LCA-Vision’s Former Executive Management Urge Board of Directors to Immediately Call Special Shareholder Meeting to Approve...
December 09 2008 - 4:02PM
Business Wire
Dr. Stephen Joffe, Craig Joffe, and Alan Buckey today filed an
amendment to their Schedule 13D with the U.S. Securities and
Exchange Commission. The group previously filed a 13D disclosing
ownership of 11.4% of LCA-Vision, Inc. (Nasdaq GS: LCAV), which
operates 77 LasikPlus fixed-site laser vision correction centers in
33 states in the United States. Dr. Joffe is the founder and former
Chairman and CEO of LCAV. Craig Joffe is the former Chief Operating
Officer and General Counsel of LCAV, and Alan Buckey is the former
Executive Vice President of Finance and Chief Financial Officer of
the Company. The three of them worked together as the executive
management team of LCAV (Nasdaq: LCAV) to grow the market
capitalization of the Company well in excess of 1000% from
2003-2006. In a letter, dated December 9, 2008, to Tony Woods and
the other members of the Board of Directors of LCA-Vision, the
group reiterated their �shock and disappointment� at the Board�s
recent decision to adopt a �stockholder rights plan,� commonly
known as a poison pill. In their letter to the Board, the group
states, �We are disappointed that LCA-Vision�s Board did not ask
shareholders to vote on the poison pill before the Board adopted
it. Given the dire state of the Company, now is decidedly not the
time for alleged paternalism. We believe, however, there is a
solution to this recent issue. We respectfully urge the Board to
call a special shareholder meeting empowering shareholders to
timely vote on the poison pill. This special shareholder meeting
would allow the Board of Directors and the executive management
team an opportunity to more fully explain why they believe this
poison pill is in fact in the best interests of shareholders. In
addition, it would provide an opportunity for shareholders to
timely agree or disagree, as the case may be, with the Board of
Directors and executive management team on the wisdom of their
judgment. Needless to say, with the Company burning approximately
$2 million of cash per month and revenues plummeting approximately
50%, when it comes to LCA-Vision, time is not a luxury any of us
can afford.� In addition to Mr. E. Anthony Woods, who in addition
to serving as Chairman of LCA-Vision, also serves as a Director of
Cincinnati Financial Corporation (Nasdaq GS: CINF) and as a
Director of Anchor Funding Services (OTC BB: AFNG.OB), the letter
dated December 9, 2008, was also copied to Mr. William Bahl, who
serves as Chairman of LCAV�s Compensation Committee, Director and
Chairman of the Nominating Committee of the Board of Cincinnati
Financial Corporation (Nasdaq GS: CINF) and as President &
Co-Founder of Bahl & Gaynor; Mr. John Gutfreund, who serves as
Chairman of LCAV�s Nominating and Governance Committee and on the
Board of Directors of several over-the-counter traded companies,
including GVI Securities Solutions (OTC BB: GVSS.OB); John Hassan,
Chairman of LCAV�s Audit Committee; and Steven Straus, LCAV�s CEO.
(The full text of the letter appears below) About Dr. Stephen N.
Joffe Stephen N. Joffe, MD, FACS, age 65, is the founder and former
Chairman and Chief Executive Officer of LCA-Vision. He was the
founder of LCA-Vision�s corporate predecessor, Laser Centers of
America, Inc., and served as its Chairman of the Board and Chief
Executive Officer from its formation in 1985 until its merger into
LCA-Vision in 1995. In 1983, Stephen Joffe also founded and served
as Chairman of Surgical Laser Technologies, Inc. until 1989. He is
presently the Chief Executive Officer of the Hearing Foundation,
Inc., a hearing company, and Co-Founder of Joffe MediCenter LLC, a
healthcare services company. In addition Dr. Joffe is an Esteemed
Quondum Professor of Surgery at the University of Cincinnati
Medical Center, an honor he has held since 1990. He has held other
medical faculty appointments at the Universities of London, Glasgow
and Cincinnati and fellowships in the American College of Surgeons
and the Royal College of Surgeons in Edinburgh and Glasgow. He has
published 170 articles in peer-reviewed and scientific journals and
authored 35 chapters for medical books as well as written and
edited several books on lasers and their application to medicine
and surgery. About Craig P.R. Joffe Craig P.R. Joffe, age 36, was
Interim Chief Executive Officer of LCA-Vision from March 2006
through November 2006. He was appointed Chief Operating Officer of
LCA-Vision in September 2005, a position he held through his
resignation in March 2008. He also served as Secretary of LCA
Vision from March 2003, when he joined the Company, until March
2008. He also served on the Board of Directors of LCA-Vision from
2004 through March 2008, and previously served as a Director from
1995 to 1997. Prior to joining LCA-Vision, Mr. Joffe served as
Assistant General Counsel of IAC/InterActiveCorp, a leading
publicly traded interactive commerce company, from September 2000
to February 2003. Previously, Mr. Joffe, a graduate of Harvard Law
School and Columbia University, was a general practice associate in
the New York and London offices of the law firm Sullivan &
Cromwell for over three years, where he concentrated his practice
on corporate finance transactions. Mr. Joffe is currently the Chief
Executive Officer and Co-Founder of Joffe MediCenter LLC, a
healthcare services company. About Alan H. Buckey Alan H. Buckey,
age 50, was Executive Vice President of Finance and Chief Financial
Officer for LCA-Vision from March 2000 to June 2008. He came to
LCA-Vision from Pease Industries; a manufacturing company based in
Fairfield, Ohio, where he served as Vice President, Finance from
1991 to February 2000. Prior to 1991, Mr. Buckey served as Chief
Financial Officer of the Hilltop Companies, a contract laboratory
research firm and as a senior manager with Ernst & Young�s
Great Lakes Consulting Group. While at Ernst & Young, he served
as acting Chief Financial Officer of a start-up laser surgery
management company which was the predecessor of LCA-Vision. Mr.
Buckey holds a B.S. in Applied Science from Miami University and
holds an M.B.A in Finance from the Wharton School, University of
Pennsylvania. He is a Certified Public Accountant. Stephen N. Joffe
Craig P. Joffe Alan H. Buckey 9560 Montgomery Road Cincinnati, OH
45242 VIA EMAIL & FEDERAL EXPRESS December 9, 2008 Mr. E.
Anthony Woods, Chairman of the Board LCA-Vision Inc. c/o LCA-Vision
Inc. 7840 Montgomery Road Cincinnati, Ohio 45236 Dear Tony: As you
and the Board of Directors are aware, we are major shareholders of
LCA-Vision, Inc. who feel financial, ethical, and reputational
responsibilities to the Company and its shareholders to help save
the Company from its apparent path to self-destruction. We
previously communicated to you our initial shock and disappointment
at the Board�s recent decision to adopt a �stockholder rights
plan,� commonly known as a poison pill. Our understanding of poison
pills and similar types of corporate governance maneuverings
indicated that such actions are often associated with Boards of
Directors and executive management teams seeking to entrench
themselves, protecting their positions and their compensation often
at the expense of their shareholders and shareholder value. We are
disappointed that LCA-Vision�s Board did not ask shareholders to
vote on the poison pill before the Board adopted it. Given the dire
state of the Company, now is decidedly not the time for alleged
paternalism. We believe, however, there is a solution to this
recent issue. We respectfully urge the Board to call a special
shareholder meeting empowering shareholders to timely vote on the
poison pill. This special shareholder meeting would allow the Board
of Directors and the executive management team an opportunity to
more fully explain why they believe this poison pill is in fact in
the best interests of shareholders. In addition, it would provide
an opportunity for shareholders to timely agree or disagree, as the
case may be, with the Board of Directors and executive management
team on the wisdom of their judgment. Needless to say, with the
Company burning approximately $2 million of cash per month and
revenues plummeting approximately 50%, when it comes to LCA-Vision,
time is not a luxury any of us can afford. Since announcing our
investment in the Company, we have made repeated attempts to help
the Board initiate necessary changes at the Company. With the Board
systematically ignoring our requests or remaining silent, to date
our requests feel as if they are falling on deaf ears. In fact, in
our very first meeting with yourself and Mr. Bahl when we initially
extended our hand in good faith to offer our help, we were
literally told that the two of you were �in listen only mode� and
that you may or may not follow up with us regarding the matters
raised in the meeting. We respectfully urge you not to let this
represent yet another time when our requests are ignored, yet
another opportunity squandered. In the third quarter of 2008, we
believe the Company had an adjusted EBITDA loss of approximately $2
million per month. Clearly, this is not the time to sit passive on
the sidelines and blindly hope that the situation improves. We
respectfully call for a response from the Board by 5:00 p.m. EST on
Friday, December 12, 2008 to our request that the Board call a
special shareholder meeting to approve the poison pill. Sincerely,
Stephen N. Joffe Craig P.R. Joffe Alan Buckey cc: LCA-Vision Inc.
Board of Directors William Bahl, LCAV�s Chairman of Compensation
Committee; Director of Cincinnati Financial Corporation (Nasdaq:
CINF) John Gutfreund, LCAV�s Chairman of Nominating &
Governance Committee; Director of GVI Securities Solutions (OTC BB:
GVSS.OB) John Hassan, Independent Director, Chairman of Audit
Committee Steven Straus, LCAV�s CEO
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