Questions and Answers
Concerning the OCA
Merger
OrthAlliance, Inc. (“OrthAlliance” or the “Company”) and Orthodontic Centers of America (“OCA”) announced in a joint press release on May 17, 2001 (the “Press Release”), a copy of which is attached, that they entered into a Merger Agreement. In an effort to facilitate our members’ understanding of the terms of the Merger Agreement, the Company is providing the following questions and answers.
·
Does my practice have to change its name or logo or display
in any way the OCA name or logo?
·
Will OCA require that my practice utilize media advertising
or any other form of advertisement?
·
Will my practice be charged for the media advertising of
other OCA practices in the broadcast vicinity?
Not unless you choose to participate in that advertising.
·
Will I or my professional corporation be required to convert
to the OCA form of Services Agreement?
Although
OCA has indicated that it intends to provide financial incentives for you to
convert to the OCA services agreement arrangement, there is no requirement in
the Merger Agreement that you do so.
Unless you choose to convert to an OCA services agreement, your practice
will continue to operate under its existing agreement with the Company. However, Doctors who convert to an OCA
services agreement will be eligible for several incentive programs that we feel
will be quite advantageous to doctors.
We will be able to provide more details on these incentives as soon as
all necessary SEC filings are completed.
·
Will I be required to be an employee of OCA?
OCA does not employ doctors. You will continue to be employed by your professional corporation, just as you are now.
·
Will I be required to extend the term on my current
Employment Agreement with my professional corporation?
If you do extend the term on your existing Employment Agreement with your professional corporation to at least 3 years following the merger and agree to a few supplemental provisions, OCA has indicated that it will provide financial incentives for doing so. We will be able to provide additional details on these financial incentives once the necessary SEC filings are completed, and we will inform you when this has been accomplished.
·
Will OCA be able to provide my practice with additional
services?
Yes, OCA is able and willing to provide your practice with
additional services. OCA has developed proprietary practice management software
that effectively manages supplies and equipment ordering, payroll processing,
patient scheduling, accounts payable and other features. OCA also provides
in-house software support services. If
you choose to adopt OCA’s practice management software and business systems,
based upon OCA’s operating history, these services can greatly benefit your
practice and can help you to reduce your overhead and supplies costs and bring
additional efficiencies to your practice.
·
Will OCA establish the hours that my practice treats
patients and the hours that my staff works?
Just as you do now, you would set your treatment hours and your staff’s schedule.
·
Will OCA set my treatment fee/case fee?
Just as you do now, you would set your treatment rates.
·
Will OCA make me use specific orthodontic and/or dental
supplies?
Just as you do now, you could choose to purchase any treatment supplies that you wish. You may choose to take advantage of OCA’s group purchasing program with a number of vendors who provide substantial discounts on supplies to OCA affiliated doctors.
·
Will OCA place any controls on my clinical decisions or
practices?
Not at all. Just as you do now, you would make, and be responsible for, all of the clinical decisions in your practice.
·
If I am an
OrthAlliance shareholder, will I receive shares of OCA stock?
Yes. If you are an OrthAlliance shareholder, upon completion of the merger, you would receive shares of OCA common stock. Shareholders of OrthAlliance would exchange their shares for shares of OCA common stock in a tax-deferred exchange. As an OrthAlliance stockholder, you would receive shares of OCA’s common stock based on a fixed exchange ratio, ranging from 0.092145 to 0.16585 of a share of OCA common stock, depending in part on the number of doctors who amend their employment agreements with their professional corporations to provide for a remaining term of at least three years at the time of the closing of the merger, and agree to a few supplemental provisions, including the adoption of the computer services and business systems offered by OCA. OCA’s obligation to close the merger is conditioned on a minimum amount of our members (as measured by headcount and by service fee income) satisfying these conditions.
·
Will OCA provide any incentives to doctors?
Yes. We can only
provide general information on these incentives until the appropriate SEC
filings are completed. We believe OCA
has prepared attractive incentives to doctors who are willing to extend their
employment agreements three years from the closing, and agree to a few supplemental terms, including
the implementation of OCA’s systems.
When is the
Merger Agreement expected to close?
The merger is anticipated to close in the third quarter of 2001.
·
Will OrthAlliance continue to exist?
Yes, upon completion of the merger, OrthAlliance will become a subsidiary of OCA.
·
Will OrthAlliance have representation on the Board of
Directors of OCA?
Yes. A member of OrthAlliance’s Board of
Directors is to be appointed to the OCA Board of Directors upon completion of
the merger.
·
Will OCA hold Practice Improvement Seminars?
Yes. OCA holds an annual meeting for its
affiliated doctors. Similar to
OrthAlliance’s Practice Improvement Seminars, OCA sponsors speakers to present
to its membership and vendors to display their latest technology. This year, OCA is holding its doctors’
meeting in Maui on October 11-13, 2001.
·
Will there still be a Clinical Advisory Committee (“CAC”)?
Yes, however, the CAC would include both OrthAlliance doctors and existing OCA doctors. The purpose of the CAC will be to identify and utilize the strengths of both companies, to make the best practices of each available to all doctors, with the goal of improving the quality of care and the efficiencies of all practices. The CAC will not only address clinical issues, but will also include the identification, sharing and adoption of best practices throughout the combined company, including the best clinical efficiencies, software and cost saving systems previously developed by both companies.
In connection with the
proposed merger, OCA and OrthAlliance will file a proxy statement/prospectus
with the Securities and Exchange Commission (“SEC”). Investors are urged to read the proxy statement/prospectus,
because it will contain important information about the merger, OCA and
OrthAlliance. After the proxy
statement/prospectus is filed with the SEC, the proxy statement/prospectus will
be available free of charge, both on the SEC’s web site (www.sec.gov) and from OCA and OrthAlliance by
directing a request to Orthodontic Centers of America, Inc., 5000 Sawgrass
Village Circle, Suite 30, Ponte Vedra Beach, FL 32082, Attention: Investor
Relations, or to OrthAlliance, Inc., 21535 Hawthorne Boulevard, Suite 200,
Torrance, CA 90503, Attention: Investor Relations. OrthAlliance and its directors and officers may be deemed to be
participants in the solicitation of proxies with respect to a shareholder
meeting to be held in connection with the merger. Information about the participants in the solicitation, including
their interests in shares of OrthAlliance’s common stock, is set forth in
OrthAlliance’s Annual Report on Form 10-K for the year ended December 31, 2000
filed with the SEC. Investors may
obtain additional information regarding the interests of OrthAlliance and its
directors and officers in the merger by reading the proxy statement/prospectus
when it becomes available. This does
not constitute an offer of any securities for sale.