<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)
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
<PAGE> 2
AMERICAN DENTAL TECHNOLOGIES, INC.
5555 BEAR LANE
CORPUS CHRISTI, TEXAS 78405
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 26, 2000
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of American
Dental Technologies, Inc. (the "Company") will be held at the Town Club, 6th
Floor, 800 N. Shoreline Blvd., Corpus Christi, Texas, on Friday, 26th day of
May, 2000, at 10:00 a.m. local time, for the following purposes:
(1) to elect three directors for a term of three years;
(2) to approve an amendment to the Company's Certificate of Incorporation
changing the Company's name to "American Medical Technologies, Inc.",
(3) to transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 10, 2000 are
entitled to vote a the Annual Meeting.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE. RETURNING THE ENCLOSED
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON OR ATTEND THE ANNUAL MEETING.
By Order of the Board of Directors
John E. Vickers, III, Secretary
April 20, 2000
<PAGE> 3
AMERICAN DENTAL TECHNOLOGIES, INC.
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
This Proxy Statement is being sent to stockholders on or about April
20, 2000, 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 Town Club,
6th Floor, 800 N. Shoreline Dr., Corpus Christi, Texas at 10:00 a.m., local
time, on Friday, May 26, 2000, 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 AND IN FAVOR
OF THE PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION DESCRIBED 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 10, 2000 (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 and
the the Company's name requires the affirmative vote of a majority of the
shares outstanding and entitled to vote at the Annual Meeting. Abstentions are
counted only for purposes of determining whether a quorum is present at the
Annual Meeting but will have the effect of a vote against the proposal to change
the Company's name. Broker non-votes will not be counted for any purpose to
change the Company's name.
1
<PAGE> 4
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, 2000, 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>
William D. Myers 1,084,711 (4) 12.8
Ben J. Gallant 956,864 11.3
Michael F. Radner 548,226 6.5
Charles A. Nichols 498,180 5.9
William D. Maroney 410,762 (5) 4.8
Wayne A. Johnson II 254,997 (6) 3.0
Terry D. Myers 133,407 (7) 1.6
John E. Vickers III 99,450 1.2
William S. Parker 31,550 *
Gary A. Chatham 12,687 *
Bertrand R. Williams, Sr. 9,861 *
William Graham -- *
All current executive officers and
directors as a group (13 persons ) 3,359,071(8) 39.7
</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; Michael
F. Radner, 18860 West Ten Mile Road, Southfield, Michigan 48075.
(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 - 15,000 shares; William D. Myers and spouse - 2,128
shares; William D. Maroney and spouse - 234 shares; Charles A. Nichols -
468 shares; Michael F. Radner - 15,625 shares; Wayne A. Johnson, II - 468
shares; John E. Vickers - 10,000 shares; Terry D. Myers - 59,999 shares;
William S. Parker - 31,250 shares; Bertrand R. Williams, Sr. - 2,028
shares; and all executive officers and directors as a group - 105,690
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 owned jointly with and/or
individually by Dr. William D. Myers' wife, Irene Myers.
(5) Includes 316,359 shares of Common Stock owned by Mr. Maroney's wife,
Aimee Maroney.
(6) Includes 37,975 shares of Common Stock owned by three family trusts for
which Mr. Johnson is the trustee.
2
<PAGE> 5
(7) Includes 73,408 shares of Common Stock owned by Dr. Terry D. Myers' wife,
Donna Myers.
(8) Includes the shares described in footnotes 2 (other than shares
beneficially owned by Michael F. Radner and Terry D. Myers) and 4 through
7.
SELECTION 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 2003 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 nine directors, three 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 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..................................................................... 62 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................................................................ 71 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,
CHARLES A. NICHOLS...................................................................... 75 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>
3
<PAGE> 6
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>
WILLIAM D. MYERS, M.D......................................................................58 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..............................................................................66 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.
MR. GARY A. CHATHAM.........................................................................55 1999
Mr. Chatham currently serves as senior consultant to Valls Group, an International
trade services provider, a position held since November, 1990. His main
responsibilities include major international business projects, warehouse development,
materials handling systems and management and information systems. From 1981 to
present to 1990, he operated Gary Chatham and Associates, a project planning and
management consulting firm. Mr. Chatham was also a director of Texas
Airsonics, Inc.,
from 1988 until its merger with the Company in August, 1996 and became a Director of
the Company in 1999.
</TABLE>
INCUMBENT DIRECTORS- WITH TERMS EXPIRING IN 2002
<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........................................................................51 1996
Mr. Johnson is currently engaged in the private practice of law, and is legal counsel
for, and a director and secretary/treasurer of, 4,0 Studio, Inc., a personalized
fitness and nutrition concept centre which he co-founded in January 1997. He acted as
President of 4.0 Studio from its inception through February 1999. Mr. Johnson served
as legal counsel to Racer Components, Inc. and Automotive Digital Systems, Inc.,
manufacturers and marketers of automotive performance and racing products, from
January 1996 to January 2000. Prior to such service, Mr. Johnson served as a director
and as vice president and general counsel of Racer Components, Inc. and Automotive
Digital Systems, Inc. from March 1995 to December 1995. Mr. Johnson served as a
director of Texas Airsonics from 1984 until its acquisition by the Company in July
1996.
John E. Vickers III........................................................................53 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 July 1994, Mr. Vickers was
of counsel to the law firm of Novak, Vickers and Burt and practiced law for over 25
years.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C> <C>
MR. WILLIAM S. PARKER.......................................................................54 1999
Mr. Parker was appointed Senior Vice President - Dental of the Company in August,
1998 and became a Director in November, 1999. He had been a consultant, then an
employee of the Company in charge of product development since 1991. From 1976 to
1991, he was the president and co-founder of the New Directions Group, Inc., a
management consulting firm which had clients such as Ford, Exxon Enterprises, AT&T and
Ross Laboratories. He is chiefly responsible for the Company's product development.
</TABLE>
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
During 1999, there were five 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 1999.
The Company's Board has a Compensation Committee, an Audit Committee
and Executive Search 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 met two times in 1999. The current members
of the Compensation Committee, none of whom are employees of the Company, are
Wayne A. Johnson, II, William D. Maroney 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 1999. 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.
An Executive Search Committee was formed in late 1999 and met once. The
function of the Executive Search Committee is to locate candidates to succeed
the President and CEO upon his retirement in August, 2001.
5
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY
The following table provides a summary of compensation paid or accrued by
the Company and its subsidiaries during 1999, 1998 and 1997 to or on behalf of
the Company's Chief Executive Officer and each of the other executive officers,
as of December 31, 1999 who earned in excess of $100,000 in 1999 (the "Named
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation Awards
Annual Compensation ---------------------- All Other
Name and ---------------------- Securities Underlyhing Compensation
Principal Position Year Salary($) Bonus($) Option/SARs (#) ($) (a)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ben J. Gallant(b) 1999 225,000 10,000 37,500 8,911
Chief Executive Officer, Chief 1998 225,000 30,000 -- 5,684
Operating Officer and President 1997 225,000 27,750 75,000 5,684
John E. Vickers III(b) 1999 150,000 7,500 25,000 500
Executive Vice President 1998 150,000 25,000 -- 500
1997 145,000 18,500 50,000 500
William S. Parker 1999 131,625 7,500 25,000 500
Senior Vice President - Dental 1998 110,800 20,000 -- 500
1997 108,508 13,875 37,500 500
William Graham 1999 114,841 5,000 5,000 500
Vice President - Eastern Sales 1998 33,055 -- -- --
Division 1997 -- -- -- --
Terry D. Myers 1999 121,923 -- -- 500
Vice President - Research & 1998 150,000 15,000 -- 500
Clinical(b) 1997 120,004 18,500 50,000 --
</TABLE>
- -------------
(a) Includes $500 401(k) contribution matching and, with respect to Mr.
Gallant, $8,410.56 for life insurance premiums, paid during 1999.
(b) Mr. Myers ceased his duties with the Company on June, 1999, although he
has rendered services since then as an independent consultant.
6
<PAGE> 9
OPTION GRANTS
The following table provides information with respect to options granted
to the Named Officers during fiscal year 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
---------- ------ Potential realizable
value at assumed
annual rates of
Number of % of stock price
Securities options appreciation for
Underlying granted to Exercise option term (b)
Options employees in or base Expiration --------------------
Granted (a) fiscal year price ($/sh) date 5%($) 10%($)
----------- ----------- ------------ --------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Ben J. Gallant 37,500 34.0% $3.50 6/22/2009 -- $66,000
John E. Vickers III 25,000 22.7% $3.50 6/22/2009 -- $44,000
William S. Parker 25,000 22.7% $3.50 6/22/2009 -- $44,000
William Graham 5,000 4.5% $3.50 6/22/2009 -- $8,800
Terry D. Myers -- -- -- -- -- --
</TABLE>
- ----------------
(a) These options were granted October 16, 1999 under the Company's
Non-Qualified and Long-Term Incentive Plan and become exercisable only
upon a change in control of the Company occurring before June 22, 2000.
(b) Represents the value of the option at the end of its term, assuming the
market price of the Common Stock appreciates at annually compounded
rates of 5% and 10%. These amounts represent assumed rates of
appreciation only. Actual gains, if any, will be dependent on overall
market conditions and on future performance of the Common Stock. There
can be no assurance that the amounts reflected in the table will be
achieved.
OPTION HOLDINGS
The following table provides information with respect to the unexercised
options held as of the end of 1999 by the Named Officers. The Named Officers did
not exercise any options during 1999.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options/SARs at Fiscal In-the-Money Options/SARs
Name Year End (#) At Fiscal Year End ($)(a)
- --------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Ben J. Gallant 15,000 97,000 -0- -0-
John E. Vickers III 10,000 65,000 -0- -0-
William S. Parker 31,250 86,250 $1,250 -0-
William Graham -- 5,000 -0- -0-
Terry D. Myers 59,999 -- $1,875 -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, 1999 on The Nasdaq National Market and the option exercise
price.
7
<PAGE> 10
EMPLOYMENT AGREEMENTS
Effective August 1, 1996, the Company entered into an employment
agreement with Ben J. Gallant, naming Mr. Gallant as the Company's Chief
Executive Officer, Chief Operating Officer and President. The employment
agreement had an initial term of three years. Effective August 1, 1999, the
Company entered into first amendment to the employment agreement extending the
term through July 31, 2001. The employment agreement, as amended, 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
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) 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.
Effective October 16, 1999, the Company entered into an executive change
in control bonus agreement with Ben J. Gallant, John E. Vickers, III, William S.
Parker and William Graham. The agreement provides that if a change of control
occurs prior to June 22, 2000 Messrs. Gallant, Vickers and Parker will receive a
cash bonus of $150,000, $100,000, $100,000 and $20,000 respectively.
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.
In 1999, each director was granted an additional option to purchase 312 shares
of Common Stock under the Long-Term Incentive Plan at an exercise price equal to
$1.381.
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 1999 Compensation" below. The current members of
the Compensation Committee are Wayne A. Johnson, II, William D. Maroney 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.
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.
8
<PAGE> 11
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 described
above. In early 1999, the compensation committee made bonus recommendations
related to the 1998 financial performance of the Company and such bonuses were
paid in 1999. Similarly in early 2000, the Compensation Committee made bonus
recommendations related to the 1999 financial performance of the Company and
such bonuses were paid in 2000.
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. Options were granted in 1999 to
incentivize the Company's executive officers to remain with the Company while it
was seeking to find someone to merge with or acquire the Company.
The Chief Executive Officer's 1999 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 1999 was comparable to that of other Chief Executive Officers in other public
companies of similar size and nature. In early 2000, the Compensation Committee
recommended a bonus of $10,000 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. Mr.
Gallant's extended contract did not provide for a raise as the Company's policy
is to address performance annually through bonuses.
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.
WILLIAM D. MARONEY
9
<PAGE> 12
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, 1994 and ending on December 31, 1999 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, 1994 and that all dividends
were reinvested.
[LINE GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
American Dental Technologies, Inc. 100.00 137.50 300.00 254.69 184.38 75.00
MG Group Index 100.00 163.52 174.29 198.56 257.50 244.79
S&P 500 Index 100.00 137.58 169.17 225.61 290.09 351.13
</TABLE>
10
<PAGE> 13
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME
The Board has unanimously approved and recommended to the stockholders
that they consider and approve an amendment to the Company's Certificate of
Incorporation changing the Company's corporate name from "American Dental
Technologies, Inc." to "American Medical Technologies, Inc." If the proposed
amendment is approved, Article First of the Company's Certificate of
Incorporation would be amended to read as follows:
"FIRST. The name of this Corporation shall be: American Medical
Technologies, Inc."
"American Dental Technologies, Inc." was selected as the Company's name
in 1993 to reflect the scope and nature of the business conducted by the Company
at that time and to foster a more positive public perception of the Company than
it had with its prior name. However, because of the Company's plans to expand
its business to include dermatology products and possibly products for other
medical fields, the Board desires to change the current name to encompass these
future endeavors. The Board also believes that the name "American Medical
Technologies. Inc." will more accurately describe a broader offering of future
products. Accordingly, the Board recommends that the corporate name be changed
to "American Medical Technologies, Inc." If the proposal is approved, a
certificate of amendment amending the Certificate of Incorporation will be filed
in the Office of the Secretary of State of the State of Delaware as promptly as
practicable and the name change would become effective on the date of such
filing.
The Board recommends a vote FOR this proposal.
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 1999 audit process. As a result, the selection of the
independent accountants to audit the financial statements of the Company for
2000 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. In 1999, Dr. Terry D. Myers, Vice
President of research filed one Form 4 late, John E. Vickers, III Executive Vice
President, filed one Form 4 late, and Dr. William D. Myers, Charles A. Nichols,
William D. Maroney, Wayne A. Johnson, II and Bertrand R. Williams, Sr.,
directors, each filed one Form 5 late.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the 2001 Annual Meeting of
Stockholders which is eligible for inclusion in the Company's proxy materials
for that meeting under the applicable rules of the Securities and Exchange
Commission, must be received by the Company no later than December 21, 2000 in
order to be considered for inclusion in the Company's proxy materials for such
meeting. The Company expects the persons named as proxies for the 2001 Annual
Meeting of Stockholders to use their discretionary voting authority with respect
to any proposal presented at that meeting by a stockholder who does not provide
the Company with written notice of such proposal prior to March 6, 2001.
By Order of the Board of Directors,
John E. Vickers, III, Secretary
Corpus Christi, Texas
April 20, 2000
11
<PAGE> 14
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 Town Club, 6th Floor, 800 N.
Shoreline Dr., Corpus Christi, Texas on Friday, May 26, 2000, 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
2000 Proxy Statement dated April 20, 2000 and the 1999 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.
<TABLE>
<S><C>
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------------------ -------------------------------------------------
- ------------------------------------------------ -------------------------------------------------
- ------------------------------------------------ -------------------------------------------------
PROXY
[x] PLEASE MARK CHOICE AS IN THIS EXAMPLE.
1. Election of directors: [ ] [ ] [ ]
For Withhold For All Except
William D. Maroney ---------------------------------------------------
Bertrand R. Williams, Sr.
Charles A. Nichols ---------------------------------------------------
---------------------------------------------------
(INSTRUCTIONS: To withhold authority to vote for one or more of the individual nominees, mark "For All Except" and
write the name of each such nominee on the line above.)
2. Amendment to Certificate of Incorporation
To change Company's Name [ ] [ ] [ ]
For Withhold Abstain
Please be sure to sign and date this proxy card.
- -------------------------------------------------- -----------------------------------------------
Stockholder sign above Co-owner sign above
Date:
---------------------------
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.
Mark box at right if [ ]
comments or address
change has been noted on
the reverse side of this card.
</TABLE>
