<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement [ ] Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
PENTEGRA DENTAL GROUP, INC.
----------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required. [ ] Fee computed on table below per Exchange
Act Rules 14a-6(i)
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- -------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -------------------------------------------------
(3) Filing Party:
- -------------------------------------------------
(4) Date Filed:
<PAGE> 2
July 9, 1999
TO THE STOCKHOLDERS OF PENTEGRA DENTAL GROUP, INC.:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders (the
"Meeting") of Pentegra Dental Group, Inc. (the "Company"), to be held on Friday,
July 30, 1999, at 9:00 a.m., local time, at the Company's offices, 2999 North
44th Street, Suite 650, Phoenix, Arizona 85018.
Please read the enclosed 1999 Annual Report to Stockholders and Proxy Statement
for the Meeting. Whether or not you plan to attend the Meeting, please sign,
date and return the proxy card in the enclosed envelope to Continental Stock
Transfer & Trust Company as soon as possible so that your vote will be recorded.
If you attend the Meeting, you may withdraw your proxy and vote your shares in
person.
Very truly yours,
By:
/s/ James M. Powers, Jr., D.D.S
-------------------------------
James M. Powers Jr., D.D.S.
Chairman of the Board and Chief Executive Officer
<PAGE> 3
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 30, 1999
TO OUR STOCKHOLDERS:
The 1999 Annual Meeting of Stockholders (the "Meeting") of Pentegra Dental
Group, Inc., a Delaware corporation ("Pentegra" or the "Company"), will be held
on Friday, July 30, 1999 at 9:00 a.m., local time, at the Company's offices,
2999 North 44th Street, Suite 650, Phoenix, Arizona 85018, for the following
purposes:
to elect three Class I directors to serve for a term of three years or
until their successors are duly elected and qualified;
to consider and vote upon a proposal to approve and ratify the
appointment of PricewaterhouseCoopers as the Company's independent
auditors for fiscal 2000; and
to consider such other matters as may properly come before the Meeting and
at any and all adjournments thereof.
Only stockholders of record at the close of business on June 15, 1999 are
entitled to notice of and to vote at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
By:
/s/ James M. Powers, Jr., D.D.S.
--------------------------------
James M. Powers Jr., D.D.S.
Chairman of the Board and Chief Executive Officer
Phoenix, Arizona
July 9, 1999
A PROXY CARD IS ENCLOSED. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU
OWN. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE MEETING, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE
PREPAID, ADDRESSED ENVELOPE TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY. NO
ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE> 4
PROXY STATEMENT
General Information
The enclosed proxy is solicited by and on behalf of the Board of Directors of
Pentegra Dental Group, Inc., ("Pentegra" or the "Company"), for use at the
Company's 1999 Annual Meeting of Stockholders (the "Meeting") to be held at 9:00
a.m., local time, on July 30, 1999, at the 2999 North 44th Street, Suite 650,
Phoenix, Arizona 85018, and at any and all adjournments thereof. This Proxy
Statement and the accompanying form of proxy are first being mailed or given to
the stockholders of the Company on or about July 9, 1999.
The Company is mailing its 1999 Annual Report to Stockholders, including
consolidated financial statements, simultaneously with this Proxy Statement to
all stockholders of record as of the close of business on June 15, 1999. That
report does not constitute a part of this proxy solicitation material.
Information Concerning Solicitation And Voting
All voting rights are vested exclusively in the holders of the Company's common
stock, par value $0.001 per share. Each share of the Company's common stock is
entitled to one vote. Cumulative voting in the election of directors is not
permitted. Holders of a majority of shares entitled to vote at the Meeting, when
present in person or by proxy, constitute a quorum. On June 15, 1999, the record
date for stockholders entitled to vote at the Meeting, 9,102,503 shares of the
Company's common stock were issued and outstanding.
Proxies in the enclosed form will be effective if properly executed and returned
prior to the Meeting in the enclosed envelope to Continental Stock Transfer &
Trust Company, Proxy Department, 2 Broadway, New York, New York 10275-0491. The
Company's common stock represented by each effective proxy will be voted at the
Meeting in accordance with the instruction on the proxy. If no instructions are
indicated on a proxy, all common stock represented by such proxy will be voted
FOR election of the nominees named in the proxy as the directors, FOR the
approval and ratification of the appointment of PricewaterhouseCoopers LLP as
the Company's independent auditors, and, as to any other matters of business
which properly come before the Meeting, by the named proxies at their
discretion.
Any stockholder signing and mailing the enclosed proxy may revoke it at any time
before it is voted by giving written notice of the revocation to the Company, by
voting in person at the Meeting or by filing at the Meeting a later executed
proxy.
When a quorum is present, in the election of directors, the nominees having the
highest number of votes cast in favor of their election will be elected to the
Company's Board of Directors. With respect to any other matter which may
properly come before the Meeting, unless a greater number of votes is required
by law or by the Company's Restated Certificate of Incorporation, a matter will
be approved by the stockholders if the votes cast in favor of the matter exceed
the votes cast in opposition.
Abstentions, broker non-votes (i.e., shares held by brokers or nominees as to
which the broker or nominee indicates on a proxy that it does not have
discretionary authority to vote) and any other shares not voted will be treated
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum. However, for purposes of determining the outcome of the
election of the directors, the approval and ratification of
PricewaterhouseCoopers LLP as the Company's independent auditors, or of any
other matter which properly may come before the Meeting, abstentions, broker
non-votes and any other shares not voted will not be considered as votes cast.
Thus, abstentions, broker non-votes and any other shares not voted will have no
impact in the election of the Class I directors, the approval and ratification
of PricewaterhouseCoopers LLP as the Company's independent auditors, or any
other matter which properly may come before the Meeting so long as a quorum is
present.
The Company will pay the cost of soliciting proxies in the accompanying form.
The Company has retained the services of Continental Stock Transfer & Trust
Company to assist in distributing proxy materials to brokerage houses, banks,
custodians and other nominee holders. The estimated cost of such services is
approximately $1,000 plus out-of-pocket
1
<PAGE> 5
expenses. Although there are no formal agreements to do so, proxies may be
solicited by officers and other regular employees of the Company by telephone,
telegraph or by personal interview for which employees will not receive
additional compensation. Arrangements also may be made with brokerage houses and
other custodians, nominees and fiduciaries to forward solicitation materials to
beneficial owners of the shares held of record by such persons, and the Company
may reimburse such persons for reasonable out-of-pocket expenses incurred by
them in so doing.
PROPOSAL ONE: ELECTION OF DIRECTORS
General
The Company's Restated Certificate of Incorporation provides for the
classification of the Company's Board of Directors into three classes. The term
of office of the Class I directors expires at this Annual Meeting, the term of
office of the Class II directors expires at the Company's 2000 Annual Meeting of
Stockholders and the term of office of the Class III directors expires at the
Company's 2001 Annual Meeting of Stockholders. Three Class I nominees are
proposed to be elected at this Annual Meeting to serve for a three-year term to
last until the 2002 Annual Meeting of Stockholders or until their successors are
duly elected and have been qualified. The directors whose terms will expire at
this Annual Meeting are Ronnie L. Andress, D.D.S., Roger Allen Kay, D.D.S. and
Ronald E. Geistfeld, D.D.S., all of whom are retiring from the Board of
Directors upon election of the Class I nominees listed below. Nominees for Class
I director will be elected by a plurality of the votes cast. Accordingly,
abstentions and broker non-votes will have no effect. The Board of Directors has
nominated Walter J. Anderson, D.D.S., James H. S. Cooper, and James M.
Powers, Jr., D.D.S.
Proxies cannot be voted for a greater number of persons than the number of
nominees named therein. Unless authority to vote is withheld, the persons named
in the enclosed form of proxy will vote the shares represented by such proxy for
the election of the nominees for director named below. If, at the time of the
Meeting, any of the nominees shall have become unavailable for any reason for
election as a director, the persons entitled to vote the proxy will vote for
such substitute nominee, if any, as they determine in their discretion. If
elected, the nominees will hold office until the year 2002 annual meeting of
stockholders or until their successors are elected and qualified. Management is
currently unaware of any circumstances likely to render any of the nominees
unavailable for election or unable to serve.
Nominees For Election At The Annual Meeting
The Board of Directors unanimously recommends that the stockholders vote FOR
election of the following nominees as Class I directors of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Walter J. Anderson, D.D.S. 46 Director
James H. S. Cooper 44 Director
James M. Powers, Jr., D.D.S. 43 Chairman of the Board,
President and Chief Executive Officer
</TABLE>
Continuing Directors
The persons named below will continue to serve as directors of the Company until
the annual meeting of stockholders in the year indicated below and until their
successors are elected and take office. Stockholders are not voting on the
election of the Class II and Class III directors. The following table shows the
names, ages and positions of each continuing directors.
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Class III - Term Expires In 2001
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- --------------
<S> <C> <C> <C>
Omer K. Reed, D.D.S. 67 Clinical Officer and Director 1998
Gerald F. Mahoney 56 Director 1998
Anthony P. Maris 65 Director 1998
George M. Siegel 61 Director 1998
</TABLE>
Class II - Term Expires In 2000
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- ---------------
<S> <C> <C> <C>
James H. Clarke, Jr. D.D.S. 51 Director 1998
Mark E. Greder, D.D.S. 55 Director 1998
Ronald M. Yaros, D.D.S. 53 Director 1998
Sam H. Carr 42 Senior Vice President, Chief 1998
Financial Officer and Secretary
</TABLE>
As required by Pentegra's Bylaws, a majority of Pentegra's Board of Directors
are dentists who are affiliated with dental practices that are a party to a
service agreement with Pentegra. The following table sets forth certain
information concerning Pentegra's directors and nominees to become a director
(ages are as of May 31, 1999):
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
James M. Powers, Jr., D.D.S. 43 Chairman, President and Chief Executive Officer
Omer K. Reed, D.D.S. 67 Clinical Officer and Director
Sam H. Carr 42 Sr. Vice President, Chief Financial Officer, Secretary and Director
James H. Clarke, Jr., D.D.S. 51 Director
Mack E. Greder, D.D.S. 55 Director
Gerald F. Mahoney 56 Director
Anthony P. Maris 65 Director
George M. Siegel 61 Director
Ronald M. Yaros, D.D.S. 53 Director
Walter J. Anderson, D.D.S. 46 Director nominee
James H. S. Cooper 44 Director nominee
</TABLE>
JAMES M. POWERS, JR., D.D.S. has served as Pentegra's Chairman of the Board and
Chief Executive Officer since November 1998. Dr. Powers served as Chairman of
the Board and President of Liberty Dental Alliance, Inc. from September 1997,
until November 1998, when Pentegra agreed to acquire Liberty Dental Alliance,
Inc. Liberty Dental Alliance, Inc. was a Nashville, Tennessee-based dental
practice management company in its formative stages that had entered into
letters of intent to purchase the assets of 75 independent dental practices. Dr.
Powers also has served as the Chairman of the Board of Directors of Clearidge,
Inc., a Nashville-based bottled water company since May 1993. He served as
President of Clearidge, Inc., from May 1993 to January 1997. Dr. Powers is a
co-founder and member of the Board of Directors of Barnhill's Country Buffet,
Inc., a Memphis, Tennessee-based, 27-unit restaurant chain. Since his graduation
from the University of Tennessee College of Dentistry in 1979 until November
1998, Dr. Powers practiced dentistry in a private practice in Waverly,
Tennessee. He also received his MBA from Vanderbilt University in 1984.
3
<PAGE> 7
OMER K. REED, D.D.S. has served as Clinical Officer since May 1997 and served as
Pentegra's Chairman of the Board from May 1997 to November 1998. He founded
Pentegra, Ltd. in 1988 and Napili International in 1963, and is a practicing
dentist with one of Pentegra's affiliated practices. Since inception, Pentegra,
Ltd. and Napili International have provided comprehensive management and
consulting services to dental practices around the nation. In 1965, Dr. Reed
founded the CeramDent Laboratory and he has maintained a private dental practice
in Phoenix since 1959. He has held associate professorships in the Departments
of Ecological Dentistry at the University of North Carolina, Chapel Hill
(1978-1988) and the University of Minnesota (1982-1991), and has lectured
extensively around the world on various subjects related to the practice of
dentistry. Dr. Reed also serves on the Board of Directors of Century Companies
of America, CUNA Mutual Insurance Group and the American Volunteer Medical Team.
SAM H. CARR has served as Pentegra's Senior Vice President and Chief Financial
Officer since September 1997. Mr. Carr has served as a Director since April 1998
and as Secretary since January 1999. From September 1996 until August of 1997,
Mr. Carr served as Vice President -- Finance and Corporate Development of Ankle
& Foot Centers of America, LLP, a podiatry practice management company. From
February 1995 until July 1996, Mr. Carr was a Senior Manager with Arthur
Andersen LLP. Prior thereto, Mr. Carr was Chief Financial Officer of
Columbia/HCA's Bellaire Hospital in Houston, Texas from January 1994 until
January 1995, and Vice President of Finance of St. Vincent Hospital in Santa Fe,
New Mexico from 1990 until 1994. From 1978 to 1990, Mr. Carr was an accountant
with Arthur Andersen L.L.P. and is a certified public accountant. Mr. Carr
received his BBA in accounting from the University of Texas in 1977 and received
an Executive MBA from the University of New Mexico in 1994.
WALTER J. ANDERSON, D.D.S. founded Anderson Dental Group in 1982, and has been
in private practice for 21 years. Dr Anderson served 4 years as a Professor of
Crown & Bridge Dentistry at the University of Texas Dental Branch in Houston. He
is a member of the American Dental Association, Texas Dental Association, and
Houston District Dental Society since 1978. Other professional affiliations
include the American Orthodontic Society, Academy of GP Orthodontics, and the
American Association of Functional Orthodontics. Dr. Anderson received his B.S.
from Sam Houston State University in 1974 and graduated from the University of
Texas Dental Branch at Houston in 1978.
JAMES H. S. COOPER is the Chairman of Brentwood Capital Advisors, LLC, a
financial advisory firm in Brentwood, Tennessee. He was a Managing Director,
Investment Banking, for SunTrust Equitable Securities in Nashville, Tennessee
from April 1995 through May 1999. Mr. Cooper served as a member of the United
States House of Representatives from January 1983 until January 1995. He is an
Adjunct Professor at the Owen Graduate School of Management, Vanderbilt
University. Mr. Cooper received his B.A. degree from the University of North
Carolina, his M.A. degree from Oxford University, and his J.D. degree from
Harvard Law School.
JAMES H. CLARKE, JR., D.D.S. has been engaged in the private practice of
dentistry in Houston, Texas since 1974 and is President of James H. Clark, Jr.,
D.D.S., Inc., one of Pentegra's affiliated practices. Dr. Clarke is a member of
the American Dental Association and the Texas Dental Association. Dr. Clarke is
a fellow in the Academy of General Dentistry, the International Congress of Oral
Implantologists and the Mish Implant Institute. He is a member of the American
Academy of Implant Prosthodontics, American Academy of Implant Dentistry,
Academy for Implants and Transplants and the American Society of
Osseointegration. Dr. Clarke received his Bachelor of Science in chemistry from
Southwestern University in 1969 and his Doctor of Dental Surgery from Baylor
School of Dentistry in 1974.
MACK E. GREDER, D.D.S. has been engaged in the private practice of dentistry in
Omaha, Nebraska since 1970 and is President of Mack E. Greder, D.D.S., P.C., one
of Pentegra's affiliated practices. Dr. Greder is a member of the American
Dental Association and the Nebraska Dental Association. He serves as a director
on several boards including Unident, Inc., a dental software company, Omni
Behavioral Health and Rowpar Pharmaceuticals, Inc. Dr. Greder is a 1968 graduate
of the Creighton University School of Dentistry.
GERALD F. MAHONEY has been Chairman of the Board and Chief Executive Officer of
Mail-Well, Inc., a public company engaged in printing and envelope manufacturing
with over 50 printing offices throughout the United States, since 1994. Prior
thereto, he served as Chairman of the Board, President and Chief Executive
Officer of Pavey Envelope beginning in 1991. Mr. Mahoney is a certified public
accountant.
4
<PAGE> 8
ANTHONY P. MARIS is a consultant to health care businesses. From 1987 to 1996,
Mr. Maris was a Director, Vice President, Chief Financial Officer and Treasurer
of Roberts Pharmaceutical Corporation, a public company engaged in
pharmaceuticals manufacturing. Prior thereto, Mr. Maris was a Director and Chief
Financial Officer of Hoffmann -- La Roche Inc., a pharmaceutical manufacturer.
GEORGE M. SIEGEL was President and Chief Executive Officer of Parcelway Courier
Systems, Inc., a publicly traded messenger and courier business with operations
throughout North America, from 1990 to 1997. In 1993, Mr. Siegel co-founded U.S.
Delivery Systems, a public company engaged in consolidating local messenger and
delivery companies. Prior thereto, Mr. Siegel founded and was the President and
Chief Executive Officer of U.S. Messenger & Delivery Service and Direct Dispatch
Corporation, two messenger and courier service companies that he sold to Mayne
Nickless Courier System, Inc.
RONALD M. YAROS, D.D.S. has been engaged in the private practice of dentistry in
Aurora, Colorado since 1973 and is President of Ronald M. Yaros, D.D.S., P.C.,
one of Pentegra's affiliated practices. He is a member of the American Dental
Association, the Colorado Dental Association, the Metro Denver Dental Society
and the Academy of General Dentistry.
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<PAGE> 9
PROPOSAL TWO: RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors has selected the firm of
PricewaterhouseCoopers LLP as independent auditors of the Company for the fiscal
year ended March 31, 2000, subject to the approval and ratification of
stockholders. The Board of Directors unanimously recommends that stockholders
vote to approve and ratify the appointment of PricewaterhouseCoopers LLP as the
Company's Independent Auditors for 2000. PricewaterhouseCoopers LLP has served
as the independent auditors of the Company since the Company's formation in
February 1997. Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Meeting, will have an opportunity to make a statement if they
desire, and will be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the shares present or
represented at the Meeting and entitled to vote is needed to ratify the
appointment of PricewaterhouseCoopers LLP as independent auditors of the Company
for fiscal 2000. If the appointment is not approved, the matter will be referred
to the Audit Committee for further review.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of May 31, 1999, the "beneficial ownership" of the
Pentegra common stock of (i) each director and nominee to become a director,
(ii) each executive officer, (iii) all executive officers and directors of
Pentegra as a group and (iv) each person who owns more than 5% of the
outstanding common stock. The address of each person in the table is c/o
Pentegra Dental Group, Inc., 2999 North 44th Street, Suite 650, Phoenix, Arizona
85018.
<TABLE>
<CAPTION>
PERCENT (1) NUMBER (1)
----------- ----------
<S> <C> <C>
Ronald M. Yaros, D.D.S. 152,214 1.7%
Omer K. Reed, D.D.S. 135,200 (2) 1.5%
James M. Powers, Jr., D.D.S. 125,865 (3) 1.4%
George M. Siegel 116,180 1.0%
Mack E. Greder, D.D.S. 114,884 (4) 1.3%
Ronnie L. Andress, D.D.S. 102,101 1.1%
James H. Clarke, Jr., D.D.S. 70,632 *
Roger Allen Kay, D.D.S. 70,185 *
James L. Dunn, Jr 51,691 (5) *
Sam H. Carr 45,494 (6) *
Walter J. Anderson, D.D.S. 38,765 *
Anthony P. Maris 9,000 (7) *
John G. Thayer 8,827 (5) *
Gerald F. Mahoney 5,000 (8) *
Ronald E. Geistfeld, D.D.S. 1,000 *
James H. S. Cooper -
All executive officers and directors as a group
(14 persons) 1,008,273 10.9%
</TABLE>
*less than 1%
(1) Shares shown in the above table do not include shares that could be
acquired upon exercise of currently outstanding stock options that do not
vest within 60 days of the date of this Proxy Statement. All computations
are based upon 9,102,503 outstanding shares.
(2) Includes 2,400 shares owned by OMR Trust, of which Dr. Reed is the
beneficiary. Excludes shares owned by Dr. Reed's adult children.
(3) Includes 60,000 shares that may be acquired upon the exercise of
incentive and nonqualified stock options and 10,858 shares that may be
acquired upon the conversion of a convertible promissory note.
(4) Includes 900 shares owned by Dr. Greder's IRA ad 2,618 shares owned by Dr.
Greder's spouse's IRA.
(5) Includes 6,666 shares that may be acquired upon the exercise of an
incentive stock option.
(6) Includes 13,333 shares that may be acquired upon the exercise of an
incentive stock option.
6
<PAGE> 10
(7) Includes 5,000 shares that may be acquired upon the exercise of a
nonqualified stock option.
(8) Consists of shares that may be acquired upon the exercise of a nonqualified
stock option.
There has been no change in control of the Company since the beginning of its
last fiscal year, and there are no arrangements known to the Company, including
any pledge of securities of the Company, the operation of which may at a
subsequent date result in a change in control of the Company.
CERTAIN TRANSACTIONS
On November 13, 1998 Pentegra and Liberty Dental Alliance, Inc. ("Liberty")
entered into an Agreement and Plan of Merger (the "Liberty Merger Agreement"),
pursuant to which Liberty will become a wholly owned subsidiary of Pentegra, and
Dr. Powers was named President of Pentegra, replacing Gary S. Glatter. The
Liberty Merger Agreement provides Pentegra will pay (a) $0.01 per share for each
outstanding share of Liberty common stock, par value $0.01 per share, at closing
and (b) up to $3.99 per share and options to purchase up to 0.25 shares of
common stock of Pentegra with an exercise price of $6.125 per share for each
share of Liberty common stock (collectively, the "Additional Common Merger
Consideration") in accordance with the following:
(i) One-third of the Additional Common Merger Consideration is
payable upon completion of affiliations with dental practices
under a letter of intent with Liberty ("Liberty Affiliations")
that had collected revenues for the year ended December 31,
1997 ("1997 Practice Revenues") aggregating to at least
$10,000,000;
(ii) One-third of the Additional Common Merger Consideration is
payable upon completion of additional Liberty Affiliations
that had aggregate 1997 Practice Revenues of at least
$15,000,000; and
(iii) One-third of the Additional Common Merger Consideration is
payable upon completion of additional Liberty Affiliations
that had aggregate 1997 Practice Revenues of at least
$15,000,000.
The holders of shares of Liberty common stock will forfeit any right to receive
Additional Common Merger Consideration related to Liberty Affiliations not
consummated by July 31, 1999. As of May 31, 1999, there are 315,750 shares of
Liberty common stock outstanding, which would result in Pentegra paying an
aggregate of up to $1,263,000 cash and issuing options to acquire up to 78,938
shares of Pentegra common stock.
The Liberty Merger Agreement also provides that Pentegra pay (a) $0.01 per share
for each outstanding share of Liberty Class B common stock, par value $0.01 per
share, at closing and (b) up to one share of Pentegra common stock for each
outstanding share of Liberty Class B common stock (the "Additional Class B
Merger Consideration") in accordance with the following:
(i) One-fifth of the Additional Class B Merger Consideration is
payable upon completion of Liberty Affiliations that had
aggregate 1997 Practice Revenues of at $10,000,000;
(ii) Three-tenths of the Additional Class B Merger Consideration is
payable upon completion of additional Liberty Affiliations
that had aggregate 1997 Practice Revenues of at least
$10,000,000;
(iii) Two-fifths of the Additional Class B Merger Consideration is
payable upon completion of additional Liberty Affiliations
that had aggregate 1997 Practice Revenues of at least
$20,000,000; and
(iv) One-tenth of the Additional Class B Merger Consideration is
payable upon completion of additional Liberty Affiliations
that had aggregate 1997 Practice Revenues of at least
$10,000,000.
The holders of shares of Liberty class B common stock will forfeit any right to
receive Additional Class B Merger Consideration related to Liberty Affiliations
not consummated by July 31, 1999. As of May 31, 1999, there are 545,000 shares
of Liberty class B common stock outstanding, which would result in Pentegra
paying an aggregate of up to $5,450
7
<PAGE> 11
cash and up to 545,000 shares of Pentegra common stock. Consummation of the
Liberty Merger Agreement, which is anticipated to occur prior to July 31, 1999,
is subject to, among other things, Pentegra obtaining the consent of its
lenders.
As of May 31, 1999, Pentegra had completed Liberty Affiliations with 17 dental
practices. One of those practices was co-owned by Dr. Powers and he received as
consideration from Pentegra $193,345 in cash, 45,007 shares of Pentegra common
stock and $76,000 aggregate principal amount of 6% Series A Convertible
Subordinated Notes, due November 2003, in connection with that transaction. In
addition, Dr. Powers owns 5,000 shares of Liberty common stock and 345,000
shares of Liberty Class B common stock. Upon consummation of the Liberty merger,
Dr. Powers may be entitled to receive up to $23,450, 345,000 shares of Pentegra
common stock and options to acquire 1,250 shares of Pentegra common stock.
In connection with a practice acquisition by Dr. Greder, a member of the Board,
in May 1998, Pentegra loaned $109,000 to Dr. Greder to fund the acquisition. Dr.
Greder issued a 9% promissory note to Pentegra for that amount, which provides
for monthly principal and interest payments of $2,263. As of June 30, 1999,
$107,555 was outstanding under the promissory note.
It is anticipated that future transactions with affiliates of Pentegra will be
minimal, will be approved by a majority of the disinterested members of the
Board of Directors and will be made on terms no less favorable to Pentegra than
could be obtained from unaffiliated third parties. Pentegra does not intend to
incur any further indebtedness to, or make any loans to, any of its executive
officers, directors or other affiliates.
BOARD ORGANIZATION AND MEETINGS
During fiscal 1999, the Board of Directors of the Company (the "Board") held
four meetings and acted by unanimous written consent on more than one occasion.
The Board has an Audit Committee, a Compensation Committee, an Acquisition
Committee, a Nominating Committee and an Executive Committee, each of which was
initially constituted on March 30, 1998.
Audit Committee.
The Audit Committee recommends the independent public accountants to be selected
by the Board for stockholder approval each year and acts on behalf of the Board
in reviewing with the independent public accountants, the chief financial and
chief accounting officer and other corporate officers, various matters relating
to the adequacy of the Company's accounting policies and procedures and
financial controls and the scope of the annual audits by the independent public
accountants. The Audit Committee consists of Messrs. Maris and Mahoney
(chairman). During fiscal 1999, the Audit Committee held one meeting.
Compensation Committee
The Compensation Committee is authorized to establish the general compensation
policy for the officers and directors of the Company and annually reviews and
establishes officers' salaries and participation in benefit plans, prepares
reports required by the Securities and Exchange Commission (the "SEC") and
approves the directors' compensation. The Compensation Committee consists of
Messrs. Maris and Siegel (chairman). During fiscal 1999, the Compensation
Committee held two (2) meetings.
Acquisition Committee
The Acquisition Committee has the authority to approve the terms of any business
combination transaction involving the payment by Pentegra of consideration with
a value of up to $3,000,000. The members of the Acquisition Committee are Dr.
Powers and Mr. Carr. During fiscal 1999, the Acquisition Committee held 17
meetings.
Nominating Committee
The Nominating Committee is authorized to (i) develop policies on the size and
composition of the Board and criteria
8
<PAGE> 12
relating to candidate selection, (ii) propose to the Board a slate of director
nominees for election at annual meetings of stockholders, (iii) propose
candidates to fill vacancies on the Board and (iv) recommend board members to
serve on the various committees of the Board. The members of the Nominating
Committee are Drs. Reed and Powers and Mr. Maris. During fiscal 1999, the
Nominating Committee did not meet.
Executive Committee
The Executive Committee is authorized to exercise all of the authority of the
Board in the management and affairs of the Company, except where action of the
Board as a whole is expressly required by law or the Restated Certificate of
Incorporation or Bylaws of the Company. During fiscal 1999, the Executive
Committee did not meet. The members of the Executive Committee are Drs. Reed and
Powers and Mr. Siegel.
During fiscal 1999, each director attended at least 75% of the aggregate of the
total number of Board meetings and of meetings of committees of the Board on
which he served. The members of the Audit and Compensation Committees are not
employees of Pentegra.
Director Compensation
Directors who are employees of Pentegra or an affiliated practice do not receive
additional compensation for serving as directors. Each director who is not an
employee of Pentegra or an affiliated practice will receive a fee of $1,500 for
attendance at each Board of Directors meeting and $750 for each committee
meeting (unless held on the same day as a Board of Directors meeting). All
directors of Pentegra are reimbursed for out-of-pocket expenses incurred in
attending meetings of the Board of Directors or committees thereof, and for
other expenses incurred in their capacity as directors of Pentegra. In addition,
under the Company's 1997 Stock Compensation Plan (the "Stock Plan"), each such
director has been granted nonqualified options to purchase 10,000 shares of
Pentegra common stock. In addition, each newly elected nonemployee director
automatically will be granted nonqualified options to purchase 10,000 shares of
Pentegra common stock on the date that the person first becomes a nonemployee
director of the Company. Thereafter, each nonemployee director automatically
will be granted nonqualified options to purchase 5,000 shares of Pentegra common
stock on the date of the Company's annual meeting of stockholders. Each option
will have an exercise price per share equal to the fair market value of the
Company's common stock on the date of grant. On completion of the Company's
initial public offering in March 1998, each of Messrs. Maris and Mahoney was
granted an option to purchase 10,000 shares of Pentegra common stock at an
exercise price per share equal to the initial public offering price to the
public (Mr. Siegel waived his right to receive this grant). All the options
granted to the nonemployee directors have a term of ten years, and become
exercisable as to one-quarter of the shares on the date of grant, and thereafter
in cumulative annual installments of one-quarter beginning on the first
anniversary of the date of grant.
9
<PAGE> 13
EXECUTIVE COMPENSATION
The following table sets forth each component of compensation paid or awarded
to, or earned by, each person who served as Chief Executive Officer of Pentegra
during the fiscal year ended March 31, 1999 and the four other most highly
compensated executive officers serving as of March 31, 1999 (collectively, the
"Named Executive Officers") for the fiscal years indicated.
<TABLE>
<CAPTION>
SECURITIES
OTHER UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL SALARY BONUS COMPENSATION OPTIONS/SAR COMPENSATION
--------------------------- YEAR $ $ $ (#) ($)(-)
---- - - - --- ------
<S> <C> <C> <C> <C> <C> <C>
James M. Powers, Jr 1999 53,974 -- 14,256 300,000 --
D.D.S.(1)(2) 1998 -- -- -- -- --
Chairman of the Board,
President and Chief Executive
Officer
Sam H. Carr(2) 1999 175,000 -- 38,326 -- --
Sr. Vice President, Chief 1998 98,435 -- -- 66,666 --
Financial Officer and
Secretary
John G. Thayer(2) 1999 125,000 25,000 14,204 -- --
Sr. Vice President and Chief 1998 32,604 25,000 -- 33,333 --
Operating Officer
James L. Dunn, Jr.(2) 1999 125,000 -- 23,292 -- --
Sr. Vice President and Chief 1998 27,604 -- -- 33,333 --
Development Officer
Omer K. Reed, D.D.S.(3) 1999 87,500 -- 310,000 -- --
Clinical Officer and Director 1998 1,823 -- -- -- --
Member
Gary S. Glatter(4) 1999 167,700 -- -- -- 350,000
Former President and Chief 1998 127,604 -- -- 333,333
Executive Officer
</TABLE>
- ----------
(1) Dr. Powers commenced his employment with Pentegra on November 13, 1998
(2) The amount set forth as Other Compensation represents the expenses paid by
Pentegra in connections with the Names Executive Officer's relocation to
Phoenix, Arizona.
(3) Dr. Reed's employment agreement provides for bonus payments aggregating
$1,250,000 payable by Pentegra in installments of $10,000 on closing of
each future dental practice affiliation subsequent to March 30, 1998 until
the bonus has been paid in full, provided that the bonus must be paid in
full by March 24, 2001. During the fiscal year ended March 31, 1999, Dr.
Reed was paid $310,000 of this bonus.
(4) Mr. Glatter entered into a severance agreement with the Company effective
November 13, 1998 pursuant to which he resigned as President, Chief
Executive Officer and a director of Pentegra. Mr. Glatter was paid $350,000
by Pentegra pursuant to the agreement and forfeited all options to acquire
shares of Pentegra common stock previously issued to him.
Option Grants
The following table provides information on stock option grants to the Named
Executive Officers in the fiscal year ended March 31, 1999 under the Stock Plan.
10
<PAGE> 14
Options/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO GRANT
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION PRESENT
GRANTED(1) FISCAL YEAR PRICE($/SH.) DATE VALUE($)(2)
---------- ----------- ------------ ---- -----------
<S> <C> <C> <C> <C> <C>
James M. Powers, Jr., DDS 150,000 43.5% $ 2.63 03/24/03 $ 256,185
150,000 43.5% $ 6.13 03/24/03 $ 172,607
Sam H. Carr -- -- -- -- --
John G. Thayer -- -- -- -- --
James L. Dunn, Jr -- -- -- -- --
Omer K. Reed, DDS -- -- -- -- --
Gary S. Glatter -- -- -- -- --
</TABLE>
Pentegra approved the grant of certain contingent options to Dr. Powers. See
"Certain Transactions." following weighted-average assumptions: dividend yield
of 0%, expected volatility of 0.50, risk-free interest rate of 5.62% and
expected life of five years.
The following table sets forth certain information with respect to unexercised
options to purchase Pentegra common stock held by the Named Executive Officers
at March 31, 1999. None of the Named Executive Officers exercised options in
1998.
Year-End 1999 Option Values
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS HELD AT OPTIONS AT
MARCH 31, 1999 MARCH 31, 1999(1)
EXERCISABLE UNEXERCISABLE(1) EXERCISABLE UNEXERCISABLE(2)
----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C>
James M. Powers, Jr., D.D.S 60,000 240,000 $ 0 $ 0
Sam H. Carr 13,333 53,334 0 0
John G. Thayer 6,667 26,666 0 0
James L. Dunn, Jr 6,667 26,666 0 0
Omer K. Reed, D.D.S 0 0 0 0
</TABLE>
11
<PAGE> 15
(1)Value of unexercised in-the-money options is calculated based upon the
difference, if any, between the option exercise price and the closing price
of the common stock at year-end, multiplied by the number of shares
underlying the options. The closing price per share of Pentegra common stock
as reported on the AMEX on March 31, 1998 was $1.6875. The exercise prices
for the options previously granted to the Named Executive Officers range
from $2.63 to $8.50 per share.
Employment Agreements
Pentegra has entered into employment agreements with Drs. Reed and Powers and
Messrs. Carr, Dunn and Thayer. Each of these agreements provides for an annual
base salary in an amount not less than the initial specified amount and entitles
the employee to participate in all Pentegra's compensation plans in which other
executive officers of Pentegra participate. Dr. Reed's employment agreement
provides that he will serve as Pentegra's clinical officer and has a three-year
term commencing on March 30, 1998. Dr. Reed's base salary during fiscal 1999
under the employment agreement was $87,500 per year, or as increased from time
to time by the Board of Directors. Dr. Reed's employment agreement also provides
for bonus payments aggregating $1,250,000 payable by Pentegra in installments of
$10,000 on closing of each future dental practice affiliation subsequent to
March 30, 1998 until the bonus has been paid in full, provided that the bonus
must be paid in full by March 24, 2001. Dr. Powers' employment agreement
provides that he shall serve as the Chairman, President and Chief Executive
Officer of Pentegra for a term of two years commencing on November 13, 1998 at a
base annual salary of $200,000. Each of the agreements for Messrs. Carr, Dunn
and Thayer has a continuous five-year term with an annual base salary of
$175,000 for Mr. Carr and a base salary of $125,000 for each of the other
officers, and is subject to the right of Pentegra to terminate the employee's
employment at any time. For purposes of determining the applicable year's
earnings per share change, the cash bonuses payable under all other employment
agreements between Pentegra and its officers will be taken into account. Each of
the other Named Executive Officers (except Dr. Reed) is eligible to receive an
annual cash bonus in an amount equal to 5%, 10%, 15%, 20% or 25% of his or her
base salary in the event that Pentegra experiences 20% to 22.5%, 22.5% to 25%,
25% to 27.5%, 27.5% to 30% or greater than 30%, respectively, growth in earnings
per share on a year-to-year basis (calculated on a pro forma basis for the
calendar year prior to Pentegra's first fiscal year of operations). For purposes
of determining the applicable year's earnings per share change, the cash bonuses
payable to the officer and under all other employment agreements between
Pentegra and its officers will be taken into account.
If the employee's employment is terminated by Pentegra without cause (as therein
defined), Dr. Powers and Messrs. Carr, Dunn and Thayer will be entitled to a
payment equal to 12 months' salary, and Dr. Reed will be entitled to a payment
equal to the salary payable over the remaining term of his employment agreement.
Each of the foregoing agreements also contains a covenant limiting competition
with Pentegra for one year following termination of employment.
Compensation Committee Interlocks And Insider Participation
No executive officer of the Company currently serves as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Board of Directors or as an executive
officer of the Company. See "Director and Executive Compensation" and "Certain
Transactions" for a description of transactions between the Company and members
of the Board of Directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview
The Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") is responsible for establishing a general compensation
policy for officers and employees of the Company, preparing any reports that may
be required relating to officer compensation and approving any increases in
director's fees. The Compensation Committee consists of Messrs. Mahoney and
Maris. The Compensation Committee was appointed in March 1998 and did not
participate in deliberations regarding executive compensation for fiscal 1999,
other than in connection with the employment of Dr. Powers in November 1998.
Prior to the closing of the Company's initial public offering, executive
compensation was determined by the Board of Directors as a whole. Beginning in
fiscal 2000, the Compensation Committee will approve, or in some cases recommend
to the Board, remuneration arrangements and compensation plans involving the
Company's directors,
12
<PAGE> 16
executive officers and certain other employees whose compensation exceeds
specified levels. The Compensation Committee will also act on the granting of
stock options to executive officers under the Company's Stock Plan.
The Company's executive compensation program has been designed to assist the
Company in attracting, motivating and retaining the executive talent necessary
for the Company to maximize its return to stockholders. To this end, this
program provides competitive compensation levels and incentive pay levels that
vary based on corporate and individual performance.
The Company's compensation program for executives consists of three key
elements: a base salary; a performance-based annual bonus; and periodic grants
of stock options.
The Compensation Committee believes that this three-part approach best serves
the interests of the Company and its stockholders. It enables the Company to
meet the requirements of the highly competitive environment in which the Company
operates while ensuring that executive officers are compensated in a way that
advances both the short-term and long-term interests of its stockholders. Under
this approach, compensation for these officers involves a high proportion of pay
that is dependent on maximizing long-term returns to stockholders. The annual
bonus payable for fiscal 2000 will depend on the Company's financial performance
in fiscal 2000.
Base Salary
Base Pay is designed to be competitive with salary levels for comparable
executive positions at other companies and the Compensation Committee reviews
such comparable salary information as one factor to be considered in determining
the base pay for the Company's executive officers. Other factors the
Compensation Committee considers in determining base pay for each of the
executive officers are that officer's responsibilities, experience, leadership,
potential future contribution and demonstrated individual performance. The
Company has employment agreements with its Chief Executive Officer, the four
other executive officers named in the Summary Compensation Table and certain of
its other officers. These agreements provide for minimum base annual salaries
the Company may increase, but cannot decrease. Any increases in these base
salaries, the base salaries of the Company's other executive officers and any
changes in those salaries will be based on recommendations by the Company's
Chief Executive Officer, taking into account such factors as competitive
industry salaries, a subjective assessment of the nature of the position and the
contribution and experience of the officer. Performance for base salary purposes
will be assessed on a qualitative, rather than a quantitative, basis. No
specific performance formula or weighting of factors will be used in determining
base salary levels.
Annual Bonus
For fiscal 1999, the Company determined that it was their preference to
compensate the executive officers primarily in the form of long-term,
equity-based compensation, and accordingly, made awards of stock options rather
than cash bonuses. Additionally, Dr. Reed was awarded a performance-based cash
bonus pursuant to his employment agreement based on the successful completion of
new affiliations of dentists with the Company. The Compensation Committee
expects to base future annual bonuses on the Company's financial performance and
the individual performance of the awardees, and intends to use qualitative,
rather than quantitative, factors for this purpose.
Stock Plan
Prior to the Company's initial public offering, the stockholders and the Board
of Directors of the Company approved the Stock Plan. The objectives of the Stock
Plan are to (i) attract and retain superior personnel for positions of
substantial responsibility and (ii) provide employees, nonemployee directors,
advisors and orthodontists with an additional incentive to contribute to the
success of the Company.
In March 1998, the Company granted to Messrs. Carr, Thayer and Dunn options to
purchase 66,667, 33,333 and 33,333 shares of Pentegra common stock,
respectively, at per-share exercise prices of $8.50. In November 1988, the
Company granted to Dr. Powers options to purchase 300,000 shares of Pentegra
common stock. One-half of those options have an exercise price of $2.63 per
share and the other half have an exercise price of $6.13 per share.
Stock options align the interests of employees and stockholders by providing
value to option holders through stock price appreciation only. The Compensation
Committee expects that it will make future stock option or other long-term
equity-based
13
<PAGE> 17
incentive awards periodically at its discretion based on recommendations of the
Chief Executive Officer. Stock option grant sizes, in general, will be evaluated
by regularly assessing competitive market practices, the overall performance of
the Company the, size of previous grants and the number of options held. In
addition, the Compensation Committee may consider factors including that
executive's current ownership stake in the Company, the degree to which
increasing that ownership stake would provide the executive with additional
incentives for future performance, the likelihood that the grant of those
options would encourage the executive to remain with the Company and the value
of the executive's service to the Company. This posture with regard to stock
options is intended to focus management's efforts on maximizing stockholder
returns. The number of options granted to a particular participant will also be
based on the Company's historical financial success, its future business plans
and the individual's position and level of responsibility within the Company,
but these factors will be assessed subjectively and not weighted.
Fiscal 1999 Chief Executive Officer Pay
As described above, the Compensation Committee will consider several factors in
developing an executive compensation package. For the Chief Executive Officer,
these factors will include competitive market pay practices, performance level,
experience, contributions toward achievement of strategic goals and the overall
financial and operations success of the Company.
The Company entered into an employment agreement with Dr. Powers, the Company's
Chief Executive Officer, in November 1998. The initial term of that agreement is
for two years at an initial base compensation rate of $200,000 per annum. Dr.
Powers is eligible to receive an annual cash bonus in an amount up to 25% of his
base salary upon achievement of certain earnings per share targets. In addition,
the Company granted to Dr. Powers options to purchase 300,000 shares of Pentegra
common stock. One-half of those options have an exercise price of $2.63 per
share and the other half have an exercise price of $6.13 per share. The
Compensation Committee believes the terms of this agreement and the foregoing
option award were appropriate.
Since the initial public offering through November 1998, the Compensation
Committee took no action respecting Mr. Glatter's compensation for fiscal 1999.
The Compensation Committee believes Mr. Glatter's total compensation (base
salary and bonus) paid for the portion of the last fiscal year that he served
the Company as Chief Executive Officer was within an acceptable range of
competitive market levels for compensation paid to the executive officers of
comparable companies.
Executive compensation is an evolving field. The Compensation Committee monitors
trends in this area, as well as changes in law, regulation and accounting
practices, that may affect either its compensation practices or its philosophy.
Accordingly, the Committee reserves the right to alter its approach in response
to changing conditions.
This report will not be deemed incorporated by reference by any general
statement incorporating this Proxy Statement by reference into any filing under
the Securities Act or under the Exchange Act and will not be deemed filed under
either of such statutes except to the extent that the Company specifically
incorporates this information by reference.
The Compensation Committee
Gerald F. Mahoney
Anthony P. Maris
14
<PAGE> 18
PERFORMANCE GRAPH
The following line graph compares the percentage change from date of public
offering (March 30, 1998) through March 31, 1999 for (i) the Pentegra common
stock, (ii) a peer group (the "Peer Group") of companies selected by the Company
that are predominantly dental management companies located in the United States,
and (iii) the AMEX Composite Index. The companies in the Peer Group are Apple
Orthodontix, Inc., Interdent, Inc., OrthAlliance, Inc., Orthodontic Centers of
America, Inc., Castle Dental Centers, Inc., Coast Dental Services Inc. and
Monarch Dental Corp.
THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL
Comparison of Total Returns*
<TABLE>
<CAPTION>
Description March 30, 1998 March 31, 1998 March 31, 1999
- ----------- -------------- -------------- --------------
<S> <C> <C> <C>
Pentegra Dental Group, Inc. $100 $103 21%
AMEX Composite Index $100 $105 102%
Peer Group $100 $102 57%
</TABLE>
*Total return based on $100 initial investment and reinvestment of dividends
The graph is presented in accordance with SEC requirements. Stockholders are
cautioned against drawing any conclusions from the data contained therein, as
past results are not necessarily indicative of future financial performance. The
total return on investment for the period shown for the Company, the AMEX
Composite Index and the Peer Group is based on the stock price or composite
index at March 28, 1998.
The performance graph appearing above will not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement by
reference into any filing under the Securities Act of 1933, as amended (the
"Securities Act"), or under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and will not be deemed filed under either of those Acts except
to the extent that the Company specifically incorporates this information by
reference.
15
<PAGE> 19
SECTION 16 REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers and beneficial owners of more than 10% of the
outstanding shares of the Company to file with the Securities and Exchange
Commission reports regarding changes in their beneficial ownership of shares in
the Company. There were no beneficial owners of Pentegra Dental Group, Inc. at
March 31, 1999 with more than 10% ownership.
Based solely on a review of the copies of such reports furnished to the Company
and written representations that no other reports were required, the Company
believes that all its directors and executive officers during fiscal 1999
complied on a timely basis with all applicable filing requirements under Section
16(a) of the Exchange Act, other than Dr. Geistfeld (who filed two reports late
each reporting one transaction), Dr. Greder (who filed one report late reporting
one transaction) and Dr. Reed (who filed two reports late each reporting one
transaction).
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the Company's proxy materials relating to
the next annual meeting of stockholders must be received by the Company on or
before April 15, 2000.
1999 ANNUAL REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1999 WAS
FILED ELECTRONICALLY WITH THE SECURITIES AND EXCHANGE COMMISSION. STOCKHOLDERS
WHO WISH TO OBTAIN, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT
(WITHOUT EXHIBITS) ON FORM 10-K SHOULD ADDRESS A WRITTEN REQUEST TO SAM H. CARR,
CHIEF FINANCIAL OFFICER AND SECRETARY, PENTEGRA DENTAL GROUP, INC., 2999 N. 44TH
STREET, SUITE 650, PHOENIX, ARIZONA, 85018. THE COMPANY WILL PROVIDE COPIES OF
THE EXHIBITS TO THE FORM 10-K UPON PAYMENT OF A REASONABLE FEE.
OTHER BUSINESS
As of the date of this Proxy Statement, management was not aware of any business
not described above would be presented for consideration at the Meeting. If any
other business properly comes before the Meeting, it is intended that the shares
represented by proxies will be voted in respect thereto in accordance with the
judgment of the persons voting them.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
/s/ Sam H. Carr
- -------------------------------------
Sam H. Carr
Chief Financial Officer and Secretary
Phoenix, Arizona
July 9, 1999
16
<PAGE> 20
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JULY 30, 1999
The undersigned hereby appoints James M. Powers, Jr. D.D.S., proxies of the
undersigned, with full power of substitution, to vote all shares of Common Stock
of Pentegra Dental Group, Inc. which the undersigned is entitled to vote, at the
Annual Meeting of Stockholders (the "Meeting") to be held on July 30, 1999, at
9:00 a.m., local time, at the Company's offices, 2999 N. 44th Street, Suite 650,
Phoenix, Arizona 85018 and at any and all adjournments thereof for the following
purposes:
(1) Election of Class 1 Directors:
[ ] FOR the nominees listed below (except as marked to the contrary
below) [ ] WITHHOLD AUTHORITY to vote for the nominees listed below
Walter J. Anderson, D.D.S. James H. S. Cooper James M. Powers, Jr., D.D.S.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME ON THE LINE IMMEDIATELY BELOW.)
- --------------------------------------------------------------------------------
(2) Approval and Ratification of PricewaterhouseCoopers LLP as the Company's
independent auditors for the fiscal year Ending March 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
- --------------------------------------------------------------------------------
PLEASE DATE AND SIGN ON REVERSE SIDE.
<PAGE> 21
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS INDICATED, THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING "FOR" ELECTION OF
THE NOMINEES FOR DIRECTOR AS SELECTED BY THE BOARD OF DIRECTORS AND "FOR"
APPROVAL AND RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS
THE COMPANY'S INDEPENDENT AUDITORS.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and the Proxy Statement furnished therewith. The undersigned
hereby revokes any proxies given prior to the date reflected below.
----------------------------------
Date
----------------------------------
Signature(s) of stockholders(s)
Please complete, date and sign
exactly as your name appears
herein. If shares are held
jointly, each holder should sign,
When signing as attorney,
executor, administrator, trustee,
guardian or corporate official,
please add your title.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN AND
RETURN THIS PROXY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE TO CONTINENTAL STOCK
TRANSFER & TRUST COMPANY AS AGENT FOR THE COMPANY. THE GIVING OF A PROXY WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
