<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 sec. 240.14a-11(c) or sec. 240.14a-12
Professional Benefits Insurance Company
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
PROXY STATEMENT AND NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
PROFESSIONAL BENEFITS INSURANCE COMPANY
HOUSTON, TEXAS
TO BE HELD AUGUST 15, 1997
INTRODUCTION
The following statement is furnished in connection with the
solicitation by the Board of Directors of Professional Benefits Insurance
Company ("Company"), of proxies to be used at the Annual Meeting of
Shareholders of the Company to be held at the hour of 2:00 P.M. on August 15,
1997, at 10835 Rockley Road, Houston, Texas 77099, and at any adjournments
thereof. The holders of the Company's Class A Common Stock of record at the
close of business on July 16, 1997, are entitled to vote at the Annual Meeting
of Shareholders of the Company. A form of Proxy is enclosed for use at the
meeting if a Shareholder is unable to attend in person. The persons named
therein as proxies were selected BY THE COMPANY. THE PROXY MAY BE REVOKED BY
THE SHAREHOLDER AT ANY TIME BEFORE IT IS EXERCISED, either by written notice
received by the Company prior to exercise or upon request of the Shareholder
made in person. If a Shareholder shall execute two or more valid Proxies, the
proxy bearing the later date will be honored. All shares represented by valid
proxies will be voted at the Annual Meeting of the Shareholders if not revoked
prior to exercise. Where the Shareholder specifies by means of the proxy a
choice with respect to any matter to be acted upon, the shares will be voted in
accordance with the specifications made.
The cost of preparing, assembling, and mailing the Notice of Annual
Meeting, Proxy Statement, and Form of Proxy is to be borne by the Company. It
is not anticipated that any further solicitation of proxies will be made. The
Company will not pay any compensation for soliciting proxies.
OUTSTANDING VOTING SECURITIES OF THE COMPANY
There were outstanding, on July 16, 1997 the record date for
determining Shareholders entitled to vote at the Annual Meeting of
Shareholders, 587,129 shares of the Company's Class A Common Stock, each with a
par value of $1.22 each. Each share is entitled to one vote on each matter
proposed to be acted upon at the forthcoming Annual Meeting. There were also
outstanding as of the record date, 73,524 shares of the Company's Class B
Common Stock with a par value of $1.22 each. Such Class B shares are designated
as non-voting shares by the Company's Articles of Incorporation.
PRINCIPAL SHAREHOLDERS
The Texas Dental Association, as of the record date, owned 73,524
shares of non-voting Class B Common Stock which constitutes 100% of the total
shares of outstanding Class B Common Stock and 11.14% of the outstanding shares
of both classes. Officers and Directors of the Company, as a group, owned 4.34%
of outstanding Class A Common Stock as of the record date. The Company held no
treasury shares as of the record date.
ELECTION OF DIRECTORS
The only substantive matter to be presented for a vote of the
shareholders at the Annual Meeting, to Management's knowledge, is the election
of six Directors. At the meeting, six (6) Directors will be elected for a term
of one (1) year or until their successors are duly elected and qualified.
Unless instructed by the Shareholders to the contrary, the proxies named in the
accompanying proxy, who have been designated by the Board of Directors (the
"Board"), intend to vote for election to the Board the persons named below:
William L. Glenn, Jr. James O. Henry, Jr.
Robert W. Little H. P. Lundblade
Jerry O. Ray Barham D. Rhodes
<PAGE> 3
CERTAIN INFORMATION CONCERNING SUCH NOMINEES IS SET FORTH BELOW:
<TABLE>
<CAPTION>
Served As Class A Directors
Name, Director Age Common Stock Fees Paid
Principal occupation Since (as of 3/25/97) As of Record in 1996
- -------------------- ----- --------------- ------------ -------
<S> <C> <C> <C> <C>
William L. Glenn, DDS 1979 73 4,032 $5,000
Practice of Dentistry
5 years or more
James O. Henry, Jr., DDS. 1981 64 1,276 $5,000
Baylor College
of Dentistry
5 years or more
Robert W. Little, DDS 1981 76 3,572 $5,000
Practice of Dentistry
5 years or more
Hobert P. Lundblade, DDS 1979 67 4,124 $5,000
Practice of Dentistry
5 years or more
Jerry O. Ray 1995 51 60 $ 0
President and CEO
of the Company
5 years or more
Barham D. Rhodes, DDS 1979 71 12,251 $5,000
Practice of Dentistry
5 years or more
</TABLE>
WILLIAM L. GLENN, JR., DDS, is a founding Director of the Company and has
served on the Board since its organization in 1979. He has been Secretary of
the Company since 1979. Dr. Glenn has practiced dentistry over 50 years. He
served in 1964-1969 as Vice President, Director of the Texas Dental
Association. He served six years as Chairman of the TDI Council on Constitution
and Bylaws. Dr. Glenn was a founder and Chairman of the Board of Directors of
Galveston Savings and Loan Association which was sold while in a strong
financial condition. He is a past President of the Rotary Club of Galveston and
of the Southwest Restorative Academy. Dr. Glenn serves on, and is Secretary of,
the Company's Executive Committee..
JAMES O. HENRY, JR., DDS, has been a Director of the Company since 1981 and
served as Treasurer of the Company from March 1990 through October 1995. He has
served as Chairman of the Board since October 1995. Dr. Henry practiced
dentistry for 15 years and currently is on the Faculty of Baylor College of
Dentistry where he served as Assistant Dean for 20 years. He is a former
Director of the First Republic Bank of Dallas East in Dallas, Texas. He has
served as the Secretary-Treasurer of the Texas Dental Association for 6 years.
Dr. Henry serves on, and is Chairman of, the Company's Executive Committee.
ROBERT W. LITTLE, DDS, has been a Director of the Company since 1981. He has
served as Treasurer of the Company since 1995. Dr. Little practiced dentistry
for over 39 years. He serves on the Company's Investment Committee and also
serves on the Company's Executive Committee.
HOBERT P. LUNDBLADE, DDS, is a founding Director of the Company and has served
on the Board of Directors since its organization in 1979. He has practiced
dentistry for over 39 years. Dr. Lundblade served as Mayor of Castle Hills,
Texas for over 23 years, and is a former Director of Castle Hills National Bank
in San Antonio, Texas. Dr. Lundblade services on, and is Chairman of, the
Company's Audit Committee and also serves on the Company's Investment
Committee.
<PAGE> 4
JERRY O. RAY, was elected President and Chief Executive Officer of Professional
Benefits Insurance Company, and became a Director of the Company in 1995. He
joined PBIC in 1988 as Vice President of Operations. In 1990 he was elected
Executive Vice President of PBIC and named Chief Operating Officer. Mr. Ray
served in that position until his election as President and Chief Executive
Officer and to the Board. Mr. Ray has worked in the insurance industry for over
21 years serving as a Vice President for Philadelphia American Life Insurance
Company and for American General Life Insurance Company. He is a Fellow of the
Life Management Institute. In addition to his duties as Director and President
of PBIC, Mr. Ray also serves on the Company's Executive Committee.
BARHAM D. RHODES, DDS, is a founding Director of the Company and has served on
the Board since its organization in 1979. He practiced dentistry for over 40
years. He is a Director of Compass Bank Lufkin, Texas. Dr. Rhodes serves on,
and is Chairman of, the Company's Investment Committee and also serves on the
Company's Audit Committee.
EMPLOYMENT ARRANGEMENTS
The Company entered into an employment agreement with William L.
Glenn, Jr., DDS, on December 1, 1991. Dr. Glenn received $14,000 in gross
earnings for the performance of duties related to his position of Corporate
Secretary for 1996. Dr. James Henry drew a salary of $12,000 for the
performance of duties related to his position of Board Chairman for 1996. Jerry
O. Ray received $66,778.08 in gross earnings for the performance of duties
related to his position of President and Chief Executive Officer for 1996.
COMPENSATION OF DIRECTORS
The Company currently pays directors a fee of $1,250 quarterly or
$5,000 annually for their services as a Director, except Jerry O. Ray who has
elected to waive his directors fee. In addition, each such Director currently
holds a stock option for 5,000 shares of Class A Common Stock, exercisable at
$2.00 per share granted on December 30, 1996 and lasting until December 30,
2001.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY
In 1996, the Board held nine meetings. An Executive Committee has been
delegated all of the powers of the Board to the maximum extent legally
permissible and met one time in 1996. The Executive Committee is currently
composed of the Chairman James O. Henry, Jr., D.D.S., President Jerry O. Ray,
Secretary William L. Glenn, Jr., D.D.S., and Treasurer Robert W. Little, D.D.S.
The Audit Committee maintains communications between the Directors and
independent accountants and assists the Board with its responsibilities
relating to corporate accounting, integrity of financial controls and reporting
practices. The Audit Committee met four times in 1996. The Audit Committee is
currently composed of Barham Rhodes, D.D.S. and Hobert Lundblade, D.D.S. The
Compensation Committee exercises the full powers of the Board with respect to
compensation paid to officers of PBIC. It approves bonus plans and determines
from time to time the standards of performance for bonus payments. It met four
times in 1996. The Compensation Committee is currently composed of all members
of the Board. The Company does not have a standing Nominations Committee for
nomination of Directors. All Directors attended at least 76% of the meetings of
the Board and the committees of which they were members.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
No Shareholder proposals were received by the Company to be included
in these proxy materials. In order for a shareholder proposal to be included in
the Board of Directors' Proxy Statement for the 1998 Annual Meeting of
Shareholders, such proposal must be received at 10835 Rockley Road, Houston,
Texas 77099, Attention: Corporate Secretary, by December 1, 1997, and must
otherwise comply with the requirements of Rule 14a-8 under the Securities
Exchange Act of 1934, as amended.
<PAGE> 5
INDEPENDENT AUDITORS
Causon & Westhoff has been selected as independent auditors for the
Company for the current fiscal year. Causon & Westhoff does not have and has
not had at any time any direct or indirect financial interest in the Company
and does not have and has not had at any time any connection with the Company
in the capacity of promoter, underwriter, voting trustee, director, officer, or
employee. Neither the Company nor any officer or director of the Company has or
has had any interest in Causon & Westhoff. The Board has approved Causon &
Westhoff as its independent auditors. Baird, Kurtz & Dobson was the independent
auditor for the Company for the fiscal year ended December 31, 1995.
One or more representatives of Causon & Westhoff are expected to be
present at the Meeting, will have an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions. On
February 14, 1997, the Company dismissed Baird, Kurtz & Dobson as its
independent accountants effective February 14, 1997. There were no adverse
opinions, disclaimer of opinions, or modification of opinions as to
uncertainty, audit scopes or accounting principles issued by such accountants
for the two most recent fiscal years or any later interim period. The Board
approved the decision to change independent accountants. During the two most
recent fiscal years or any later interim period, there were no disagreements
with the former accountants on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
During the two most recent fiscal years or any later interim period, there have
been none of the kinds of events described in Regulation S-B, Item
304(a)(1)(iv)(B). Baird, Kurtz & Dobson furnished the Company with a letter
that was addressed to the Securities and Exchange Commission stating that it
agreed with the above statements. A copy of such letter was filed as Exhibit 16
to Form 8-KA dated February 14, 1997 and filed on April 3, 1997. On February
17, 1997, the Company engaged Causon & Westhoff as its new independent
accountants for the fiscal year ended December 31, 1996. During the two most
recent fiscal years or any later interim periods, the Company did not engage or
consult with Causon & Westhoff regarding the matters described in Regulation
S-B, Item 304(a)(2), but did discuss with Causon & Westhoff its engagement fees
and standard engagement terms for serving as PBIC's auditors.
ANNUAL REPORT
The Company's Annual Report to Shareholders containing its financial
statements for the fiscal year ended December 31, 1996 is enclosed. The Annual
Report to Shareholders does not constitute any part of this Proxy Statement.
Any Shareholder who does not receive a copy of such Annual Report to
Shareholders may obtain one by writing to the Company without cost to the
Shareholder.
REPORT FILED WITH SECURITIES AND EXCHANGE COMMISSION
ANY BENEFICIAL OWNER OF SECURITIES OF THE COMPANY WHOSE PROXY IS
HEREBY SOLICITED MAY REQUEST AND RECEIVE WITHOUT CHARGE A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB, INCLUDING THE FINANCIAL STATEMENTS THERETO, BUT
EXCLUDING EXHIBITS, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SUCH
REQUEST SHOULD BE ADDRESSED TO: PROFESSIONAL BENEFITS INSURANCE COMPANY, 10835
ROCKLEY ROAD, HOUSTON, TEXAS 77099, ATTENTION: ASSISTANT VICE PRESIDENT OF
ADMINISTRATIVE SERVICES.
<PAGE> 6
OTHER MATTERS
It is not intended that any business other than the proposals
described above will be presented at the Meeting. With respect, however, to
any other matters or proposals that may properly come before the Meeting, it is
the intention of the persons named as proxies in any proxy solicited hereunder
to vote such proxy in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS OF
PROFESSIONAL BENEFITS INSURANCE COMPANY
/s/ WILLIAM L. GLENN, JR.
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William L. Glenn, Jr., DDS, Secretary
Professional Benefits Insurance Company
Houston, Texas
July 16, 1997
<PAGE> 7
PROFESSIONAL BENEFITS INSURANCE COMPANY
PROXY FOR ANNUAL SHAREHOLDERS MEETING TO BE HELD ON FRIDAY, AUGUST 15, 1997
CLASS A AND CLASS B SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Professional Benefits Insurance Company
(the "Company") hereby appoints William L. Glenn, Jr., D.D.S. and Robert
Little, D.D.S. or either of them, the attorneys and proxies of the undersigned,
each with full power of substitution to appear, to vote, and to take any other
action with respect to all shares of the capital stock of the Company that the
undersigned is entitled to vote at the Annual Shareholders Meeting of the
Company, to be held at its offices located at 10835 Rockley Road, Houston,
Texas 77099, on Friday, August 15, 1997, at 2:00 o'clock p.m., and at any
adjournment of said meeting, hereby revoking any proxy or proxies heretofore
given the undersigned. Receipt of the notice of the meeting and the Proxy
Statement dated July 16, 1997, is hereby acknowledged.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL
BE VOTED IN ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS HEREON. IN THE
ABSENCE OF SUCH SPECIFICATIONS, THE PROXY WILL BE VOTED "FOR" THE PROPOSALS SET
OUT BELOW.
1. The election of the following Directors: o FOR o AGAINST
For one (1) year:
William L. Glenn, Jr. Robert W. Little Jerry O. Ray
James O. Henry, Jr. H.P. Lundblade Barham D. Rhodes
Should it be your desire to withhold your vote on the above nominee, please
line through the name of the nominee.
2. Management of the Company does not intend to bring any other
business before the Annual Meeting of the Shareholders and has no reason to
believe that any will be presented to the Annual Meeting. However, if any other
business should properly be presented at the Annual Meeting, the proxies named
above will vote the proxy in accordance with their best judgment.
IN THEIR DISCRETION, THE AFOREMENTIONED PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE SHAREHOLDERS MEETING
AND ANY ADJOURNMENT THEREOF.
DATED: , 1997.
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SIGNATURE OF SHAREHOLDER
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SIGNATURE OF SHAREHOLDER
*Please sign as name appears. Joint owners each should sign. When signing as
attorney, trustee, administrator, executor, etc., please indicate your full
title as such. If signer is a corporation, please give full corporate name by
duly authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE DATE, SIGN AND MAIL YOUR PROXY PROMPTLY.
