<PAGE>
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
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
COMMISSION FILE NO. 0-20572
PATTERSON DENTAL COMPANY
(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>
PATTERSON DENTAL COMPANY
1031 MENDOTA HEIGHTS ROAD
ST. PAUL, MINNESOTA 55120
August 6, 1997
Dear Shareholder of Patterson Dental Company:
You are cordially invited to attend the Annual Meeting of Shareholders of
Patterson Dental Company (the "Company"), to be held at the Decathlon Club, 1700
East 79th Street, Bloomington, Minnesota, on Monday, September 8, 1997, at 4:30
p.m.
At the Annual Meeting you will be asked to vote for the election of one
director and to ratify the selection by the Board of Directors of Ernst & Young
LLP as the Company's independent public accountants for the fiscal year ending
April 25, 1998. I encourage you to vote FOR the nominee for director and FOR
ratification of the appointment of Ernst & Young LLP.
Whether or not you are able to attend the Annual Meeting in person, I urge
you to sign and date the enclosed Proxy Card and return it promptly in the
enclosed envelope.
Very truly yours,
PATTERSON DENTAL COMPANY
/s/ Peter L. Frechette
Peter L. Frechette
President and Chief Executive Officer
<PAGE>
PATTERSON DENTAL COMPANY
1031 MENDOTA HEIGHTS ROAD
ST. PAUL, MINNESOTA 55120
_____________
NOTICE
OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
SEPTEMBER 8, 1997
______________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Patterson
Dental Company (the "Company") will be held at the Decathlon Club, 1700 East
79th Street, Bloomington, Minnesota, on Monday, September 8, 1997, at 4:30 p.m.,
for the following purposes, as more fully described in the accompanying Proxy
Statement:
1. To elect one director of the Company to have a term expiring in 2000,
and until his successor shall be elected and duly qualified;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending April 25,
1998; and
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on July 11, 1997, are
entitled to notice of and to vote at the meeting. Whether or not you expect to
attend the meeting in person, please mark, date and sign the enclosed proxy
exactly as your name appears thereon and promptly return it in the envelope
provided, which requires no postage if mailed in the United States. Proxies may
be revoked at any time and, if you attend the meeting in person, you may
withdraw your proxy and vote personally on any matter brought properly before
the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ronald E. Ezerski
Ronald E. Ezerski
Secretary
Saint Paul, Minnesota
August 6, 1997
<PAGE>
PATTERSON DENTAL COMPANY
1031 MENDOTA HEIGHTS ROAD
ST. PAUL, MINNESOTA 55120
_____________
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
SEPTEMBER 8, 1997
______________
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Patterson Dental Company (the "Company")
for use at the Annual Meeting of Shareholders to be held at the Decathlon Club,
1700 East 79th Street, Bloomington, Minnesota, on Monday, September 8, 1997, at
4:30 p.m., and at any adjournments thereof.
All shares represented by properly executed proxies, unless such proxies
have previously been revoked, will be voted at the meeting as follows, unless
otherwise specified by the shareholder in the proxy: (i) in favor of the
election of the nominee for director listed herein; and (ii) in favor of the
selection of Ernst & Young LLP as the independent public accountants of the
Company. If any other matters are properly presented at the meeting for action,
including a question of adjourning the meeting from time to time, the persons
named in the proxies and acting thereunder will have discretion to vote on such
matters in accordance with their best judgment. If a properly executed Proxy
Card is returned and the shareholder has abstained from voting on any matter,
the shares represented by such proxy will be considered present at the meeting
for purposes of determining a quorum and for purposes of calculating the vote,
but will not be considered to have been voted in favor of such matter. If a
properly executed proxy is returned by a broker holding shares in street name
which indicates that the broker does not have discretionary authority as to
certain shares to vote on one or more matters, such shares will be considered
present at the meeting for purposes of determining a quorum, but will not be
considered to be represented at the meeting for purposes of calculating the vote
with respect to such matter.
Any shareholder who executes and returns a proxy may revoke it at any time
before it is voted by giving written notice to the Secretary of the Company, by
executing a later-dated proxy and delivering it to the Secretary of the Company,
or by attending the meeting and giving oral notice to the Secretary of the
Company. Any written notice delivered to the Secretary of the Company should be
sent to Ronald E. Ezerski, Secretary, Patterson Dental Company, 1031 Mendota
Heights Road, St. Paul, Minnesota 55120.
The Board of Directors has fixed the close of business on July 11,
1997, as the record date for determining the holders of the Company's
outstanding voting shares entitled to notice of, and to vote at, the Annual
Meeting. On that date, the voting shares of the Company consisted of 21,742,679
shares of Common Stock each entitled to one vote per share. The Notice of
Annual Meeting, this Proxy Statement and the related Proxy Card are first being
mailed to shareholders of the Company on or about August 6, 1997.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership
of the Company's Common Stock as of June 30, 1997 (unless noted otherwise), by
(i) each person known to the Company to own beneficially more than 5% of its
Common Stock, (ii) each director and nominee for director, (iii) each officer
named in the "Summary Compensation Table" below, and (iv) the directors and
officers as a group. Unless otherwise indicated, each person in the table has
sole voting and investment power as to the shares shown.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENTAGE OF
OF BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) STOCK
- ------------------------------------ ------------ -----
<S> <C> <C>
First Trust National Association.......................... 3,824,916 17.6%
Trustee of the Patterson Dental Company
Employee Stock Ownership Plan and Trust
180 East Fifth Street
St. Paul, MN 55164-0488
Peter L. Frechette........................................ 1,862,378(2) 8.6
1031 Mendota Heights Road
St. Paul, MN 55120
Ronald E. Ezerski......................................... 1,849,265(2) 8.5
1031 Mendota Heights Road
St. Paul, MN 55120
T. Rowe Price Associates, Inc............................. 1,325,200(3) 6.1
100 East Pratt Street
Baltimore, MD 21202
James W. Wiltz............................................ 396,380(2) 1.8
John V. Dodd.............................................. 54,795(2) *
David K. Beecken.......................................... 90,460(4) *
Andre B. Lacy............................................. 28,950(4) *
Burt E. Swanson........................................... 25,500(4) *
All directors and officers as a group
(7 persons)............................................ 4,307,728 19.8
</TABLE>
_________
*Less than 1%
(1) The securities "beneficially owned" by a person are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission (the "Commission")
and accordingly, may include securities owned by or for, among others, the
spouse, children or certain other relatives of such person as well as other
securities as to which the person has or shares voting or investment power
or has the right to acquire within 60 days. The same shares may be
beneficially owned by more than one person. Beneficial ownership includes
shares of Common Stock held as of June 30, 1997, by the Patterson Dental
Company Employee Stock Ownership Plan and Trust (the "ESOP"). Shares
reported as owned by the ESOP Trustee are also reported as beneficially
owned by the executive officers to the extent that shares have been
allocated to the ESOP accounts of the named person. In July 1996, 3,552,855
shares of Preferred Series A shares owned by the ESOP were converted into
3,837,083 Common Shares. Allocated shares are voted by the ESOP Trustee in
accordance with the direction of ESOP participants. Generally, unallocated
shares and allocated shares as to which no
2
<PAGE>
direction is made by the participants are voted by the ESOP Trustee in the
same percentage as the allocated shares as to which directions are received
by the ESOP Trustee.
(2) Beneficial ownership shown includes the following amounts of Common Stock
allocated by the ESOP account of the respective officers: Peter L.
Frechette, 849 shares; Ronald E. Ezerski, 815 shares; James W. Wiltz, 680
shares; and John V. Dodd, 3,315 shares.
(3) As set forth in Schedule 13G filed with the Commission on February 13,
1997, includes 57,500 shares over which T. Rowe Price Associates, Inc.
claims sole voting power, and 1,325,200 shares over which sole dispositive
power is claimed.
(4) Includes shares purchasable by the named person under the Company's
Director Stock Option Plan: David K. Beecken (24,000 shares); Andre B. Lacy
(24,000 shares); and Burt E. Swanson (24,000 shares).
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation earned by the Company's
Chief Executive Officer and the other executive officers for the fiscal years
ended April 1995, 1996 and 1997. No stock options were granted to executive
officers during the last fiscal year, nor were there any options outstanding on
April 26, 1997. The Company has no formalized employment agreements with its
executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION ALL OTHER
---------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)(1)
- --------------------------- --- ---------- -------- -------------------
<S> <C> <C> <C> <C>
Peter L. Frechette................................. 1997 292,505 187,278 1,713
President and Chief Executive Officer 1996 286,800 176,717 1,644
1995 277,600 154,163 2,211
Ronald E. Ezerski.................................. 1997 177,904 74,008 1,705
Executive Vice President, 1996 183,732 75,379 1,636
Treasurer and Secretary 1995 177,064 71,398 2,204
James W. Wiltz..................................... 1997 156,404 69,452 1,674
Vice President - Sales and 1996 152,004 62,735 1,606
Distribution 1995 146,935 59,160 2,053
John V. Dodd....................................... 1997 116,796 40,061 10,014
Vice President - Management 1996 113,868 40,915 9,639
Information Services 1995 106,643 38,556 8,991
</TABLE>
_________________________
(1) Consists of contributions by the Company to the executive officer's account
under the ESOP for the end of each ESOP plan year in April 1995, 1996 and
1997.
3
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors makes annual
recommendations to the Board respecting the appropriate levels of compensation
for the Company's senior executive officers for the following calendar year.
The Committee considers how the achievement of the overall goals and objectives
of the Company can be aided through adoption of an appropriate compensation
philosophy and effective compensation program elements. In addition to
approving the compensation arrangements for senior management, the Committee
also reviews and approves the adoption of any compensation plans in which
officers and directors are eligible to participate. The Company's three outside
directors, Messrs. Swanson, Beecken and Lacy, comprise the Compensation
Committee. The Committee reviews and makes recommendations to the Board with
respect to the base salary component on a calendar year basis and on a next
fiscal year basis with respect to the proposed bonus potential for the senior
executives. The bonus potential for each of the senior officers is directly
affected by their participation in the Management Incentive Compensation Plan
(MICP) which is reviewed by the Committee and adopted by the Board on a fiscal
year basis.
The Committee had discussions with the President and Executive Vice
President (formerly, Vice President-Finance), reviewed the present salary
ranges, current salaries and bonus potential for each position, considered
management's overall salary objectives and discussed philosophy respecting the
components of the compensation package such as the amount of compensation to be
placed at risk, short term versus longer term incentives, the use of stock
option programs, the alignment of executive compensation with the enhancement of
shareholder value and other issues. The Committee also reviewed other
information available to its members, including an executive compensation survey
and report prepared for members of the National Association of Wholesaler-
Distributors (N.A.W.) by Management Foresight, a Unit of Arthur Andersen LLP.
Compensation Philosophy and Objectives
The Company's executive compensation philosophy is to link such
compensation to the attainment of business objectives and earnings performance
which in turn will enable the Company to attract, retain and reward executive
officers who contribute to the long-term success of the Company. The MICP for
the fiscal year ending April 26, 1997 specifically ties incentive compensation
to the Company's earnings, and each participating officer's incentive
compensation, including incentive compensation for the senior officers,
increases in direct proportion to the Company's increase in profit. The
objective of the MICP is to encourage greater initiative, resourcefulness,
teamwork and efficiency on the part of all key employees whose performance and
responsibilities directly affect Company profits. The overall goal of the plan
is to reward these officers for achieving superior performance.
The Committee recognizes that the MICP, together with the bonus potential
for each officer, places a substantial amount of the total compensation of an
executive at risk. To accommodate the Colwell acquisition on October 1, 1996
and the formation of Patterson Dental Supply, Inc. (PDSI) as a subsidiary to
handle the traditional sale and distribution of dental supplies and equipment,
the duties, reporting functions and responsibilities of the officers of the
Company and its subsidiaries were changed to fit the restructured organization.
In furtherance of this process, James Wiltz, a vice president of the Company,
also became president of PDSI and Ronald Ezerski became the executive vice
president of the Company with responsibility for MIS, human resources and
corporate development in addition to his former duties in finance and general
administration. By reason of the foregoing, the bonus potential for James Wiltz
was increased from 40% to 50% of base salary, beginning January 1, 1997, for
fiscal year 1997 and increased for Ronald Ezerski from 40% to 50% of base salary
for fiscal year 1998. If the Company's goals are achieved under the new
alignment, an executive other than the Chief Executive Officer could obtain
total compensation near or above the competitive total compensation shown in the
N.A.W. survey for comparable positions in companies having similar sales for
fiscal year 1997. Keeping base salaries relatively low with a higher portion of
the total
4
<PAGE>
compensation package dependent upon performance is compatible with the Company's
traditional executive compensation approach.
Executive Compensation Program Components
The Company's executive compensation program for the senior officers,
including the President and Chief Executive Officer, consists of a base salary
and an annual cash incentive in the form of a potential bonus measured as a
percentage of base salary. The particular elements of the compensation program
are discussed more fully below.
Base Salary. Annual base salary levels of executives are determined by the
potential impact of the individual on the Company and its performance, the
skills and experience required by the position, the individual performance of
the executive, as well as the Company's overall performance, internal equity and
external pay practices.
Incentive Compensation. Annual cash bonuses are paid under the Company's
MICP and are designed to provide a direct financial incentive to executives to
achieve the Company's annual profit goals. The annual bonus potential
percentage of base salary range from 35% to 65% of base salary, subject to
increase in direct proportion to the Company's increase in profit. Each senior
executive officer has the opportunity to increase his targeted bonus potential
as a percentage of base salary in accordance with the formula contained in the
MICP which allows a maximum of 150% of the targeted bonus potential to be paid
if 125% of the planned profit is achieved. Conversely, the MICP allows 50% of
the targeted bonus potential to be paid if 75% of the planned profit is
achieved. Because the Company achieved 99% of its profit goals for the fiscal
year ending April 26, 1997, the senior officers earned cash bonuses of 98% of
their targeted potential bonus percentage of base salary. For example, Peter L.
Frechette, the Company's Chief Executive Officer, who had a 65% bonus potential
for fiscal year 1997, received a bonus of 63.7% of base pay as a bonus because
the Company achieved 99% of its plan. Each year the MICP is revised to set new
performance goals for the Company and the key employee participants in the plan.
Except to accommodate the change in duties assumed by Messrs. Ezerski and
Wiltz in the fall of 1996, the Company's base salary ranges remained unchanged
for calendar 1996 and continue to closely approximate the market averages
described in the N.A.W. report. Nevertheless, except for the Chief Executive
Officer, the Committee believes that total compensation is competitive in
relation to market data, primarily because a larger part of the Company's
compensation package is at risk under the MICP. For fiscal 1997, the hurdle
rates under the MICP were a 20% increase in net earnings and a 15% increase in
operating income, both of which were substantial targets to meet. Because the
Company continues to reward the performance of its executives through the
profitability-oriented MICP, the Committee believes that the Company can justify
paying more than competitive levels of total compensation.
In addition to the previously adopted Employee Stock Purchase Plan pursuant
to which approximately 700 employees have subscribed to purchase Company stock,
the Capital Accumulation Plan approved by the shareholders last year has in the
Committee's view, by reason of its favorable response among key employees,
provided an effective tool in motivating and encouraging officers and other key
employees to lessen the dependence of the Company on annual compensation and
bonuses in order to attract, retain and motivate key personnel to grow the
Company's sales and earnings. Since the senior officers are also shareholders
whose interests are aligned with the long-term interests of shareholders, each
of the senior officers currently has long-term incentives which are directly
linked to the interests of the Company's other shareholders. The Committee
continues to believe that longer term incentive compensation which the stock
purchase plan and the Capital Accumulation Plan provide will be beneficial to
key employees as well as the Company and its shareholders.
5
<PAGE>
CORPORATE TAX DEDUCTION ON COMPENSATION IN EXCESS OF $1 MILLION A YEAR
The Company's income tax deduction for executive compensation is limited by
Code Section 162(m) to $1 million per executive per year, unless compensation
above that amount is "performance-based." This limit applies to the Company's
chief executive officer and the other executive officers who are most highly
compensated. They are identified in the Summary Compensation Table. The Company
has not had any deductions limited by Section 162(m) to date.
The Committee will make every reasonable effort to ensure that all
compensation paid to its executives is fully deductible, provided it determines
that application of this limit is consistent with the Company's needs and its
executive compensation philosophy.
Respectfully submitted,
/s/ David K. Beecken
/s/ Andre B. Lacy
/s/ Burt E. Swanson, Chairman
The Compensation Committee
6
<PAGE>
COMPANY STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on $100
invested on October 28, 1992, the date of the initial public offering of the
Company's Common Stock, through April 26, 1997, with the cumulative total return
for the same time period on the same amount invested in the Nasdaq Stock Market
(U.S. Companies) Index and an index of peer companies selected by the Company.
The Peer Group Index consists of 26 companies (including the Company) based on
the same Standard Industrial Code.*
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------FISCAL YEAR ENDING-----------------------------------
COMPANY 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
PATTERSON DENTAL COMPANY 100.00 107.75 196.48 196.38 255.51 282.96
PEER GROUP 100.00 105.70 121.14 110.19 140.75 112.73
NASDAQ INDEX 100.00 119.17 133.76 146.06 203.88 217.32
</TABLE>
_______________________
*American HomePatient, Inc., Aprogenex, Inc., Bio-Dental Technologies Corp.,
Biodynamics International Inc., Cantel Industries, Inc., Cyberonics, Inc., Elron
Electronic Industries Ltd., ESC Medical Systems Ltd., Graham-Field Health
Products Inc., Gulf South Medical Supply, Inc., Gull Laboratories Inc., Henry
Schein Inc., MBF USA Inc., Micro Bio-Medics Inc., Norland Medical Systems Inc.,
Owens & Minor Inc., Phoenix-Shannon PLC, Physician Sales and Services, Inc.,
Potlatch Corporation, Pro-Dex Inc., Sterile Concept Holdings, Inc., Strategic
Distribution, Inc., Sullivan Dental Products Inc., Thermo-Mizer Environmental
Corp., Vallen Corporation.
7
<PAGE>
PROPOSAL NO. 1.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, as nearly equal in
number as possible, with the term of office of a class expiring each year.
Directors are elected for staggered terms of three years. Burt E. Swanson is
nominated to serve a three year term expiring in 2000. There are four other
directors of the Company whose terms of office do not expire in fiscal 1997.
The persons named in the accompanying proxy will vote for the election of
the above named nominee, unless authority to vote is withheld. The Board is
informed that the nominee is willing to serve as director, however, if the
nominee is unable to serve or for good cause will not serve, the proxy may be
voted for such other person as the proxies shall, in their discretion,
determine.
Set forth below is certain information concerning the nominee for election
as director of the Company and the four directors of the Company whose terms of
office will continue after the Annual Meeting of Shareholders.
NOMINEE FOR ELECTION AS DIRECTOR FOR A TERM
EXPIRING AT THE ANNUAL MEETING IN 2000
--------------------------------------
BURT E. SWANSON, age 70, is of counsel to the law firm of Briggs and
Morgan, Professional Association, legal counsel to the Company since its
acquisition from The Beatrice Companies, Inc. Mr. Swanson was a practicing
member of Briggs and Morgan from 1955 to 1995 and has been a director of
Patterson Dental Company since 1989.
DIRECTORS WHOSE TERMS EXPIRE
AT THE ANNUAL MEETING IN 1999
-----------------------------
RONALD E. EZERSKI, age 51, has been Vice President, Treasurer and Secretary
of the Company since December 1982 and was President of its subsidiary, Dental
Capital Corporation, from December 1982 until October 1988 when it was merged
into the Company. In September 1996, Mr. Ezerski was appointed Executive Vice
President of the Company. Mr. Ezerski has been a director of the Company since
March 1983. Prior to joining Patterson Dental Company in December 1982, Mr.
Ezerski was Controller and Treasurer of Estech, Inc., a subsidiary of Esmark,
Inc. Prior to that, Mr. Ezerski was Manager of the Special Projects Department
for two years at Esmark. Prior to his employment with Esmark, Mr. Ezerski spent
eight years at Touche Ross & Co. as an assistant and then manager on its audit
staff. Mr. Ezerski holds a B.S. degree in accounting from DePaul University and
is a certified public accountant.
ANDRE B. LACY, age 57, has been President and Chief Executive Officer of
LDI Management, Inc. since 1986 and its Chairman since 1992. LDI Management,
Inc. is managing general partner of LDI, Ltd., an industrial and investment
limited partnership. Mr. Lacy is also a member of the boards of directors of
FinishMaster, Inc., IPALCO Enterprises, Inc., Tredegar Industries, Albemarle
Corporation and Herff Jones, Inc. Mr. Lacy has been a director of Patterson
since 1989.
DIRECTORS WHOSE TERMS EXPIRE
AT THE ANNUAL MEETING IN 1998
-----------------------------
PETER L. FRECHETTE, age 59, has been President of the Company since
September 1982 and has been a director of the Company since March 1983. Prior
to joining Patterson Dental Company, Mr. Frechette was employed by American
Hospital Supply Corporation for 18 years, the last seven of which he served as
President of its Scientific Products Division. Mr. Frechette holds an M.B.A.
degree from Northwestern
8
<PAGE>
University and a B.S. degree in economics from the University of Wisconsin. Mr.
Frechette is also a director of FinishMaster, Inc. where he serves on the
compensation committee of the board.
DAVID K. BEECKEN, age 50, has been Managing Director of Beecken Petty &
Company, which is the General Partner of Healthcare Equity Partners, an
investment limited partnership, since September 1996. Mr. Beecken has also been
Senior Managing Director of ABN AMRO Chicago Corporation (formerly The Chicago
Corporation), a broker-dealer, since February 1993. ABN AMRO Chicago
Corporation has provided certain financial advisory services to the Company.
From 1989 to February 1993, Mr. Beecken was a Senior Vice President - Managing
Director of First National Bank of Chicago. Mr. Beecken has been a director of
Patterson since 1985.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors held seven meetings during fiscal 1997. Each
director attended all of the Board meetings held.
The Board of Directors has established Executive, Audit, Compensation and
Stock Option Committees. There is no nominating committee of the Board. The
members of the Executive Committee are Messrs. Frechette and Ezerski. The
Executive Committee is granted the power to deal with important matters which
arise between Board meetings and upon which action must be taken or attention
given prior to the next scheduled Board meeting. The Executive Committee did
not meet in person in fiscal 1997, but took written action on two occasions.
The members of the Audit Committee are Messrs. Beecken, Swanson and Lacy.
The Audit Committee is empowered by the Board of Directors to review the
financial books and records of the Company in consultation with the Company's
accounting and auditing staff and its independent auditors and to review with
the accounting staff and independent auditors the scope of the audit, the audit
plan and any questions raised with respect to accounting and auditing policy and
procedure. The Audit Committee held four meetings during fiscal 1997.
The members of the Compensation and Stock Option Committee are Messrs.
Beecken, Swanson and Lacy. The Compensation and Stock Option Committee is
authorized by the Board of Directors to establish general levels of compensation
for officers of the Company, to set the annual compensation of each of the
executive officers of the Company, to grant options to employees under the
Company's option plans, and to review and approve compensation and benefit plans
of the Company. The Compensation and Stock Option Committee held three meetings
during fiscal 1997.
DIRECTORS' COMPENSATION
Directors of the Company who are not employees of the Company receive a
retainer of $10,000 per year. Out-of-pocket expenses incurred on behalf of the
Company are reimbursed for all directors.
REQUIRED VOTE
Election as a director requires the affirmative vote of the holders of a
majority of the shares represented in person or by proxy and entitled to vote at
the Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE ELECTION OF THE NOMINEE LISTED ABOVE.
9
<PAGE>
PROPOSAL NO. 2.
RATIFICATION OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Ernst & Young LLP as independent
public accountants for the Company for the year ending April 25, 1998. A
proposal to ratify that appointment will be presented to shareholders at the
Annual Meeting. If the shareholders do not ratify the selection of Ernst &
Young LLP, another firm of independent public accountants will be selected by
the Board. Representatives of Ernst & Young LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions from shareholders in
attendance.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Commission and provide the Company
with copies of such reports. Based solely on its review of the copies of such
forms received by it, or written representations from certain reporting persons
that no Forms 5 were required for those persons, the Company believes that,
during the past fiscal year its officers, directors and greater than ten percent
stockholders complied with applicable filing requirements.
VOTING OF PROXIES AND EXPENSES
The Board of Directors recommends that an affirmative vote be cast in favor
of each of the proposals listed on the Proxy Card.
The Board of Directors knows of no other matters that may be brought before
the meeting which require submission to a vote of the shareholders. If any
other matters are properly brought before the meeting, however, the persons
named in the enclosed proxy or their substitutes will vote in accordance with
their best judgment on such matters.
Expenses incurred in connection with the solicitation of proxies will be
paid by the Company. The proxies are being solicited principally by mail. In
addition, directors, officers and regular employees of the Company may solicit
proxies personally or by telephone, for which they will receive no consideration
other than their regular compensation. The Company will also request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
the beneficial owners of Common Stock of the Company and will reimburse such
persons for their expenses so incurred.
SHAREHOLDER PROPOSALS
Shareholders wishing to present proposals for action by the shareholders at
the next annual meeting must present such proposals at the principal offices of
the Company not later than April 8, 1998. Due to the complexity of the
respective rights of the shareholders and the Company in this area, any
shareholder desiring to propose such an action is advised to consult with his or
her legal counsel with respect to such rights. It is suggested that any such
proposals be submitted by certified mail, return receipt requested.
10
<PAGE>
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended April 26, 1997, accompanies this Notice of Annual Meeting, Proxy Statement
and related Proxy Card. No part of the Annual Report to Shareholders is
incorporated herein and no part thereof is to be considered proxy soliciting
material.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Peter L. Frechette
Peter L. Frechette
President and Chief Executive Officer
Saint Paul, Minnesota
August 6, 1997
11
<PAGE>
PATTERSON DENTAL COMPANY
1031 Mendota Heights Road
St. Paul, Minnesota 55120
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and the Proxy Statement, dated August 6, 1997, hereby appoints
Ronald E. Ezerski and Peter L. Frechette as proxies (each with the power to act
alone and with the power of substitution and revocation), to represent the
undersigned and to vote, as designated below, all common shares of Patterson
Dental Company held of record by the undersigned on July 11, 1997, at the 1997
Annual Meeting of Shareholders to be held at the Decathlon Club, 1700 East 79th
Street, Bloomington, Minnesota, on Monday, September 8, 1997, at 4:30 p.m., and
at any adjournments thereof.
1. To elect one director of the Company to have a term expiring in 2000, and
until his successor shall be elected and duly qualified.
[_] FOR the nominee listed below [_] WITHHOLD AUTHORITY to vote
for the nominee listed below
BURT E. SWANSON
2. To ratify the selection of Ernst & Young LLP as the Company's independent
public accountants for the fiscal year ending April 25, 1998.
[_] FOR [_] AGAINST [_] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON THE
PROXY BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2. ABSTENTIONS WILL BE COUNTED TOWARDS THE
---
EXISTENCE OF A QUORUM.
Please sign exactly as name appears on this proxy. When shares are held by
joint tenants, both should sign. If signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
Dated:_______________________________ ___________________________________
___________________________________
(Signature)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
