<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AMERICAN DENTAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
AMERICAN DENTAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(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) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] 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:
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<PAGE> 2
AMERICAN DENTAL TECHNOLOGIES, INC.
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
This Proxy Statement is being sent to stockholders on or about April
30, 1999, and is furnished in connection with the solicitation of proxies by the
Board of Directors (the "Board") of American Dental Technologies, Inc., a
Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders (the "Annual Meeting") of the Company to be held at the Skyline
Club, Mackinac Room, 2000 Town Center, Southfield, Michigan 48075, at 10:00
a.m., local time, on Friday, June 4, 1999, and at any and all adjournments
thereof, for the purposes set forth in the accompanying notice.
A proxy may be revoked at any time before it is exercised by delivering
written notice to the Secretary of the Company, executing and delivering a later
dated proxy or voting in person at the Annual Meeting. Unless revoked, the
shares represented by the proxy will be voted in accordance with the
specifications made. IF NO SPECIFICATIONS ARE MADE, SUCH SHARES WILL BE VOTED
FOR THE ELECTION OF DIRECTORS AS PROPOSED IN THIS PROXY STATEMENT. The Board
does not intend to present any other matters at the Annual Meeting. However,
should any other matters properly come before the Annual Meeting, it is the
intention of such proxy holders to vote the proxies in accordance with their
best judgment.
The cost of solicitation of proxies by the Board will be borne by the
Company. Such solicitation will be made by mail and may also be made by
directors, officers and employees of the Company personally or by telephone,
facsimile or other electronic means, without additional compensation. In
addition, Corporate Investor Communications, Inc., a proxy soliciting firm, has
been retained by the Company to assist in the solicitation at a cost of
approximately $5,000, plus out-of-pocket expenses. Proxy materials may also be
distributed through brokers, custodians and other like parties to the beneficial
owners of common stock of the Company ("Common Stock"), and the Company will
reimburse such parties for their reasonable expenses incurred in connection
therewith.
Only holders of record of Common Stock at the close of business on
April 15, 1999 (the "Record Date") are entitled to vote at the Annual Meeting or
any adjournments thereof. As of the Record Date, there were 7,431,672 shares of
Common Stock outstanding. Each share of Common Stock entitles the owner to one
vote. The presence at the meeting in person or by proxy of a majority of the
shares of the Company's Common Stock outstanding on the Record Date will
constitute a quorum to transact business at the Annual Meeting. The election of
directors requires a plurality of the votes cast.
1
<PAGE> 3
PRINCIPAL STOCKHOLDERS OF THE COMPANY
AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the
ownership of the Common Stock as of March 15, 1999, except as otherwise
indicated, by each current director, each director nominee, each of the
executive officers named in the Summary Compensation Table under "Executive
Compensation," all current directors and executive officers as a group, and each
person who is known by the Company to own beneficially 5% or more of the
Company's outstanding shares of Common Stock (each, a "5% Owner").
<TABLE>
<CAPTION>
Number of Percent of
Name (1) Shares (2) Class(3)
<S> <C> <C>
Ben J. Gallant 1,419,728 16.0
William D. Myers 1,178,722 (4) 13.3
William D. Maroney 688,374 (5) 7.8
Charles A. Nichols 798,911 9.0
Michael F. Radner 676,382 7.6
Denics Co., Ltd. 559,607 6.3
Wayne A. Johnson II 386,684 (6) 4.4
John E. Vickers III 194,116 2.2
Terry D. Myers 145,878 (7) 1.7
Diane M. Miller 67,500 *
William S. Parker 31,550 *
Bertrand R. Williams, Sr. 9,627 *
All current executive officers and
directors as a group (11 persons ) 4,921,246 55.6
</TABLE>
*Less than one percent.
(1) The business addresses of the 5% Owners are as follows: William D. Myers,
29877 Telegraph Road, Southfield, Michigan 48034; Ben J. Gallant and
Charles A. Nichols, 5555 Bear Lane, Corpus Christi, Texas 78405; William
D. Maroney and Michael F. Radner, 18860 West Ten Mile Road, Southfield,
Michigan 48075; and Denics Co., Ltd., Yotsuya Y's Bldg., 7-6 Honshio-cho,
Shinjuku-ku Tokyo 160 Japan.
(2) The column sets forth shares of Common Stock which are deemed to be
"beneficially owned" by the persons named in the table under Rule 13d-3
of the SEC, including shares of Common Stock that may be acquired upon
the exercise of stock options or common stock purchase warrants that are
presently exercisable or become exercisable within 60 days, as follows:
Ben J. Gallant - 477,864 shares; William D. Myers and spouse - 96,295
shares; William D. Maroney and spouse - 277,856 shares; Charles A.
Nichols - 301,199 shares; Michael F. Radner - 143,781 shares; Denics Co.
Ltd. - 126,843 shares; Wayne A. Johnson, II - 132,155 shares; John E.
Vickers - 63,966 shares; Terry D. Myers - 59,999 shares; Diane M. Miller
- 67,500 shares; William S. Parker - 31,250 shares; Bertrand R. Williams,
Sr. - 1,794 shares; and all executive officers and directors as a group -
1,509,878 shares. Each of the persons named in the table has sole voting
and investment power with respect to all shares beneficially owned by
them, except as described in the following footnotes.
(3) For purposes of calculating the percentage of Common Stock beneficially
owned by any person in the table, the shares issuable to such person
under stock options or common stock purchase warrants exercisable
currently or within 60 days are considered outstanding and are added to
the shares of Common Stock actually outstanding.
(4) Includes 550,072 shares of Common Stock and 55,555 common stock purchase
warrants owned jointly with and/or individually by Dr. Myers' wife, Irene
Myers.
(5) Includes 316,359 shares of Common Stock and 277,778 common stock purchase
warrants owned by Mr. Maroney's wife, Aimee Maroney.
(6) Includes 37,975 shares of Common Stock owned by three family trusts for
which he is the trustee.
(7) Includes 82,033 shares of Common Stock owned by his wife, Donna Myers.
2
<PAGE> 4
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation divides the directors into
three classes, the terms of which expire as set forth below. At each annual
meeting, the stockholders of the Company will elect directors to three-year
terms to replace those directors whose terms expire at that annual meeting. The
term of office of the directors elected at this year's Annual Meeting will
continue until the 2002 annual stockholders' meeting.
The Board recommends a vote FOR the nominees for election. THE PERSONS
NAMED IN THE ACCOMPANYING FORM OF PROXY WILL VOTE FOR THE ELECTION OF THE
NOMINEES UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES. If any nominee
at the time of election is unable to serve, or otherwise is unavailable for
election, and if other nominees are designated, the persons named in such proxy
will have discretionary authority to vote or refrain from voting in accordance
with their judgment on such other nominees. If any nominees are substituted by
the Board, the persons named in the accompanying form of proxy intend to vote
for such nominees. Management is not aware of the existence of any circumstance
which would render the nominees named hereunder unavailable for election. All of
the nominees are currently directors of the Company.
The Board presently consists of seven directors, two of whom are
standing for election at the Annual Meeting. Information with respect to the
nominees for election and for the other directors continuing in office is set
forth below.
NOMINEES FOR DIRECTORS - WITH TERMS EXPIRING IN 1999
<TABLE>
<CAPTION>
Name, Principal, Occupation, Business Experience Year First
During the Last Five Years and Other Current Directorships Age Became Director
<S> <C> <C>
William D. Myers, M.D......................................................................57 1990
Dr. Myers is one of the founders of the Company and a co-inventor of the Company's
first dental laser. He has been Chairman of the Board of the Company since January
1990. Dr. Myers has been a practicing ophthalmologist for more than 20 years and is
the founder and director of the Michigan Eyecare Institute.
Ben J. Gallant..............................................................................65 1996
Mr. Gallant was appointed President and Chief Operating Officer of the Company in
September 1996 and Chief Executive Officer in November 1996. He became a director in
July 1996. Mr. Gallant was a founder of Texas Airsonics, Inc. ("Texas Air"), served
as a director and chairman of the board since that company's inception in 1982, and
was elected president and chief executive officer in 1991. He is chiefly responsible
for the design and development of the Company's KCP and industrial product lines.
</TABLE>
INCUMBENT DIRECTORS- WITH TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
Name, Principal, Occupation, Business Experience Year First
During the Last Five Years and Other Current Directorships Age Became Director
<S> <C> <C>
Wayne A. Johnson, II........................................................................50 1996
Mr. Johnson currently serves as advisor and legal counsel to Racer Components, Inc.
and Automotive Digital Systems, Inc., manufacturers and marketers of automotive
performance and racing products, a position held since January 1996. He is also
engaged in the private practice of law and is a director, secretary/treasurer and
legal counsel for 4.0 Studio, Inc, a company involved in the personal conditioning,
fitness and nutrition business, which he co-founded in January 1997. Mr. Johnson
acted as President and director of 4.0 Studio, Inc. through February, 1999. From
August 1994 to December 1995, Mr. Johnson served as a director and as vice president
and general counsel of Racer Components, Inc. and Automotive Digital Systems, Inc.
Mr. Johnson served as a director of Texas Air from 1984 until its acquisition by the
Company in July 1996.
John E. Vickers III........................................................................52 1996
Mr. Vickers was appointed Executive Vice President of the Company in August 1998. He
had been the Senior Vice President - Operations of American Dental since November 1996
and became a director in July 1996. Mr. Vickers had served as Texas Air's chief
financial officer and legal counsel since June 1993 and had various operating
responsibilities with Texas Air. From December 1991 until September 1994, Mr. Vickers
was of counsel to the law firm of Novak, Vickers and Burt and practiced law for over 25
years.
</TABLE>
3
<PAGE> 5
INCUMBENT DIRECTORS - WITH TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
Name, Principal, Occupation, Business Experience Year First
During the Last Five Years and Other Current Directorships Age Became Director
<S> <C> <C>
WILLIAM D. MARONEY.........................................................................61 1997
Mr. Maroney is a private investor. From January 1987 to December 1996, Mr. Maroney
had been in private law practice in New York, New York. Prior thereto, Mr. Maroney
was a senior tax counsel for ITT Corporation. Mr. Maroney previously served as a
director of the Company from May 1990 to May 1993. Mr. Maroney was re-appointed to
the Board in March 1997.
BERTRAND R. WILLIAMS, SR....................................................................70 1990
Mr. Williams has been the chief executive officer of Global Focus Marketing and
Distribution ("GFMD"), since February 1995. GFMD sells specialized clinical
laboratory supplies and diagnostics, research and industrial equipment. Prior to
founding GFMD, Mr. Williams had been the chief executive
officer of Rupp & Bowman Company, a marketer of high technology medical
equipment and diagnostics for more than 30 years. Since 1981, he has also been
chairman of the board and chief executive officer of Immuno Concepts, Inc., a
manufacturer of immuno-diagnostic and virology products in Sacramento,
California. In June 1994, Rupp & Bowman Company commenced bankruptcy proceedings
pursuant to Chapter 11 of the federal Bankruptcy Code to reorganize its
business. In February 1995, that action, which is still pending in the United
States Bankruptcy Court in Dallas, Texas, was converted to a proceeding under
Chapter 7 of the federal Bankruptcy Code.
CHARLES A. NICHOLS..........................................................................74 1996
Mr. Nichols is a pharmacist by profession at Southside Pharmacy, Inc., in Corpus
Christi, Texas, where he has been the President since 1954. Mr. Nichols was one of
the founders of Texas Air and served as a director from that company's inception in
1982 until its acquisition by the Company in July 1996. He also served as treasurer
for Texas Air from 1989 to 1996.
</TABLE>
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
During 1998, there were four Board meetings held. Each director
attended 75% or more of the total number of meetings of the Board and committees
of which he was a member in 1998.
The Company's Board has a Compensation Committee and an Audit
Committee. The members of each committee serve without additional compensation.
The Company's Board does not have a nominating committee or a committee serving
a similar function.
The Compensation Committee did not meet in 1998. The current members of
the Compensation Committee, neither of whom are employees of the Company, are
Wayne A. Johnson, II and Bertrand R. Williams, Sr. The functions of this
Committee are to establish and administer the Company's executive compensation
plans and the compensation of executive management.
The Audit Committee of the Board held one meeting during 1998. The
current members of the Audit Committee, neither of whom are employees of the
Company, are Charles A. Nichols, Wayne A. Johnson II and William D. Maroney. The
functions of the Audit Committee include reviewing the adequacy of the Company's
system of internal controls and accounting practices; reviewing the scope of the
annual audit performed by the Company's independent auditors, Ernst & Young; and
reviewing the Company's annual audited financial statements.
4
<PAGE> 6
EXECUTIVE COMPENSATION
SUMMARY
The following table provides a summary of compensation paid or accrued by
the Company and its subsidiaries during 1998, 1997 and 1996 to or on behalf of
the Company's Chief Executive Officer and each of the other executive officers,
as of December 31, 1998 who earned in excess of $100,000 in 1998 (the "Named
Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
- -------------------------- Long Term
Compensation Awards
Annual Compensation ---------------------- All Other
Name and --------------------- Securities Underlying Compensation
Principal Position Year Salary($) Bonus($) Option/SARs (#) ($) (a)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ben J. Gallant(b) 1998 225,000 30,000 -- 5,684
Chief Executive Officer, Chief 1997 225,000 27,750 75,000 5,684
Operating Officer and President 1996 181,250(b) -- -- 53,750
Terry D. Myers 1998 150,000 15,000 -- 500
Vice President - Research & 1997 150,000 18,500 50,000 --
Clinical 1996 120,004 -- 15,000 --
John E. Vickers III(b) 1998 150,000 25,000 -- 500
Executive Vice President 1997 145,000 18,500 50,000 500
1996 108,000(c) -- -- --
Diane M. Miller 1998 110,000 15,000 -- 500
Chief Financial Officer 1997 112,500 13,875 37,500 500
1996 100,000 -- 25,000 --
William S. Parker 1998 110,800 20,000 -- 500
Senior Vice President - Dental 1997 108,508 13,875 37,500 500
1996 87,102 -- 12,500 --
</TABLE>
- -----------------------
(a) Includes $500 401(k) contribution matching and, with respect to Mr.
Gallant, $5,184 for life insurance premiums, paid during 1998.
(b) Includes $87,500 received as president of Texas Air through July 31, 1996
paid by Texas Air.
(c) Includes $63,000 received as chief financial officer of Texas Air through
July 31, 1996 paid by Texas Air.
OPTION GRANTS
There were no stock options granted under the Company's Stock Option
Plans during 1998 to the Named Officers.
OPTION HOLDINGS
The following table provides information with respect to the unexercised
options held as of the end of 1998 by the Named Officers. The Named Officers did
not exercise any options during 1998.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options/SARs at Fiscal In-the-Money Options/SARs
Name Year End (#) At Fiscal Year End ($)(a)
- --------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ben J. Gallant 15,000 60,000 -0- -0-
Terry D. Myers 59,999 40,000 6,330 -0-
John E. Vickers III 10,000 40,000 -0- -0-
Diane M. Miller 67,500 30,000 6,330 -0-
William S. Parker 31,250 30,000 4,220 -0-
</TABLE>
- -----------------------
(a) Value was determined by multiplying the number of shares subject to an
option by the difference between the closing price of the Common Stock on
December 31, 1998 on The Nasdaq National Market and the option exercise
price.
5
<PAGE> 7
EMPLOYMENT AGREEMENTS
Effective August 1, 1996, the Company entered into an employment
agreement with Ben J. Gallant, the Company's President, Chief Operating Officer
and Chief Executive Officer. The employment agreement provides for an annual
base salary of $225,000, maintenance of a life insurance policy, an automobile
allowance and the right to such benefits under the Company's employee benefit
plans as are available to executive management. The employment agreement has a
term of three years, but may be terminated at any time if Mr. Gallant commits a
material criminal act, fraud, dishonesty, or malfeasance with respect to the
Company or his employment. In the event (i) his employment is terminated without
cause, (ii) his duties as the President and Chief Executive Officer are
materially changed, or (iii) the Company liquidates, dissolves, merges with, or
transfers substantially all of its assets to a company which does not assume the
Company's obligations under the employment agreement, Mr. Gallant will continue
to be entitled to his base salary and health coverage through the end of the
term. Mr. Gallant has agreed not to compete with the Company during his
employment and for one year after termination.
COMPENSATION OF DIRECTORS
Directors who are not officers or employees of the Company are entitled
to a fee of $500 for each Board meeting attended. In addition, such directors
receive an annual option grant to purchase 312 shares of Common Stock at an
exercise price equal to the market value per share on the date of grant. Such
options become exercisable in equal annual installments over four years as long
as the optionee remains a director and expire ten years after the date of grant.
COMPENSATION COMMITTEE REPORT
The Compensation Committee, comprised of directors who are not
employees of the Company, periodically reviews and makes recommendations to the
Board of Directors regarding executive compensation. It is the philosophy of the
Committee that the executive compensation program should allow the Company to
attract, maintain and motivate quality management personnel by offering and
maintaining a competitive compensation package with an appropriate relationship
between executive pay and the creation and maintenance of shareholder value. In
practice, the Committee's review and evaluation of compensation is general and
subjective, although consistent in approach with the stated philosophy and the
policies discussed in "Base Salary", "Bonus Compensation", "Stock Options" and
"The Chief Executive Officer's 1998 Compensation" below. The current members of
the Compensation Committee are Wayne A. Johnson, II and Bertrand R. Williams,
Sr. The key elements of the Company's current program include a base salary,
bonus compensation linked to the Company's financial performance and equity
participation through stock options.
The Compensation Committee believes that its philosophy, policies and
practices assist the Company in meeting its short-term and long-term business
objectives and appropriately relate executive compensation to the Company's
performance.
During 1998, the Compensation Committee made no recommendations for
executive compensation changes, bonuses or stock options. In early 1999, the
Compensation Committee made bonus recommendations related to the 1998 financial
performance of the Company. This was in keeping with the Committee's policy to
review such matters on a periodic, rather than a routine, annual basis.
Base Salary
The Compensation Committee's policy with respect to salaries is to
establish base compensation levels for executives, which are competitive in
relation to other public companies of similar size and nature. The Compensation
Committee will also take into consideration the executive's responsibilities,
experience level, and individual performance. Salaries are reviewed periodically
and are adjusted based on the recommendation of management.
Bonus Compensation
The Company does not have a formal bonus plan. Bonuses are considered
by the Committee periodically based upon individual and Company performance,
with application of the philosophy and policies of the Committee.
6
<PAGE> 8
Stock Options
The Compensation Committee may grant stock options, restricted stock or
performance shares to employees of the Company, including executive officers.
Option grants become exercisable over a period of time and generally have an
exercise price equal to the fair market value of the Common Stock on the grant
date, creating long-term incentives to enhance the value of the Company's Common
Stock. Generally, the Compensation Committee considers grants to executive
officers and key managers on a periodic basis. The size and type of grants are
determined based upon management's recommendation and are generally a function
of the position held by an executive and the expected contribution to the
Company's future growth and profitability.
The Chief Executive Officer's 1998 Compensation
The Chief Executive Officer's Compensation during 1998 was fixed by a
negotiated employment contract entered into in August 1, 1996, expiring July 31,
1999. The Compensation Committee believes Mr. Gallant's base salary of $225,000
in 1998 was comparable to that of other Chief Executive Officers in other public
companies of similar size and nature. In early 1999, the Compensation Committee
recommended a bonus of $30,000 for Mr. Gallant based upon his individual
efforts, which the Committee deemed to be of significant importance in the
achievement of targeted Company earnings, excluding non-recurring items.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended,
restricts the deductibility of executive compensation paid to the Company's
Chief Executive Officer and any of the four other most highly compensated
executive officers at the end of any fiscal year to not more than $1 million in
annual compensation (including gains from the exercise of certain stock option
grants). Certain performance-based compensation is exempt from this limitation
if it complies with the various conditions described in Section 162(m).
The Compensation Committee does not believe that the components of the
Company's compensation program are likely to result in payments to any executive
officer in any year which would be subject to the restriction on deductibility
and has concluded that no action with respect to qualifying such compensation
for deductibility is necessary at this time. The Compensation Committee intends
to continue to evaluate from time to time the advisability of qualifying future
executive compensation programs for exemption from the Section 162(m)
restriction on deductibility.
COMPENSATION COMMITTEE:
WAYNE A. JOHNSON II
BERTRAND R. WILLIAMS, SR.
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative
total shareholder return on the Company's Common Stock during the period
beginning December 31, 1993 and ending on December 31, 1998 with the Standard
and Poor's 500 Stock Index (the "S&P 500") and a published industry index (the
"MG Group") comprised of over 100 companies in the medical instruments business.
The graph assumes that the value of the investment in the Common Stock, the S&P
500, and the MG Group index was $100 on December 31, 1993 and that all dividends
were reinvested.
[GRAPH]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
American Dental Technologies, Inc. 100 21.62 29.73 64.86 55.07 39.86
MG Group Index 100 108.35 177.17 188.84 215.14 279.00
S&P 500 Index 100 101.32 139.40 171.41 228.59 293.92
</TABLE>
7
<PAGE> 9
CERTAIN TRANSACTIONS
The Company had accounts receivable from Denics Co., Ltd. ("Denics"), a
5% owner, of $1,143,475 at December 31, 1998. In February 1998, the Company
agreed to convert $500,000 of outstanding accounts receivable from Denics, which
was the largest amount outstanding during 1998, to a note receivable with
interest payable at 10.5% due in September 1998. In August 1998, the Company
agreed to modify the repayment terms of the note receivable to $200,000 due
August 31, 1998 and five monthly installments of $60,000 commencing in April
1999. The Company realized $3,465,819 during 1998, from the sale of KCP units,
lasers and related parts to Denics.
ACCOUNTANTS' REPRESENTATIVES
The accounting firm of Ernst & Young, LLP has acted as independent
accountants to audit the financial statements of the Company and its
consolidated subsidiaries since 1989. The Audit Committee has not yet completed
its evaluation of the 1998 audit process. As a result, the selection of the
independent accountants to audit the financial statements of the Company for
1999 will be made by the Board of Directors at a later date. Representatives of
Ernst & Young, LLP are expected to be present at the Annual Meeting and to be
available to respond to appropriate questions. Such representatives will have
the opportunity to make a statement if they desire to do so.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4, 5 and amendments thereto and
written representations furnished to the Company, except as indicated below, the
Company's officers, directors, ten percent owners and other reporting persons
timely filed all required reports for 1998 pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended. Since the beginning of 1998, Dr.
Terry Myers, Vice President - Research & Clinical, filed one late Form 4 and one
late Form 5 reporting a total of eight transactions by his wife. In 1999,
William Graham, Vice-President - Sales, filed a late Form 3.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the next annual
meeting of stockholders must be received by the Company no later than January 1,
2000 in order to be considered for inclusion in the Company's proxy materials
for such meeting.
By Order of the Board of Directors,
John E. Vickers III, Secretary
Southfield, Michigan
April 30, 1999
8
<PAGE> 10
AMERICAN DENTAL TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF AMERICAN DENTAL TECHNOLOGIES, INC.
I (we) hereby constitute and appoint Ben J. Gallant and John E. Vickers, III,
and each of them, attorneys, agents and proxies with power of substitution to
vote all of the shares of common stock of American Dental Technologies, Inc.
("American Dental") that I am (we are) entitled to vote at the Annual Meeting of
Stockholders of American Dental, to be held at the Skyline Club, Mackinac Room,
2000 Town Center, Southfield, Michigan, on June 4, 1999 at 10:00 a.m., local
time, and at any adjournments thereof, upon all matters set forth on the reverse
side of this card, all of which are being proposed by American Dental.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED; IF NO
DIRECTION IS MADE WITH RESPECT TO A NOMINEE OR A PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH NOMINEE OR PROPOSAL.
In their discretion, the proxies are also authorized to vote upon such other
matters as may properly come before the meeting, if any.
I (we) acknowledge receipt of the Notice of Annual Meeting of Stockholders, the
1999 Proxy Statement dated April 30, 1999 and the 1998 Annual Report to
Stockholders and ratify all that the proxies or either of them or their
substitutes may lawfully do or cause to be done by virtue hereof and revoke all
former proxies.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------- ------------------------------
- ---------------------------- ------------------------------
- ---------------------------- ------------------------------
<PAGE> 11
PROXY
[X] PLEASE MARK CHOICE AS IN THIS EXAMPLE UNLESS AUTHORITY IS WITHHELD,
THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE
NOMINEES NAMED BELOW.
1) Election of directors:
Ben J. Gallant [ ] [ ]
For Withheld
William D. Myers, M. D. [ ] [ ]
For Withheld
-------------------
Date: Mark box at right if [ ]
Please be sure to sign and date this comments or address
proxy card. change has been noted on
the reverse side of this
card.
- --------------------------------------------------------
Note: Please sign
exactly as name(s)
appear(s) on stock
records. When signing as
attorney, administrator,
trustee, guardian,
administrator or
corporate officer,
please so indicate.
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Stockholder sign above Co-owner sign above
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AMERICAN DENTAL TECHNOLOGIES, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy.
Your vote counts, and you are strongly urged to exercise your right to vote your
shares.
Please mark the box on the proxy card to indicate how your shares shall be
voted. Then sign and date the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Stockholders Meeting which will
be held on June 4, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
American Dental Technologies, Inc.
