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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
MONARCH DENTAL CORPORATION
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
609044 10 2
(CUSIP Number)
Warren F. Melamed, D.D.S.
4201 Spring Valley Road, Suite 320
Dallas, Texas 75244
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
Copy to:
Jeffrey A. Chapman
Mirjam T. Schuller
Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
(214) 220-7797
May 2, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S) 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [X]
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CUSIP NO. 609044 10 2
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1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Warren F. Melamed
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2 Check the appropriate box if a member of a group (a) [_]
(b) [_]
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3 SEC use only
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4 Source of Funds 00; PF
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5 Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [_]
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6 Citizenship or Place of Organization United States of America
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7 Sole Voting Power/(1)/ 2,159,432
Number of Shares Beneficially -----------------------------------------------
8 Shared Voting Power 0
Owned by Each Reporting -----------------------------------------------
9 Sole Dispositive Power/(1)/ 2,159,432
Person With -----------------------------------------------
10 Shared Dispositive Power 0
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11 Aggregate Amount Beneficially Owned by
each Reporting Person/(1)/ 2,159,432
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12 Check if the Aggregate Amount in Row (11)
Excludes Certain Shares/(1)/ [X]
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13 Percent of Class Represented by Amount in Row (11)/(2)/ 16.8%
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14 Type of Reporting Person IN
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(1) Does not include 289,830 shares held by irrevocable trusts for the benefit
of members of the reporting person's family of which the reporting person
is not a trustee. Includes 118,500 shares subject to options exercisable
within 60 days.
(2) Based on 12,839,881 shares of Common Stock outstanding as of March 20,
2000, as reported in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1999.
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CUSIP NO. 609044 10 2
Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is the
Common Stock, par value $0.01 per share (the "Stock"), of Monarch Dental
Corporation, a Delaware corporation (the "Issuer"). The address of the Issuer's
principal executive offices is 4201 Spring Valley Road, Suite 320, Dallas,
Texas, 75244.
Item 2. Identity and Background.
This Schedule 13D is hereby filed Warren F. Melamed, D.D.S. (the "Reporting
Person").
The business address of the Reporting Person is 4201 Spring Valley Road,
Suite 320, Dallas, Texas, 75244.
The Reporting Person's present principal occupation is serving as the
Chairman of the Board of Directors of the Issuer. The principal business of the
Issuer is the management of dental group practices in selected markets in 14
states. The address of the Issuer is set forth in Item 1 above.
During the last five years, the Reporting Person has not been (i) convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
The Reporting Person is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Person founded a predecessor of the Issuer in 1983. The
Reporting Person incorporated the Issuer in 1994 and owned all of the capital
stock of the Issuer until February 5, 1996. On that date, in connection with a
reorganization of the Issuer, the Reporting Person acquired 2,015,932 shares of
Stock in exchange for the redemption of a portion of his shares of Stock and for
contributing to the Issuer his equity interests in affiliated entities. The
Reporting Person reported ownership of these shares on a Schedule 13G filed with
the Securities and Exchange Commission on February 17, 1998.
In the first quarter of 1999, the Reporting Person acquired 25,000 shares
of Stock with approximately $80,000 of his personal funds.
In connection with his service as an officer and director of the Issuer,
the Issuer granted to the Reporting Person options to acquire 150,000 shares of
Stock on July 1, 1997. In consideration of his service as a director of the
Issuer, the Issuer also granted to the Reporting Person options to acquire 3,000
shares of Stock on each of January 1, 1999 and January 1, 2000, and options to
acquire 100,000 shares of Stock in February 2000. The Reporting Person holds
options to acquire an aggregate of 118,500 shares of Stock that are exercisable
within 60 days of the date hereof.
Item 4. Purpose of the Transaction.
The Reporting Person previously held his Stock for the purpose of
investment.
On March 23, 2000, the Issuer announced that it had retained the services
of Bank of America Securities LLC to explore strategic alternatives in order to
expand the Issuer's growth opportunities and to maximize stockholder value,
including potential strategic transactions such as the possible sale or merger
of the Issuer. In its Annual Report on Form 10-K for the year ended December
31, 1999, the Issuer stated that it was contacting potential acquirors of the
Issuer and that potential acquirors were expected to commence due diligence
procedures
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CUSIP NO. 609044 10 2
in the second quarter of 2000. The Reporting Person and an investment firm have
jointly communicated to the Issuer their interest in forming a new corporation
to acquire all of the outstanding Stock of the Issuer. Such a transaction, if
consummated, would result in a change in control of the Issuer. Such an
acquisition could also result in any or all of the actions described in clauses
(a) through (j) of Item 4 to Schedule 13D.
Subject to the Reporting Person's fiduciary duties as a director of the
Issuer and any obligations pursuant to agreements between the Reporting Person
and the Issuer, the Reporting Person, directly and through representatives,
expects to continue to evaluate possible transactions involving the Issuer, and
in connection therewith, to participate in meetings and discussions with the
Issuer. In meetings with, or related to, the Issuer, the Reporting Person and
his representatives may express their views with regard to the operations,
assets, capital structure or ownership of the equity securities of the Issuer,
and such expressions may relate to one or more of the transactions specified in
clauses (a) through (j) of Item 4 of this Schedule 13D. Although the Reporting
Person and his representatives have had, and expect to continue to have,
discussions regarding the Issuer and its operations, assets, capital structure,
management and board of directors and the possible acquisition of the Issuer,
and the Reporting Person and an investment firm have expressed an interest in
pursuing the acquisition of the Issuer, there exists no agreement between the
Reporting Person and any third party of the kind described in clauses (a)
through (j) of Item 4 to Schedule 13D. The Reporting Person or the investment
firm may terminate his or its discussions with the Issuer at any time or may
enter into an agreement with the Issuer to which the other is not a party.
Without limiting the generality of the foregoing, the Reporting Person does not
have any agreement, arrangement or understanding with any third party regarding
the voting or disposition of any Stock held of record or beneficially by the
Reporting Person. The Reporting Person has an agreement with the Issuer, which
is described in Item 6.
The Reporting Person reserves the right, subject to applicable law,
including his fiduciary duties as a director of the Issuer, to (i) acquire
equity securities of the Issuer or its affiliates by tender offer, in the open
market, in private transactions or otherwise, (ii) propose, or propose to
participate in, a merger or other business combination with the Issuer or its
affiliates, (iii) seek control of the Issuer by stock ownership or otherwise, or
(iv) to take any other action with respect to the Issuer.
Except as set forth in this Item 4, the Reporting Person has no present
plans or proposals that relate to or that would result in any of the following
actions:
(a) The acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy
of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
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CUSIP NO. 609044 10 2
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) and (b) At the close of business on May 11, 2000, the Reporting
Person may be deemed to be the beneficial owner of 2,159,432 shares of the
Stock, which constitutes approximately 16.8% of the 12,839,881 shares of the
Stock outstanding on May 20, 2000, according to information contained in the
Issuer's Annual Report on Form 10-K for the year ended December 31, 1999. The
Reporting Person, either directly or indirectly, has the power to vote or to
direct the vote of, or to dispose or to direct the disposition of, such shares
of Stock. The 2,159,432 shares of Stock reported as beneficially owned by the
Issuer includes 118,500 shares of Stock subject to options exercisable within 60
days. This number does not include 289,830 shares held by irrevocable trusts for
the benefit of members of the Reporting Person's family of which the Reporting
Person is not a trustee. The investment firm referenced in Item 2 does not have
any stock in the Issuer.
(c) No transactions in the Stock were effected by the Reporting Person
during the past 60 days.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, such
Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The Reporting Person entered into an agreement with the Issuer as of March
26, 1999 which supplanted the terms of his then-existing employment
arrangements. Under this agreement, the Issuer's Board of Directors pledged to
support the Reporting Person's continued status as a director and position as
Chairman of the Board of Directors. In exchange, the Reporting Person agreed
not to solicit proxies in connection with any vote of the Issuer's stockholders
other than in his capacity as a director of the Issuer and agreed to vote his
shares of Stock on each matter submitted to a vote to the Issuer's stockholders
either in proportion to the votes cast by the Issuer's other stockholders or in
accordance with the recommendation of the Issuer's Board of Directors as
determined by the Reporting Person, in each case prior to July 31, 2001. These
provisions of the agreement terminate upon the closing of any sale of the
Issuer.
As indicated in the agreement described in the immediately preceding
paragraph, the Reporting Person has agreed with the Issuer not to engage in
certain activities that are competitive with the Issuer. The Reporting Person's
noncompetition agreement with the Issuer terminates on February 5, 2001.
The Issuer has granted to the Reporting Person options to acquire shares of
Stock as described in Item 3 above.
On May 5, 2000, the Reporting Person engaged Wellington Associates, Inc.
("WAI") as his financial advisor with respect to a possible transaction. As a
result, WAI will be compensated if the Reporting Person enters into such a
transaction.
To the best knowledge of the Reporting Person, there are no other
contracts, arrangements, understandings or relationships (legal or otherwise)
between the Reporting Person and any other person with respect to any securities
of the Issuer, including but not limited to, transfer or voting of any of the
securities of the Issuer, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies, or a pledge or contingency the
occurrence of which would give another person voting power over the securities
of the Issuer.
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CUSIP NO. 609044 10 2
Item 7. Material to be Filed as Exhibits.
Exhibit No.
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10.1 Agreement dated as of March 26, 1999 by and among the Issuer, the
Reporting Person and Modern Dental Professionals, P.C./(1)/
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(1) Filed as an exhibit to the Issuer's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 31, 1999 and incorporated
herein by referenced thereto.
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: May 12, 2000
By: /s/ WARREN F. MELAMED, D.D.S.
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Warren F. Melamed, D.D.S.
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INDEX TO EXHIBITS
Exhibit No.
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10.1 Agreement dated as of March 26, 1999 by and among the Issuer, the
Reporting Person and Modern Dental Professionals, P.C./(1)/
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(1) Filed as an exhibit to the Issuer's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 31, 1999 and incorporated
herein by referenced thereto.
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