SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
BIRNER DENTAL MANAGEMENT SERVICES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------
BIRNER DENTAL MANAGEMENT SERVICES, INC.
3801 EAST FLORIDA AVENUE, SUITE 508
DENVER, COLORADO 80210
May 10, 2002
TO THE SHAREHOLDERS OF BIRNER
DENTAL MANAGEMENT SERVICES, INC.:
You are cordially invited to attend the 2002 Annual Meeting of Shareholders (the
"Meeting") of Birner Dental Management Services, Inc. (the "Company"), to be
held on Thursday, June 6, 2002, at 10:00 a.m., Mountain Time, at the Company's
offices, 3801 East Florida Avenue, Suite 508, Denver, Colorado 80210.
Please read the enclosed Annual Report to Shareholders on Form 10-K and Proxy
Statement for the Meeting. Whether or not you plan to attend the Meeting, please
sign, date and return the proxy card in the enclosed envelope to Computershare
Trust Company, Inc. as soon as possible so that your vote will be recorded. If
you attend the Meeting, you may withdraw your proxy and vote your shares in
person.
Very truly yours,
BIRNER DENTAL MANAGEMENT SERVICES, INC.
By: /s/ Frederic W.J. Birner
-----------------------------------
Name: Frederic W.J. Birner
Title: Chairman of the Board and Chief Executive Officer
BIRNER DENTAL MANAGEMENT SERVICES, INC.
3801 EAST FLORIDA AVENUE, SUITE 508
DENVER, COLORADO 80210
---------------------------
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD JUNE 6, 2002
---------------------------
TO OUR SHAREHOLDERS:
The 2002 Annual Meeting of Shareholders (the "Meeting") of Birner Dental
Management Services, Inc., a Colorado corporation (the "Company"), will be held
on Thursday, June 6, 2002, at 10:00 a.m., Mountain Time, at the Company's
offices, 3801 East Florida Avenue, Suite 508, Denver, Colorado 80210, for the
following purposes:
(1) to elect two Class II directors to serve for a term of three years or
until their successors are duly elected and qualified;
(2) to vote upon a proposal to approve an amendment to increase the number
of shares of the Company's Common Stock available under the 1995
Employee Stock Option Plan to 329,250 shares;
(3) to consider and vote upon the stockholder proposal set forth on page 13
in the accompanying Proxy Statement.
(4) to consider such other matters as may properly come before the Meeting
and at any and all adjournments thereof.
Only shareholders of record at the close of business on April 5, 2002 are
entitled to notice of and to vote at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Dennis N. Genty
---------------------
Name: Dennis N. Genty
Title: Chief Financial Officer, Secretary
and Treasurer
Denver, Colorado
May 10, 2002
A PROXY CARD IS ENCLOSED. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU
OWN. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE MEETING, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE
PREPAID, ADDRESSED ENVELOPE TO COMPUTRESHARE TRUST COMPANY, INC. NO ADDITIONAL
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. THE GIVING OF A PROXY WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
BIRNER DENTAL MANAGEMENT SERVICES, INC.
3801 EAST FLORIDA AVENUE, SUITE 508
DENVER, COLORADO 80210
Proxy Statement
ANNUAL MEETING OF SHAREHOLDERS
To be held June 6, 2002
---------------------------
GENERAL INFORMATION
The enclosed proxy is solicited by and on behalf of the Board of Directors of
Birner Dental Management Services, Inc., a Colorado corporation (the "Company"),
for use at the Company's 2002 Annual Meeting of Shareholders (the "Meeting") to
be held at 10:00 a.m., Mountain Time, on Thursday, June 6, 2002, at the
Company's offices, 3801 East Florida Avenue, Suite 508, Denver, Colorado 80210,
and at any and all adjournments thereof. This Proxy Statement and the
accompanying form of proxy are first being mailed or given to the shareholders
of the Company on or about May 10, 2002.
The Company's Annual Report on Form 10-K (the "Annual Report"), which includes
audited financial statements for the fiscal year ended December 31, 2001, is
being mailed to shareholders of the Company simultaneously with this Proxy
Statement.
INFORMATION CONCERNING SOLICITATION AND VOTING
All voting rights are vested exclusively in the holders of the Company's Common
Stock, without par value. Each share of the Company's Common Stock is entitled
to one vote. Cumulative voting in the election of directors is not permitted.
Holders of a majority of shares entitled to vote at the Meeting, when present in
person or by proxy, constitute a quorum. On April 5, 2002, the record date for
shareholders entitled to vote at the Meeting, 1,506,705 shares of the Company's
Common Stock, without par value, were issued and outstanding.
Proxies in the enclosed form will be effective if properly executed and returned
prior to the Meeting in the enclosed envelope to Computershare Trust Company,
Inc., Proxy Department, P.O. Box 1596, Denver, Colorado 80201-1596. The Common
Stock represented by each effective proxy will be voted at the Meeting in
accordance with the instructions on the proxy. If no instructions are indicated
on a proxy, all Common Stock represented by such proxy will be voted FOR
election of the nominees named in the proxy as Class II directors, FOR the
approval to increase the number of shares of the Company's Common Stock
available under the 1995 Employee Stock Option Plan to 329,250 shares, AGAINST
the shareholder proposal, and, as to any other matters of business which
properly come before the Meeting, by the named proxies at their discretion.
Any shareholder signing and mailing the enclosed proxy may revoke it at any time
before it is voted by giving written notice of the revocation to the Company, by
voting in person at the Meeting or by filing at the Meeting a later executed
proxy.
1
When a quorum is present, in the election of directors, the nominees having the
highest number of votes cast in favor of their election will be elected to the
Company's Board of Directors. With respect to any other matter that may properly
come before the Meeting, unless a greater number of votes are required by law or
by the Company's Amended and Restated Articles of Incorporation, a matter will
be approved by the shareholders if the votes cast in favor of the matter exceed
the votes cast in opposition.
Abstentions, broker non-votes (i.e., shares held by brokers or nominees as to
which the broker or nominee indicates on a proxy that it does not have
discretionary authority to vote) and any other shares not voted will be treated
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum. However, for purposes of determining the outcome of the
election of Class II directors, the approval to increase the number of shares of
our Common Stock available under our 1995 Employee Stock Option Plan to 329,250
shares, the shareholder proposal, or of any other matter which properly may come
before the Meeting, abstentions, broker non-votes and any other shares not voted
will not be considered as votes cast. Thus, abstentions, broker non-votes and
any other shares not voted will have no impact in the election of Class II
directors, the approval to increase the number of shares of our Common Stock
available under our 1995 Employee Stock Option Plan to 329,250 shares, the
shareholder proposal, or any other matter which properly may come before the
Meeting so long as a quorum is present.
The Company will pay the cost of soliciting proxies in the accompanying form.
The Company has retained the services of Computershare Trust Company, Inc. to
assist in distributing proxy materials to brokerage houses, banks, custodians
and other nominee holders. The estimated cost of such services is approximately
$1,400 plus out-of-pocket expenses. Although there are no formal agreements to
do so, proxies may be solicited by officers and other regular employees of the
Company by telephone or by personal interview for which employees will not
receive additional compensation. Arrangements also may be made with brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
materials to beneficial owners of the shares held of record by such persons, and
the Company may reimburse such persons for reasonable out-of-pocket expenses
incurred by them in so doing.
Proposal one: ELECTION OF class II DIRECTORS
General
The Company's Amended and Restated Articles of Incorporation provide for the
classification of the Company's Board of Directors. The Board of Directors is
divided into three classes. One class stands for re-election at each annual
meeting of shareholders. The Board of Directors has set the size of the Board at
six members. The Board of Directors currently is classified into two Class II
directors whose terms will expire upon the election and qualification of
directors at the annual meeting of shareholders held in 2002 (Dennis N. Genty
and Steven M. Bathgate); two Class III directors whose terms will expire upon
the election and qualification of directors at the annual meeting of
shareholders held in 2003 (Frederic W.J. Birner and Mark A. Birner, D.D.S.) and
two Class I directors whose terms will expire upon the election and
qualification of directors at the annual meeting of shareholders held in 2004
(James M. Ciccarelli and Paul E. Valuck, DDS). At each annual meeting of
shareholders, directors will be elected by the shareholders of the Company for a
full term of three years to succeed those directors whose terms are expiring.
The powers and responsibilities of each class of directors are identical. All
directors shall serve until their successors are duly elected and qualified,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
2
Proxies cannot be voted for a greater number of persons than the number of
nominees named therein. Unless authority to vote is withheld, the persons named
in the enclosed form of proxy will vote the shares represented by such proxy FOR
the election of the nominees for director named below. If, at the time of the
Meeting, the nominees shall have become unavailable for any reason for election
as a director, the persons entitled to vote the proxy will vote for such
substitute nominee, if any, as they determine in their discretion. If elected,
the nominees will hold office until the year 2005 annual meeting of shareholders
or until their successors are elected and qualified.
Class II Director Nominees
The Board of Directors unanimously recommends that the shareholders vote FOR
election of the following nominees as Class II directors of the Company.
Name Age Position Director Since
---- --- -------- --------------
Dennis N. Genty 44 Chief Financial Officer, 1995
Secretary, Treasurer and Director
Steven M. Bathgate 47 Director 1998
Continuing Directors
The persons named below will continue to serve as directors of the Company until
the annual meeting of shareholders in the year indicated below and until their
successors are elected and take office. Shareholders are not voting on the
election of the Class I and Class III directors. The following table shows the
names, ages and positions of each continuing director.
Class III - Term Expires in 2003
--------------------------------
Name Age Position Director Since
---- --- -------- --------------
Frederic W.J. Birner 44 Chairman of the Board, Chief 1995
Executive Officer and Director
Mark A. Birner, D.D.S. 42 President and Director 1995
Class I - Term Expires in 2004
------------------------------
Name Age Position Director Since
---- --- -------- --------------
James M. Ciccarelli 49 Director 1996
Paul E. Valuck, D.D.S. 45 Director 2001
3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of March 13, 2002, by (i)
all persons known by the Company to be the beneficial owners of 5% or more of
the Common Stock, (ii) each director, (iii) each of the executive officers, and
(iv) all executive officers and directors as a group. Unless otherwise
indicated, the address of each of the persons named below is in care of the
Company, 3801 East Florida Avenue, Suite 508, Denver, Colorado 80210.
Number of Shares
Name of Beneficial Owner Beneficially Owned Percent of Class (1)(2)
------------------------ ------------------ -----------------------
Frederic W.J. Birner (3).................... 200,786 13.2%
Mark A. Birner, D.D.S. (4).................. 197,492 13.0%
Dennis N. Genty (5)......................... 134,946 8.9%
Lee Schlessman (6)......................... 131,785 8.7%
Steven M. Bathgate (7)...................... 103,019 6.8%
Paul E. Valuck, D.D.S..................... 5,273 *
James M. Ciccarelli (8)..................... 4,209 *
All executive officers and directors (six
persons) (9)................................ 645,725 41.2%
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock
subject to options, warrants and convertible debentures currently
exercisable or convertible, or exercisable or convertible within 60
days of March 13, 2002, are deemed outstanding for computing the
percentage of the person or entity holding such securities but are not
outstanding for computing the percentage of any other person or entity.
Except as indicated by footnote, and subject to community property laws
where applicable, the persons named in the table above have sole voting
and investment power with respect to all shares of Common Stock shown
as beneficially owned by them.
(2) Percentage of ownership is based on 1,506,705 shares of Common Stock
outstanding at March 13, 2002.
(3) Includes 14,880 shares of Common Stock that are issuable upon the
exercise of options that are currently exercisable and 2,293 shares of
Common Stock that are issuable upon the exercise of warrants that are
currently exercisable. Includes 2,125 shares of Common Stock owned by
his wife. Mr. Birner disclaims beneficial ownership of all shares held
by his wife.
(4) Includes 14,527 shares of Common Stock that are issuable upon the
exercise of options that are currently exercisable and 2,293 shares of
Common Stock that are issuable upon the exercise of warrants that are
currently exercisable.
(5) Includes 12,235 shares of Common Stock that are issuable upon the
exercise of options that are currently exercisable and 2,293 shares of
Common Stock that are issuable upon the exercise of warrants that are
currently exercisable. Includes 118,443 shares of Common Stock owned by
his wife. Mr. Genty disclaims beneficial ownership of all shares held
by his wife.
(6) Includes 61,753 shares of Common Stock over which Mr. Schlessman has
sole voting power pursuant to certain powers of attorney, but for which
he disclaims beneficial ownership. The address for Mr. Schlessman is
1301 Pennsylvania Street, Suite 800, Denver, CO 80203.
(7) Includes 6,250 shares of Common Stock that are issuable upon the
exercise of options that are currently exercisable. Includes 37,625
shares of Common Stock owned by his wife. Mr. Bathgate disclaims
beneficial ownership of all shares held by his wife. Includes 23,500
shares of Common Stock owned by Bathgate Family Partnership Ltd. Mr.
Bathgate disclaims beneficial ownership of these securities except to
the extent of his pecuniary interest therein.
(8) Includes 3,750 shares of Common Stock that are issuable upon the
exercise of options that are currently exercisable and 459 shares of
Common Stock that are issuable upon the exercise of warrants that are
currently exercisable.
(9) Includes 58,980 shares of Common Stock issuable upon the exercise of
options and warrants held by all executive officers and directors as a
group that are currently exercisable or are exercisable within 60 days.
4
There has been no change in control of the Company since the beginning of its
last fiscal year, and there are no arrangements known to the Company, including
any pledge of securities of the Company, the operation of which may at a
subsequent date result in a change in control of the Company.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning each of the directors and
executive officers of the Company. All directors shall serve until their
successors are duly elected and qualified, subject, however, to prior death,
resignation, retirement, disqualification or removal from office. Officers are
appointed by and serve at the discretion of the Board of Directors.
Name Age Position
---- --- --------
Frederic W.J. Birner 44 Chairman of the Board, Chief Executive Officer and Director
Mark A. Birner, D.D.S. 42 President and Director
Dennis N. Genty 44 Chief Financial Officer, Secretary, Treasurer and Director
James M. Ciccarelli 49 Director
Steven M. Bathgate 47 Director
Paul E. Valuck, D.D.S. 45 Director
Business Biographies
Frederic W.J. Birner is a founder of the Company and has served as Chairman of
the Board and Chief Executive Officer since the Company's inception in May 1995.
From May 1992 to September 1995, he was employed as a Senior Vice President in
the Corporate Finance Department at Cohig & Associates, Inc., an investment
banking firm. From 1983 to February 1992, Mr. Birner held various positions with
Hanifen, Imhoff, Inc., an investment banking firm, most recently as Senior Vice
President in the Corporate Finance Department. Mr. Birner received his M.S.
degree from Columbia University and his B.A. degree from The Colorado College.
Mr. Birner is the brother of Mark A. Birner, D.D.S.
Mark A. Birner, D.D.S. is a founder of the Company and has served as President,
and as a director, since the Company's inception in May 1995. From February 1994
to October 1995, Dr. Birner was the owner and operator of three individual
dental practices. From 1986 to February 1994, he was an associate dentist with
Family Dental Group. Dr. Birner received his D.D.S. and B.A. degrees from the
University of Colorado and completed his general practice residency at the
University of Minnesota. Dr. Birner is the brother of Frederic W.J. Birner.
Dennis N. Genty is a founder of the Company and has served as Secretary since
May 1995, and as Chief Financial Officer, Treasurer, and as a director, since
September 1995. From October 1992 to September 1995, he was employed as a Vice
President in the Corporate Finance Department at Cohig & Associates, Inc., an
investment banking firm. From May 1990 to October 1992, he was a Vice President
in the Corporate Finance Department at Hanifen, Imhoff, Inc., an investment
banking firm. Mr. Genty received his M.B.A. degree from Columbia University and
his B.S. degree from the Colorado School of Mines.
James M. Ciccarelli joined the Company as a consultant in August 1996 and has
served as a director since November 1996. Mr. Ciccarelli has been Chairman of
the Board of TeleConnex Solutions, LLC (formerly ActiveLink Communications and
CommWorld International) since October 1998. Mr. Ciccarelli served as Chairman
of the Board of Wireless Telecom, Inc., a wireless data and network service
provider from March 1993 to January 2000. In addition Mr. Ciccarelli served as
their Chief Executive Officer from March 1993 to October 1998. From September
1990 to March 1993, Mr. Ciccarelli was a Vice President of Intelligent
Electronics, a high technology distribution and services company, and the
President and CEO of its Reseller Network Division. From November 1988 to
September 1990, Mr. Ciccarelli was the President of Connecting Point of America,
a franchisor of retail computer stores.
5
Steven M. Bathgate became a director of the Company effective upon consummation
of the Company's initial public offering in February 1998. Mr. Bathgate has
served as a principal of Bathgate McColley Capital Corp. LLC, an investment
banking firm, since its formation in January 1996. Mr. Bathgate held a number of
positions from 1985 to 1996 at Cohig & Associates, Inc., an investment banking
firm, including Chairman and Chief Executive Officer.
Paul E. Valuck, D.D.S. was in private dental practice in Denver from September
1985 until November 1995. From November 1995 until December 1997, Dr. Valuck
practiced as an affiliated dentist with the Company. Since January 1998 Dr.
Valuck has been in private dental practice in Denver. Dr. Valuck received his
D.D.S. and his B.S. Pharmacy degree from the University of Colorado.
CERTAIN TRANSACTIONS
The Company's Chief Executive Officer, Frederic W.J. Birner, is indebted to the
Company on an unsecured basis in the amount of $112,134. Principal and interest
(at 7% per annum) are due December 31, 2002. The Company's President, Mark A.
Birner, is indebted to the Company on an unsecured basis in the amount of
$94,065. Principal and interest (at 7% per annum) are due December 31, 2002. The
Company's Chief Financial Officer, Dennis N. Genty, is indebted to the Company
on an unsecured basis in the amount of $78,280. Principal and interest (at 7%
per annum) are due December 31, 2002.
Directors' Meetings and Committees
The entire Board of Directors met 11 times during the year ended December 31,
2001, including five actions by unanimous consent. Each incumbent director
attended 100% of the board meetings. The Audit Committee is comprised of outside
directors and the full Board of Directors acts as the Company's Compensation
Committee.
Audit Committee
The Audit Committee has as its primary responsibilities the recommendation of an
independent public accountant to audit the annual financial statements of the
Company, the review of internal and external audit functions, the review of
internal accounting controls, the review of annual financial statements, and a
review at its discretion of compliance with corporate policies and codes of
conduct. The Audit Committee is comprised of outside directors. The current
members of the Audit Committee are Steven M. Bathgate, James M. Ciccarelli
(Chairman) and Paul E. Valuck, D.D.S. The Board of Directors has reviewed Rule
4200(a)(14) of the National Association of Securities Dealers and has determined
that Messrs. Ciccarelli, Bathgate and Valuck are independent directors as
defined in that Rule. The Board of Directors has adopted a written charter for
the Audit Committee, a copy of which was attached as Appendix A to the Company's
2001 Proxy Statement. The Audit Committee met two times in 2001 at which all
members were present.
Compensation Committee
Currently, the full Board of Directors is acting as the Compensation Committee.
The Compensation Committee determines officers' salaries and bonuses and
administers the grant of stock options and other awards pursuant to the Birner
Dental Management Services, Inc. 1995 Employee Plan (the "Employee Plan") and
the Birner Dental Management Services, Inc. 1995 Stock Option Plan for Managed
Dental Centers. The Compensation Committee met five times in 2001 at which all
members were present.
6
DIRECTOR AND EXECUTIVE COMPENSATION
Director Compensation
Directors currently do not receive any cash compensation from the Company for
their services as directors and are not presently reimbursed for expenses in
connection with attendance at Board of Directors and committee meetings.
Executive Compensation
Summary Compensation
The following table sets forth the compensation paid by the Company to the Chief
Executive Officer and each of the executive officers of the Company who were
paid total salary and bonus exceeding $100,000 during the fiscal year ended
December 31, 2001 (the "Named Executive Officers").
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------- Securities
Underlying All Other
Name and Principal Position Fiscal Year Salary Bonus Options/Warrants Compensation
- --------------------------- ---------- ------ ----- ---------------- ------------
Frederic W.J. Birner 1999 $210,691 $ - - $2,528 (1)
Chairman of the Board and 2000 $223,413 $ - - $2,006 (1)
Chief Executive Officer 2001 $225,000 $ 10,000 - $1,125 (1)
Mark A. Birner, D.D.S. 1999 $140,897 $ - - $2,536 (1)
President and Director 2000 $148,942 $ - - $1,893 (1)
2001 $150,000 $10,000 - $1,125 (1)
Dennis N. Genty 1999 $141,382 $ - - $2,121 (1)
Chief Financial Officer 2000 $148,942 $ - - $2,681 (1)
Treasurer, Secretary and 2001 $150,000 $10,000 - $1,125 (1)
Director
- ------------------------------------
(1) 401(k) contributions paid for by the Company on behalf of each named
executive officer.
7
Option Grants
No stock options were granted during the fiscal year ended December 31, 2001 to
any Named Executive Officer.
Option Exercises and Holdings
The following table sets forth for the Named Executive Officers the number and
value of securities underlying unexercised in-the-money options held as of
December 31, 2001. None of the Named Executive Officers exercised any options
during the fiscal year ended December 31, 2001.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised,
Options Held at In-the-Money Options at
December 31, 2001 December 31, 2001 (1)
------------------------------ --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ ------------- ----------- -------------
Frederic W.J. Birner 14,880 - $ - $ -
Mark A. Birner, D.D.S. 14,527 - $ - $ -
Dennis N. Genty 12,235 - $ - $ -
(1) Value is based on the difference between the stock option exercise
price and the closing price of the Common Stock on the Nasdaq SmallCap
Market on December 31, 2001 of $4.45 per share. The stock price on
December 31, 2001 was less than the exercise price of all outstanding
options.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Company currently serves as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Board of Directors or as an executive
officer of the Company. See "Director and Executive Compensation" and "Certain
Transactions" for a description of transactions between the Company and members
of the Board of Directors.
Compensation Committee Report on Executive Compensation
Currently, the entire Board of Directors makes all determinations with respect
to executive officer compensation. The following report is submitted by the
Board of Directors of the Company, in its capacity as Compensation Committee,
pursuant to rules established by the Securities and Exchange Commission, and
provides certain information regarding compensation of the Company's executive
officers.
The Compensation Committee is responsible for establishing and administering a
general compensation policy and program for the Company. The Compensation
Committee also possesses all of the powers of administration under the Company's
employee benefit plans, including all stock option plans and other employee
benefit plans. Subject to the provisions of those plans, the Compensation
Committee must determine the individuals eligible to participate in the plans,
the extent of such participation and the terms and conditions under which
benefits may be vested, received or exercised.
Compensation Policies. The Company's executive compensation policies are
designed to complement the Company's business objectives by motivating and
retaining quality members of senior management, by aligning management's
interests with those of the Company's shareholders and by linking total
compensation to the performance of the Company. The Company's executive
compensation policies generally consist of equity-based long-term incentives,
short-term incentives and competitive base salaries. The Compensation Committee
will continue to monitor the performance of the Company and its executive
officers in reassessing executive compensation.
8
Base Salary. The Compensation Committee reviews the base salaries of the
Company's executive officers on an annual basis. Base salaries are determined
based upon a subjective assessment of the nature and responsibilities of the
position involved, the performance of the particular officer and of the Company,
the officer's experience and tenure with the Company and base salaries paid to
persons in similar positions with companies comparable to the Company.
Annual Bonus. Annual bonuses may be paid to the Company's executive officers at
the discretion of the Compensation Committee. The Compensation Committee granted
bonuses of $10,000 each to three executive officers during 2001.
Long-Term Incentives. The Company's long-term compensation strategy is focused
on the grant of stock options under the stock option plans and warrants, which
the Compensation Committee believes rewards executive officers for their efforts
in improving long-term performance of the Common Stock and creating value for
the Company's shareholders, and which the Compensation Committee believes aligns
the financial interests of management with those of the Company's shareholders.
During 2001, the Compensation Committee did not grant stock options to the
executive officers.
Chief Executive Officer Compensation for Fiscal Year 2001. The compensation for
Frederic W.J. Birner during 2001 consisted of his base salary, the rate of which
was established in 1999, and a cash bonus of $10,000. Mr. Birner's base salary
was not increased in 2001.
COMPENSATION COMMITTEE
Frederic W.J. Birner
Mark A. Birner, D.D.S.
Dennis N. Genty
James M. Ciccarelli
Steven M. Bathgate
Paul E. Valuck D.D.S.
PERFORMANCE GRAPH
The following line graph compares the percentage change from date of public
offering (February 11, 1998) through December 31, 2001 for (i) the Common Stock,
(ii) a peer group (the "Peer Group") of companies selected by the Company that
are predominantly dental management companies located in the United States,
(iii) Nasdaq Composite Index and (iv) S&P 500 Composite Index. The companies in
the Peer Group are American Dental Partners, Inc., Castle Dental Centers, Inc.,
Coast Dental Services, Inc., Interdent, Inc. and Monarch Dental Corporation.
[THE FOLLOWING TABLE WAS REPRESENTED BY
A LINE GRAPH IN THE PRINTED MATERIAL]
Comparison of Total Returns*
2/11/98 12/31/98 12/31/99 12/31/00 12/31/01
Description ------- -------- -------- -------- --------
- -----------
Birner Dental Management $100.00 $ 50.00 $ 19.64 $ 6.70 $ 15.89
Services, Inc.
Peer Group 100.00 57.57 32.58 11.16 6.69
Nasdaq Composite Index 100.00 136.69 254.02 152.85 120.79
S&P 500 Composite Index 100.00 127.17 153.93 139.92 123.29
- --------------------------
*Total return based on $100 initial investment and reinvestment of dividends
9
Audit Committee Report
The audit committee has reviewed and discussed the audited financial statements
of the Company with management and has discussed with Hein + Associates LLP
("Hein"), the Company's independent public accountants, the matters required to
be discussed under Statements on Auditing Standards No. 61 ("SAS 61"). In
addition, the audit committee has received from Hein the written disclosures and
the letter required to be delivered by Hein under Independence Standards Board
Standard No. 1 ("ISB Standard No. 1") addressing all relationships between the
independent public accountants and the Company that might bear on their
independence. The audit committee has reviewed the materials to be received from
Hein and has met with representatives of Hein to discuss the independence of
their firm.
In connection with the new standards for independence of the Company's
independent public accountants promulgated by the Securities and Exchange
Commission, the audit committee has reviewed the non-audit services currently
provided by the Company's independent public accountants and has considered
whether the provision of such services is compatible with maintaining the
independence of the Company's independent public accountants.
Based on the audit committee's review of the financial statements, its
discussion with Hein regarding SAS 61, and the written materials provided by
Hein under ISB Standard No. 1 and the related discussion with Hein of their
independence, the audit committee has recommended to the Board of Directors that
the audited financial statements of the Company be included in its Annual Report
10-K for the fiscal year ended December 31, 2001, for filing with the Securities
and Exchange Commission.
THE AUDIT COMMITTEE
Steven M. Bathgate
James M. Ciccarelli (Chairman)
Paul E. Valuck D.D.S.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Independent Public Accountants
On November 14, 2001, the Company dismissed Arthur Andersen LLP as the Company's
principal accountant. The decision to change accountants was recommended by the
Audit Committee of the Board of Directors and approved by the Board of
Directors.
The Report of Arthur Andersen LLP on the financial statements of the Company for
either of the past two fiscal years ended December 31, 1999 and 2000 did not
contain an adverse opinion or disclaimer of opinion nor was it qualified or
modified as to uncertainty, audit scope or accounting principles. The Company
does not believe that there were any disagreements with Arthur Andersen LLP on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, during the past two fiscal years
ended December 31, 1999 and 2000 and during the subsequent interim period
through November 14, 2001, which, if not resolved to Arthur Andersen LLP's
satisfaction, would have caused Arthur Andersen LLP to make reference to the
subject matter of the disagreement(s) in connection with its Reports.
On November 14, 2001, the Board of Directors engaged Hein as the Company's
independent public accountants. Representatives of Hein will be present at the
Annual Meeting and will have the opportunity to make a statement if they so
desire. These representatives will be available to respond to appropriate
questions from shareholders at the meeting.
10
Audit Fees
During the fiscal year ended December 31, 2001, the aggregate fees billed for
professional services rendered for the audit of the Company's annual financial
statements and the reviews of the financial statements included in the Company's
Quarterly Reports on Form 10-Q filed during the fiscal year ended December 31,
2001 were $32,930 by Arthur Andersen LLP and $30,000 by Hein.
All Other Fees
For the fiscal year ended December 31, 2001, the aggregate fees billed the
Company by Arthur Andersen LLP for the audit of the 401(k) retirement savings
plan were $8,350.
PROPOSAL TWO: INCREASE SHARES AVAILABLE UNDER 1995 EMPLOYEE
STOCK OPTION PLAN
Amendment
The Board of Directors has determined that, in order to be able to provide
additional incentive to the Company's management and selected employees, it is
in the best interests of shareholders that the number of shares of Common Stock
which the Company is currently authorized to issue pursuant to the exercise of
options granted under the 1995 Employee Stock Option Plan (the "Plan") be
increased.
The Company is currently authorized to issue up to 229,250 shares of Common
Stock under the Plan. As of April 5, 2002, options have been exercised to
purchase 2,740 shares, options to purchase up to 224,077 shares of Common Stock
were outstanding and 2,433 shares remain available for future grants under the
Plan.
At a meeting held on February 28, 2002, the Board of Directors of the Company
adopted an amendment to the Plan, subject to the approval of the shareholders of
the Company, which increases from 229,250 to 329,250 the number of shares of
Common Stock available under the Plan.
The purpose of the amendment is to ensure that the Company has a sufficient
number of shares reserved under the Plan to accomplish the Plan's objective of
affording selected employees, directors and consultants of the Company who are
responsible for the conduct and management of its business or who are involved
in endeavors significant to its success. The Company believes that rewarding
individuals in this fashion creates an increased interest in, and a greater
concern for, its success on the part of the individuals. Options also help to
attract and retain employees
The Board of Directors also amended the Plan on February 28, 2002 to provide
that, in the event of certain "Changes in Control," all outstanding options
shall become immediately vested and exercisable prior to the "Change in
Control," notwithstanding any vesting requirements contained in any option
agreement.
General
The Plan was adopted by the Board of Directors effective as of October 30, 1995,
and was amended as of September 4, 1997. The Plan has been ratified and approved
by the Company's shareholders. The following is a summary of the material
features of the Plan.
The Plan provides for the grant of incentive stock options, as defined in the
Internal Revenue Code of 1986, as amended (the "Code"), to employees (including
officers and employee-directors) and non-statutory stock options to employees,
directors and consultants. The Company's Board of Directors or a committee
appointed by and serving at the pleasure of the Board, consisting of not less
than two directors, administers the Plan. The Board or committee, whichever is
appointed to administer the Plan, is called the "Committee." The Committee
determines recipients and types of options to be granted, including the exercise
price, the number of shares, the grant dates, and the exercisability thereof.
11
Shares Available for Issuance
A maximum of 329,250 shares of Common Stock after the amendment, and 229,250
shares of the Company's Common Stock prior to the amendment, are available for
the issuance upon the exercise of options granted under the Plan. The number of
shares available under the Plan, the number of shares subject to outstanding
options, and the exercise price per share of such options are subject to
adjustment on account of stock dividends, stock splits, mergers, consolidations,
recapitalizations, combinations or exchanges of stock, or other similar
occurrences effecting a change in the outstanding shares without the receipt of
additional consideration by the Company. If any option under the Plan terminates
or expires, the shares allocable to the unexercised portion of the option will
again be available for the purposes of the Plan.
Option Exercise Price and Other Terms
The term of any stock option granted under the Plan may not exceed 10 years.
Shares subject to options that have expired or have otherwise terminated without
having been exercised in full shall again become available for the grant of
options under the Plan. The exercise price of options granted under the Plan is
determined by the Committee, provided that the exercise price of a stock option
cannot be less than 100% of the fair market value of the shares subject to the
option on the date of grant. The fair market value is determined by reference to
closing prices on the public market. Options granted under the Plan vest at the
rate specified in the option agreements, which generally provide that options
vest in three to five equal annual installments. No stock option may be
transferred by the optionee other than by will or the laws of descent and
distribution. Options shall be exercisable during the optionee's lifetime only
by the optionee. Options granted to an optionee terminate upon the earlier to
occur of (i) the expiration date set forth in the option agreement, (ii) the
termination of employment (or, in the case of directors or consultants, the
termination of service), or (iii) the death or disability of the optionee. An
optionee whose option terminates for any reason (other than by death or
disability) may exercise an option during the three-month period following such
termination (unless such option expires sooner by its terms). Options may be
exercised for up to twelve months following termination due to death or
disability (unless such options expire sooner by their terms). Subject to
certain limitations, the Committee may extend the termination date of any stock
option granted under the Plan in its sole discretion.
No incentive stock option may be granted to any person who, at the time of the
grant, owns (or is deemed to own) stock possessing more than 10% of the total
combined voting power of the Company or any affiliate of the Company, unless the
option exercise price is at least 110% of the fair market value of the stock
subject to the option on the date of grant, and the term of the option does not
exceed five years from the date of grant. The aggregate fair market value,
determined at the time of grant by the committee, of the shares of Common Stock
with respect to which incentive stock options are exercisable for the first time
by an optionee during any calendar year (under all such plans of the Company and
its affiliates) may not exceed $100,000.
Amendment and Termination
The Company's Board of Directors may at any time amend, suspend or terminate the
Plan except that no action by the Board may impair outstanding options. No
amendment to the Plan may be made without shareholder approval that would
increase the total number of shares under the Plan (except for any adjustments
as described above for stock dividends and other events), reduce the minimum
exercise price of options or materially modify the eligibility requirements.
Subject to the terms of the Plan, the Board may modify, extend or renew any
outstanding option under the Plan, accept the surrender of outstanding options,
and authorize the grant of substitute options.
12
Federal Income Tax Consequences
The grant of an incentive stock option under the Plan does not produce taxable
income to the optionee or a tax deduction to the Company. Upon exercise of an
incentive stock option, the employee will not realize taxable income and the
Company will not be entitled to a compensation deduction; however, the excess of
the fair market value over the exercise price may be taxed to the employee under
the alternative minimum tax provisions of the Code. The Code imposes a statutory
holding period for incentive stock options, which is the later of (1) one year
after the shares were transferred to an employee upon exercise of an option or
(2) two years after the date of grant. If an employee sells or otherwise
disposes of shares acquired upon the exercise of an incentive stock option prior
to meeting the statutory holding period requirements, all or a portion of any
gain will be taxed as ordinary income to the employee; in that case, the Company
will be entitled to deduct an equal amount as a compensation expense. The amount
of ordinary income is the lesser of (1) the difference between the fair market
value at the date of exercise and the exercise price, or (2) the gain on the
sale (the amount realized less the exercise price). Otherwise, an optionee's
disposition of shares acquired upon the exercise of an incentive stock option
(including a disposition after the expiration of the statutory holding period)
will result in short-term or long-term capital gain or loss measured by the
difference between the disposition price and the employee's tax basis in the
shares (the tax basis is generally the exercise price plus the amount previously
recognized as ordinary income).
The grant of a nonqualified stock option under the Plan does not produce taxable
income to the optionee or a tax deduction to the Company. Upon exercise of a
nonqualified stock option, the excess of the fair market value of the shares
acquired over the exercise price will be taxable to the optionee as ordinary
income and will be deductible by the Company as a compensation expense.
The Board of Directors unanimously recommends voting "FOR" the proposal to amend
the 1995 Employee Stock Option Plan. Proxies solicited by the Board of Directors
will be voted "FOR" approval of the amendment to the 1995 Employee Stock Option
Plan.
PROPOSAL THREE: SHAREHOLDER PROPOSAL
Shareholder Proposal Relating to Take Immediate Action to Cause the Sale, Merger
or Other Disposition of Birner Dental Management Services, Inc.
The Company has been informed that the following shareholder proposal will be
presented for a vote at the 2002 Annual Meeting. The Board of Directors
recommends a vote "AGAINST" this proposal; its reasons follow the shareholder's
proposal and supporting statement.
Shareholder Proposal
The Company has been advised that Walter Knysz, Jr. D.D.S., 300 East Long Lake
Road, Suite 311, Bloomfield Hills, Michigan 48304, owner of 68,725 shares of the
Company's common stock, intends to present the following proposal at the annual
meeting:
RESOLVED: That the Shareholders of Birner Dental Management Services, Inc.
believe that, for the purpose of maximizing shareholder value, the Board of
Directors should take immediate action to cause the sale, merger or other
disposition of Birner.
Shareholder's Statement Supporting the Proposed Resolution
Since going public in 1998, Birner's stock has delivered negative returns and
has performed substantially below its peers. Birner's stock price has declined
from its public offering price of $28.00 to $4.50 on a split-adjusted basis.
13
I have been a shareholder of Birner since 1999 and have accumulated a 4.55%
interest in Birner. Since 1999, Birner has had a one-for-four reverse stock
split to avoid delisting from the Nasdaq Market, and had essentially breakeven
operating results. In addition, during that time the Colorado Board of Dental
Examiners made allegations against Birner's President over certain treatment
procedures and Birner was suspended by one of its managed care dental plans.
During the quarter ended September 30, 2001, Birner apparently realized limited
benefits from a series of cost control measures that, while improving
profitability in the short term, may be detrimental to Birner in the long term
as Birner has contracted the size and scope of its operations.
I am not satisfied with my investment in Birner and I believe Birner needs to
merge or be sold to another dental practice management company to give it
additional size and markets in which to grow. I believe the value Birner's
shareholders can achieve through the sale of Birner is significantly greater
than the value that can be achieved by remaining an independent company under
existing management.
A company which I control, American Dental Group, Inc. has expressed interest on
several occasions in combining with Birner. We have made numerous attempts to
contact Birner to discuss what we believe is an attractive offer for Birner's
shareholders. In June 2001, we had a meeting with Birner's management with the
express purpose of exploring ways to combine our two companies. However, this
and other attempts to engage in substantive discussions failed.
While management has announced changes to reduce its cost structure in an
attempt to increase shareholder value, I believe these reductions may have the
opposite effect in the long run. These changes are not strategic in nature but
are designed to merely increase short-term profitability. While I am not
insisting that Birner's Board agree to a combination with American Dental Group,
Inc. on the terms that have been previously proposed, I do believe that
strategic alternatives need to be explored to increase the size, scope and
long-term profitability of Birner. Therefore, I believe that Birner's Board must
take immediate action for the sale, merger or other disposition of the company.
Without this approach, I believe that Birner many continue to contract and
become a less valuable dental provider to insurance plans, which will result in
further contractions in revenue and net income. For these reasons, I ask that
you vote FOR the resolution.
Board of Directors Statement Opposing Shareholder Proposal
The Board of Directors of the Company unanimously recommends that you vote
"AGAINST" the shareholder proposal for the following reasons:
During the 2001 calendar year, the Company's stock was up 137% and was the only
dental practice management company to show a positive return on its stock.
Furthermore, the increase in the Company's stock price during 2001 vastly
out-performed all major market indices during 2001. From December 31, 2001
through May 3, 2002, the Company's stock price has increased an additional 127%
continuing to out-perform all the major market indices. The Company's stock, as
reported in the Denver Post, was the 11th best performing stock for calendar
year 2001 and the 8th best performing stock in the first quarter of 2002
relative to all publicly traded companies in the State of Colorado.
Within the Company's current base of 54 offices, there exists significant
physical capacity to increase revenues, profits and cash flow. By adding
dentists and hygienists to the offices and without adding a single incremental
office, management believes that over the next few years the Company can
generate annual patient revenues of $60.0 to $65.0 million and earnings before
interest, taxes, depreciation and amortization ("EBITDA") of $7.5 to $9.0
million. This opportunity represents a low-risk, non-capital intensive strategy
that management has identified and is keenly focused on implementing. Management
believes that this opportunity, together with some de novo office developments,
is a rational way to grow the Company and will continue to add value to the
shareholders over the long-term.
Management believes that the Company is in the early stages of realizing the
above-described opportunity. The Company has demonstrated this by reporting
profits in each of the second, third and fourth quarters of 2001 as well as for
the full year 2001. The Company continues this demonstrated turn-around in 2002,
reporting a profitable first quarter. This makes the first time in the Company's
history to report four consecutive profitable quarters. In addition to
generating increased profits, the Company has also significantly increased cash
flow; EBITDA has increased 39.3% from $2.9 million for the twelve-month period
ending December 31, 2000 to $4.1 million for the twelve-month period ending
March 31, 2002.
14
To date, the Company has proven itself as one of the most successful dental
practice management company's in the United States. The market for dental
expenditures in the U.S. is in excess of $60.0 billion and the Company is a
financially viable player with a proven track record. The Company has been in
business and developing its dental networks for about six and one-half years and
management believes it is in the early stages of realizing the opportunity that
exists in the market.
By selling the Company at this time, this market opportunity and its potential
value to shareholders, which is not currently recognized in the Company's stock
price, would be transferred to the acquirer and would only benefit the
shareholders of the acquirer. The Company's shareholders would not recognize any
of this value.
For these reasons, the Board of Directors of the Company ask that you vote
"AGAINST" the shareholder proposal.
SECTION 16 REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers and beneficial owners of more than 10% of the
outstanding shares of the Company to file with the Securities and Exchange
Commission reports regarding changes in their beneficial ownership of shares in
the Company. To the Company's knowledge and based solely on a review of the
Section 16(a) reports furnished to the Company, Mr. Ciccarelli, Mr. Bathgate and
Mr. Valuck were late in filing their Statements of Changes in Beneficial
Ownership on Form 4 for the month of June 2001. All other Section 16(a) reports
were filed on a timely basis.
SHAREHOLDER PROPOSALS
Shareholder proposals for inclusion in the Company's proxy materials relating to
the next annual meeting of shareholders must be received by the Company on or
before January 10, 2003.
2001 ANNUAL REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001
ACCOMPANIES THIS PROXY STATEMENT AND WAS FILED ELECTRONICALLY WITH THE
SECURITIES AND EXCHANGE COMMISSION. SHAREHOLDERS WHO WISH TO OBTAIN, WITHOUT
CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT (WITHOUT EXHIBITS) ON FORM 10-K
SHOULD ADDRESS A WRITTEN REQUEST TO DENNIS N. GENTY, CHIEF FINANCIAL OFFICER,
SECRETARY AND TREASURER, BIRNER DENTAL MANAGEMENT SERVICES, INC., 3801 EAST
FLORIDA AVENUE, SUITE 508, DENVER, COLORADO 80210. THE COMPANY WILL PROVIDE
COPIES OF THE EXHIBITS TO THE FORM 10-K UPON PAYMENT OF A REASONABLE FEE.
OTHER BUSINESS
As of the date of this Proxy Statement, management was not aware of any business
not described above which would be presented for consideration at the Meeting.
If any other business properly comes before the Meeting, it is intended that the
shares represented by proxies will be voted in respect thereto in accordance
with the judgment of the persons voting them.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
/s/ Dennis N. Genty
-------------------
DENNIS N. GENTY
Chief Financial Officer, Secretary and Treasurer
Denver, Colorado
May 10, 2002
15
PROXY PROXY
Proxy Solicited by the Boardof Directors for the Annual Meeting of
Shareholders To be held June 6, 2002
The undersigned hereby appoints Frederic W.J. Birner, Mark A. Birner, D.D.S. and
Dennis N. Genty, and each of them, proxies of the undersigned, with full power
of substitution, to vote all shares of Common Stock of Birner Dental Management
Services, Inc., which the undersigned is entitled to vote, at the Annual Meeting
of Shareholders (the "Meeting") to be held on Thursday, June 6, 2002, at 10:00
a.m., Mountain Time, at the Company's offices, 3801 East Florida Avenue, Suite
508, Denver, Colorado, and at any and all adjournments thereof for the following
purposes:
(1) Election of Class II Directors:
FOR the nominees listed below (except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for the nominees listed below
Dennis N. Genty
Steven M. Bathgate
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NOMINEE'S NAME ON THE LINE IMMEDIATELY BELOW.)
(2) Authorization to increase the number of shares of Common Stock
available under the 1995 Employee Stock Option Plan to 329,250 shares.
FOR AGAINST ABSTAIN
(3) Shareholder proposal to take immediate action to cause the sale, merger
or other disposition of the Company.
FOR AGAINST ABSTAIN
(4) In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Meeting.
1
(back of card)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER (S). IF NO DIRECTION IS INDICATED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING "FOR" ELECTION OF THE
NOMINEES FOR DIRECTOR AS SELECTED BY THE BOARD OF DIRECTORS, "FOR" AUTHORIZATION
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE UNDER THE 1995
EMPLOYEE STOCK OPTION PLAN TO 329,250 SHARES, AND AGAINST THE SHAREHOLDER
PROPOSAL.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and the Proxy Statement furnished therewith. The undersigned hereby
revokes any proxies given prior to the date reflected below.
Dated
-----------------------, 2002
-----------------------
-----------------------
SIGNATURE (S) OF SHAREHOLDER (S)
Please complete, date and sign exactly as
your name appears hereon. If sharesare held
jointly, each holder should sign. When
signing as attorney, executor,
administrator,trustee, guardian or corporate
official, pleaseadd your title.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN AND
RETURN THIS PROXY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE TO COMPUTERSHARE
TRUST COMPANY, INC., AS AGENT FOR THE COMPANY. THE GIVING OF A PROXY WILL NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
2