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:

[ X ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))

[ ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

GENTLE DENTAL SERVICE CORPORATION
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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)(1) and 0-11

1) Title of each class 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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[ ] 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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April 30, 1998

Dear Gentle Dental Shareholders:

We are pleased to invite you to our 1998 Annual Meeting which will be held
at 222 North Sepulveda Boulevard, Suite 740, El Segundo, California 90245, on
Thursday, June 4, 1998, at 8:00 a.m., Pacific Daylight Savings Time.

The Annual Meeting will begin with a report on the Company's progress,
followed by a discussion and shareholder questions. Voting on the election and
ratification of certain directors and other matters is also scheduled. The items
to be voted on are addressed in the enclosed Notice of Annual Meeting of
Shareholders and Proxy Statement.

Your vote is important. Whether or not you plan to attend the meeting,
please promptly complete and return the enclosed proxy card to ensure that your
shares will be represented. A postage pre-paid envelope has been provided for
your convenience. Even if you have given your proxy, you may still vote in
person if you attend the Annual Meeting. It is not necessary to retain your
proxy in order to gain admission to or vote at the Annual Meeting.

We look forward to seeing you at the Annual Meeting.

Sincerely,

Michael T. Fiore
Co-Chairman of the Board, Chief Executive
Officer and President

GENTLE DENTAL SERVICE CORPORATION

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

JUNE 4, 1998

To the Shareholders of Gentle Dental Service Corporation:

The annual meeting of the shareholders (the "Annual Meeting") of Gentle
Dental Service Corporation, a Washington corporation (the "Company"), will be
held at 8:00 a.m., Pacific Daylight Savings Time, on Thursday, June 4, 1998, at
222 North Sepulveda Boulevard, Suite 740, El Segundo, California 90245, for the
following purposes:

1. To elect three directors to serve for a term of three years and until their
successors are elected and qualified and to elect three individuals appointed to
the Board of Directors in 1997 in order to allow such individuals to serve as
directors for the remainder of their respective terms and until their successors
are elected and qualified.

2. To approve a series of amendments to the Company's 1993 Stock Incentive Plan
(the "Plan") to effect the following changes: (i) increase the number of shares
of common stock (the "Common Stock") of the Company authorized for issuance
under the Plan by 1,000,000 shares from 1,000,000 to 2,000,000 shares; (ii)
clarify that the eligibility provisions of the Plan include dentists and other
professionals who are employed by corporations, partnerships, sole
proprietorships or other business organizations which have entered into
agreements with the Company under which the Company manages the non-professional
aspects of such businesses; (iii) provide that, unless otherwise determined by
the Board of Directors, options granted to employees under the Plan will
continue to vest after termination or cessation of employment so long as such
former employee is continuously retained by the Company on an independent
contractor basis and for so long as such independent contractor relationship
continues; and (iv) increase the aggregate number of shares of Common Stock
underlying stock options and stock appreciation rights that any employee may
receive under the Plan in any calendar year by 75,000 shares from 75,000 to
150,000 shares.

3. To approve the transfer of all of the Company's operating assets and
liabilities to Gentle Dental Management, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company, in order to convert the Company from an
operating company into a holding company, provided, however, that this action
shall not be taken if the holders of more than ____ percent of the shares
entitled to vote at the Annual Meeting exercise their dissenters' rights under
Washington law.

4. To ratify the selection of KPMG Peat Marwick LLP as the Company's independent
auditor for fiscal year 1998.

5. To transact any other business that may properly come before the Annual
Meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy
Statement that accompanies this Notice.

The close of business on Friday, April 10, 1988 has been fixed as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof. Only
shareholders of record at such time will be entitled to notice of and to vote at
the Annual Meeting. A majority of the outstanding shares of Common Stock must be
represented at the Annual Meeting in order to constitute a quorum. Please return
your Proxy Card in order to ensure that a quorum is obtained.

YOUR VOTE IS IMPORTANT

By Order of the Board of Directors
L. THEODORE VAN EERDEN
Executive Vice President and Secretary
Yorba Linda, California
April 30, 1998

GENTLE DENTAL SERVICE CORPORATION

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PROXY STATEMENT

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This Proxy Statement and the enclosed Proxy Card are furnished in
connection with the 1998 annual meeting of shareholders (the "Annual Meeting")
of Gentle Dental Service Corporation, a Washington corporation (the "Company"),
which will be held at 222 North Sepulveda Boulevard, Suite 740, El Segundo,
California 90245, on Thursday, June 4, 1998, at 8:00 a.m., Daylight Savings
Time. Shareholders of record at the close of business on April 10, 1998 are
entitled to notice of and to vote at the annual meeting and any adjournment or
postponement thereof.

On April 10, 1998, there were 7,802,660 outstanding shares of the Company's
common stock (the "Common Stock"). Each share of Common Stock is entitled to one
vote on all matters properly brought before the Annual Meeting. The only
outstanding authorized voting security of the Company is Common Stock. There are
no cumulative voting rights associated with the Common Stock.

A majority of the outstanding shares of Common Stock entitled to vote at
the Annual Meeting will constitute a quorum. The Company's inspector of
elections for the Annual Meeting will count abstentions and so-called "broker
votes" (i.e., shares held by a broker or other nominee having discretionary
power to vote on some matters but not others) for purposes of determining
whether a quorum exists for the transaction of business at the Annual Meeting.
Broker non-votes are not counted for purposes of determining either the number
of votes cast on any matter voted on by the shareholders or whether such matter
has been approved. Abstentions are counted in tabulating the total number of
votes cast on matters voted on by the shareholders at the Annual Meeting.

Properly executed proxies will be voted in the manner directed by the
shareholders. If no direction is given, proxies will be voted as follows: FOR
the election of all nominees named under the caption "Election of Directors" as
directors of the Company to serve for their respective terms as described in
this Proxy Statement; FOR the amendments to the Company's 1993 Stock Incentive
Plan (the "Plan") as described more fully in this Proxy Statement under Proposal
2; FOR the transfer of all of the Company's operating assets and liabilities to
Gentle Dental Management, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company, in order to convert the Company from an operating
company into a holding company; and FOR the ratification of the selection of
KPMG Peat Marwick LLP as independent auditor of the Company for fiscal year
1998.

The enclosed proxy is being solicited by the Company's Board of Directors
and is revocable at any time prior to its exercise. A proxy may be revoked by
delivery of a written revocation to the Secretary of the Company, by
presentation of a properly executed subsequent proxy or by a vote in person at
the Annual Meeting.

This Proxy Statement, the enclosed Proxy Card and the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1997 are scheduled to be
mailed commencing on or about April 30, 1998 to shareholders of record on April
10, 1998.

On November 4, 1997, GMS Dental Group, Inc., a Delaware corporation ("GMS")
was merged (the "GMS Merger") with and into the Company. Since the GMS Merger,
the principal executive offices of the Company have been located at 22800 Savi
Ranch Parkway, Suite 206, Yorba Linda, California 92887, and on or about June 1,
1998 the Company's principal executive offices will be located at 222 North
Sepulveda Boulevard, Suite 740, El Segundo, California 90245. The Company's
phone number is (714) 998-0587.

PROPOSAL 1

ELECTION OF DIRECTORS

The shareholders are being asked to elect three individuals to serve on the
Company's Board of Directors for a term of three years and until their
successors are elected and qualified and to elect three individuals appointed to
the Board of Directors in 1997 in order to allow such individuals to serve as
directors for the remainder of their respective terms and until their successors
are elected and qualified.

Classified Board

The Company's Restated Articles of Incorporation provide that the Company's
Board of Directors shall be divided into three classes, as nearly equal in
number as is reasonably possible, with the members of the Board of Directors
serving staggered terms. At each annual meeting of shareholders, the successors
to the class of directors whose terms expire at the time are elected to hold
office for terms of three years, such that the term of one class of directors
expires at each annual meeting. The preceding notwithstanding, directors serve
until their successors have been duly elected and qualified or until they
resign, become disqualified or disabled, or are otherwise removed.

The Company has 11 present directors divided into three classes as follows:
Michael T. Fiore, Robert Finzi and H. Wayne Posey, who were appointed to Class
II in November 1997; Grant M. Sadler and L. Theodore Van Eerden, who were
appointed to Class III in November 1997, joining Dany Y. Tse, D.M.D. and Gerald
R. Aaron, D.D.S.; and Kathleen D. La Porte who was appointed to Class I in
November 1997, joining Kenneth D. Hooten, Paul H. Keckley and Craig W. Wong,
D.M.D. The Class I, Class II and Class III directorships expire in 2000, 1998
and 1999, respectively.

Director Steven R. Bull, D.D.S. who was appointed to Class II in November
1997, resigned from the Board of Directors, effective as of April 1, 1998, and
the number of director positions has been reduced by resolution of the Board to
eleven. Director Hooten has indicated his intention to resign from the Board of
Directors following the sale of 100,000 shares of Common Stock by The
ServiceMaster Company in connection with the Company's proposed public offering
of Common Stock pursuant to its Registration Statement, Registration No.
333-44037, filed with the Securities and Exchange Commission on January 9, 1998.
The Company has agreed that Arthur G. Kaiser, D.D.S., will be made a director of
the Company effective as of the closing of the Company's affiliation with
Dedicated Dental Systems, Inc.

While directors Sadler and Van Eerden have been appointed to serve until
the annual meeting of shareholders in 1999 and director La Porte has been
appointed to serve until the annual meeting of shareholders in 2000, these
appointments are required to be voted upon by the Company's shareholders in
order for such directors to continue to serve until their terms expire or their
successors have been duly elected and qualified, or until they resign, become
disqualified or disabled, or are otherwise removed.

The enclosed proxy will be voted, unless authority is withheld or the proxy
is revoked, only for the election of each of the full-term nominees named below
each to serve until the 2001 annual meeting of shareholders and for the election
of the partial-term nominees named below who were originally appointed to the
Board of Directors in 1997, each to serve until the date of the Company's 1999
or 2000 annual meeting of shareholders, as the case may be, or until such
director's successor has been duly elected and qualified or in each case until
such director resigns, becomes disqualified or disabled or is otherwise removed.
In the unanticipated event that any nominee becomes unable to or declines to
serve at the time of the Annual Meeting, the proxies will be voted for a
substitute person nominated by the Board of Directors. The six individuals who
receive the highest number of affirmative votes of shares entitled to vote at
the Annual Meeting will be elected directors of the Company.

Nominees

Full-Term Nominees. The names and certain information about the full-term
Class II nominees for director as of April 30, 1998 are set forth below:

Name Age Position
- ---- --- --------

Michael T. Fiore 44 Co-Chairman of the Board, Chief
Executive Officer and President

Robert Finzi 44 Director

H. Wayne Posey 59 Director

Michael T. Fiore. Mr. Fiore has served as Co-Chairman of the Board, Chief
Executive Officer and President of the Company since joining the Company in
November 1997, the effective date of the GMS Merger. Before joining the Company,
Mr. Fiore was the Chief Executive Officer, President and a director of GMS from
April 1997 to November 1997. From 1986 to March 1997, Mr. Fiore served in
various management positions at Salick Health Care, Inc., a provider of
diagnostic and therapeutic services to patients with catastrophic illness,
principally in the areas of cancer and kidney failure, including serving as a
director, Executive Vice President and Chief Operating Officer, and as President
of its principal subsidiary, Comprehensive Cancer Centers, Inc.

Robert Finzi. Mr. Finzi has been a director of the Company since November
1997 and served as a director of GMS from October 1996 until the GMS Merger.
Since May 1991, Mr. Finzi has been a Vice President of the Sprout Group, a
division of DLJ Capital Corporation, which is the Managing General Partner of
Sprout Capital VII, L.P. and Sprout Growth II, L.P., and an affiliate of
Donaldson, Lufkin & Jenrette Securities Corporation. Mr. Finzi is also a general
partner of the general partner of a series of investment funds managed by the
Sprout Group and a limited partner of the general partner of ML Venture Partners
II, L.P. From 1984 to 1991, Mr. Finzi was a Vice President of Merrill Lynch
Venture Capital. Mr. Finzi serves on the board of directors of The Cerplex
Group, Inc. ("Cerplex") and, if the merger of Cerplex with and into an
acquisition subsidiary of Aurora Electronics, Inc. ("Aurora") is effected, Mr.
Finzi will become a member of the board of directors of Aurora. In addition, Mr.
Finzi serves on the board of directors of six privately held companies.

H. Wayne Posey. Mr. Posey has been a director of the Company since November
1997 and served as a director of GMS from December 1996 until the GMS Merger.
Since its inception in 1994, Mr. Posey has served as President, Chief Executive
Officer, director, and a member of the executive committee of ProMedCo. Mr.
Posey was a healthcare consultant from 1975 until 1994, most recently as the
principal in charge of the healthcare services division of McCaslin & Company,
P.C., a public accounting and consulting company in Fort Worth, Texas.

Partial-Term Nominees. The names and certain information, as of April 30,
1998, about certain individuals appointed in 1997 to the Board of Directors
whose appointments are required to be voted upon by the shareholders of the
Company in order for such individuals to serve for the remainder of their
respective terms are set forth below:

Name Age Position Term Ending
- ---- --- -------- -----------

Grant M. Sadler 51 Vice Chairman of the Board 1999

L. Theodore Van Eerden 42 Executive Vice President, Chief 1999
Development Officer and Director

Kathleen D. La Porte 36 Director 2000

Grant M. Sadler. Mr. Sadler has been Vice Chairman of the Board since the
GMS Merger in November 1997. Prior to joining the Company, Mr. Sadler founded
and served as the Chief Executive Officer, President and Secretary of GMS from
its inception in October 1996 to April 1997, at which time he vacated those
positions and

assumed the position of Chairman of the Board and served in that capacity until
the GMS Merger. Prior to GMS, Mr. Sadler served as President of Group Management
Services, Inc., a dental group consulting practice formed by Mr. Sadler in 1991.

L. Theodore Van Eerden. Mr. Van Eerden has served as Executive Vice
President, Chief Development Officer and as a director since November 1997. He
served as Chief Financial Officer of the Company from March 1996 until November
1997. Before joining the Company, Mr. Van Eerden was Vice
President-Administration for HOSTS Corporation, a Vancouver, Washington company
that provides proprietary educational software products and instructional
delivery systems to schools throughout the United States. From April 1993 to
April 1994, Mr. Van Eerden was Director of Development for The ServiceMaster
Company where he focused on mergers and acquisitions and new business
development. Before that, Mr. Van Eerden was Vice President and Chief Financial
Officer of Medical SafeTec, Inc., a manufacturer of medical waste destruction
equipment. Prior to Medical SafeTec, Inc., Mr. Van Eerden served in various
positions with The ServiceMaster Company focusing on mergers and acquisitions.

Kathleen D. La Porte. Ms. La Porte has been a director of the Company since
November 1997 and served as a director of GMS from October 1996 until the GMS
Merger. From January 1993 to the present, Ms. La Porte has been affiliated with
the Sprout Group, a division of DLJ Capital Corporation, which is the Managing
General Partner of Sprout Capital VII, L.P. and Sprout Growth II, L.P. and an
affiliate of Donaldson, Lufkin & Jenrette Securities Corporation. Ms. La Porte
has served as a general partner of the Sprout Group since December 1993. From
August 1987 to January 1993, Ms. La Porte was a principal at Asset Management
Company, a venture capital firm focused on early stage health care and
technology investments. Ms. La Porte currently serves on the board of directors
of FemRx, Hall Kinion, Onyx Pharmaceuticals and Lynx Therapeutics and three
privately held companies.

Continuing Directors. The names and certain information, as of April 30,
1998, about certain individuals who are presently serving on the Board of
Directors until 1999 or 2000 and who may continue their service without a vote
of the shareholders at the Annual Meeting are set forth below:

Name Age Position Term Ending
- ---- --- -------- -----------

Dany Y. Tse, D.M.D. 48 Co-Chairman of the Board and 1999
President of Clinical Services
Council

Gerald R. Aaron, D.D.S. 52 Director 1999

Kenneth D. Hooten 35 Director 2000

Paul H. Keckley 48 Director 2000

Craig W. Wong, D.M.D. 42 Director 2000

Dany Y. Tse, D.M.D. Dr. Tse has served as Co-Chairman of the Board and
President of Clinical Services Council since November 1997. Dr. Tse served as
Chairman of the Board since December 1996 and, as President and Chief Executive
Officer of the Company from March 1996 until November 1997. He previously served
as Chairman of the Board from inception in December 1992 to March 1996. Dr. Tse
is a licensed dentist in Oregon and Washington.

Gerald R. Aaron, D.D.S. Dr. Aaron has been a director of the Company since
December 1996. He has been certified as a pediatric dentist since 1976 and has
been employed since 1991 by a professional corporation in the State of
Washington which is affiliated with the Company. See "Certain Transactions."

Kenneth D. Hooten. Mr. Hooten has been a director of the Company since June
1996. Since 1995, Mr. Hooten has been Vice President of The ServiceMaster
Company ("ServiceMaster") responsible for managing the

ServiceMaster Ventures Group, an internal venture capital firm. From 1990 to
1995, Mr. Hooten served as Vice President of Lasalle Partners Ltd., a real
estate company.

Paul H. Keckley. Mr. Keckley has been a director of the Company since
December 1996. Since 1994, he has been Vice President Strategic Development at
PhyCor, Inc. Mr. Keckley previously served as a director of PhyCor, Inc., and
from 1985 to 1994 he was President of The Keckley Group, a market research and
strategic planning firm for hospitals, health systems, medical practices, and
health maintenance organizations.

Craig W. Wong, D.M.D. Dr. Wong has been a director of the Company since
March 1995. Dr. Wong has been an oral and maxillofacial surgeon licensed to
practice in the states of Washington and Oregon since 1986. Dr. Wong serves as
the Chief of the Department of Oral and Maxillofacial Surgery for certain dental
practices affiliated with the Company located in the States of Oregon and
Washington. Dr. Wong also serves as Section Chief of Oral and Maxillofacial
Surgery for the Veterans Administration Medical Center in Portland, Oregon.

Board Committees and Meetings

The standing committees of the Board of Directors are the Executive
Committee, the Audit Committee and the Compensation Committee. The Company does
not have a Nominating Committee. The Executive Committee, consisting of
directors Finzi, Fiore, La Porte, Van Eerden and Tse, has all of the authority
of the Board of Directors, except as limited by applicable law. The Audit
Committee, consisting of directors Bull, La Porte and Posey, oversees actions
taken by the Company's independent auditor and reviews the Company's internal
audit controls. The Compensation Committee, consisting of directors Finzi,
Keckley and Posey, reviews the compensation levels of the Company's employees
and makes recommendations to the Board of Directors regarding compensation.

In 1997, the Board of Directors met eight times, the Compensation Committee
met seven times and the Executive Committee did not meet. No current director
attended fewer than 75 percent of the aggregate of all meetings held while such
individual was a member of the Board of Directors, and no current director
attended fewer than 75 percent of the meetings of the committees in 1997 of
which such individual was a member.

The Board of Directors recommends a vote FOR each of the nominees named
above.

PROPOSAL 2

AMENDMENTS TO 1993 STOCK INCENTIVE PLAN

The shareholders are being asked to approve a series of amendments to the
Company's 1993 Stock Incentive Plan (the "Plan") to effect the following
changes: (i) increase the maximum number of shares of Common Stock authorized
for issuance over the term of the Plan by 1,000,000 from 1,000,000 shares to
2,000,000 shares; (ii) clarify that the eligibility provisions of the Plan
include dentists and other professionals who are employed by corporations,
partnerships, sole proprietorships or other business organizations
(collectively, the "Affiliated Dental Practices"), which have entered into
agreements with the Company under which the Company manages the non-professional
aspects of the Affiliated Dental Practices; (iii) provide that, unless otherwise
determined by the Board of Directors, options granted to employees under the
Plan will continue to vest after termination or cessation of employment so long
as such former employee is continuously retained by the Company on an
independent contractor basis and for so long as such independent contractor
relationship continues; and (iv) increase the aggregate number of shares of
Common Stock underlying stock options and stock appreciation rights that any
employee may receive under the Plan in any calendar year by 75,000 shares from
75,000 to 150,000 shares. The Board of Directors believes that it is necessary
to increase the number of shares available for issuance under the Plan and the
number of shares underlying grants in any calendar year to enable the Company to
continue using equity incentives to attract and retain the services of key
individuals essential to the Company's long-term success.

The Plan was adopted by the Board of Directors of the Company on January
25, 1993 and approved by the Company's shareholders on March 3, 1993. It was
subsequently amended on several occasions. The amendments

to the Plan for which shareholder approval is sought under this Proposal 2 were
adopted by the Board of Directors on December 11, 1997 and April 8, 1998, in
each case subject to shareholder approval.

The amendments to the Plan are intended to reserve a sufficient number of
shares of Common Stock to enable the Company to provide a broad equity incentive
program for the Company's directors, officers, employees and other key
contributors, including key employees of the Affiliated Dental Practices, that
will encourage such persons to continue their service to the Company or the
Affiliated Dental Practices and align such persons' interest with those of the
Company's shareholders. The remaining amendments in this Proposal 2 are intended
to allow the Company to retain the services of qualified individuals by
continuing to recognize their service to the Company.

The following is a summary of the principal features of the Plan. This
summary does not purport to be a complete description of all the provisions of
the Plan. Any shareholder of the Company who wishes to obtain a copy of the
actual Plan may do so upon written request to the Secretary of the Company at
the Company's principal executive offices.

Structure of the Plan

Under the Plan, the Company's Board of Directors may grant incentive stock
options ("ISOs"), as defined under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), grant options other than ISOs ("Non-Statutory
Stock Options"), grant stock appreciation rights ("SARs") or bonus rights, award
bonuses of Common Stock and sell Common Stock subject to restrictions. Common
Stock issued under the Plan may be subject to such restrictions on transfer,
repurchase rights or other restrictions as the Board of Directors may determine.

The Board of Directors may delegate to a committee of the Board of
Directors or a senior executive officer, or both, any or all authority for
administration of the Plan. Notwithstanding such authority, only the Board of
Directors may amend or terminate the Plan. The Board of Directors has granted to
the Compensation Committee the broadest non-exclusive authority to administer
the Plan permitted under the Plan.

Eligibility

Grants and awards may be made under the Plan to directors, officers and key
employees of the Company or any parent or subsidiary of the Company, and any
other key individuals, such as consultants to the Company, who the Board of
Directors or Compensation Committee believes have made or will make an essential
contribution to the Company. However, only employees of the Company may receive
ISOs under the Plan. Although dentists and other professionals employed by any
of the Company's Affiliated Dental Practices may also receive grants and awards
under the Plan, this Proposal 2 clarifies such persons' eligibility under the
Plan.

Price and Exercisablity

The exercise price per share of an option granted under the Plan is
determined by the Compensation Committee or Board of Directors, but may not be
less than 85 percent of the fair market value of the shares underlying the
option on the date of grant. The option price per share for any grant to an
optionee possessing more than ten percent of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary of the Company
may not be less than 110 percent of the fair market value on the date of such
grant. In addition, the option price with respect to an ISO may not be less than
100 percent of the fair market value of the shares covered by the ISO on the
date of grant. On March 31, 1998, the closing bid price for a share of the
Company's Common Stock on the Nasdaq Small Cap Market was $8.75.

Except as otherwise provided in the Plan for situations involving
termination of employment or service of the optionee, the Compensation Committee
may determine the time of exercisability of an option grant, provided that (i)
no option may become exercisable at a rate of less than 20 percent per year over
the first five years of the option, and (ii) options may not be exercisable for
fractional shares of Common Stock. The maximum term of any stock option is 10
years, or five years in the case of 10 percent shareholders.

Shares Subject to Plan

A total of 2,000,000 shares of Common Stock (including the 1,000,000 share
increase subject to shareholder approval under this Proposal 2) have been
reserved for issuance over the ten-year term of the Plan. In no event may any
one participant in the Plan be granted options or SARs under the Plan for more
than an aggregate of 150,000 shares in any calendar year (including the 75,000
share increase subject to shareholder approval under Proposal 2). In addition,
no employee may be granted an ISO under the Plan such that the aggregate fair
market value, on the date of the grant, of the Common Stock with respect to
which ISOs are exercisable for the first time by that employee during any
calendar year, under the Plan and any other incentive stock plan (within the
meaning of Section 422 of the Code) of the Company or any parent or subsidiary
of the Company, exceeds $100,000.

At March 31, 1998, options for 863,350 shares were outstanding under the
Plan (none of which are subject to shareholder approval under this Proposal 2),
90,112 shares of Common Stock had been issued under the Plan and 46,538 shares
remained available for future grants under the Plan. In addition, at March 31,
1998, options granted under GMS stock option plans assumed by the Company in the
GMS Merger covering 93,353 shares of the Company's Common Stock were also
outstanding, but not subject to the Plan.

If any option or SAR granted without a related option expires or is
cancelled or terminated and is unexercised in whole or in part, the shares
allocable to the unexercised portion shall again become available for awards
under the Plan, except that shares that are issued on exercise of a SAR that
were allocable to an option, or portion thereof, surrendered in connection with
the exercise of the SAR shall not again become available for awards under the
Plan. If Common Stock sold or awarded as a bonus under the Plan is forfeited to
the Company or repurchased by the Company pursuant to applicable restrictions,
the number of shares forfeited or repurchased will be available again under the
Plan.

Termination of Employment

Unless otherwise determined by the Compensation Committee or Board of
Directors, if an employee's employment by the Company is terminated by
retirement or for any reason other than such employee's death or disability, any
option, SAR or cash bonus right held by such employee may be exercised at any
time prior to the earlier of its expiration date or the expiration of three
months after the date of the termination, but only if and to the extent the
employee was entitled to exercise the option, SAR or cash bonus right on the
date of expiration. Notwithstanding the foregoing and subject to shareholder
approval of this Proposal 2, unless otherwise determined by the Board of
Directors, any option granted to an employee under the Plan shall continue to
vest in accordance with its terms after termination of employment, so long as
such former employee is continuously retained by the Company on an independent
contractor basis and for so long as such independent contractor relationship
continues uninterrupted. Transfer of the employee to any parent or subsidiary of
the Company is not considered termination for purposes of the Plan. With respect
to grants and awards made to persons who are not employees of the Company, under
the Plan the Board of Directors may establish provisions relating to the
termination of such persons' status with the Company.

Unless otherwise determined by the Compensation Committee or Board of
Directors, if an employee's employment by the Company or any parent or
subsidiary of the Company is terminated because of such employee's death or
physical disability (within the meaning of Section 22(e)(3) of the Code), any
award or grant held by such employee may be exercised at the earlier of one year
after the date of termination or the expiration date, for the greater of the
number of remaining shares for which the employee (i) was entitled to exercise
under the award or grant on the date of termination, or (ii) would have been
entitled to exercise under the award or grant if such option had been
exercisable as to 50 percent of such award or grant on the date of termination.
If an employee's employment is terminated by death, any award or grant held by
the employee shall be exercisable only by the person or persons to whom the
employee's rights under the award or grant pass by the employee's will or by the
laws of descent and distribution of the state or country of the employee's
domicile at the time of death.

Changes in Capital Structures

In the event any change is made to the outstanding shares of Common Stock
by reason of any recapitalization, stock dividend, stock split or combination of
shares, appropriate adjustment by the Board of Directors shall be made in the
number and kind of shares for the purchase of which options or SARs may be
granted and for which Common Stock may be awarded as bonuses or sold subject to
restrictions under the Plan.

Payment for Shares and Financial Assistance

Shares of Common Stock acquired by an optionee under the Plan upon the
exercise of an option may be paid for in cash, including cash that may be the
proceeds of a loan from the Company, in shares of Common Stock previously
acquired by the optionee valued at fair market value, or in any combination of
cash and shares of Common Stock.

Payment by Company to Holder of SARs

Payment by the Company upon exercise of a SAR may be made in shares of
Common Stock valued at fair market value, or in cash, or partly in Common Stock
and partly in cash, as determined by the Board of Directors. Instead of issuing
fractional shares that may result from the exercise of a SAR, the Company may
pay to the holder thereof cash in an amount equal to the value of the fraction
or, in the discretion of the Board of Directors, the number of shares may be
rounded to the next whole share.

Transferability

Options, SARs and cash bonus rights granted under the Plan are generally
not assignable or transferable by the optionee and, unless otherwise determined
by the Board of Directors, must be exercised by the optionee during the period
of the optionee's employment or service with the Company or within a specified
period following termination of employment or service.

Amendment and Termination

The Board of Directors may at any time and from time to time modify or
amend the Plan in such respects as it deems advisable for any reason. However,
no change in an option or SAR already granted to any person shall be made
without the written consent of such person. Furthermore, unless approved by the
shareholders of the Company entitled to vote thereon, no amendment or change
shall be made in the Plan (i) increasing the total number of shares that may be
issued under the Plan, or (ii) changing the class of persons eligible to receive
options under the Plan.

Federal Income Tax Considerations

Option Grants. Options granted under the Plan may be either ISOs which
satisfy the requirements of Section 422 of the Internal Revenue Code or
Non-Statutory Stock Options which are not intended to meet such requirements.
The federal income tax treatment for the two types of options differs as
follows:

Incentive Stock Options. No taxable income is recognized by the optionee at
the time of the ISO grant, and no taxable income is generally recognized at the
time the ISO is exercised. The optionee will, however, recognize taxable income
in the year in which the purchased shares are sold or otherwise disposed. For
federal tax purposes, dispositions are divided into two categories: (i)
qualifying and (ii) disqualifying. A qualifying disposition occurs if the sale
or other disposition is made after the optionee has held the shares for more
than two years after the option grant date and more than one year after the
exercise date. If either of these two holding periods is not satisfied, then a
disqualifying disposition will result.

If the optionee makes a disqualifying disposition of the purchased shares,
then the Company will be entitled to an income tax deduction, for the taxable
year in which such disposition occurs, equal to the excess of (i) the fair

market value of such shares on the option exercise date over (ii) the exercise
price paid for the shares. In no other instance will the Company be allowed a
deduction with respect to the optionee's disposition of the purchased shares.

Non-Statutory Stock Options. No taxable income is recognized by an optionee
upon the grant of a Non-Statutory Stock Option. The optionee will in general
recognize ordinary income, in the year in which the option is exercised, equal
to the excess of the fair market value of the purchased shares on the exercise
date over the exercise price paid for the shares, and the optionee will be
required to satisfy the tax withholding requirements applicable to such income.

If the shares acquired upon exercise of the Non-Statutory Stock Option are
unvested and subject to repurchase by the Company in the event of the optionee's
termination of service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Code to include as
ordinary income in the year of exercise of the option an amount equal to the
excess of (i) the fair market value of the purchased shares on the exercise date
over (ii) the exercise price paid for such shares. If the Section 83(b) election
is made, the optionee will not recognize any additional income as and when the
repurchase right lapses.

The Company will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the optionee with respect to the exercised
Non-Statutory Stock Option. The deduction will in general be allowed for the
taxable year of the Company in which such ordinary income is recognized by the
optionee.

Stock Appreciation Rights. An optionee who is granted a SAR will recognize
ordinary income in the year of exercise equal to the amount of the appreciation
distribution. The Company will be entitled to an income tax deduction equal to
the appreciation distribution for the taxable year in which such ordinary income
is recognized by the optionee.

Deductibility of Executive Compensation

The Company anticipates that any compensation deemed paid by it in
connection with disqualifying dispositions of ISO shares or exercises of
Non-Statutory Stock Options or SARs granted with an exercise price equal to the
fair market value of the option shares will qualify as performance-based
compensation for purposes of Section 162(m) of the Code and will not have to be
taken into account for purposes of the $1 million limitation on the
deductibility of the compensation paid to certain executive officers of the
Company.

Accounting Treatment

Option grants with exercise prices less than the fair market value of the
shares on the grant date will result in a compensation expense to the Company's
earnings equal to the difference between the exercise price and the fair market
value of the shares on the grant date. Such expense will be accruable by the
Company over the period that the option shares are to vest. Option grants at 100
percent of fair market value will not result in any charge to the Company's
earnings, but the Company must disclose, in pro-forma statements to its
financial statements, the impact those options would have upon the Company's
reported earnings were the value of those options at the time of grant treated
as compensation expense. Whether or not granted at a discount, the number of
outstanding options may be a factor in determining the Company's earnings per
share on a fully-diluted basis. The grant of SARs will result in a compensation
expense to the Company's earnings measured by the appreciation in the fair
market value of the SAR shares from time to time.

Recent Option Awards Under the Plan

The table below shows, as to each of the Company's Named Executive
Officers, each nominee for director and the various indicated groups, the number
of shares of Common Stock subject to options granted between January 1, 1997 and
March 31, 1998 under the Plan with the weighted average exercise price payable
per share.

Number of Option Weighted Average
Name Shares Option Prices
- -------------------------------------------------------------- ---------------- ----------------

Michael T. Fiore.............................................. 75,000 $8.25

Dany Y. Tse, DMD.............................................. 106,000 $5.73

Grant M. Sadler............................................... -- --

L. Theodore Van Eerden........................................ 63,500 $5.00

Norman R. Huffaker............................................ 53,000 $8.25

All current executive officers as a group (5 persons)......... 297,500 $6.66

All current directors who are not executive officers as a
group (7 persons)............................................. 12,000 $7.61

All employees, including current officers who are not
executive officers, as a group (34 persons)................... 382,700 $6.71

New Plan Benefits

As of March 31, 1998, no options have been granted under the Plan on the
basis of the 1,000,000-share increase to the Plan which forms a part of this
Proposal 2.

Shareholder Approval

The affirmative vote of the holders of a majority of shares of Common Stock
present or represented at the Annual Meeting is required for approval of the
amendments to the Plan. If the required shareholder approval is not obtained,
then the number of shares available for issuance under the Plan will remain at
1,000,000 shares. The Plan will, however, continue to remain in effect and
option grants or stock issuances may continue under the Plan pursuant to the
provisions in effect prior to the amendments summarized in this Proposal 2,
until the available shares of Common Stock have been issued pursuant to grants
and awards under the Plan.

The Board of Directors recommends a vote FOR the approval of the amendments
to the Plan set forth in Proposal 2.

PROPOSAL 3

CONVERSION OF COMPANY FROM OPERATING COMPANY TO HOLDING COMPANY

The shareholders are being asked to approve the transfer of all of the
Company's operating assets and liabilities to Gentle Dental Management, Inc., a
Delaware corporation and wholly-owned subsidiary of the Company (the
"Subsidiary"), in exchange for additional shares of capital stock of the
Subsidiary, in order to convert the Company from an operating company into a
holding company (the "Conversion"). The Company's Board of Directors has
determined that the Conversion will not be consummated and shall automatically
cease in the

event the holders of more than ____ percent of the shares entitled to vote on
this Proposal 3 exercise their dissenters' rights (as described below) under
Washington law.

Under the Company's Amended and Restated Credit Agreement with Imperial
Bank (the Credit Facility"), the Company is required to convert into a holding
company that holds no assets, other than the capital stock of its operating
subsidiaries, on or before July 31, 1998. If the Company fails to effect the
Conversion on or before such date, an event of default will have occurred under
the Credit Facility, which, among other things, would permit Imperial Bank to
accelerate the repayment of all outstanding amounts under the Credit Facility.
Such an acceleration could have a material adverse effect on the Company's
business and results of operations.

In the event the Company effectuates the Conversion, all operations of the
Company's business will be conducted through subsidiaries. As such, claims of
creditors, including trade creditors, of such subsidiaries would generally have
priority as to the assets of such subsidiaries over the claims of the Company
and its shareholders. In addition, all or substantially all of the Company's
operating income and cash flow will be generated by its subsidiaries. In order
to make cash payments on its direct liabilities, the Company will have to rely
on dividends or loans from its subsidiaries to generate the funds for such
payments. The ability of such subsidiaries to pay such dividends would be
subject to applicable state laws and could become subject to debt or other
contractual limitations.

The Company is not aware of any governmental authorizations, approvals or
consents that are necessary or required for the Company to consummate the
Conversion.

Federal Income Tax Consequences

The Company believes that, although the Conversion will be treated as an
exchange of the transferred assets which qualifies for tax-deferral under
Section 351 of the Code, the Company will realize taxable income under Section
357(c) of the Code to the extent that Company liabilities transferred to the
Subsidiary exceed the Company's basis for Federal income tax purposes in the
assets transferred. Under Section 362 of the Code, the Subsidiary's basis in the
assets it receives will equal the Company's basis in the assets it transfers
plus any gain realized by the Company with respect to the liabilities
transferred. The Company's basis in the Subsidiary's capital stock will be
increased by the amount of its basis in the assets transferred plus any gain
realized. However, the Company's gain recognition will be deferred pursuant to
Treasury Regulation Section 1.1502-13(c)(7). This gain will be deferred for
Federal income tax purposes as long as the Company and the Subsidiary continue
to file a consolidated tax return and certain specified triggering events do not
occur.

Rights of Dissenting Shareholders

The Conversion constitutes a sale of substantially all of the assets of the
Company under Washington law. Pursuant to Sections 23B.13.010 through 23B.13.310
of the Washington Business Corporation Act (the "WBCA"), any shareholder (a
"Shareholder") who gives proper notice and who does not vote in favor of the
Conversion will, upon proper demand, have the right under the WBCA to obtain
payment of the fair value of his or her shares of the Company's Common Stock.

Any Shareholder electing to exercise dissenters' rights must file a written
notice of this intent with the Company, attention of the Secretary, at 22800
Savi Ranch Parkway, Suite 206, Yorba Linda, California 92887, prior to the vote,
and must not vote his or her shares in favor of the Conversion. As provided in
Section 23B.13.030 of the WBCA, a shareholder whose shares are held in a
brokerage account or by some other nominee must either have the record holder of
the shares file the dissenters' notice on the shareholder's behalf or obtain the
written consent of the record holder and file the shareholder's dissenters'
notice. These documents must be filed with the Secretary of the Company prior to
the vote on the Conversion. A beneficial shareholder of the Company's Common
Stock who chooses to exercise dissenters' rights must exercise such rights with
respect to all shares of Common Stock either beneficially held by such
shareholder or over which such shareholder has power to direct the vote. A VOTE
IN FAVOR OF THE CONVERSION WILL CONSTITUTE A WAIVER OF DISSENTERS' RIGHTS. A
VOTE AGAINST THE CONVERSION WILL NOT SATISFY THE REQUIREMENT THAT

WRITTEN NOTICE BE FILED WITH THE COMPANY IN ORDER TO ASSERT DISSENTERS'
RIGHTS.

For the purpose of dissenters' rights, the fair value of shares will be
their value immediately prior to the effectiveness of the Conversion, excluding
any appreciation or depreciation in anticipation of the Conversion, if any,
unless exclusion would be inequitable. Shareholders considering exercising their
dissenters' rights should recognize that the fair value of their shares of
Common Stock as determined under Sections 23B.13.010 through 23B.13.310 of the
WBCA could be more than, the same as or less than the value of their shares if
they do not exercise their appraisal rights.

If the Conversion is approved by the requisite vote of shareholders, the
Company will, within ten days following the effective date of the Conversion,
mail a notice to each Shareholder who gave the Company due notice of his or her
intention to demand payment and who did not vote in favor of the Conversion. The
notice will provide, among other things: (i) the form of payment demand
(including the date of the first announcement to the shareholders of the terms
of the Conversion), (ii) where the payment demand must be delivered, (iii) when
and where the certificates for certificated shares must be deposited, and (iv)
the date by which the Company must receive the payment demand. A Shareholder who
fails to make a timely or proper demand for payment (including the deposit of
certificates) in accordance with the notice is not entitled to payment under the
WBCA for his or her shares. A Shareholder who fails to certify that he or she
acquired beneficial ownership of the shares prior to the date of the first
announcement of the terms of the Conversion to the shareholders may not receive
immediate payment for his or her shares, as described below with respect to
After Acquired Shares (as defined below).

Except with respect to those Shareholders who held After-Acquired Shares,
the Company will remit, within 30 days of the later of the date of effectiveness
of the Conversion or the date the payment demand is received, to all
Shareholders who made proper demand, an amount that the Company estimates to be
the fair value of their shares of Common Stock, together with any interest that
has accrued from the effective date of the Conversion until the date of payment.
The remittance will be accompanied by certain financial information of the
Company, an explanation of how the fair value of the shares was estimated and an
explanation of how the accrued interest was calculated. If the Company fails so
to remit or if the dissenting Shareholder believes the amount remitted is less
than the fair value of his or her shares, the dissenting Shareholder may send
the Company his or her own estimate of the fair value of the shares and amount
of accrued interest due and demand payment of the deficiency. The dissenting
Shareholder must notify the Company in writing of his or her estimate within 30
days after the date the Company mails its remittance, if any. If the Company and
the dissenting Shareholder are unable to agree on a fair value within 60 days
after the receipt of a demand for payment of a deficiency, the Company will
petition that the fair value of the shares and interest thereon be determined by
an appropriate court.

If a dissenting Shareholder acquired his or her shares of Common Stock
after the date set forth in the dissenters' notice as the date of the first
announcement of the terms of the Conversion to the news media or to the
shareholders ("After-Acquired Shares"), the Company may elect to withhold the
payment described in the preceding paragraph and to offer to pay fair value for
the After-Acquired Shares subject to such dissenting Shareholder's agreement to
accept payment as satisfaction in full of the dissenting claim. The Company will
send with its offer an explanation of how the fair value of the After-Acquired
Shares was estimated and how the accrued interest was calculated.

If the dissenting Shareholder believes that the amount offered is less than
the fair value of his or her After-Acquired Shares, the dissenting Shareholder
may send the Company his or her own estimate of the fair value of the
After-Acquired Shares and amount of accrued interest due. The dissenting
Shareholder must notify the Company in writing of his or her estimate within 30
days after the date the Company makes its offer. If the Company and the
dissenting Shareholder are unable to agree on a fair value for the
After-Acquired Shares within 60 days after the receipt of the dissenting
Shareholder's estimate of the fair value of the After-Acquired Shares, the
Company will petition that the fair value of the After-Acquired Shares and
interest thereon be determined by an appropriate court.

With respect to a judicial proceeding commenced by the Company to determine
the fair value of the shares and interest thereon with respect to any shares of
Common Stock (including After-Acquired Shares), the court will

determine the costs of such proceeding and will assess such costs against the
Company, except that the court may assess such costs against one or more of the
dissenting Shareholders party to such proceeding, in amounts the court finds
equitable, to the extent that such court finds that the dissenting Shareholder
acted arbitrarily, vexatiously or not in good faith in demanding payment.

The foregoing summary is not, and does not purport to be, a complete
statement of dissenters' rights and is qualified in its entirety by reference to
Sections 23B.13.010 through 23B.13.310 of the WBCA, a copy of which is attached
to this Proxy Statement as Exhibit A.

Shareholder Approval

The affirmative vote of the holders of a majority of shares of Common Stock
entitled to vote at the Annual Meeting is required for approval of the
Conversion. If the required shareholder approval is not obtained or if the
holders of more than ____ percent of the shares entitled to vote on Proposal 3
exercise their dissenters' rights, then the Conversion will not be effectuated.

The Board of Directors recommends a vote FOR the transfer of all of the
Company's operating assets and liabilities to Gentle Dental Management, Inc., a
wholly-owned subsidiary of the Company, in order to convert the Company from an
operating company into a holding company.

PROPOSAL 4

RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR

The accounting firm of KPMG Peat Marwick LLP served as the independent
auditor of the Company for the fiscal year ended December 31, 1997. The Board of
Directors has selected KPMG Peat Marwick LLP as the Company's independent
auditor for the fiscal year ending December 31, 1998 and has further directed
that the selection of the auditor be submitted for ratification by the
shareholders at the Annual Meeting. Neither KPMG Peat Marwick LLP nor any of its
members has any relationship with the Company or any of its affiliates except in
the firm's capacity as the Company's auditor. Representatives of KPMG Peat
Marwick LLP are not expected to be present at the Annual Meeting.

Shareholder ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent auditor is not required by the Company's Bylaws or
otherwise. However, the Board of Directors is submitting the selection of KPMG
Peat Marwick LLP to the shareholders for ratification as a matter of good
corporate practice. If the shareholders fail to ratify the selection by an
affirmative vote of the holders of majority of the Common Stock present or
represented at the meeting and entitled to vote thereat, the Audit Committee of
the Board of Directors will reconsider whether to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board of Directors in their
discretion may direct the appointment of a different independent accounting firm
at any time during the year if they determine that such a change would be in the
best interests of the Company and its shareholders.

The Board of Directors recommends a vote FOR the ratification of the
selection of KPMG Peat Marwick LLP as the Company's independent auditor.

VOTING SECURITIES AND
PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1998 by (i) each person
known by the Company to own beneficially more than five percent of the Common
Stock, (ii) each director of the Company, and (iii) the Chief Executive Officer
and each other Named Executive Officer (as such term is defined below under the
caption "Executive Officers of the Company." Except as otherwise noted, the
Company believes the persons listed below have sole investment and voting power
with respect to the Common Stock owned by them.

Shares Percentage of
Beneficially Common Stock
Name and Address of Beneficial Owner(1) Owned Beneficially Owned
- --------------------------------------------------------------------------- ------------ ------------------

Sprout Capital VII L.P. and certain related entities (2)................... 1,649,562 21.14%
3000 Sand Hill Road
Bldg. 3, Suite 170
Menlo Park, CA 94025
Accel V L.P. and certain related entities (3).............................. 524,708 6.72%
c/o Accel Partners
428 University Avenue
Palo Alto, CA 94301
Bessemer Venture Partners GMS.............................................. 393,530 5.04%
83 Walnut Street
Wellesley Hills, MA 02181
ServiceMaster Venture Fund L.L.C. (4)...................................... 200,000 2.53%
One ServiceMaster Way
Downers Grove, IL 60515
Michael T. Fiore (5)....................................................... 356,772 4.57%
Dany Y. Tse, DMD (6)....................................................... 629,411 8.04%
Grant M. Sadler (7)........................................................ 395,541 5.07%
L. Theodore Van Eerden (8)................................................. 28,175 *
Norman R. Huffaker (9)..................................................... 5,564 *
Gerald R. Aaron, DDS (10).................................................. 11,250 *
Kenneth D. Hooten (11)..................................................... 200,000 2.53%
Paul H. Keckley (12)....................................................... 400 *
Craig W. Wong, DMD (13).................................................... 89,500 1.15%
Steven R. Bull, DDS (14)................................................... 2,782 *
Wayne Posey (15)........................................................... 29,017 *
Robert Finzi (16).......................................................... 1,649,562 21.14%
Kathleen D. La Porte (16).................................................. 1,649,562 21.14%
All directors and officers as a group (13 persons) (17).................... 3,397,974 42.04%

- --------------

* Less than one percent.

(1) Unless otherwise indicated the address of each named person listed in the
table is 22800 Savi Ranch Parkway, Suite 206, Yorba Linda, California 92887
until the first week of June, 1998, after which time the address is 222
North Sepulveda Boulevard, Suite 740, El Segundo, California 90245.

(2) Consists of the following shares: 793,600 shares held by Sprout Capital VII
L.P. ("Sprout"); 164,956 held by DLJ First ESC L.L.C. ("DLJ First");
648,797 shares held by Sprout Growth II, L.P. ("Sprout Growth"), 9,218
shares held by the Sprout CEO Fund, L.P. ("Sprout CEO"); and 32,991 shares
held by DLJ Capital Corporation ("DLJ Capital"). DLJ Capital is the
Managing General Partner of each of Sprout CEO, Sprout Growth and Sprout
Capital VII and has voting and investment control over the shares held by
each of these three shareholders. DLJ LBO Plans Management Corporation is
the manager of DLJ First and has voting and investment control over the
shares held by DLJ First.
(3) Consists of the following shares: 422,914 shares held by Accel V L.P.
("A5"); 56,669 shares held by Accel Internet/Strategic Technology Fund L.P.
("AISTF"); 25,186 shares held by Accel Investors `96 L.P. ("AI96"); 11,544
shares held by Ellmore C. Patterson Partners ("ECPP"); and 8,395 shares
held by Accel Keiretsu V L.P. ("AK5") (A5, AISTF, AI96, ECPP, AK5 and A5A
collectively, the "Accel Entities"). Arthur C. Patterson, ACP Family
Partnership L.P., James R. Swartz, James W. Breyer, The Breyer 1995 Trust
dated 10/4/95, Eugene D. Hill, Swartz Family Partnership L.P., Luke B.
Evnin, and G. Carter Sednaoui share control of the Accel Entities and
disclaim beneficial ownership of the shares held by the Accel Entities
except to the extent of their respective pecuniary interests.
(4) Includes 100,000 shares subject to an exercisable warrant. ServiceMaster
Venture Fund L.L.C. is a subsidiary of the ServiceMaster Company Limited
Partnership, which in turn is a subsidiary of ServiceMaster Limited
Partnership, a NYSE-listed limited partnership.
(5) Includes 16,691 shares currently subject to repurchase by the Company and
16,691 shares subject to repurchase by the Company in January 1999 if
certain performance targets are not met, all at $0.45 per share. See
"Certain Transactions."
(6) Includes 89,800 shares subject to exercisable options, 34,500 shares
subject to an exercisable warrant and 3,500 shares held by Dr. Tse's wife.
(7) Includes 110,255 shares currently subject to repurchase by the Company and
110,255 shares subject to repurchase by the Company in January 1999 if
certain performance targets are not met, all at $0.225 per share. Also
includes 170,169 shares subject to repurchase by the Company at a price of
$0.225 per share, which rights lapse at a rate of 2,431 shares per month
until October 31, 2000, at which time the Company's rights will have lapsed
as to all such 170,169 shares. See "Certain Transactions."
(8) Includes 25,200 shares subject to options exercisable within 60 days after
March 31, 1998 and 2,875 shares subject to an exercisable warrant.
(9) Includes 5,564 shares subject to an option exercisable within 60 days after
March 31, 1998
(10) Includes 9,000 shares subject to options exercisable within 60 days after
March 31, 1998.
(11) Includes 200,000 shares beneficially owned by ServiceMaster Venture Fund
L.L.C. Mr. Hooten, as a Vice President of The ServiceMaster Company, which
manages ServiceMaster Venture Fund L.L.C., may be deemed to share voting
and dispositive power with respect to such shares. Mr. Hooten disclaims
beneficial ownership of these shares.
(12) Includes 400 shares subject to an option exercisable within 60 days after
March 31, 1998.
(13) Includes 1,600 shares subject to an exercisable option and 6,900 shares
subject to an exercisable warrant.
(14) Includes 2,782 shares subject to options exercisable within 60 days after
March 31, 1998. Dr. Bull has resigned from the Company's Board of
Directors, effective as of April 1, 1998.
(15) Includes 2,782 shares subject to options exercisable within 60 days after
March 31, 1998.
(16) Includes 1,649,562 shares beneficially owned by Sprout Capital VII, L.P.
and certain related entities. Mr. Finzi and Ms. La Porte, as general
partners of a general partner of entities within this group, may be deemed
to share voting and dispositive power with respect to such shares. Mr.
Finzi and Ms. La Porte each disclaims beneficial ownership of these shares.
(17) Includes 135,462 shares subject to options exercisable within 60 days after
March 31, 1998, 144,275 shares subject to exercisable warrants, 147,976
shares currently subject to repurchase by the Company and 105,916 shares
subject to repurchase by the Company if certain performance targets are not
met.

EXECUTIVE OFFICERS OF THE COMPANY

Executive Officers

The following table sets forth certain information for each person who
served as chief executive officer of the Company in 1997 and all other current
executive officers of the Company whose annual income in 1997 exceeded $100,000
(collectively, the "Named Executive Officers").

Name Age Position
- ----------------------------- --- -------------------------------------------------------------------

Michael T. Fiore............. 44 Co-Chairman of the Board, Chief Executive Officer and President

Dany Y. Tse, DMD............. 47 Co-Chairman of the Board and President of Clinical Services Council

Grant M. Sadler.............. 51 Vice Chairman of the Board

L. Theodore Van Eerden....... 42 Executive Vice President, Chief Development Officer and Director

Norman R. Huffaker........... 51 Chief Financial Officer

For a description of the backgrounds of Michael T. Fiore, Grant M. Sadler,
L. Theodore Van Eerden and Dany Y. Tse, DMD, see "Proposal 1 -- Nominees, and --
Continuing Directors."

Norman R. Huffaker. Mr. Huffaker has served as Chief Financial Officer of
the Company since November 1997. Prior to joining the Company in November 1997,
Mr. Huffaker served as Chief Financial Officer of GMS from December 1996 to
November 1997. Mr. Huffaker previously served as Vice President of Finance for
Community Dental Services, Inc. (SmileCare Dental Group), an Irvine, California
based dental HMO and staff model practice company. Prior to SmileCare Dental
Group, Mr. Huffaker served as Senior Vice President of Finance for Abbey/Foster,
a multi-location home health care company.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth compensation information about the Named
Executive Officers.

Long-Term
Annual Compensation
Compensation ------------
-------------------- Options All Other
Name and Principal Position Year Salary Bonus Granted Compensation
- ----------------------------------------------------- ---- ---------- ------- ------------ ------------

Michael T. Fiore..................................... 1997 $ 35,000 $50,000 -- $2,000(1)
Co-Chairman of the Board, Chief Executive 1996 $ -- $ -- -- --
Officer and President (2)(3)

Dany Y. Tse, DMD..................................... 1997 $ 212,887 $83,000 125,000(5) --
Co-Chairman of the Board, President of Clinical 1996 $ 187,313 $ -- -- $3,339(6)
Services Council(4)

Grant M. Sadler...................................... 1997 $ 29,166 $15,000 -- --
Vice Chairman of the Board(2)(7) 1996 $ -- $ -- -- --

L. Theodore Van Eerden............................... 1997 $ 122,994 $60,000 101,000(8) --
Executive Vice President Chief Development 1996 $ 77,500 $ -- 37,500 --
Officer

Norman R. Huffaker................................... 1997 $ 23,334 $25,000 44,508(10) --
Chief Financial Officer (2)(9) 1996 $ -- $ -- -- --

- --------------

(1) Consists of auto allowances from November 4, 1997 (the effective date of
the GMS Merger).
(2) Amounts shown reflect compensation earned from November 4, 1997 (the
effective date of the GMS Merger) through December 31, 1997.
(3) Mr. Fiore's annual base compensation was $225,000 in 1997 and has been
increased to $250,000 on and as of April 1, 1998. At December 31, 1997, Mr.
Fiore held 333,816 shares of Common Stock as unvested restricted stock. At
December 31, 1997, the value of these shares, net of the amount paid for
the shares, was $2,770,908. See "Certain Transactions."
(4) Dr. Tse served as President and Chief Executive Officer of the Company
until November 4, 1997.
(5) Includes options for 50,000 shares repriced at the time of the Company's
initial public offering in February 1997.
(6) Consists of matching contributions made by the Company to the Company's
401(k) Plan.
(7) Mr. Sadler's annual base compensation is currently $175,000. At December
31, 1997, Mr. Sadler held 303,162 shares of unvested restricted stock. At
December 31, 1997, the value of these shares, net of the amount paid for
the shares, was $2,622,630. See "Certain Transactions."
(8) Includes options for 37,500 shares originally granted in 1996 and repriced
at the time of the initial public offering.
(9) Mr. Huffaker's annual base compensation is currently $140,000.

(10) Consists of options to purchase 100,000 shares of GMS Common Stock granted
to Mr. Huffaker by GMS on December 4, 1996, which options were converted
into options to purchase 44,508 shares of Common Stock in connection with
the GMS Merger on November 4, 1997.

Employment Agreements

The Company has entered into certain employment agreements with its
executive officers under which the annual base salaries of Mr. Fiore, Dr. Tse,
Mr. Sadler, Mr. Van Eerden, and Mr. Huffaker are $250,000, $243,000,

$175,000, $140,000, and $140,000, respectively. The executive officers are also
entitled to participate in bonus plans maintained or established by the Company.
The employment agreements for Dr. Tse and Mr. Van Eerden provide for terms
through April 30, 2002, and the employment agreement for Mr. Fiore provides for
a term through July 31, 1999, during which they may not be terminated without
cause. Mr. Fiore, Dr. Tse, Mr. Sadler, Mr. Van Eerden and Mr. Huffaker are
entitled to continuation of their base salaries (for Mr. Fiore and Dr. Tse in
part under consulting arrangements) for 18 months, three years, nine months, 12
months and nine months, respectively, if their employment is terminated by the
Company without cause or if they voluntarily terminate their employment for good
reason. In addition, if Mr. Fiore's employment is terminated by the Company
without cause before April 1, 2001, he is entitled to be retained by the Company
as a consultant for a number of months equal to one-half of the number of months
between the termination date and April 1, 2001.

Stock Options Granted in Fiscal 1997

The following table sets forth information concerning stock options granted
to the Named Executive Officers during 1997:

Percentage of
Number of Options
Shares Granted to
Underlying Employees
Options During Exercise Price Expiration
Name Granted Fiscal Year per Share Date
- ---------------------------------------------- ------------ ------------- -------------- ----------

Michael T. Fiore(1)........................... -- -- -- --

Dany Y. Tse, DMD.............................. 31,000(2) 6.1% $5.50 01/29/02
50,000(2)(3) 9.8% $5.50 07/26/05
44,000(4) 8.6% $4.125 04/09/02

Grant M. Sadler............................... -- -- -- --

L. Theodore Van Eerden........................ 63,500(5) 12.5% $5.00 01/29/07
25,000(3)(6) 4.9% $5.00 03/19/06
12,500(3)(7) 2.5% $5.00 05/31/06

Norman R. Huffaker............................ 22,254(8) 4.4% $0.45 12/04/06
22,254(9) 4.4% $0.45 12/04/06

- --------------

(1) Does not include options for 333,816 shares of Common Stock (on a post-GMS
Merger basis) granted to Mr. Fiore by GMS and exercised on April 1, 1997,
prior to the GMS Merger. See "Certain Transactions."
(2) This option was fully exercisable at the time of grant.
(3) Although this option was originally granted prior to 1997, it was repriced
at the time of the Company's Initial Public Offering in February 1997.
(4) This option becomes exercisable for 20 percent of the shares on each of the
first five anniversaries of the April 9, 1997 grant date.
(5) This option becomes exercisable for 20 percent of the shares on each of the
first five anniversaries of the January 29, 1997 grant date.
(6) This option becomes exercisable for 20 percent of the shares on each of the
first five anniversaries of the March 19, 1996 grant date.
(7) This option becomes exercisable for 20 percent of the shares on each of the
first five anniversaries of the May 31, 1996 grant date.
(8) This option becomes exercisable for 25 percent of the shares on each of the
first four anniversaries of December 4, 1996 original date of grant by GMS.

(9) This option will become exercisable for one-half of the shares if, among
other things, the Company's earnings before interest, taxes, depreciation
and amortization ("EBITDA") (excluding CEO salary and related expense)

for 1997 exceeds $6,298,000, and will become exercisable for only a portion
of that one-half of the shares if such EBITDA exceeds $4,723,500 but does
not exceed $6,298,000. This option will become exercisable for the entire
second half of the shares if, among other things, the Company's EBITDA
(excluding CEO salary and related expense) for 1998 exceeds $16,911,000,
and will become exercisable for a portion of that half of the shares if
such EBITDA exceeds $12,683,250 but does not exceed $16,911,000. To the
extent the performance targets are not met, this option will be forfeited.

Aggregated Option Exercises and Fiscal Year-End Option Values

No options were exercised by the Named Executive Officers during 1997. The
following table sets forth certain information concerning the number of shares
covered by both exercisable and unexercisable stock options as of December 31,
1997. Also reported are values of "in-the-money" options that represent the
positive spread between the respective exercise prices of outstanding stock
options and the fair market value of the Company's Common Stock as of December
31, 1997.

Fiscal Year-End Option Value

Number of Shares Value of
Subject to Unexercised In-the-Money Options
Options at Fiscal Year-End Fiscal Year-End(1)
--------------------------- ---------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------- ----------- ------------- ----------- -------------

Michael T. Fiore.......................................... -- -- -- --
Dany Y. Tse, DMD.......................................... 81,000 44,000 $708,750 $385,000
Grant M. Sadler........................................... -- -- -- --
L. Theodore Van Eerden.................................... 7,500 93,500 $ 65,625 $818,125
Norman R. Huffaker........................................ 5,563 38,945 -- $340,769

- --------------

(1) Based on the Closing price of $8.75 per share on December 31, 1997.
(2) Does not include options for 333,816 shares of Common Stock (on a post-GMS
Merger basis) granted to Mr. Fiore by GMS and exercised on April 1, 1997,
prior to the GMS Merger. See "Certain Transactions."

Committee Interlocks and Insider Participation

The Compensation Committee, and its members are named above in Proposal 1
under the heading "Board Meetings and Committees." No member of the Compensation
Committee was at any time during the 1997 fiscal year or at any other time an
officer or employee of the Company. No executive officer of the Company serves
as a member of the board of directors or compensation committee of any entity
which has one or more executive officers serving as a member of the Company's
Board of Directors or Compensation Committee.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The outstanding capital stock of certain professional corporations located
in the Oregon and Washington (the "Oregon and Washington Professional
Corporations") is owned in whole or in part by Dany Y. Tse and Gerald R. Aaron.
The Company is a party to certain management agreements (the "Management
Agreements") with each of the Oregon and Washington Professional Corporations
pursuant to which the Company earns a significant portion of its revenues.
Effective January 1, 1998, the Company entered into agreements to amend these
Management Agreements to conform them to the existing management agreements of
Affiliated Dental Practices historically affiliated with GMS and to increase the
Company's control over the Oregon and Washington Professional Corporations. As
consideration for entering into the amended Management Agreements, the Company
has agreed to pay to the Oregon and one of the Washington Professional
Corporations or certain of their respective designated dental practitioners, in
the aggregate, the following: (i) approximately $1.8 million in cash offset by
approximately $1.8 million of Company receivables due from such Oregon and
Washington Professional Corporations; (ii) the right to receive an aggregate of
either $575,000 in cash in 18 equal monthly installments or options to acquire
230,000 shares of Common Stock at an exercise price of $8.375 per share, subject
to five year vesting, plus options

to acquire an aggregate of 110,000 shares of Common Stock exercisable at $8.375
per share, subject to five year vesting; and (iii) future cash or options
subject to five year vesting in amounts to be determined according to a formula
based upon the operating revenues of such Oregon and Washington Professional
Corporations for fiscal years ending December 31, 1998 and 1999.

On May 31, 1996, the Company executed a modification of its former loan and
security agreement with Silicon Valley Bank (the "Modification"). In connection
with the Modification, 14 officers, directors, and shareholders of the Company
including Dr. Tse, Dr. Wong and Mr. Van Eerden, provided continuing personal
guarantees on $1,000,000 of the Company's indebtedness to Silicon Valley Bank in
connection with a $1,000,000 increase in availability under such credit
facility. In consideration for the personal guarantees, the Company issued
warrants to purchase an aggregate total of 115,000 shares of the Company's
Common Stock at $7.50 per share. Each guarantor received warrants to purchase
1,150 shares for each $10,000 of indebtedness guaranteed. All of these
guarantees terminated in February 1997 upon the repayment of the loan.

The above-described transactions with related parties were on terms the
Company's Board of Directors believed to be fair to the Company and no less
favorable to the Company than terms that could have been obtained from an
unrelated party. Future transactions between the Company and Affiliated Dental
Practices controlled by officers, directors, and principal shareholders of the
Company will be carried out pursuant to a related party transaction policy
adopted by the Company's Board of Directors. The policy provides that any
transaction between the Company and (i) an officer, director, or principal
shareholder of the Company or (ii) any entity that is controlled by officers,
directors, or principal shareholders of the Company must be approved by at least
a majority of the Company's directors who do not have an interest in the
transaction. The terms of such transactions must be no less favorable to the
Company than those that are generally available from unaffiliated third parties.

On April 1, 1997, Mr. Fiore was granted stock options by GMS exercisable
for 750,000 shares of GMS Common Stock at an aggregate exercise price of
$150,000. On the same date, Mr. Fiore exercised the options for all such shares.
The exercise price was paid in the form of a secured promissory note in the
principal amount of $150,000 which bears annual interest at the rate of 6.84%
compounded annually. All unpaid principal and accrued interest becomes due and
payable to the Company on March 31, 2001. In the GMS Merger, the shares
purchased on exercise of Mr. Fiore's options were converted into 333,816 shares
of Common Stock. Of these shares, 300,434 shares are subject to a four year
vesting schedule under which 25% of the shares vested on April 1, 1998 and the
remaining shares vest in equal amounts over the next 36 months. All unvested
shares are subject to repurchase by the Company at $0.45 per share upon
termination of Mr. Fiore's service to the Company for any reason. Of the
remaining 33,382 shares of Common Stock held by Mr. Fiore, one half are
currently subject to repurchase by the Company at $0.45 per share because the
Company's EBITDA (excluding CEO salary and related expense) for 1997 did not
exceed $4,723,500. The second half of the remaining shares are subject to
repurchase by the Company at the same price if, among other things, the
Company's EBITDA (excluding CEO salary and related expense) for 1998 does not
exceed $12,683,250, and a portion of the second half will be subject to
repurchase if such EBITDA does not exceed $16,911,000.

In 1996, Mr. Sadler purchased from GMS 888,681 shares of GMS Common Stock
for $88,868. The purchase price was paid in part in the form of secured
promissory note in the principal amount of $87,911, which bears interest at the
rate of 6.84%, compounded annually. All unpaid principal and accrued interest on
such promissory note becomes due and payable on August 31, 2000. In the GMS
Merger, the foregoing shares were converted into 395,541 shares of Common Stock.
Of these shares, 175,031 shares are subject to a four year vesting schedule
under which one fourth of the shares vested immediately upon issuance, another
one fourth vested on October 11, 1997 and the remaining shares vest in equal
amounts over the next 36 months thereafter. All unvested shares are subject to
repurchase by the Company at $0.225 per share upon termination of Mr. Sadler's
service to the Company for any reason. In addition, 110,255 shares of Common
Stock held by Mr. Sadler are currently subject to repurchase by the Company at
$0.225 per share because the Company's EBITDA (excluding CEO salary and related
expense) for 1997 did not exceed $4,723,500. Another 110,255 shares are subject
to repurchase by the Company at the same price if, among other things, the
Company's EBITDA (excluding CEO salary and related expense) for 1998 does not
exceed $12,683,250, and a portion of those shares will be subject to repurchase
if such EBITDA does not exceed $16,911,000.

An additional 340,255 shares of Common Stock held by certain other former
GMS shareholders (including 42,060 shares held by Sprout Capital VII and certain
related entities are also subject to repurchase by the Company at an average
price of $0.37 per share ($.45 per share for Sprout Capital VII and certain
related entities). One half of the shares are currently subject to repurchase
because the Company's EBITDA (excluding CEO salary and related expense) for 1997
did not exceed $4,723,500. The second half of the shares are subject to
repurchase if, among other things, the Company's EBITDA (excluding CEO salary
and related expense) for 1998 does not exceed $12,683,250, and a portion of the
second half will be subject to repurchase if such EBITDA does not exceed
$16,911,000.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than 10 percent of the
Common Stock to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC"). Executive officers, directors and
beneficial owners of more than ten percent of the Common Stock are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. These requirements have been applicable to such persons only since
January 28, 1998. Accordingly, no executive officers or directors of the Company
were delinquent in their filings under Section 16(a) during 1997.

SHAREHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING

A shareholder who intends to present a proposal at the Company's 1999
annual meeting of shareholders must submit such proposal to the Company for
inclusion in the Company's 1999 Proxy Statement and Proxy Card not later than
December 31, 1998. Shareholder proposals must be mailed to the attention of the
Company's Secretary at the Company's headquarters located at 222 North Sepulveda
Boulevard, Suite 740, El Segundo, California 90245.

OTHER MATTERS

Management does not know of any other matters to be brought before the
Annual Meeting. If any other matter is properly presented for consideration at
the Annual Meeting, it is intended that the proxies will be voted by the persons
named therein in accordance with their judgment on such matters.

COSTS OF SOLICITATION AND REVOCABILITY OF PROXY

The Company will bear the cost of preparing and mailing the Proxy
Statement, Proxy Card and any other material furnished to shareholders by the
Company in connection with the Annual Meeting. Proxies will be solicited by use
of the mails, and officers and employees of the Company may also solicit proxies
by telephone or personal contact. Copies of solicitation materials will be
furnished to fiduciaries, custodians, banks, brokerage houses and other
institutions for forwarding to beneficial owners of the stock held in their
names.

Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it at any time before its exercise. The proxy may be
revoked by filing an instrument of revocation or a duly executed proxy bearing a
later date with the Company to the attention of the Secretary of the Company.
The proxy may also be revoked by voting in person at the meeting. A shareholder
who attends the meeting, however, is not required to revoke the proxy by voting
in person. All valid, unrevoked proxies will be voted at the annual meeting in
accordance with the instructions given.

By Order of the Board of Directors
L. Theodore Van Eerden
Executive Vice President and Secretary
Yorba Linda, California
April 30, 1998

EXHIBIT A

TITLE 23B. WASHINGTON BUSINESS CORPORATION ACT
CHAPTER 23B.13. DISSENTERS' RIGHTS

23B.13.010. DEFINITIONS

As used in this chapter:

(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.

(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under RCW 23B.13.020 and who exercises that right when and in
the manner required by RCW 23B.13.200 through 23B.13.280.

(3) "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effective date of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.

(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.

(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.

(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.

(7) "Shareholder" means the record shareholder or the beneficial
shareholder.

23B.13.020. RIGHT TO DISSENT

(1) A shareholder is entitled to dissent from, and obtain payment of the
fair value of the shareholder's shares in the event of, any of the following
corporate actions:

(a) Consummation of a plan of merger to which the corporation is a
party (i) if shareholder approval is required for the merger by RCW
23B.11.030, 23B.11.080, or the articles of incorporation and the
shareholder is entitled to vote on the merger, or (ii) if the corporation
is a subsidiary that is merged with its parent under RCW 23B.11.040;

(b) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;

(c) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one year after the date of sale;

(d) An amendment of the articles of incorporation that materially
reduces the number of shares owned by the shareholder to a fraction of a
share if the fractional share so created is to be acquired for cash under
RCW 23B.06.040; or

A-1

(e) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.

(2) A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter may not challenge the corporate action
creating the shareholder's entitlement unless the action fails to comply with
the procedural requirements imposed by this title, RCW 25.10.900 through
25.10.955, the of incorporation, or the bylaws, or is fraudulent with respect to
the shareholder or the corporation.

(3) The right of a dissenting shareholder to obtain payment of the fair
value of the shareholder's shares shall terminate upon the occurrence of any one
of the following events:

(a) The proposed corporate action is abandoned or rescinded;

(b) A court having jurisdiction permanently enjoins or sets aside the
corporate action; or

23B.13.030. DISSENT BY NOMINEES AND BENEFICIAL OWNERS

(1) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in the shareholder's name only if the shareholder dissents
with respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the shareholder asserts dissenters' rights. The rights of a partial dissenter
under this subsection are determined as if the shares as to which the dissenter
dissents and the dissenter's other shares were registered in the names of
different shareholders.

(2) A beneficial shareholder may assert dissenters' rights as to shares
held on the beneficial shareholder's behalf only if:

(a) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and

(b) The beneficial shareholder does so with respect to all shares of
which such shareholder is the beneficial shareholder or over which such
shareholder has power to direct the vote.

23B.13.200. NOTICE OF DISSENTERS' RIGHTS

(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this chapter and be accompanied by a copy of this chapter.

(2) If corporate action creating dissenters' rights under RCW 23B.13.020 is
taken without a vote of shareholders, the corporation, within ten days after
[the] effective date of such corporate action, shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken and
send them the dissenters' notice described in RCW 23B.13.220.

23B.13.210. NOTICE OF INTENT TO DEMAND PAYMENT

(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights must (a) deliver to the corporation before
the vote is taken written notice of the shareholder's intent to demand payment
for the shareholder's shares if the proposed action is effected, and (b) not
vote such shares in favor of the proposed action.

(2) A shareholder who does not satisfy the requirements of subsection (1)
of this section is not entitled to payment for the shareholder's shares under
this chapter.

A-2

23B.13.220. DISSENTERS' NOTICE

(1) If proposed corporate action creating dissenters' rights under RCW
23B.13.020 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of RCW 23B.13.210.

(2) The dissenters' notice must be sent within ten days after the effective
date of the corporate action, and must:

(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;

(b) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;

(c) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not the person acquired beneficial
ownership of the shares before that date;

(d) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty nor more than sixty days
after the date the notice in subsection (1) of this section is delivered;
and

(e) Be accompanied by a copy of this chapter.

23B.13.230. DUTY TO DEMAND PAYMENT

(1) A shareholder sent a dissenters' notice described in RCW 23B.13.220
must demand payment, certify whether the shareholder acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenters' notice pursuant to RCW 23B.13.220(2)(c), and deposit the
shareholder's certificates in accordance with the terms of the notice.

(2) The shareholder who demands payment and deposits the shareholder's
share certificates under subsection (1) of this section retains all other rights
of a shareholder until the proposed corporate action is effected.

(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter.

23B.13.240. SHARE RESTRICTIONS

(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is effected or the restriction is released under RCW 23B.13.260.

(2) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until the
effective date of the proposed corporate action.

23B.13.250. PAYMENT

(1) Except as provided in RCW 23B.13.270, within thirty days of the later
of the effective date of the proposed corporate action, or the date the payment
demand is received, the corporation shall pay each dissenter who complied with
RCW 23B.13.230 the amount the corporation estimates to be the fair value of the
shareholder's shares, plus accrued interest.

A-3

(2) The payment must be accompanied by:

(a) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;

(b) An explanation of how the corporation estimated the fair value of
the shares;

(d) A statement of the dissenter's right to demand payment under RCW
23B.13.280; and

(e) A copy of this chapter.

23B.13.260. FAILURE TO TAKE ACTION

(1) If the corporation does not effect the proposed action within sixty
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release any transfer
restrictions imposed on uncertificated shares.

(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation wishes to undertake the proposed action, it must
send a new dissenters' notice under RCW 23B.13.220 and repeat the payment demand
procedure.

23B.13.270. AFTER-ACQUIRED SHARES

(1) A corporation may elect to withhold payment required by RCW 23B.13.250
from a dissenter unless the dissenter was the beneficial owner of the shares
before the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.

(2) To the extent the corporation elects to withhold payment under
subsection (1) of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full satisfaction
of the dissenter's demand. The corporation shall send with its offer an
explanation of how it estimated the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the dissenter's right to
demand payment under RCW 23B.13.280.

23B.13.280. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER

(1) A dissenter may notify the corporation in writing of the dissenter's
own estimate of the fair value of the dissenter's shares and amount of interest
due, and demand payment of the dissenter's estimate, less any payment under RCW
23B.13.250, or reject the corporation's offer under RCW 23B.13.270 and demand
payment of the dissenter's estimate of the fair value of the dissenter's shares
and interest due, if:

(a) The dissenter believes that the amount paid under RCW 23B.13.250
or offered under RCW 23B.13.270 is less than the fair value of the
dissenter's shares or that the interest due is incorrectly calculated;

(b) The corporation fails to make payment under RCW 23B.13.250 within
sixty days after the date set for demanding payment; or

(c) The corporation does not effect the proposed action and does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.

A-4

(2) A dissenter waives the right to demand payment under this section
unless the dissenter notifies the corporation of the dissenter's demand in
writing under subsection (1) of this section within thirty days after the
corporation made or offered payment for the dissenter's shares.

23B.13.300. COURT ACTION

(1) If a demand for payment under RCW 23B.13.280 remains unsettled, the
corporation shall commence a proceeding within sixty days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding within
the sixty-day period, it shall pay each dissenter whose demand remains unsettled
the amount demanded.

(2) The corporation shall commence the proceeding in the superior court of
the county where a corporation's principal office, or, if none in this state,
its registered office, is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located.

(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled, parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.

(4) The corporation may join as a party to the proceeding any shareholder
who claims to be a dissenter but who has not, in the opinion of the corporation,
complied with the provisions of this chapter. If the court determines that such
shareholder has not complied with the provisions of this chapter, the
shareholder shall be dismissed as a party.

(5) The jurisdiction of the court in which the proceeding is commenced
under subsection (2) of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers described
in the order appointing them, or in any amendment to it. The dissenters are
entitled to the same discovery rights as parties in other civil proceedings.

(6) Each dissenter made a party to the proceeding is entitled to judgment
(a) for the amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the corporation,
or (b) for the fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold payment
under RCW 23B.13.270.

23B.13.310. COURT COSTS AND COUNSEL FEES

(1) The court in a proceeding commenced under RCW 23B.13.300 shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of appraisers appointed by the court. The court shall assess the costs
against the corporation, except that the court may assess the costs against all
or some of the dissenters, in amounts the court finds equitable, to the extent
the court finds the dissenters acted arbitrarily, vexatiously, or not in good
faith in demanding payment under RCW 23B.13.280.

(2) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:

(a) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of RCW 23B.13.200 through 23B.13.280; or

(b) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by chapter 23B.13 RCW.

A-5

(3) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.

A-6

APPENDIX I

(Subject to shareholder approval)

GENTLE DENTAL SERVICE CORPORATION

1993 STOCK INCENTIVE PLAN

1. Purpose. The purpose of this 1993 Stock Incentive Plan (the "Plan"), as
amended herein, is to enable Gentle Dental Service Corporation (the "Company")
to attract and retain experienced and able directors, officers, employees and
other key contributors and to provide an additional incentive to these
individuals to exert their best efforts for the Company and its shareholders.

2. Administration.

2.1 Board of Directors. The Plan shall be administered by the board of
directors of the Company (the "Board of Directors"), which shall determine and
designate from time to time the persons to whom grants and awards shall be made
and the amounts, terms and conditions of those grants and awards. Subject to the
provisions of the Plan, the Board of Directors may from time to time adopt or
amend rules and regulations relating to administration of the Plan, and the
interpretation and construction of the provisions of the Plan by the Board of
Directors shall be final and conclusive. Whenever the operation of the Plan
requires that the fair market value of the Company's Common Stock be determined,
the fair market value shall be determined by, or in a manner approved by, the
Board of Directors.

2.2 Committee. The Board of Directors may delegate to a committee of
the Board of Directors or a senior executive officer of the Company, or both
(the "Committee") any or all authority for administration of the Plan. If
authority is delegated to a Committee, all references to the Board of Directors
in the Plan shall mean and relate to the Committee except (i) as otherwise
provided by the Board of Directors, and (ii) that only the Board of Directors
may amend or terminate the Plan as provided in paragraphs 5 and 11.

3. Eligibility. Grants and awards may be made under the Plan to directors,
officers, and key employees of the Company or any parent or subsidiary of the
Company, dentists and other professionals employed by corporations,
partnerships, sole proprietorships or other business organizations
(collectively, the "Affiliated Dental Practices") which have entered into
agreements with the Company under which the Company manages the non-professional
aspects of the Affiliated Dental Practices, and other key individuals such as
consultants to the Company who the Board of Directors believes have made or will
make an essential contribution to the Company; provided, however, that only
employees of the Company and the Affiliated Dental Practices shall be eligible
to receive Incentive Stock Options under the Plan.

4. Shares Subject to the Plan. Subject to paragraph 9, an aggregate of
2,000,000 shares of Common Stock of the Company may be issued under the Plan (i)
upon exercise of options and stock appreciation rights granted under the Plan,
(ii) as bonuses under the Plan and (iii) pursuant to sales under the Plan. If
any option under the Plan or stock appreciation right granted without a related
option expires or is cancelled or terminated and is unexercised in whole or in
part, the shares allocable to the unexercised portion shall again become
available for awards under the Plan, except that shares that are issued on
exercise of a stock appreciation right that were allocable to an option, or
portion thereof, surrendered in connection with the exercise of the stock
appreciation right shall not again become available for awards under the Plan.
If Common Stock sold or awarded as a bonus under the Plan is forfeited to the
Company or repurchased by the Company pursuant to applicable restrictions, the
number of shares forfeited or repurchased shall again be available under the
Plan. Common Stock issued under the Plan may be subject to such restrictions on
transfer, repurchase rights or other restrictions as are determined by the Board
of Directors. The certificates representing such Common Stock shall bear such
legends as are determined by the Board of Directors.

5. Effective Date and Duration of Plan.

5.1 Effective Date. The Plan shall become effective when adopted by
the Board of Directors (the "Effective Date"), but no option shall become
exercisable until the Plan is approved by a vote of the shareholders of the
Company entitled to vote thereon. Subject to this limitation, options and stock
appreciation rights may be granted and Common Stock may be awarded as bonuses or
sold under the Plan at any time after the Effective Date and before termination
of the Plan.

5.2 Duration of the Plan. The Plan shall continue until, in the
aggregate, options and stock appreciation rights have been granted and exercised
and Common Stock has been awarded as bonuses or sold and the restrictions on any
such Common Stock have lapsed with respect to all shares subject to the Plan
under paragraph 4 (subject to any adjustments under paragraph 9), provided,
however, that unless sooner terminated by the Board of Directors, the Plan shall
terminate on, and no option or stock appreciation right or bonus right shall be
granted and no Common Stock shall be awarded as a bonus or sold under the Plan
on or after, the tenth anniversary of the Effective Date. The Board of Directors
may suspend or terminate the Plan at any time except with respect to options,
stock appreciation rights and bonus rights, and Common Stock subject to
restrictions then outstanding under the Plan. Termination shall not affect any
right of the Company to repurchase shares or the forfeitability of shares issued
under the Plan.

6. Grants, Awards and Sales.

6.1 Type of Security. The Board of Directors may, from time to time,
take the following actions, separately or in combination, under the Plan: (i)
grant Incentive Stock Options, as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"); (ii) grant options other than Incentive
Stock Options (hereinafter "Non-Statutory Stock Options"); (iii) grant stock
appreciation rights or bonus rights; (iv) award bonuses of Common Stock; and (v)
sell Common Stock subject to restrictions. The Board of Directors shall specify
the action taken with respect to each person granted, awarded or sold any option
or Common Stock under the Plan and shall specifically designate each option
granted under the Plan as an Incentive Stock Option or a Non-Statutory Stock
Option. At the discretion of the Board of Directors, an individual may be given
an election to surrender an award in exchange for the grant of a new award. No
employee may be granted options or stock appreciation rights under the Plan for
more than an aggregate of 150,000 shares of Common Stock in any calendar year.

6.2 General Rules Relating to Options.

6.2.1 Time of Exercise. Except as provided in paragraph 8,
options granted under the Plan may be exercised over the period stated in each
option in amounts and at times prescribed by the Board of Directors and stated
in the option, provided that (i) no option granted under the Plan may become
exercisable at a rate of less than 20 percent per year over the first five years
of the option, and (ii) options shall not be exercised for fractional shares. If
the optionee does not exercise an option in any period with respect to the full
number of shares to which the optionee is entitled in that period, the
optionee's rights shall be cumulative and the optionee may purchase those shares
in any subsequent period during the term of the option. 6.2.2 Option Price. The
option price per share of each option granted under the Plan shall be determined
by the Board of Directors, but shall not be less than 85 percent of the fair
market value of the shares covered by the option on the date the option is
granted. With respect to options granted to optionees possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any parent or subsidiary of the Company (a "Ten Percent Owner"),
the option price per share shall not be less than one hundred ten percent (110%)
of the fair market value on the date the option is granted.

6.2.3 Duration of Options. Subject to paragraph 8, each option
granted under the Plan shall continue in effect for the period fixed by the
Board of Directors, except that no option granted under the Plan shall be
exercisable after the expiration of 10 years from the date it is granted. No
option granted to a Ten Percent Owner shall be exercisable after the expiration
of five (5) years from the date such option is granted.

6.2.4 Purchase of Shares. Shares may be purchased or acquired
pursuant to an option granted under the Plan only on receipt by the Company of
notice in writing from the optionee of the optionee's intention to exercise,
specifying the number of shares the optionee desires to purchase and the date on
which the

optionee desires to complete the transaction, which may not be more than 30 days
after receipt of the notice, and, unless in the opinion of counsel for the
Company such a representation is not required to comply with the Securities Act
of 1933, as amended, containing a representation that it is the optionee's
intention to acquire the shares for investment and not with a view to
distribution. Unless otherwise determined by the Board of Directors, on or
before the date specified for completion of the purchase, the optionee must have
paid the Company the full purchase price in cash, including cash that may be the
proceeds of a loan from the Company, in shares of Common Stock previously
acquired by the optionee valued at fair market value, or in any combination of
cash and shares of Common Stock. No shares shall be issued until full payment
therefor has been made. Each optionee who has exercised an option shall, on
notification of the amount due, if any, and prior to or concurrently with
delivery of the certificates representing the shares for which the option was
exercised, pay to the Company amounts necessary to satisfy any applicable
federal, state and local withholding tax requirements. If additional withholding
becomes required beyond any amount deposited before delivery of the
certificates, the optionee shall pay such amount to the Company on demand. If
the employee fails to pay the amount demanded, the Company shall have the right
to withhold that amount from other amounts payable by the Company to the
optionee, including salary, subject to applicable law.

6.3 Incentive Stock Options. Incentive Stock Options shall be subject
to the following additional terms and conditions:

6.3.1 Limitation on Amount of Grants. No employee may be granted
Incentive Stock Options under the Plan such that the aggregate fair market
value, on the date of grant, of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by that employee during any
calendar year, under the Plan and under any other incentive stock option plan
(within the meaning of section 422 of the Code) of the Company or any parent or
subsidiary of the Company, exceeds $100,000.

6.3.2 Option Price. The option price per share under each option
granted under the Plan shall be determined by the Board of Directors in
accordance with paragraph 6.2.2, but the option price with respect to an
Incentive Stock Option shall be not less than 100 percent of the fair market
value of the shares covered by the option on the date the option is granted.

6.4 Stock Bonuses. Common Stock awarded as a bonus shall be subject to
the terms, conditions and restrictions determined by the Board of Directors at
the time the Common Stock is awarded as a bonus. The Board of Directors may
require the recipient to sign an agreement as a condition of the award, but may
not require the recipient to pay any money consideration except as provided in
the last sentence of this paragraph. The agreement may contain such terms,
conditions, representations and warranties as the Board of Directors may
require. The Company may require any recipient of a Common Stock bonus to pay to
the Company amounts necessary to satisfy any applicable federal, state or local
tax withholding requirements prior to delivery of certificates. If the recipient
fails to pay the amount demanded, the Company may withhold that amount from
other amounts payable by the Company to the recipient, including salary or fees
for services, subject to applicable law. With the consent of the Board of
Directors, a recipient may deliver Common Stock to the Company to satisfy this
withholding obligation.

6.5 Restricted Stock. The Board of Directors may issue shares of
Common Stock under the Plan for such consideration (including promissory notes
and services) as determined by the Board of Directors in accordance with the law
and with such restrictions concerning transferability, repurchase by the
Company, or forfeiture as determined by the Board of Directors. If shares of
Common Stock are subject to repurchase by the Company at the original purchase
price upon termination of employment of the recipient, such right of repurchase
shall lapse at a rate of no less than twenty percent (20%) per year over five
years from the date the shares are granted. All shares of Common Stock issued
pursuant to this paragraph 6.5 shall be subject to a purchase agreement, which
shall be executed by the Company and the prospective recipient of the Common
Stock prior to the delivery of certificates representing such shares to the
recipient. Subject to the terms of the Plan, the purchase agreement shall
contain such terms and conditions and representations and warranties as the
Board of Directors shall require. The Company may require any purchaser of
restricted stock to pay to the Company in cash upon demand amounts necessary to
satisfy any applicable federal, state or local tax withholding requirements. If
the purchaser fails to pay the amount demanded, the Company may withhold that
amount from other amounts payable by the

Company to the purchaser, including salary, subject to applicable law. With the
consent of the Board of Directors, a purchaser may deliver Common Stock to the
Company to satisfy this withholding obligation.

6.6 Stock Appreciation Rights.

6.6.1 Description. Each stock appreciation right shall entitle
the holder, on exercise, to receive from the Company in exchange therefor an
amount equal in value to the excess of the fair market value on the date of
exercise of one share of Common Stock over its fair market value on the date of
grant (or, in the case of a stock appreciation right granted in connection with
an option, the option price per share under the option to which the stock
appreciation right relates), multiplied by the number of shares covered by the
stock appreciation right or the option, or portion thereof, that is surrendered.

6.6.2 Exercise. A stock appreciation right shall be exercisable
only at the time or times established by the Board of Directors. If a stock
appreciation right is granted in connection with an option, then it shall be
exercisable only to the extent and on the same conditions that the related
option is exercisable. Upon exercise of a stock appreciation right, any option
or portion thereof to which the stock appreciation right relates must be
surrendered unexercised.

6.6.3 Payment. Payment by the Company upon exercise of a stock
appreciation right may be made in shares of Common Stock valued at fair market
value, or in cash, or partly in Common Stock and partly in cash, as determined
by the Board of Directors. No fractional shares shall be issued upon exercise of
a stock appreciation right. In lieu thereof, cash may be paid in an amount equal
to the value of the fraction or, in the discretion of the Board of Directors,
the number of shares may be rounded to the next whole share.

6.6.4 Adjustment. In the event of any adjustment pursuant to
paragraph 9 in the number of shares of Common Stock subject to an option granted
under the Plan, any stock appreciation right granted hereunder in connection
with such option shall be proportionately adjusted.

6.6.5 Withholding. Each participant who has exercised a stock
appreciation right shall, upon notification of the amount due, pay to the
Company in cash amounts necessary to satisfy any applicable federal, state and
local tax withholding requirements. If the participant fails to pay the amount
demanded, the Company may withhold that amount from other amounts payable by the
Company to the participant including salary, subject to applicable law. With the
consent of the Board of Directors a participant may satisfy this obligation, in
whole or in part, by having the Company withhold from any shares to be issued
upon the exercise that number of shares that would satisfy the withholding
amount due or by delivering Common Stock to the Company to satisfy the
withholding amount.

6.7 Cash Bonus Rights.

6.7.1 Grant. The Board of Directors may grant bonus rights under
the Plan in connection with (i) an option or stock appreciation right granted or
previously granted, (ii) Common Stock awarded, or previously awarded, as a bonus
and (iii) Common Stock sold, or previously sold, under the Plan. Bonus rights
will be subject to rules, terms and conditions as the Board of Directors may
prescribe.

6.7.2 Bonus Rights in Connection with Options and Stock
Appreciation Rights. A bonus right granted in connection with an option will
entitle an optionee to a cash bonus when the related option is exercised (or is
surrendered in connection with the exercise of a stock appreciation right
related to the option) in whole or in part. A bonus right granted in connection
with a stock appreciation right will entitle the holder to a cash bonus when the
stock appreciation right is exercised. Upon exercise of an option, the amount of
the bonus shall be determined by multiplying the excess of the total fair market
value of the shares to be acquired upon the exercise over the total option price
for the shares by the applicable bonus percentage. Upon exercise of a stock
appreciation right, the bonus shall be determined by multiplying the total fair
market value of the shares or cash received pursuant to the exercise of the
stock appreciation right by the applicable bonus percentage. The bonus
percentage applicable to a bonus right shall be determined from time to time by
the Board of Directors but shall in no event exceed 100 percent.

6.7.3 Bonus Rights in Connection with Stock Bonus. A bonus right
granted in connection with Common Stock awarded as a bonus will entitle the
person awarded such Common Stock to a cash bonus either at the time the Common
Stock is awarded or at such time as restrictions, if any, to which the Common
Stock is subject lapse. If Common Stock awarded is subject to restrictions and
is repurchased by the Company or forfeited by the holder, the bonus right
granted in connection with such Common Stock shall terminate and may not be
exercised. The amount of cash bonus to be awarded and the time such cash bonus
is to be paid shall be determined from time to time by the Board of Directors.

6.7.4 Bonus Rights in Connection with Stock Purchase. A bonus
right granted in connection with Common Stock purchased hereunder (excluding
Common Stock purchased pursuant to an option) shall terminate and may not be
exercised in the event the Common Stock is repurchased by the Company or
forfeited by the holder pursuant to restrictions applicable to the Common Stock.
The amount of cash bonus to be awarded and the time such cash bonus is to be
paid shall be determined from time to time by the Board of Directors.

7. Nontransferability. Each option, stock appreciation right, or cash bonus
right granted under the Plan by its terms shall be nonassignable and
nontransferable by the holder except by will or by the laws of descent and
distribution of the state or country of the holder's domicile at the time of
death, and each option, stock appreciation right or cash bonus right by its
terms shall be exercisable during the holder's lifetime only by the holder.

8. Termination of Employment.

8.1 Retirement or General Termination. Unless otherwise determined by
the Board of Directors, if an employee's employment by the Company or any parent
or subsidiary of the Company is terminated by retirement or for any reason other
than in the circumstances specified in 8.2 below, any option, stock appreciation
right or cash bonus right held by the employee may be exercised at any time
prior to its expiration date or the expiration of three months after the date of
the termination, whichever is the shorter period, but only if and to the extent
the employee was entitled to exercise the option, stock appreciation right or
cash bonus right on the date of termination. Notwithstanding the foregoing
provisions of this subparagraph 8.1, unless otherwise determined by the Board of
Directors, any option granted to an employee under the Plan shall continue to
vest in accordance with its terms after termination of employment, so long as
such former employee is continuously retained by the Company on an independent
contractor basis and for so long as such independent contractor relationship
continues uninterrupted. Transfer of an employee by the Company or any parent or
subsidiary of the Company to the Company or any parent or subsidiary of the
Company shall not be considered a termination for purposes of the Plan.

8.2 Death or Disability. Unless otherwise determined by the Board of
Directors, if an employee's employment by the Company or any parent or
subsidiary of the Company is terminated because of death or physical disability
(within the meaning of section 22(e)(3) of the Code), any option, stock
appreciation right or cash bonus right held by the employee may be exercised at
any time prior to its expiration date or the expiration of one year after the
date of termination, whichever is the shorter period, for the greater of (a) the
number of remaining shares for which the employee was entitled to exercise the
option, stock appreciation right or cash bonus right on the date of termination
or (b) the number of remaining shares for which the employee would have been
entitled to exercise the option, stock appreciation right or cash bonus right if
such option or right had been 50 percent exercisable on the date of termination.
If an employee's employment is terminated by death, any option, stock
appreciation right or cash bonus right held by the employee shall be exercisable
only by the person or persons to whom the employee's rights under the option,
stock appreciation right or cash bonus right pass by the employee's will or by
the laws of descent and distribution of the state or country of the employee's
domicile at the time of death.

8.3 Termination of Unexercised Rights. To the extent an option, stock
appreciation right or cash bonus right held by any deceased employee or by any
employee whose employment is terminated is not exercised within the limited
periods provided above or otherwise provided by the Board of Directors, all
further rights to exercise the option, stock appreciation right or cash bonus
right shall terminate at the expiration of such periods.

8.4 Termination of Non-Employees. With respect to options, stock
appreciation rights and cash bonus rights granted to persons who are not
employees of the Company, the Board of Directors may establish provisions
relating to the termination of those persons' status with the Company.

9. Changes in Capital Structure. If the outstanding shares of Common Stock
are increased or decreased or changed into or exchanged for a different number
or kind of shares or other securities of the Company or of another corporation,
by reason of any reorganization, merger, consolidation, plan of exchange,
recapitalization, reclassification, stock split-up, combination of shares, or
dividend payable in shares, appropriate adjustment shall be made by the Board of
Directors in the number and kind of shares for the purchase of which options or
stock appreciation rights may be granted and for which Common Stock may be
awarded as bonuses or sold subject to restrictions under the Plan. In addition,
the Board of Directors shall make appropriate adjustments in the number and kind
of shares as to which outstanding options, or portions thereof then unexercised,
shall be exercisable, and the number and kind of shares covered by outstanding
stock appreciation rights to the end that each optionee's proportionate interest
shall be maintained as before the occurrence of such event. Adjustments in
outstanding options shall be made without change in the total price applicable
to the unexercised portion of any option and with a corresponding adjustment in
the option price per share. Adjustments in outstanding stock appreciation rights
shall be made without change in their total value. Any such adjustment made by
the Board of Directors shall be conclusive. In the event of dissolution or
liquidation of the Company or a merger, consolidation, or plan of exchange
affecting the Company, in lieu of making adjustments as provided for above in
this paragraph 9, the Board of Directors may, in its sole discretion, provide a
30-day period immediately preceding the event during which optionees shall have
the right to exercise options or stock appreciation rights to the extent options
are exercisable at such time. Upon the expiration of such 30-day period all
unexercised options shall be terminated and optionees shall have no further
rights to acquire shares.

10. Corporate Mergers, Acquisitions, Etc. The Board of Directors may also
grant options and stock appreciation rights having terms and provisions which
vary from those specified in this Plan, provided that any options and stock
appreciation rights granted pursuant to this section are granted in substitution
for, or in connection with the assumption of, existing options and stock
appreciation rights granted by another corporation and assumed or otherwise
agreed to be provided for by the Company pursuant to or by reason of a
transaction involving a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization or liquidation to which the Company or a
subsidiary is a party.

11. Amendment of Plan. The Board of Directors may at any time and from time
to time modify or amend the Plan in such respects as it deems advisable because
of changes in the law while the Plan is in effect or for any other reason. After
the Plan has been approved by the shareholders and except as provided in
paragraph 9, however, no change in an option or stock appreciation right already
granted to any person shall be made without the written consent of such person.
Furthermore, unless approved by the shareholders of the Company entitled to vote
thereon, no amendment or change shall be made in the Plan (a) increasing the
total number of shares that may be issued under the Plan, or (b) changing the
class of persons eligible to receive options under the Plan.

12. Approvals. The obligations of the Company under the Plan are subject to
the approval of state and federal authorities or agencies with jurisdiction in
the matter. The Company will use its best efforts to take steps required by
state or federal law or applicable regulations, including rules and regulations
of the Securities and Exchange Commission in connection with the granting of any
option or the issuance or sale of any shares under the Plan. The foregoing
notwithstanding, the Company shall not be obligated to issue or deliver shares
of Common Stock under the Plan if the Company is advised by its legal counsel
that such issuance or delivery would violate applicable state or federal laws.

13. Employment Rights. Nothing in the Plan or any grant pursuant to the
Plan shall confer on any employee any right to be continued in the employment of
the Company or any parent or subsidiary of the Company or shall interfere in any
way with the right of the Company or any parent or subsidiary of the Company by
whom such employee is employed to terminate such employee's employment at any
time, with or without cause.

14. Rights as a Shareholder. A holder of an option or a stock appreciation
right, a recipient of Common Stock awarded as a bonus, or a purchaser of Common
Stock shall have no rights as a shareholder with respect to any shares covered
by any option, stock appreciation right, bonus award, or stock purchase
agreement

until the date of issue of a stock certificate to him or her for such shares.
Except as otherwise provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.

15. Information. The Company will provide all recipients of grants or
awards under Plan with financial statements of the Company on at least an annual
basis.

PROXY

GENTLE DENTAL SERVICE CORPORATION
Annual Meeting, June 4, 1998

PROXY SOLICITED BY BOARD OF DIRECTORS

PLEASE SIGN AND RETURN THIS PROXY

The undersigned revokes all previous proxies, acknowledges receipt of the Notice
of Annual Meeting of Shareholders to be held on Thursday, June 4, 1998 and the
accompanying Proxy Statement, and appoints Michael T. Fiore and Norman R.
Huffaker, and each of them, the proxy of the undersigned, with full power of
substitution, to vote all shares of the common stock (the "Common Stock") of
Gentle Dental Service Corporation, a Washington corporation (the "Company"),
which the undersigned is entitled to vote, either on the undersigned's own
behalf or on behalf of any entity or entities, at the annual meeting (the
"Annual Meeting") of shareholders of the Company to be held at 222 North
Sepulveda Boulevard, Suite 740, El Segundo, California 90245, on Thursday, June
4, 1998 at 8:00 a.m. Pacific Daylight Savings Time, and at any adjournment or
postponement thereof, with the same force and effect as the undersigned might or
could do if personally present thereat. The shares represented by this proxy
shall be voted in the following manner:

1. To elect the following [ ] FOR all nominees except as [ ] WITHHOLD AUTHORITY to vote
directors: marked to the contrary for all nominees listed
below. below.

(Instructions: To withhold authority to vote for any nominee,
strike a line through the nominee's name below.)
Michael T. Fiore, Robert Finzi, H. Wayne Posey, Grant M. Sadler,
L. Theodore Van Eerden, Kathleen D. La Porte

2. To amend the Company's 1993 Stock Incentive Plan (the "Plan") to effect the
following changes (i) increase the number of shares of Common Stock
authorized for issuance under the Plan by 1,000,000 shares from 1,000,000
to 2,000,000 shares; (ii) clarify that the eligibility provisions of the
Plan include dentists and other professionals who are employed by
corporations and other businesses which have entered into management
agreements with the Company under which the Company manages the
non-professional aspects of such businesses; (iii) provide that, unless
otherwise determined by the Board of Directors, options granted to
employees under the Plan will continue to vest after termination or
cessation of employment so long as such former employee is continuously
retained by the Company on an independent contractor basis and for so long
as such independent contractor relationship continues; and (iv) increase
the aggregate number of shares of Common Stock underlying stock options and
stock appreciation rights that any employee may receive under the Plan in
any calendar year by 75,000 shares from 75,000 to 150,000 shares.

[ ] For [ ] Against [ ] Abstain

3. To approve the transfer of all of the Company's operating assets and
liabilities to Gentle Dental Management, Inc., a Delaware corporation and
wholly-owned subsidiary of the Company, in order to convert the Company
from an operating company into a holding company, provided that the holders
of no more than ____ percent of the shares entitled to vote at the Annual
Meeting exercise their dissenters' rights under Washington law.

[ ] For [ ] Against [ ] Abstain

4. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditor for fiscal year 1998.

[ ] For [ ] Against [ ] Abstain

A majority of the proxies or substitutes at the meeting may exercise all
the powers granted hereby.

(Continued and to be signed on the other side.)

The shares represented by this proxy will be voted as specified on the
reverse hereof, but if no specification is made, this proxy will be voted
for the election of directors and for each of the other proposals. The
proxies may vote in their discretion as to other matters that may come
before the Annual Meeting.

Date: _____________________________, 1998
P
R
O _________________________________________
X Signature or Signatures
Y
Please date and sign as name is imprinted
hereon, including designation as
executor, trustee, etc., if applicable. A
corporation must sign its name by the
president or other authorized officer.

The annual meeting of shareholders of
Gentle Dental Service Corporation will be
held on June 4, 1998 at 8:00 a.m.,
Pacific Daylight Savings Time, at Gentle
Dental Service Corporation, 222 North
Sepulveda Boulevard, Suite 740, El
Segundo, California 90245.

Please Note: Any shares of stock of the Company held in the name of fiduciaries,
custodians or brokerage houses for the benefit of their clients may only be
voted by the fiduciary, custodian or brokerage house itself--the beneficial
owner may not directly vote or appoint a proxy to vote the shares and must
instruct the person or entity in whose name the shares are held how to vote the
shares held for the beneficial owner. Therefore, if any shares of stock of the
Company are held in "street name" by a brokerage house, only the brokerage
house, at the instructions of its client, may vote or appoint a proxy to vote
the shares.