<PAGE> 1
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 ss. 240.14a-11(c) or ss. 240.14a-12
THE TENERE GROUP, INC.
(Name of Registrant as Specified in Its Charter)
THE BOARD OF DIRECTORS OF THE TENERE GROUP, INC.
(Name of Person Filing Proxy Statement if Other Than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
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): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total Fee paid: N/A
[ ] 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: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE> 2
May 14, 1998
DEAR SHAREHOLDERS:
Our Annual Meeting of Shareholders will be held at The Baron's Room,
Hammons Tower, 21st Floor, 901 St. Louis Street, Springfield, Missouri, at 10:00
A.M., local time, on Friday, June 26, 1998. The Notice of Annual Meeting of
Shareholders, Proxy Statement and Proxy Card which accompany this letter outline
fully matters on which action is expected to be taken at the Annual Meeting.
We cordially invite you to attend the Annual Meeting. Even if you plan to
be present at the meeting, you are requested to date, sign and return the
enclosed Proxy Card in the envelope provided so that your shares will be
represented. The mailing of an executed Proxy Card will not affect your right to
vote in person should you later decide to attend the Annual Meeting.
Sincerely,
Raymond A. Christy, M.D.
President and Chief Executive Officer
<PAGE> 3
THE TENERE GROUP, INC.
1903 EAST BATTLEFIELD
SPRINGFIELD, MISSOURI 65804
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 26, 1998
Dear Shareholder:
The Annual Meeting of Shareholders of The Tenere Group, Inc. (the
"Company") will be held at The Baron's Room, Hammons Tower, 21st Floor, 901 St.
Louis Street, Springfield, Missouri, on Friday, June 26, 1998, at 10:00 A.M.,
local time, for the following purposes:
1. To elect three Class I directors to hold office for a term of three
years.
2. To transact any and all other business that may properly come before
the meeting or any adjournment thereof.
These items are more fully described in the following Proxy Statement,
which is hereby made a part of this Notice. Only shareholders of record of the
Company at the close of business on April 24, 1998 are entitled to notice of,
and to vote at, the meeting or any adjournment thereof.
By order of the Board of Directors,
MICHAEL D. HOEMAN, M.D.
Secretary
May 14, 1998
<PAGE> 4
THE TENERE GROUP, INC.
1903 EAST BATTLEFIELD
SPRINGFIELD, MISSOURI 65804
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 26, 1998
-----------------
GENERAL INFORMATION
This Proxy Statement is furnished to the shareholders of THE TENERE GROUP,
INC. (the "Company") in connection with the solicitation of proxies for use at
the Annual Meeting of Shareholders to be held at The Baron's Room, Hammons
Tower, 21st Floor, 901 St. Louis Street, Springfield, Missouri, at 10:00 A.M.,
local time, on Friday, June 26, 1998, and at all adjournments thereof (the
"Annual Meeting"), for the purposes set forth in the preceding Notice of Annual
Meeting of Shareholders.
This Proxy Statement, the Notice of Annual Meeting and the accompanying
Proxy Card were first mailed to the shareholders of the Company on or about May
14, 1998.
The proxy reflected on the accompanying Proxy Card is being solicited by
the Board of Directors of the Company. A proxy may be revoked at any time before
it is voted by filing a written notice of revocation or a later-dated Proxy Card
with the Secretary of the Company at the principal offices of the Company or by
attending the Annual Meeting and voting the shares in person. Attendance alone
at the Annual Meeting will not of itself revoke a proxy. Proxy Cards that are
properly executed, timely received and not revoked will be voted in the manner
indicated thereon at the Annual Meeting and any adjournment thereof.
The Company will bear the entire expense of soliciting proxies. Proxies
will be solicited by mail initially. The directors, executive officers and
employees of the Company also may solicit proxies personally or by telephone or
other means but such persons will not be specially compensated for such
services. Certain holders of record, such as brokers, custodians and nominees,
are being requested to distribute proxy materials to beneficial owners and will
be reimbursed by the Company for their reasonable expenses incurred in sending
proxy materials to beneficial owners.
Only shareholders of record at the close of business on April 24, 1998 are
entitled to notice of, and to vote at, the Annual Meeting. On such date, there
were 1,999,774 shares of the Company's Common Stock, $.01 par value ("Common
Stock"), issued and outstanding. To the knowledge of the Company, no person
beneficially owned more than 5% of the shares of Common Stock outstanding on
April 24, 1998.
Each outstanding share of the Company's Common Stock is entitled to one
vote on each matter to be acted upon at the Annual Meeting. A quorum is required
for votes taken at the Annual Meeting to be deemed valid. A quorum shall be
attained if holders of a majority of the Common Stock issued and outstanding are
present at the Annual Meeting in person or by proxy.
<PAGE> 5
Shares subject to abstentions will be treated as shares that are present
at the Annual Meeting for purposes of determining the presence of a quorum and
as voting for purposes of determining the base number of shares voting on a
particular proposal. Accordingly, abstentions will have the same effect as a
vote withheld on the election of directors or a vote against any other matter
submitted to the shareholders for a vote. If a broker or other nominee holder
indicates on the Proxy Card that it does not have discretionary authority to
vote the shares it holds of record on a proposal, those shares will not be
considered as voted for purposes of determining the approval of the shareholders
on a particular proposal.
ELECTION OF DIRECTORS
At the Annual Meeting, three individuals will be elected to serve as Class
I directors of the Company for a term of three years. The three nominees
receiving the greatest number of votes in the election will be elected.
Shareholders do not have the right to cumulate votes in the election of
directors.
Except as otherwise directed by the shareholder on the Proxy Card, the
persons named as proxies on the accompanying Proxy Card intend to vote all duly
executed proxies received by the Board of Directors for the election of Thomas
E. Ashley, M.D., Albert J. Bonebrake, M.D. and Raymond A. Christy, M.D. as Class
I directors. Each such nominee is currently a director of the Company. If for
any reason any such nominee becomes unavailable for election, which is not now
anticipated, the persons named in the accompanying Proxy Card will vote for such
substitute nominee as is designated by the Board of Directors. The Board of
Directors recommends a vote "FOR" the election of Thomas E. Ashley, M.D., Albert
J. Bonebrake, M.D. and Raymond A. Christy, M.D. as Class I directors.
The name, age, principal occupation or position and other directorships
with respect to each nominee and the other directors whose terms of office will
continue after the Annual Meeting is set forth below.
CLASS I - TO BE ELECTED FOR A TERM OF THREE YEARS EXPIRING IN 2001
Thomas E. Ashley, M.D., age 79, has been a member of the Board of
Directors and Vice President of the Company since 1993. Dr. Ashley was one of
the incorporators of RCA Mutual Insurance Company, the predecessor of the
Company's wholly owned subsidiary, Intermed Insurance Co. (collectively
"Intermed"), and has served as a director of Intermed since 1976 and as Vice
President since 1992. Dr. Ashley is a retired General Surgeon in Springfield,
Missouri.
Albert J. Bonebrake, M.D., age 49, has been a member of the Board of
Directors of the Company since 1993 and has served on the Board of Directors of
Intermed since June 1991. Dr. Bonebrake is an Obstetrician/Gynecologist in
Springfield, Missouri.
Raymond A. Christy, M.D., age 71, has been a member of the Board of
Directors of the Company since 1993. Dr. Christy was one of the incorporators,
and has served on the Board of Directors of Intermed since 1976. Dr. Christy
serves as President and Chief Executive Officer of the Company and has served as
Chief Executive Officer of Intermed since 1988 and as President since June 1992.
CLASS II - TO CONTINUE IN OFFICE UNTIL 1999
Harry O. Cole, M.D., age 59, has been a member of the Board of Directors
of the Company since 1993. Dr. Cole has served on the Board of Directors of
Intermed since 1984 and has been
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<PAGE> 6
the Chairman of the Board of Intermed since April 1992. Dr. Cole is a
Neurosurgeon in Chesterfield, Missouri.
C. Richard Gulick, M.D., age 55, has been a member of the Board of
Directors of the Company since 1993 and has been a member of the Board of
Directors of Intermed since November 1987. Dr. Gulick is an
Obstetrician/Gynecologist in St. Louis, Missouri.
Christopher H. Jung, M.D., age 55, has been a member of the Board of
Directors of the Company since 1993 and has been a member of the Board of
Directors of Intermed since November 1991. Dr. Jung is an Otolaryngologist in
Cape Girardeau, Missouri.
CLASS III - TO CONTINUE IN OFFICE UNTIL 2000
Gary O. Baker, D.D.S., age 55, has been a member of the Board of Directors
of the Company since 1993 and has been a member of the Board of Directors of
Intermed since November 1991. Dr. Baker is an Oral Surgeon practicing in St.
Louis, Missouri.
Michael D. Hoeman, M.D., age 46, has been a member of the Board of
Directors of the Company since 1993 and has been a member of the Board of
Directors of Intermed since June 1991. Dr. Hoeman serves as the
Secretary/Treasurer of the Company and has served as Secretary/Treasurer of
Intermed since June 1992. Dr. Hoeman is an Internist in Springfield, Missouri.
Carroll R. Wetzel, D.O., age 68, has been a member of the Board of
Directors of the Company since 1993 and has been a member of the Board of
Directors of Intermed since December 1986. Dr. Wetzel is a General Surgeon in
Clinton, Missouri.
BOARD OF DIRECTORS AND COMMITTEES
During 1997, the Board of Directors of the Company met seven times. Each
of the directors and nominees attended not less than 75% of the meetings of the
Board of Directors during 1997. The Board of Directors has a standing
Compensation Committee.
The Compensation Committee reviews and recommends to the Board of
Directors the salaries of all executive officers of the Company and authorizes
all other forms of executive compensation, including administration of the
Company's stock-based incentive plans. The current members of the Compensation
Committee are Drs. Bonebrake and Cole. The Compensation Committee met one time
during 1997.
DIRECTORS' FEES
Members of the Board of Directors of the Company are not separately
compensated for their services (other than reimbursement of expenses). Directors
of Intermed receive an annual fee of $12,000 and are reimbursed for reasonable
expenses incurred in connection with their attendance at Board meetings.
Pursuant to The Tenere Group, Inc. Retirement Plan for Directors, the
Company provides retirement benefits to any director who retires as a director
of the Company or who terminates his directorship with the Company due to a
disability, after serving as a director of the Company or its predecessors for a
minimum of five years. The benefits that are payable to each director are
determined by
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<PAGE> 7
multiplying the annual retainer paid to directors of the Company on the date of
such director's retirement or termination of services due to disability by 10%
for each year of service as a director, with the maximum annual benefit for any
director being 100% of the then-applicable annual retainer. Benefits will
commence on the later of the date that the former director attains the age of 65
or the date that such former director ceases to be a director of the Company due
to retirement or disability. An eligible director will continue to receive
benefits under the plan during his lifetime on a quarterly basis for a maximum
of ten years.
SECURITY OWNERSHIP BY MANAGEMENT
The following table indicates, as of April 24, 1998, the beneficial
ownership of the Company's Common Stock by each person who is a director or
nominee for director and the executive officers named in the Summary
Compensation Table, individually, and all directors and executive officers as a
group:
<TABLE>
<CAPTION>
Number of Shares
Name of Beneficial Owner Beneficially Owned Percent of Class(1)
- ------------------------ ------------------ -------------------
<S> <C> <C>
Thomas E. Ashley, M.D. 15,000(2) (7)
Gary O. Baker, D.D.S. 12,918(3) (7)
Albert J. Bonebrake, M.D. 29,230(3) 1.45%
Raymond A. Christy, M.D. -- --
Harry O. Cole, M.D. 21,778(3) 1.08%
C. Richard Gulick, M.D. 17,000(3) (7)
Michael D. Hoeman, M.D. 10,750(3) (7)
Christopher H. Jung, M.D. 12,664(3) (7)
Carroll Wetzel, D.O. 10,000(3) (7)
Andrew C. Fischer 20,730(4) 1.02%
Joseph D. Williams 20,730(4) 1.02%
Andrew K. Bennett 25,688(5) 1.26%
Clifton R. Stepp 20,730(4) 1.02%
All directors and executive officers as a group (13 persons) 217,218(6) 10.0%
</TABLE>
- ----------------
(1) Based upon 1,999,774 shares of the Company's Common Stock issued and
outstanding as of April 24, 1998 and, for each director and executive
officer and the group, the number of shares subject to options that may be
acquired within 60 days upon exercise of the option.
(2) Total includes 15,000 shares subject to stock options which are presently
exercisable.
(3) Total includes 10,000 shares subject to stock options which are presently
exercisable.
(4) Total includes 20,730 shares subject to stock options which are presently
exercisable.
(5) Total includes 25,688 shares subject to stock options which are presently
exercisable.
(6) Total includes 172,878 shares subject to stock options which are presently
exercisable.
(7) Less than one percent.
-4-
<PAGE> 8
REPORT OF THE COMPENSATION COMMITTEE
REGARDING EXECUTIVE COMPENSATION
The Company does not separately compensate its executive officers for
services rendered to the Company. Each of the executive officers of the Company
receives compensation for his services as an executive officer of ISI. The
Compensation Committee of the Company administers the executive compensation
program for all executive officers and has furnished the following report on
executive compensation for 1997:
COMPENSATION POLICY
The Company's executive compensation policy is designed and administered
to provide a competitive compensation program that will enable the Company to
attract, motivate, reward and retain executives who have the skills, education,
experience and capabilities required to discharge their duties in a competent
and efficient manner. In light of the fact that the Company is now a stock
corporation, the Board has adjusted the Company's compensation policy to align
it with the financial interests of the shareholders of the Company. During 1996,
the Board of Directors and the shareholders of the Company approved The Tenere
Group, Inc. 1996 Long Term Incentive Plan. In this manner, the Company will meet
its ultimate responsibility to its shareholders by striving to create a suitable
long-term return on their investment through earnings from operations and
prudent management of the Company's business and operations.
ANNUAL COMPENSATION
The annual compensation for individual executive officers of the Company
is based upon the level and scope of the responsibility of the office, the pay
levels of similarly positioned executive officers in insurance companies of
comparable size to the Company and consideration of the level of performance and
contribution to overall corporate performance of each particular executive
officer. During 1997, the Board determined that it was appropriate and in the
best interest of the shareholders to secure the services of the Company's key
executives by extending the terms of each of the existing employment agreements
with each of Dr. Christy and Messrs. Bennett, Fischer, Stepp and Williams. These
employment contracts established an initial base salary for the executive
officer, which salary rate is subject to review by the Board.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Dr. Christy's base salary for 1997 was determined by the Board of
Directors in the same manner as is used by the Board for executive officers
generally as well as by reference to Dr. Christy's employment contract with the
Company. The Board believes that Dr. Christy's compensation is competitive
within the industry and provides sufficient incentives for high performance.
This report shall not be deemed to be incorporated by reference by any
general statement incorporating by reference the Proxy Statement into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent that the Company specifically
incorporates this information by reference. This report shall not otherwise be
deemed to be filed under such Acts.
-5-
<PAGE> 9
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF
THE TENERE GROUP, INC.
ALBERT J. BONEBRAKE, M.D.
HARRY O. COLE, M.D.
COMPENSATION OF EXECUTIVE OFFICERS
Neither the Company nor Intermed separately compensate their respective
executive officers for services rendered to the Company or Intermed. Each of the
executive officers of the Company receives compensation for services as an
executive officer of Insurance Services, Inc., the Company's wholly owned
management company ("ISI"). The following table sets forth the compensation paid
to each named executive officer of ISI during 1997:
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) COMPENSATION($)(1) OPTION/SARS($) COMPENSATION(2)
- --------------------------- ---- ---------- ------------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
Raymond A. Christy, M.D. 1997 242,842 18,000 --/-- 21,745
President and Chief Executive 1996 215,782 18,000 --/-- 20,500
Officer 1995 235,540 18,000 --/-- 20,760
Andrew C. Fischer 1997 129,710 -- 20,730/-- 17,515
Vice President - Underwriting 1996 116,646 -- --/-- 15,147
and Policy Services 1995 129,506 -- --/-- 17,447
Andrew K. Bennett 1997 162,615 -- 25,688/-- 21,745
Vice President - Claims 1996 141,641 -- --/-- 19,158
and General Counsel 1995 150,312 -- --/-- 20,760
Clifton R. Stepp 1997 129,710 -- 20,730/-- 17,365
Vice President - Marketing 1996 115,310 -- --/-- 14,933
1995 121,398 -- --/-- 16,136
Joseph D. Williams 1997 129,710 -- 20,730/-- 17,822
Vice President - Finance and 1996 115,698 -- --/-- 14,995
Chief Financial Officer 1995 114,352 -- --/-- 14,997
</TABLE>
- -----------------
(1) The amounts set forth in this column represent director's fees received
by Dr. Christy for service on the Board of Directors of Intermed
Insurance Co. and Interlex Insurance Co.
(2) The amounts set forth in this column represent contributions made by ISI
pursuant to its defined contribution pension plan and, for each of
Messrs. Fischer, Bennett, Stepp and Williams, payments of certain life
insurance premiums.
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<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock option
grants made during 1997 to the individuals named in the Summary Compensation
Table:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS VALUE OPTION TERM (2)
--------------------------------------------------------------- --------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- ------------- -------- ----------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Raymond A. Christy, M.D... -- -- -- -- -- --
Andrew C. Fischer......... 20,730 21.3% $5.45 1/31/07 $67,559 $174,588
Andrew K. Bennett......... 25,688 26.4% 5.45 1/31/07 83,717 216,334
Clifton R. Stepp.......... 20,730 21.3% 5.45 1/31/07 67,559 174,588
Joseph D. Williams ....... 20,730 21.3% 5.45 1/31/07 67,559 174,588
</TABLE>
- ------------------
(1) Options terminate on the earlier of ten years after grant or twelve months
after termination of employment.
(2) There is no independent market for the Common Stock. The amounts reflected
below are based upon a fair market value of $5.35 per share on the date of
grant, as determined by the Company's Board of Directors.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information concerning the number of
exercisable and unexercisable stock options at December 31, 1997 as well as the
value of such stock options having an exercise price lower than the last
reported trading price on December 31, 1997 ("in-the-money" options) held by the
executive officers named in the Summary Compensation Table. There were no option
exercises during 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT FISCAL
NAME OPTIONS AT FISCAL YEAR-END(#) YEAR-END($)(1) EXERCISABLE/
---- EXERCISABLE/UNEXERCISABLE UNEXERCISABLE
----------------------------- ----------------------------
<S> <C> <C>
Raymond A. Christy, M.D...... -- --
Andrew C. Fischer............ 20,730/-- $104,479/--
Andrew K. Bennett............ 25,688/-- 129,468/--
Clifton R. Stepp............. 20,730/-- 104,479/--
Joseph D. Williams........... 20,730/-- 104,479/--
</TABLE>
- --------------------
(1) There is no independent market for the Common Stock. Amounts are based on
a price per share of $10.49, being the book value per common share at
fiscal year end.
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<PAGE> 11
EMPLOYMENT ARRANGEMENTS
The Company currently has separate employment agreements with each of Dr.
Raymond A. Christy, President and Chief Executive Officer, Andrew K. Bennett,
Vice President - Claims and General Counsel, Andrew C. Fischer, Vice President
Underwriting and Policy Services, Clifton R. Stepp, Vice President - Marketing,
and Joseph D. Williams, Vice President Finance and Chief Financial Officer. Each
agreement provide for a term of employment through May 6, 2000, and is
automatically renewable thereafter for successive one-year terms unless
terminated by either party.
The agreements provide for minimum annual base salaries of $211,521 for
Dr. Christy, $140,000 for Mr. Bennett, $112,980 for Mr. Fischer, $112,980 for
Mr. Stepp and $112,980 for Mr. Williams. Such minimum annual base salaries are
subject to increases at the discretion of the Board of Directors. Dr. Christy's
employment agreement additionally provides that upon the earlier to occur of (i)
Dr. Christy's retirement after age 70, (ii) termination of Dr. Christy's
employment by reason of death or disability, (iii) or termination of Dr.
Christy's employment by the Company without Cause (as defined) or by Dr. Christy
for Good Reason (as defined), Dr. Christy or his estate or legal representative
shall be entitled to a supplemental retirement payment of $80,000 per year for a
period of ten years.
Each employment agreement provides that if the Company terminates the
employment of the executive without Cause or if the executive terminates his
employment for Good Reason, the Company will be required to pay such executive
officer severance benefits including the continuation of the executive's
then-current annual salary through May 6, 2000, and the continuation of certain
welfare benefits to which he otherwise would have been entitled. "Cause" is
generally defined as willful failure by the executive to perform his duties,
commission of an act constituting a criminal offense, or material breach of the
agreement. "Good Reason" is generally defined as (i) the assignment of duties
inconsistent with the executive officer's position, duties, responsibilities and
status, (ii) a failure to continue the executive officer's then-current
participation in benefits or compensation; (iii) the geographic relocation of
the executive officer; (iv) within a period of two years following a change in
control, resignation by the executive in his sole and absolute discretion, or
(v) any breach of the agreement.
Each employment additionally provides that each such executive officer
will be paid severance benefits in the event that his employment with the
Company is terminated by the Company without Cause or by the executive for Good
Reason within two years of a "Change in Control" of the Company. The change in
control provisions would require a lump-sum cash payment in an amount equal to
2.99 times the executive officer's average annual base compensation. If payment
of the foregoing amounts and any other benefits received or receivable upon
termination after a "Change in Control" would subject such executive officer to
the payment of a federal excise tax, the total amount payable by the Company to
such executive officer shall be increased by an amount sufficient to provide
such executive officer (after satisfaction of all excise taxes and federal and
state income taxes attributable to such increased payment) with a net amount
equal to the federal excise tax owed by the executive officer.
"Change in Control" is generally defined as (i) the acquisition by any
person of beneficial ownership of 20% or more of the outstanding shares of the
Company's Common Stock or of the combined voting power in the election of
directors; (ii) the replacement of the majority of the existing directors or
persons nominated for election as directors by the incumbent Board of Directors;
(iii) approval by the shareholders of the Company of a reorganization, merger or
consolidation unless following such transaction 50% of the outstanding shares of
common stock of the surviving corporation are held by the holders of the
Company's Common Stock; or (iv) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company or the sale of substantially
all of the assets of the Company.
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<PAGE> 12
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total shareholder
return, including the reinvestment of dividends, on the Company's Common Stock
with the cumulative return of The Nasdaq Stock Market US Index and The Nasdaq
Insurance Index for the period beginning on January 27, 1996, the date that the
Company became a reporting public company, and ending on December 31, 1997, the
most recent fiscal year-end of the Company.
<TABLE>
<CAPTION>
1/27/95 12/95 12/96 12/97
------- ----- ----- -----
<S> <C> <C> <C> <C>
The Tenere Group, Inc. 100 127 110 108
- --------------------------------------------------------------------
NASDAQ Stock Market U.S. 100 140 172 211
- --------------------------------------------------------------------
NASDAQ Insurance 100 139 158 232
- --------------------------------------------------------------------
</TABLE>
Include Foot Notes
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except for Drs. Christy, Wetzel, Ashley, Bonebrake and Gulick, each of the
directors of the Company and Intermed is a named insured under a policy or
contract of professional liability insurance issued by Intermed for which
premiums are paid to Intermed by the individual director or by a corporation,
partnership, association or other entity with which such director is affiliated.
All policies on which such directors are a named insured were made in the
ordinary course of business, did not involve more than the normal underwriting
risks or present other unfavorable features and were made on substantially the
same terms as those prevailing at the same time for comparable policies issued
to unaffiliated persons.
Other than as stated above, none of the directors or executive officers of
the Company, or the corporations and firms with such persons are associated,
currently maintains or has maintained since the
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<PAGE> 13
beginning of the last fiscal year, any significant business or personal
relationship with the Company other than such as may arise by virtue of his
position with the Company.
APPOINTMENT OF AUDITORS
KPMG Peat Marwick LLP served as the Company's independent accountants for
1997 and has been selected by the Board of Directors to continue in such
capacity during 1998. The Board of Directors anticipates that representatives of
KPMG Peat Marwick LLP will be present at the Annual Meeting of Shareholders to
respond to appropriate questions and to make a statement if they desire.
PROPOSALS OF SHAREHOLDERS
Under applicable regulations of the Securities and Exchange Commission,
all proposals of shareholders to be considered for inclusion in the proxy
statement for, and to be considered at, the 1998 Annual Meeting of Shareholders
must be received at the offices of the Company, c/o Michael D. Hoeman,
Secretary, 1903 East Battlefield, Springfield, Missouri 65804 by not later than
January 14, 1999. The Company's By-Laws also prescribe certain time limitations
and procedures regarding prior written notice to the Company by shareholders,
which limitations and procedures must be met for the nomination of a person for
election as a director of the Company or the making of proposals of shareholders
considered at such annual meeting. Any shareholder who wishes to make such a
nomination or proposal should request a copy of the applicable provisions of the
Company's By-Laws from the Secretary of the Company.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not intend to present, nor has it been informed that other persons
intend to present, any matters for action at the Annual Meeting, other than
those specifically referred to herein. If, however, any other matters should
properly come before the Annual Meeting, it is the intention of the persons
named as proxies on the Proxy Card to vote the shares represented by Proxy Cards
granting such proxies discretionary authority to vote on such matters in
accordance with their judgment as to the best interest of the Company on such
matters.
RAYMOND A. CHRISTY, M.D.
President and Chief Executive Officer
May 14, 1998
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<PAGE> 14
THE TENERE GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Raymond A. Christy, M.D., Joseph D.
Williams and Andrew K. Bennett, and each of them, with or without the other,
proxies, with full power of substitution to vote, as designated below, all
shares of stock that the signatory hereof is entitled to vote at the Annual
Meeting of Shareholders of The Tenere Group, Inc. to be held at The Baron's
Room, Hammons Tower, 21st Floor, 901 St. Louis Street, Springfield, Missouri, on
Friday, June 26, 1998, at 10:00 A.M., local time, and all adjournments thereof,
all in accordance with and as more fully described in the Notice and
accompanying Proxy Statement for such meeting, receipt of which is hereby
acknowledged.
1. ELECTION OF THREE CLASS III DIRECTORS FOR A TERM OF THREE YEARS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as written to to vote for nominees as
the contrary below) listed below
THOMAS E. ASHLEY, M.D., ALBERT J. BONEBRAKE, M.D. AND RAYMOND A. CHRISTY, M.D.
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.)
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2. In their discretion upon any business which may properly come before the
meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
[Reverse]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" EACH OF THE NOMINEES LISTED.
Dated this _____ day of ____________________________, 1998.
PLEASE DATE, SIGN AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE.
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Signature
Please date and sign in the exact name in
which you own the Company's Common Stock.
Executors, administrators, trustees and others
acting in a representative or fiduciary
capacity should so indicate when signing.
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