Filed by the Registrant x | Filed by a Party other than the Registrant o |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | No fee required. |
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): |
o | Fee paid previously with preliminary materials. |
o | 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. |
Place: | Posternak Blankstein & Lund LLP Prudential Tower 800 Boylston Street, 33rd Floor Boston, MA 02199-8004 |
1. | Election of five directors. | |
2. | Ratification of the selection of PricewaterhouseCoopers LLP as our independent auditors for 2005. | |
3. | Any other matters properly brought before the meeting. |
By Order of the Board of Directors, | |
Donald H. Siegel P.C. | |
Clerk |
Page | ||||
General Information | 2 | |||
Stock Ownership | 5 | |||
Proposal No. 1: Election of Directors | 7 | |||
Executive Compensation | 9 | |||
Proposal No. 2: Ratification of Selection of Independent Registered Public Accounting Firm | 16 | |||
Other Matters | 18 |
2
3
4
• | each nominee for director; | |
• | each executive officer shown in the summary compensation table below; | |
• | all executive officers and directors as a group; and | |
• | each person who we believe beneficially owns more than 5% of our common stock. |
Percentage of | |||||||||
Number of | Outstanding | ||||||||
Name | Shares(1) | Shares(2) | |||||||
David V. Harkins* | 46,452 | 0.9 | % | ||||||
Jack R. Crosby* | 3,154 | 0.1 | |||||||
Norman F. Strate* | 8,841 | 0.2 | |||||||
Thomas E. Callahan* | 790 | ** | |||||||
David L. Brown(3)*† | 234,851 | 4.2 | |||||||
Donald E. Merz(4)† | 98,532 | 1.8 | |||||||
Richard F. Becker, Jr.(5)† | 76,775 | 1.4 | |||||||
James F. Dodd III(6)† | 59,750 | 1.1 | |||||||
Arthur B. Champagne(7)† | 56,780 | 1.1 | |||||||
Daniel A. Grady(8) | 4,452 | 0.1 | |||||||
All executive officers and directors as a group (14 persons)(9) | 689,989 | 11.8 | |||||||
Artisan Partners Limited Partnership(10) | 596,101 | 11.2 | |||||||
825 East Wisconsin Ave., #800 | |||||||||
Milwaukee, WI 53202 | |||||||||
FMR Corp.(10) | 522,000 | 9.8 | |||||||
82 Devonshire Street | |||||||||
Boston, MA 02109 | |||||||||
Royce & Associates, L.L.C.(10) | 379,500 | 7.1 | |||||||
1414 Avenue of the Americas | |||||||||
New York, NY 10019 |
* | Nominee for re-election as a director. The address of this person is c/o National Dentex Corporation, 526 Boston Post Road, Wayland, MA 01778. |
** | Less than 0.1% |
† | Executive officer. The address of this person is c/o National Dentex Corporation, 526 Boston Post Road, Wayland, MA 01778. |
(1) | The number of shares beneficially owned by each entity, person, director or named executive officer is determined under applicable SEC rules, particularly Rule 13d-3, and the information is not necessarily indicative of beneficial ownership for any other purposes. Under such rules, each entity or individual is considered the beneficial owner of any shares as to which they have the sole or shared voting power or investment power. Such persons are also deemed under the same rules to beneficially own any shares that they have the right to acquire within 60 days of May 2, 2005, through the exercise of stock options or other similar rights. This stock ownership information is based upon information furnished to us by the persons named on the table. |
(2) | Ownership percentage is reported based on 5,326,415 shares of common stock outstanding on May 2, 2005, plus, as to each holder thereof and no other person, the number of shares (if any) that such person |
5
has the right to acquire within 60 days of May 2, 2005, through the exercise of stock options or other similar rights. | |
(3) | Mr. Brown owns 26,601 shares and holds options for 212,250 shares, of which 208,250 are exercisable within 60 days of May 2, 2005. |
(4) | Mr. Merz owns 14,032 shares and holds options for 88,500 shares, of which 84,500 are exercisable within 60 days of May 2, 2005. |
(5) | Mr. Becker owns 14,775 shares and holds options for 66,000 shares, of which 62,000 are exercisable within 60 days of May 2, 2005. |
(6) | Mr. Dodd owns 7,500 shares and holds options for 56,250 shares, of which 52,250 are exercisable within 60 days of May 2, 2005. |
(7) | Mr. Champagne owns 12,750 shares, is deemed under applicable SEC rules to beneficially own 30 shares held by his wife and holds options for 48,000 shares, of which 44,000 are exercisable within 60 days of May 2, 2005. |
(8) | Mr. Grady resigned as a director effective as of December 31, 2004. He resigned due to the imposition of new independence criteria applicable to our independent auditors, PricewaterhouseCoopers LLP (“PwC”). In late 2003, Mr. Grady’s son was named a partner in PwC’s Hartford, Connecticut office. Effective January 2005, Mr. Grady’s son was to be relocated to PwC’s Boston office. As a result of this relocation, PwC advised us and Mr. Grady that, owing to various independence criteria applicable to independent auditors and related corporate governance issues, it would not be able to continue to serve as our independent auditors if Mr. Grady continued his service on our Board of Directors beyond December 31, 2004. Not wanting to jeopardize our existing relationship with PwC, Mr. Grady informed us that he was submitting his resignation from our Board of Directors effective December 31, 2004. |
(9) | Certain executive officers, other than the executive officers named in the table, own a total of 12,762 shares and hold options for 92,850 shares, of which 86,850 are exercisable within 60 days of May 2, 2005. |
(10) | Information as to the number of shares is as of December 31, 2004 and is furnished in reliance on the most recently filed Schedule 13G of the named beneficial owner. |
6
Director Name | Age | Office Held | ||||
David V. Harkins | 64 | Chairman of the Board and Director | ||||
David L. Brown | 64 | President, Chief Executive Officer and Director | ||||
Jack R. Crosby | 78 | Director | ||||
Norman F. Strate | 64 | Director | ||||
Thomas E. Callahan | 65 | Director |
7
Function | Members | |
• Approve terms of acquisitions of dental laboratories or other businesses under $1.0 million in purchase price | David V. Harkins (Chairman) Norman F. Strate David L. Brown |
Function | Members | |
• Review and approve compensation and benefit programs • Approve compensation of senior executives • Administer stock option plans | Thomas E. Callahan (Chairman) Jack R. Crosby Norman F. Strate |
8
Function | Members | |
• Engage the independent auditors • Review the annual financial statements • Review control procedures and accounting practices • Monitor accounting and reporting practices • Review compliance with the conflict-of-interest policy • Review our capital structure • Exercise such other functions as mandated by the Sarbanes-Oxley Act and other applicable law and regulations | Norman F. Strate (Chairman) Jack R. Crosby Thomas E. Callahan |
Function | Members | |
• Review and recommend to the full Board nominations for election to the Board of Directors | Jack R. Crosby (Chairman) Norman F. Strate Thomas E. Callahan |
9
• | provide compensation competitive with similar companies; | |
• | reward executives consistent with the performance of National Dentex; | |
• | recognize individual performance; | |
• | retain and attract qualified executives; and | |
• | encourage our executives to increase stockholder value by aligning their interests with the interests of our stockholders. |
• | dental laboratory management and other key employees who directly influence the financial performance of an individual dental laboratory; | |
• | key executives based upon our achievement of corporate earning targets, expressed in terms of pre-tax income, as compared to our budget for each year; and | |
• | group managers based upon the achievement of earnings within each manager’s group of dental laboratories. |
• | reward executives for long-term strategic management and the enhancement of stockholder value through appropriate equity ownership in National Dentex; | |
• | support a performance-oriented environment that rewards plan participants for improving the financial performance of National Dentex; and | |
• | attract and retain key executives and employees critical to our long-term success. |
10
First Year as | ||||||||||
an Executive | ||||||||||
Name | Age | Offices Held | Officer | |||||||
David L. Brown | 64 | President, Chief Executive Officer, and Director | 1984 | |||||||
Donald E. Merz | 66 | Senior Vice President | 1987 | |||||||
Richard F. Becker, Jr. | 52 | Vice President-Treasurer, Chief Financial Officer and Assistant Clerk | 1990 | |||||||
James F. Dodd, III | 65 | Vice President-Business Development | 1993 | |||||||
Richard G. Mariacher | 60 | Vice President-Technical Services | 1982 | |||||||
Arthur B. Champagne | 64 | Group Vice President | 1986 | |||||||
Lynn D. Dine | 53 | Vice President-Research & Development | 2003 | |||||||
Wayne M. Coll | 41 | Corporate Controller & Assistant Treasurer | 2003 |
11
Long Term Compensation | |||||||||||||||||||||
Annual Compensation | Securities | ||||||||||||||||||||
Underlying | All Other | ||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus(1) | Options | Compensation(2) | ||||||||||||||||
David L. Brown | 2004 | $ | 300,000 | $ | 65,000 | — | 173,063 | ||||||||||||||
President and Chief | 2003 | 273,385 | 65,000 | 12,000 | 172,064 | ||||||||||||||||
Executive Officer | 2002 | 215,000 | 75,000 | 18,000 | 171,814 | ||||||||||||||||
Donald E. Merz | 2004 | 175,000 | 72,355 | — | 29,391 | ||||||||||||||||
Senior Vice President | 2003 | 169,192 | 70,812 | 12,000 | 28,540 | ||||||||||||||||
2002 | 140,000 | 93,193 | 18,000 | 28,290 | |||||||||||||||||
Richard F. Becker, Jr. | 2004 | 175,000 | 40,000 | — | 11,418 | ||||||||||||||||
Vice President, Treasurer | 2003 | 159,462 | 35,000 | 12,000 | 10,416 | ||||||||||||||||
and Chief Financial Officer | 2002 | 140,000 | 30,000 | 18,000 | 10,166 | ||||||||||||||||
James F. Dodd, III | 2004 | 175,000 | 35,000 | — | 86,000 | ||||||||||||||||
Vice President Business | 2003 | 159,462 | 35,000 | 12,000 | 85,000 | ||||||||||||||||
Development | 2002 | 140,000 | 30,000 | 18,000 | 84,750 | ||||||||||||||||
Arthur B. Champagne | 2004 | 157,500 | 40,526 | — | 20,974 | ||||||||||||||||
Group Vice President | 2003 | 149,327 | 33,997 | 12,000 | 19,972 | ||||||||||||||||
2002 | 125,000 | 51,127 | 18,000 | 19,722 |
(1) | Paid for services rendered in 2002, 2003 and 2004 to all of the officers named above under the Corporate Executives Incentive Compensation Plan and as to Messrs. Merz and Champagne under the National Dentex Laboratory Incentive Compensation Plan for 2002, 2003 and 2004. |
(2) | Represents the portion of life insurance premiums we pay to fund our Supplemental Executive Retirement Plan. Also includes our matching contribution for the account of the officers named above |
12
under the National Dentex Dollars Plus Plan, a plan qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. The matching contribution is 100% of the first 1% of salary contributed by the employee and 50% of the next 3% of salary contributed. |
Value of Unexercised | ||||||||||||||||||||||||
Number of Unexercised | In-the-Money Options | |||||||||||||||||||||||
Options at Fiscal Year-End | at Fiscal Year End(2) | |||||||||||||||||||||||
Stock Acquired | Value | |||||||||||||||||||||||
Name | on Exercise | Realized(1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
David L. Brown | — | $ | — | 202,750 | 14,000 | $ | 1,412,021 | $ | 78,546 | |||||||||||||||
Donald E. Merz | — | — | 74,500 | 14,000 | 555,818 | 78,546 | ||||||||||||||||||
Richard F. Becker, Jr. | — | — | 52,000 | 14,000 | 374,943 | 78,546 | ||||||||||||||||||
James F. Dodd, III | — | — | 42,250 | 14,000 | 282,143 | 78,546 | ||||||||||||||||||
Arthur B. Champagne | — | — | 46,750 | 14,000 | 319,493 | 78,546 |
(1) | The value realized upon the exercise of an option is determined by multiplying the number of options exercised by the difference between the market price of the common stock on the date of exercise of the options and the exercise price of the options exercised. |
(2) | The value of unexercisedin-the-money options at the end of fiscal year 2004 is determined by multiplying the number of options held by the difference between the market price of the common stock underlying the options on December 31, 2004 ($20.30 per share, on a split-adjusted basis) and the exercise price of the options. |
13
12-31-99 | 12-31-00 | 12-31-01 | 12-31-02 | 12-31-03 | 12-31-04 | |||||||||||||||||||
NADX | 100.00 | 117.16 | 144.36 | 116.66 | 143.28 | 181.80 | ||||||||||||||||||
NASDAQ | 100.00 | 66.24 | 62.05 | 45.99 | 71.63 | 82.97 | ||||||||||||||||||
Peers | 100.00 | 164.68 | 208.29 | 229.56 | 301.61 | 391.13 |
(1) | Assumes $100 invested on December 31, 1999 in our common stock, the NASDAQ Industrial Index and the Peer Group Index, including reinvestment of any dividends paid on the investment. |
(2) | The Peer Group Index consists of Dentsply International, Inc. and Patterson Dental Company. We believe that these companies represent the other publicly traded companies within the dental service community. |
14
15
• | Has reviewed and discussed the audited financial statements as of and for the year ended December 31, 2004 with the management of National Dentex Corporation (“National Dentex”); | |
• | Has discussed with National Dentex’s independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as may be modified or supplemented; | |
• | Has received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as may be modified or supplemented, and has discussed with the independent auditors the independent auditors’ independence; and | |
• | Based upon the above mentioned reviews and discussions, has recommended to the Board of Directors of National Dentex that the audited financial statements be included in National Dentex’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 for filing with the SEC. |
16
17
2003 | 2004 | |||||||
Audit fees | $ | 97,500 | $ | 410,000 | ||||
Audit-Related fees | 20,600 | 43,100 | ||||||
Tax fees | 17,000 | 25,300 | ||||||
All other fees | — | 1,200 |
18
x | PLEASE MARK VOTES AS IN THIS EXAMPLE | REVOCABLE PROXY NATIONAL DENTEX CORPORATION |
PROXY FOR THE SPECIAL MEETING IN LIEU OF ANNUAL
MEETING OF SHAREHOLDERS ON JUNE 22, 2005
THIS PROXY IS BEING SOLICITED BY
THE BOARD OF DIRECTORS
The undersigned, having received the Notice of Special Meeting in Lieu of Annual Meeting of Shareholders, Proxy Statement and the Annual Report of National Dentex Corporation (the “Company”), hereby appoint(s) David V. Harkins, David L. Brown, and Richard F. Becker or any one of them, proxies for the undersigned, with full power of substitution in each of them, to represent the undersigned at the Special Meeting in Lieu of Annual Meeting of Shareholders of the Company to be held at Posternak Blankstein & Lund LLP, Prudential Tower, 800 Boylston Street, 33rdFloor, Boston, Massachusetts, 02199 at 10:00 a.m. on Wednesday, June 22, 2005 and at any adjournment or postponement thereof, and thereat, to vote and act in regard to all matters which may properly come before said meeting (except those matters as to which authority is hereinafter withheld) upon and in respect of all shares of Common Stock of the Company upon or in respect of which the undersigned would be entitled to vote or act and with all powers the undersigned would possess, if personally present, and especially (but without limiting the general authorization and power hereby given) to vote and act as indicated hereon.
Please be sure to sign and date this Proxy in the box below. | Date | ||||
| |||||
With- | For All | |||||||||
For | hold | Except | ||||||||
1. | Proposal to elect the following persons as directors. | o | o | o | ||||||
(01) David L. Brown | (04) David V. Harkins | |||||||||
(02) Thomas C. Callahan | (05) Norman F. Strate | |||||||||
(03) Jack R. Crosby | ||||||||||
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “For All Except” and write that nominee’s name(s) in the space provided below. | ||||||||||
For | Against | Abstain | ||||||
2. | Proposal to approve the appointment of PricewaterhouseCoopers LLP as Auditors. | o | o | o | ||||
3. | In their discretion on any other matters as may properly come before the meeting or at any adjournment or postponement thereof. | |||||||
Mark box at right if an address change or comment has been noted on the bottom portion of this card. | o |
Please check the box at right if you plan to attend the meeting on June 22. | o |
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER. IF NO INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
éDetach above card, sign, date and mail in postage paid envelope provided.é
NATIONAL DENTEX CORPORATION
The undersigned hereby confer(s) upon said proxies, and each of them, discretionary authority to vote (a) upon any other matters or proposals not known at the time of solicitation of this proxy which may properly come before the meeting, and (b) with respect to the selection of Directors in the event of any unforeseen emergency.
Attendance of the undersigned at said meeting or at any adjournment or postponement thereof will not be deemed to revoke this proxy unless the undersigned shall affirmatively indicate thereat his or her intention to vote said shares in person. If a fiduciary capacity is attributed to the undersigned hereon, this proxy will be deemed signed by the undersigned in that capacity.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.