (ii) within three (3) months after the termination of such
holder's employment/consulting, such Options may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives or distributees at any time within such time as determined by
the Board of Directors or the Committee in its sole discretion, but in no event
less than six months after the individuals death, to the extent such Options
were exercisable as of the date of death or date of termination of employment,
whichever date is earlier.
(c) If the holder of an Option under the Plan becomes disabled within
the definition of section 22(e)(3) of the Code while employed by the Company or
a subsidiary or parent corporation, such Option may, subject to the provisions
of subparagraph (d) of this Paragraph 6, be exercised at any time within six
months less one day after such holder's termination of employment due to the
disability.
(d) Except as otherwise determined by the Board of Directors or the
Committee in its sole discretion, an option may not be exercised pursuant to
this Paragraph 6 except to the extent that the holder was entitled to exercise
the Option at the time of termination of employment, consulting relationship or
death, and in any event may not be exercised after the original expiration date
of the Option. Notwithstanding anything contained herein which may be to the
contrary, such termination or death prior to vesting shall, unless otherwise
determined by the Board of Directors or Committee, in its sole discretion, be
deemed to occur at a time the holder was not entitled to exercise the Option.
(e) The Board of Directors or the Committee, in its sole discretion,
may at such time or times as it deems appropriate, if ever, accelerate all or
part of the vesting provisions with respect to one or more outstanding options.
The acceleration of one Option shall not infer that any Option is or to be
accelerated.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90)
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days or such longer period as such individual's right to reemployment is
guaranteed either by statute or by contract.
8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Class A Common Stock
are hereafter changed by reason of recapitalization, reclassification, stock
split-up, combination or exchange of Class A Common Stock or the like, or by
the issuance of dividends payable in shares of Class A Common Stock, an
appropriate adjustment shall be made by the Board of Directors, as determined
by the Board of Directors and/or the Committee, in the aggregate number of
shares of Class A Common Stock available under the Plan, in the number of
shares of Class A Common Stock issuable upon exercise of outstanding Options,
and the Option Price per share. In the event of any consolidation or merger of
the Company with or into another company, where the Company is not the
surviving entity, or the conveyance of all or substantially all of the assets
of the Company to another company for solely stock and/or securities, each then
outstanding Option shall upon exercise thereafter entitle the holder thereof to
such number of shares of Class A Common Stock or other securities or property
to which a holder of shares of Class A Common Stock of the Company would have
been entitled to upon such consolidation, merger or conveyance; and in any such
case appropriate adjustment, as determined by the Board of Directors of the
Company (or successor entity) shall be made as set forth above with respect to
any future changes in the capitalization of the Company or its successor
entity. In the event of the proposed dissolution or liquidation of the Company,
or, except as provided in (b) below, the sale of substantially all the assets
of the Company for other than stock and/or securities, all outstanding Options
under the Plan will automatically terminate, unless otherwise provided by the
Board of Directors of the Company or any authorized committee thereof.
(b) Any Option granted under the Plan, may, at the discretion of
the Board of Directors of the Company and said other corporation, be exchanged
for options to purchase shares of capital stock of another corporation which
the Company, and/or a subsidiary thereof is merged into, consolidated with, or
all or a substantial portion of the property or stock of which is acquired by
said other corporation or separated or reorganized into. The terms, provisions
and benefits to the optionee of such substitute option(s) shall in all respects
be identical to the terms, provisions and benefits of optionee under his
Option(s) prior to said substitution. To the extent the above may be
inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall be
deemed interpreted so as to comply therewith.
(c) Any adjustment in the number of shares of Class A Common Stock
shall apply proportionately to only the unexercised portion of the Options
granted hereunder. If fractions of shares of Class A Common Stock would result
from any such adjustment, the adjustment shall be revised to the next higher
whole number of shares of Class A Common Stock.
9. Further Conditions of Exercise.
(a) Unless the shares of Class A Common Stock Issuable upon the
exercise of an Option have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, prior to the
exercise of the Option, an optionee must represent in writing to
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the Company that such shares of Class A Common Stock are being acquired for
investment purposes only and not with a view towards the further resale or
distribution thereof, and must supply to the Company such other documentation
as may be required by the Company, unless in the opinion of counsel to the
Company such representation, agreement or documentation is not necessary to
comply with said Act.
(b) The Company shall not be obligated to deliver any shares of Class
A Common Stock until they have been listed on each securities exchange on which
the shares of Class A Common Stock may then be listed or until there has been
qualification under or compliance with such state or federal laws, rules or
regulations as the Company may deem applicable.
(c) The Board of Directors or Committee may make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
any taxes that the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign,
to withhold in connection with the exercise of any Option, including, but not
limited to, (i) the withholding of payment of all or any portion of such Option
and/or SAR until the holder reimburses the Company for the amount the Company
is required to withhold with respect to such taxes, or (ii) the cancelling of
any number of shares of Class A Common Stock issuable upon exercise of such
Option and/or SAR in an amount sufficient to reimburse the Company for the
amount it is required to so withhold, (iii) the selling of any property
contingently credited by the Company for the purpose of exercising such Option,
in order to withhold or reimburse the Company for the amount it is required to
so withhold, or (iv) withholding the amount due from such employee's wages if
the employee is employed by the Company or any subsidiary thereof.
10. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the stockholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of capital stock of the Company entitled to vote thereon.
(c) The Board of Directors of the Company may at any time, prior to
ten (10) years from the earlier of the date of the adoption of the Plan by such
Board of Directors or the date the Plan is approved by the stockholders,
terminate the Plan or from time to time make such modifications or amendments
of the Plan as it may deem advisable, provided, however, that the Board of
Directors shall not, without approval by the affirmative vote of the holders of
a majority of the outstanding shares of capital stock of the Company entitled
to vote thereon, increase (except as provided by Paragraph 8) the maximum
number of shares of Class A Common Stock as to which Options or shares may be
granted under the Plan, or materially change the standards of eligibility under
the Plan. Any amendment to the Plan which, in the opinion of counsel to the
Company, will be deemed to result in the adoption of a new Plan, will not be
effective until approved by the affirmative vote of the holders of a majority
of the outstanding shares of capital stock of the Company entitled to vote
thereon.
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(d) No termination, modification or amendment of the Plan may
adversely affect the rights under any outstanding Option without the consent of
the individual to whom such Option shall have been previously granted.
11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of
Directors of the Company. The Plan shall be subject to approval by the
affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon within one year before or
after adoption of the Plan by the Board of Directors.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed
pursuant hereto shall be deemed to confer upon any individual to whom an Option
is or may be granted hereunder any right to remain in the employ of the Company
or of a subsidiary or parent of the Company or in any way limit the right of
the Company, or of any parent or subsidiary thereof to terminate the employment
of any employee.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.
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EMPLOYMENT AGREEMENT
AGREEMENT made as of the 20th day of September , 1993 and between
Clark A. Marcus, an individual residing in Clearwater, Florida (hereinafter
referred to as "Executive") and EYE CARE INTERNATIONAL, INC., a Florida
corporation with offices in Largo, Florida (hereinafter called "ECI").
W I T N E S S E T H
WHEREAS, the Company desires to retain the services of Executive to
render his services to Company on the terms and conditions hereinafter set
forth; and
WHEREAS, Executive is agreeable to rendering such services to the
Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Employment Term, Duties and Acceptance
(a) Company hereby retains Executive as Company's Chief Executive
Officer ("CEO")for period of six (6) years, commencing on the date hereof (the
"Employment Period"), subject to earlier termination as hereinafter provided,
to render his services to Company upon the terms and conditions herein
contained, in such executive capacity. In such executive capacity, Executive
shall report and be responsible only to the Company's Board of Directors.
During the Employment Period, Executive shall also serve as general legal
counsel to the Company and be paid a fee of $5,000 per month therefore.
Executive shall also serve on the Company's Board of Directors as its Chairman
for a term equal to the term of this Agreement.
(b) Executive hereby accepts the foregoing employment and agrees to
render his services to Company on a full-time basis in such a manner as to
reflect his best efforts to the end that the Company's operations are properly
managed. In furtherance of Executive performing the duties assigned to him
under this Agreement, the Company agrees to provide Executive with a support
staff reasonably required by Executive so as to enable him to carry out such
duties. Notwithstanding the foregoing, Executive shall be permitted to maintain
his professional practice provided same does not require him to be absent from
the Company's offices, on the average, more than one day per week.
2. Compensation
(a) During the first year of the term of this Agreement, Executive
shall receive interim compensation of $150,000. This compensation may, at
Executive's election, be accrued, in whole or in part, if the Company has
insufficient funds to pay same. Notwithstanding the foregoing, upon completion
of a certain private placement offering, or initial public offering, (the
"offering") or one year from the date hereof, whichever shall first occur,
Executive's base compensation for all services to be rendered pursuant to this
Agreement, shall be at the rate of One-hundred and Seventy-five
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Thousand Dollars ($175,000) per annum payable in accordance with the general
payroll practices of the Company as from time to time in effect, less such
deductions or amounts as shall be required to be withheld by applicable law or
regulation. On each yearly anniversary date of the execution of this Agreement
(hereinafter sometimes called the "Anniversary Date," in each yearly instance)
the Board of Directors shall review the services provided by Executive to
determine the amount that Executive's salary shall be increased for the
forthcoming yearly period. Such increase shall be no less than the higher of
fifteen (15) percent per year or an amount equal to the percentage increase in
the Consumer Price Index or such other similar index reflective of the cost of
living increase in the Tampa Bay, Florida metropolitan area from the beginning
of yearly period to the end of the yearly period with respect to the Consumer
Price Index applicable to the said metropolitan area, times Executive's base
compensation in effect during the said yearly period. The sum resulting by way
of this increase to the Executive's base compensation shall, for the then
immediately succeeding period, be considered the Executive's base compensation.
The Board of Directors shall also determine on an annual (fiscal or calendar
year, as the case may be) basis, the amount, if any, of bonus or incentives to
be paid to Executive. Provided, however, that Executive shall receive a special
bonus ("special bonus") in an amount equal to three (3) percent of the
Company's pre-tax profits from the preceding year (as determined by the
application of generally accepted accounting principles), up to the first
one-million dollars of such profits; plus an additional sum equal to four (4)
percent of the Company's pre-tax profits over one-million dollars and up to
two-million dollars of such profits; plus five (5) percent of all pre-tax
profits over two-million dollars up to three-million dollars; plus six (6)
percent of all pre-tax profits over three-million dollars up to four-million
dollars, and seven (7) percent of all pre-tax profits over four million
dollars. The special bonus shall be paid within thirty (30) days following
determination thereof, which determination shall be made as soon as
practicable.
(b) During the Employment Period, the Company agrees to obtain and pay
the premiums for life, travel and accident insurance (with a double indemnity
provision) in the amount of five (5) times Executive's then base compensation,
with the beneficiary to be designated by Executive. Executive and Company
further agree that the Company may obtain such other insurance on Executive as
the Company may determine, it being understood that Company shall be able to
designate the beneficiary of any such insurance. The Company also agrees to
obtain and maintain throughout the term of Executive's employment with the
Company, a directors' and officers' liability insurance policy as may be
mutually agreed upon between Executive and the Company provided same should be
a "no deductible" policy as to Executive and malpractice insurance.
(c) Executive shall be entitled to reasonable paid vacation time, sick
leave and time to attend professional meetings comparable to that offered the
executives in comparable positions.
(d) Executive shall be entitled (subject to the terms and conditions
of particular plans and programs) to all fringe benefits afforded to other
senior executives to the Company, including, but not by way of limitation,
bonuses and the right to participate in any pension, stock option, retirement,
major medical, group health, disability, accident and life insurance,
relocation reimbursement, and other employee benefit programs made generally
available, from time to time, by the Company.
(e) Company shall pay or reimburse Executive for reasonable expenses
incurred in the performance of his services under this Agreement during the
Employment Period, upon
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presentation of expense statements, vouchers or such other supporting
documentation as may reasonably be required.
3. Disability
(a) Upon the disability, as defined in subparagraph 3(b) hereof, of
Executive during the Employment Period, Company may, in its sole discretion,
terminate Executive's employment; provided that if the Company elects to so
terminate Executive's employment, Executive shall be entitled to receive,
accrued but unpaid salary, expense reimbursement and bonuses, the proceeds of
any disability insurance policy plus an amount from the Company monthly which,
when added to the amount received by the Executive from any disability policy
in effect for the Executive at the time of his disability will equal the
Executive's salary for a twelve-month period following the date of termination,
as if the termination had not occurred. Such termination shall have no effect
on the Company's obligation to pay the special bonus referred to hereinbefore.
Provided, however, in the event Executive partially perform and discharge the
duties previously performed by him for Company, nothing herein shall prevent
the Executive from continuing his duties in a part-time capacity, at a level of
Compensation to be determined at that time.
(b) For purposes of this Agreement the term "disability" shall mean
Executive's inability to continue to materially and substantially perform and
discharge the duties previously required of him on behalf of the Company for an
aggregate period exceeding three (3) consecutive months within any twelve (12)
month consecutive period.
(c) In the event of a dispute between the parties as to what
constitutes a disability, such dispute shall be finally determined by a person
mutually agreed upon by Executive and Company. If a mutually acceptable person
cannot be selected, such designations shall be made by Executive and Company
each choosing a person, which person shall then mutually select a third person
(collectively called the "panel"). The panel's determination shall be made by
majority vote and such determination shall be deemed binding and conclusive.
The parties agree to fully cooperate with whatever procedures and examinations
may be required in order to allow the panel to make its determination.
4. Termination of Employment
(a) (i) In the event Fifty (50) Percent or more of the equity
securities of the Company are acquired by any single person or identifiable
group, as defined by the applicable rules and regulations under the Security
and Exchange Act of 1934, as amended at an average acquisition price of $5.00
per share or more (valuing promissory notes, preferred stock or subordinated
debentures given as consideration at their face value, and valuing any other
assets given as consideration at their fair market value) and in the further
event that Executive's employment is terminated within twelve (12) months
following such event, except if such termination is by reason of "cause" (as
that term is defined at paragraph 4(b) hereafter, or (ii) in the event
Executive terminates his employment by reason of the uncured breach of this
Agreement by Company ("cause"), then, on the termination date, Company shall
pay (or issue, as the case may be) to Executive a lump sum amount equal to the
aggregate of (i) accrued but unpaid salary, if any; (ii) accrued but unpaid
expenses, if any; (iii) accrued but unpaid bonuses, if any; (iv) unissued
warrants, if any; and (v) the total compensation which would have been paid to
Executive through
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the longer of (i) the remaining term, if any, of the Employment Period, or (ii)
three (3) years compensation. Additionally, as of the termination date,
Executive's rights to exercise his warrants, (if any) and/or stock option to
the full extent of the shares covered thereby (if said rights had not otherwise
matured or vested), shall forthwith mature and vest and Executive shall have
the right to exercise his rights under any such securities. If the Executive
intends to terminate his employment with the company for "cause", he "cause"
shall be specified in a written notice sent by Executive to the Company, and
the Company shall be afforded fifteen (15) days or longer, if reasonably
required, to cure such breach, if such breach is capable of being cured.
(b) In the event of gross misconduct in office by Executive in the
performance of his duties hereunder (which shall hereinafter be referred to as
"Termination for Cause"), Company may terminate this Agreement by giving two
(2) weeks prior written notice to Executive identifying the cause of
termination and specifying the effective date of such termination. If Executive
is subjected to Termination for Cause, then such "cause" shall be specified in
such notice and Executive shall be afforded fifteen (15) days or longer, if
reasonably required, to cause such breach, if such breach is capable of being
cured. On the termination date Company shall pay to Executive the aggregate of
(i) accrued but unpaid expenses, if any (ii) accrued but unpaid bonuses, if
any; and (iii) the net salary compensation which would have been paid to
Executive through the date of termination. Furthermore, in that event any
warrants to be issued pursuant to this Agreement, and any options granted
pursuant to plans then applicable to Executive which have not then vested shall
be forfeited as of the termination date.
(c) In the event Executive resigns or is terminated as an employee of
Company and any of its subsidiaries, Executive hereby agrees that his
position(s) as officer and director of the Company shall automatically end as
of the date of his resignation or termination of employment.
(d) Anything contained herein to the contrary notwithstanding,
Executive may terminate his employment with Company prior to the expiration of
the five-year period as afore-described, (i) in the event Company does not
receive gross financing of debt or equity in the amount of not less than three
million dollars by December 15, 1994, or (ii) if, without justifiable cause, he
is not paid the compensation due him pursuant to the terms of this Agreement.
5. CONFIDENTIALITY
(a) Executive agrees to execute Company's standard form of
Confidentiality Non-Competition Agreement as prepared by Counsel to Company.
(b) Except if this Agreement is terminated by way of or due to breach
of same by the Company or for reasons specified in subparagraph "d" of Article
"4" or subparagraphs "a", "b" and/or "d" of Article " 6", Executive's covenants
contained herein shall survive the termination or expiration of this Agreement.
6. TERMINATION OF AGREEMENT
This Agreement shall, in addition to other provisions affecting
termination, terminate on the occurrence of any of the following events:
(a) Cessation of the Company's business;
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(b) Dissolution of the Company; or
(c) The voluntary agreement of the parties hereto.
7. NOTICES
All notices, requests, demands, deliveries and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, postage prepaid, registered or certified mail, return receipt requested
to the parties at the addresses (or at such other address for a party as shall
be specified by like notice) specified on the first page of this Agreement.
8. WAIVER
The failure of either party at any time or times to require
performances of any provision hereof shall in no manner effect the right at a
later time to enforce the same. To be effective, any waiver must be contained
in a written instrument signed by the party waiving compliance by the other
party of the term or covenant as specified. The waiver by either party of the
breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
9. GOVERNING LAW
This Agreement shall be governed by the laws of the Sate of Florida,
which shall have exclusive jurisdiction over any claims or disputes arising
from the subject matter contained herein without regard to any conflict of laws
provision.
10. COMPLETE AGREEMENT
This Agreement constitutes the complete and exclusive agreement
between the parties hereto which supersedes all proposals, oral and written,
and all other communications between the parties relating to the subject matter
contained herein.
11. SEVERABILITY
If any of the provisions of this Agreement are held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
12. EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS
This Agreement may not be assigned, transferred or otherwise inure to
the benefit of any third person, firm or corporation by operation of law or
otherwise, without the written consent by the other party hereto, except as
herein specifically provided to the contrary.
13. MODIFICATION
This Agreement may only be amended, varied or modified by a written
document executed by the parties hereto.
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14. FURTHER INSTRUMENTS
The parties hereto agree to execute and deliver, or cause to be
executed and delivered, such further instruments or documents and take such
other action as may be required to effectively carry out the transactions
contemplated herein.
15. INDEMNIFICATION
In addition to any liability insurance to be provided the Executive
from any and all claims, demands, suits, actions or judgments which hereafter
may by asserted, instituted or recorded by any person, firm or corporation for
the duration of this Agreement and for a six (6) year period following the
termination of said Agreement as defined in paragraph 4. The foregoing
indemnity shall be enforceable only with respect to claims made against
Executive with respect to all expenses, losses, charges and attorney's fees
sustained or incurred by the Executive in defending any suit, action or other
proceeding brought against the Executive, directly or indirectly, arising out
of Executive's employment by Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this; 20th day of September, 1993.
EYE CARE INTERNATIONAL, INC.
By: /s/ Jerry Katzman
------------------------------
Jerry Katzman, President
/s/ Clark Marcus
----------------------------------
Clark Marcus
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EMPLOYMENT AGREEMENT
AGREEMENT made as of the lst day of February , 1996 by and between
James L. Koenig, an individual residing at 1003 Centerbrook Drive, Brandon
Florida 33511,(hereinafter referred to as "Executive", and EYE CARE
INTERNATIONAL, INC., a Delaware corporation with offices at 7411 114th Avenue
North, Suite 302, Largo, Florida 33773 (hereinafter called "Company" or "ECI").
W I T N E S S E T H
WHEREAS, the Company desires to retain the services of Executive to
render his services to Company on the terms and conditions hereinafter set
forth; and
WHEREAS, Executive is agreeable to rendering such services to the
Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Employment Term, Duties and Acceptance
(a) Company hereby retains Executive as Company's Sr. Vice President
and Chief Financial Officer for a period of five (5) years, commencing on the
date hereof (the "Employment Period"), subject to earlier termination as
hereinafter provided, to render his services to Company upon the terms and
conditions herein contained, in such executive capacity. In such executive
capacity, Executive shall report and be responsible to the Company's Chief
Executive Officer. During the Employment Period, Executive shall also serve on
the Company's Board of Directors for a term equal to the term of this
Agreement.
(b) Executive hereby accepts the foregoing employment and agrees to
render his services to Company on a full-time basis in such a manner as to
reflect his best efforts to the end that the Company's operations are properly
managed. In furtherance of Executive performing the duties assigned to him
Agreement, should the Company's finances permit same, the Company agrees to
provide Executive with a support staff reasonably required by Executive so as
to enable him to carry out such duties. During the term of this Agreement,
Executive shall not be employed by, work for, or be associated with, directly
or indirectly, as an officer, consultant, employee, or in any other capacity,
any other business operation competitive with the business of the Company.
2. Compensation
(a) Except as hereinafter provided during the first yearly period,
Executive shall receive compensation of $125,000. On each yearly anniversary
date of the execution of this Agreement (hereinafter sometimes called the
"Anniversary Date," in each yearly instance), the Board of Directors shall
review the services provided by Executive to determine the amount that
Executive's salary shall be increased for the forthcoming yearly period. Such
increase shall be no less than the higher of ten (10) percent per year or an
amount equal to the percentage increase in the Consumer Price Index or such
other similar index reflective of the cost of living increase in the Tampa Bay,
Florida metropolitan area from the beginning of yearly period to the end of the
yearly period with respect to the Consumer Price Index applicable to the said
metropolitan area, times Executive's base compensation in effect during the said
yearly period. The sum resulting by way of this increase to the Executive's base
compensation shall, for the then immediately succeeding period, be considered
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the Executive's base compensation. The Board of Directors shall also determine,
on an annual (fiscal or calendar year, as the case may be) basis, the amount, if
any, of bonus or incentives to be paid to Executive. Provided, however, that
Executive shall receive a special bonus ("special bonus") amount equal to three
(3%) percent of the Company's pre-tax profits from the preceding calendar year
(as determined by the application of generally accepted accounting principles)
over and above $1 million. The special bonus shall be paid within thirty (30)
days following determination thereof.
(b) Executive shall be entitled to reasonable paid vacation and
holiday time, sick leave and time to attend professional meetings comparable to
that offered the executives in comparable positions.
(c) Executive shall be entitled (subject to the terms and conditions
of particular plans and programs) to all fringe benefits afforded to other
senior executives of the Company, including, but not by way of limitation, an
auto allowance, bonuses and the right to participate in any pension, stock
option, 401K, retirement, major medical, dental, vision, group health,
disability, accident and life insurance, relocation reimbursement, and other
employee benefit programs made generally available, from time to time, by the
Company. The Company shall also maintain D&O Liability insurance.
(d) Company shall pay or reimburse Executive for reasonable expenses
incurred in the performance of his services under this Agreement during
Employment Period, upon presentation of expense statements, vouchers or such
other supporting documentation as may reasonably be required.
(e) As compensation for Executive entering into the employ of the
Company and duly rendering services pursuant to this Agreement for such time as
may be necessary prior to the Company compensating Executive financially as
hereinbefore and hereinafter set forth, Executive has agreed to receive, in
lieu of financial compensation, One-hundred Fifty Thousand (150,000) shares of
the Company's Common Stock. The Executive acknowledges being advised that:
(i) there can be no assurances that the Company will, subsequent to
the date hereof, file a Registration Statement or, if filed, that said
Registration Statement will become effective and that;
(ii) the shares being so issued, will not be registered and that the
Company shall have no obligation to register the shares so issued and, further,
that;
(iii) said shares will be received by Executive with the understanding
that all shares so acquired by Executive are what is commonly known as "144"
shares (i.e., not publicly tradable).
(f) Notwithstanding the foregoing, Executive acknowledges being
advised that the Company may not be able to pay Executive full compensation
until some time in 1997. Such non-payment shall not be deemed a default by
Company, provided in the event the Company does not commence paying Executive
full financial compensation by December 31, 1997, Executive shall have the
option of forthwith terminating this Agreement or accepting payment of a lesser
sum as may be mutually agreed upon and accruing the difference. Notwithstanding
Executive's acceptance of said lesser sum, Executive may nonetheless terminate
this Agreement on 90 days written notice at any time thereafter -- up to the
date Company commences paying Executive his Base Compensation.
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3. Disability
(a) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, the
Executive shall continue to receive his full Base Compensation at the rate then
in effect and all other compensation, until the Executive's employment is
terminated by the Company pursuant to the provisions hereof. Upon the
disability, as defined in subparagraph 3(b) hereof, of Executive during the
Employment Period, Company may, in its sole discretion, terminate Executive's
employment; provided that if the Company elects to so terminate Executive's
employment, Executive shall be entitled to receive, accrued but unpaid salary,
expense reimbursement and bonuses, the proceeds of any disability insurance
policy plus an amount from the Company monthly which, when added to the amount
received by the Executive from any disability policy in effect for the
Executive at the time of his disability will equal the Executive's salary for a
twelve-month period following the date of termination, as if the termination
had not occurred. Such termination shall have no effect on the Company's
obligation to pay the special bonus referred to hereinbefore. Provided,
however, in the event Executive partially perform and discharge the duties
previously performed by him for Company, nothing herein shall prevent the
Executive from continuing his duties in a part-time capacity, at a level of
Compensation to be mutually determined at that time.
(b) For purposes of this Agreement the term "disability" shall mean
Executive's inability to continue to materially and substantially perform and
discharge the duties previously required of him on behalf of the Company for an
aggregate period exceeding three (3) consecutive months within any twelve (12)
month consecutive period.
(c) In the event of a dispute between the parties as to what
constitutes a disability, such dispute shall be finally determined by a person
mutually agreed upon by Executive and Company. If a mutually acceptable person
cannot be selected, such designation shall be made by Executive and Company
each choosing a person, which persons shall then mutually select a third person
(collectively called the "panel"). The panel's determination shall by majority
vote and such determination shall be deemed binding and conclusive. The parties
agree to fully cooperate with whatever procedures and examinations may be
required in order to allow the panel to make its determination.
4. Vacations
Executive shall be entitled, during each employment year, to four (4)
weeks vacation, per annum, non-cumulative, or payment for vacation time not
taken by Executive.
5. Termination of Employment
(a) (i) In the event Fifty (50) Percent or more of the equity
securities of the Company are acquired by any single person or identifiable
group, as defined by the applicable rules and regulations under the Security
and Exchange Act of 1934, as amended at an average acquisition price of $5.00
per share or more (valuing promissory notes, preferred stock or subordinated
debentures given as consideration at their face value, and valuing any other
assets given as consideration at their fair market value) and in the further
event that Executive's employment is terminated within twelve (12) months
following such event, except if such termination is by reason of "cause" (as
that term is defined in paragraph 5(b) hereafter; or (ii) in the event this
Agreement is terminated by reason of Executive's death or if Executive
terminates his employment by reason of the uncured breach of the Agreement by
Company ("cause"), then, on the termination date, Company shall pay (or issue,
as the case may be) to Executive a lump sum amount equal to the
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aggregate of (i) accrued but unpaid salary, if any; (ii) accrued but unpaid
expenses, if any; (iii) accrued but unpaid bonuses, if any; (iv) unissued stock
and/or warrants, if any; and (v) the total compensation which would have been
paid to Executive through the longer of (i) the remaining term, if any, of the
Employment Period; or (ii) three (3) years compensation. The Company also
agrees to provide for Executive, at no cost to Executive, family medical and
dental insurance for one year after the termination date. Additionally, as of
the termination date, Executive's rights to exercise his warrants, (if any)
and/or stock option to the full extent of the shares covered thereby (if said
rights had not otherwise matured or vested), shall forthwith mature and vest
and Executive shall have the right to exercise his rights under any such
securities. If the Executive intends to terminate his employment with the
Company for "cause", the "cause" shall be specified in a written notice sent by
Executive to the Company, and the Company shall be afforded fifteen (15) days
or longer, if reasonably required, to cure such breach, if such breach is
capable of being cured.
(b) In the event of gross misconduct in office by Executive in the
performance of his duties hereunder (which shall hereinafter be referred to as
"Termination for Cause"), Company may terminate this Agreement by giving two
(2) weeks prior written notice to Executive identifying the cause of
termination and specifying the effective date of such termination. If Executive
is subjected to Termination for Cause, then such "cause" shall be specified in
such notice and Executive shall be afforded fifteen (15) days or longer, if
reasonably required, to cure such breach, if such breach is capable of being
cured. On the termination date, Company shall pay to Executive the aggregate of
(i) accrued but unpaid expenses, if any; (ii) accrued but unpaid bonuses, if
any; and (iii) the net salary compensation which would have been paid to
Executive through the date of termination. Furthermore, in that event, any
warrants to be issued pursuant to this Agreement, and any options granted
pursuant to plans then applicable to Executive which have not been vested shall
be forfeited as of the termination date.
(c) In the event Executive resigns or is terminated as an employee of
Company and any of its subsidiaries, Executive hereby agrees that his
position(s) as officer and director of the Company shall automatically end as
of the date of his resignation or termination of employment.
(d) Anything contained herein to the contrary notwithstanding,
Executive may terminate his employment with Company prior to the expiration of
the five-year period as afore-described, in the event, without justifiable
cause, he is not paid the compensation due him pursuant to the terms of this
Agreement.
6. CONFIDENTIALITY
(a) Executive agrees to execute Company's standard form of
Confidentiality Non-Competition Agreement as prepared by Counsel to Company.
(b) Except if this Agreement is terminated by way of or due to breach
of same by the Company or for reasons specified in subparagraph (d) of Article
5., or subparagraphs (a), (b), (c) and/or (d) of Article 7., Executive's
covenants contained herein shall survive the termination or expiration of this
Agreement.
7. TERMINATION OF AGREEMENT
This Agreement shall, in addition to other provisions affecting
termination, terminate on the occurrence of any of the following events:
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(a) Cessation of the Company's business;
(b) Dissolution of the Company;
(c) The voluntary agreement of the parties hereto; or (d) The
Executive's death.
8. NOTICES
All notices, requests, demands, deliveries and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, postage prepaid, registered or certified mail, return receipt requested
to the parties at the addresses (or at such other address for a party as shall
be specified by like notice) specified on the first page of this Agreement.
9. WAIVER
The failure of either party at any time or times to require
performances of any provision hereof shall in no manner effect the right at a
later time to enforce the same. To be effective, any waiver must be contained
in a written instrument signed by the party waiving compliance by the other
party of the term or covenant as specified. The waiver by either party of the
breach of any term or covenant contained herein, whether by conduct or
otherwise, in any one or more instances, shall not be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
10. GOVERNING LAW
This Agreement shall be governed by the laws of the Sate of Florida,
which shall have exclusive jurisdiction over any claims or disputes arising
from the subject matter contained herein without regard to any conflict of laws
provision.
11. COMPLETE AGREEMENT
This Agreement constitutes the complete and exclusive agreement
between the parties hereto which supersedes all proposals, oral and written,
and all other communications between the parties relating to the subject matter
contained herein.
12. SEVERABILITY
If any of the provisions of this Agreement are held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
13. EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS
This Agreement may not be assigned, transferred or otherwise inure to
the benefit of any third person, firm or corporation by operation of law or
otherwise, without the written consent by the other party hereto, except as
herein specifically provided to the contrary.
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14. MODIFICATION
This Agreement may only be amended, varied or modified by a written
document executed by the parties hereto.
15. FURTHER INSTRUMENTS
The parties hereto agree to execute and deliver, or cause to be
executed and delivered, such further instruments or documents and take such
other action as may be required to effectively carry out the transactions
contemplated herein.
16. INDEMNIFICATION
In addition to any liability insurance to be provided the Executive
hereunder, the Company will indemnify and hold harmless the Executive from any
and all claims, demands, suits, actions or judgments which hereafter may by
asserted, instituted or recorded by any person, firm or corporation for the
duration of this Agreement and for a six (6) year period following the
termination of said Agreement as defined in paragraph 5. The foregoing
indemnity shall be enforceable only with respect to claims made against
Executive with respect to all expenses, losses, charges and attorney's fees
sustained or incurred by the Executive in defending any suit, action or other
proceeding brought against the Executive, directly or indirectly, arising out
of the Executive's employment by Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this 1st day of February , 1996.
EYE CARE INTERNATIONAL, INC.
By: /s/ Clark Marcus
------------------------
Clark Marcus
/s/ James L. Koenig
----------------------------
James L. Koenig
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Exhibit 21.1
Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation Ownership
------------------ ----------------------------- ---------
National Vision Services, Inc. Florida 100%
