<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
<TABLE>
<S> <C>
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
HENRY SCHEIN 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:
<PAGE>
[LOGO HENRY SCHEIN(REGISTERED)]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 2000
--------------------------
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of Henry
Schein, Inc. (the "Company"), to be held at 4 p.m., on Wednesday, May 31, 2000
at the Huntington Hilton, 598 Broadhollow Road, Melville, NY.
The Annual Meeting will be held for the following purposes:
1. To elect 11 directors of the Company for terms expiring in 2001.
2. To ratify the selection of BDO Seidman, LLP as the Company's
independent auditors for the fiscal year ending December 30, 2000.
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on April 12, 2000
are entitled to notice of and to vote at the meeting or any
adjournments or postponements thereof.
Whether or not you expect to attend the meeting in person, please complete, date
and sign the enclosed proxy exactly as your name appears thereon and promptly
return it in the envelope provided, which requires no postage if mailed in the
United States.
STANLEY M. BERGMAN
Chairman, Chief Executive Officer
and President
Melville, New York
April 26, 2000
<PAGE>
HENRY SCHEIN, INC.
135 DURYEA ROAD
MELVILLE, NEW YORK 11747
PROXY STATEMENT
The Board of Directors of Henry Schein, Inc. (the "Company") has fixed the close
of business on April 12, 2000 as the record date for determining the holders of
the Company's common stock, par value $.01 per share (the "Common Stock"),
entitled to notice of and to vote at the 2000 Annual Meeting of Stockholders
(the "Annual Meeting"). As of that date, 40,777,880 shares of Common Stock were
outstanding, each entitled to one vote. The Notice of Annual Meeting, this Proxy
Statement and the form of proxy are first being mailed to stockholders of record
of the Company on or about May 1, 2000. A copy of the Company's 1999 Annual
Report to Stockholders is being mailed with this Proxy Statement but is not
incorporated herein by reference.
At the Annual Meeting, abstentions will be counted as votes cast on proposals
presented to stockholders, whereas broker non-votes will not be considered votes
cast and the shares represented by broker non-votes with respect to any proposal
will be considered present but not eligible to vote on such proposal.
Abstentions and broker non-votes will have no effect on the election of
directors (Proposal 1), which is by plurality vote, but abstentions will, in
effect, be votes against the ratification of the selection of independent public
accountants (Proposal 2), as this item requires the affirmative vote of a
majority of the shares present and eligible to vote on such matters.
The expense of this proxy solicitation will be borne by the Company. In addition
to solicitation by mail, proxies may be solicited in person or by telephone,
telegraph or other means by directors or employees of the Company or its
subsidiaries without additional compensation. The Company will reimburse
brokerage firms and other nominees, custodians and fiduciaries for costs
incurred by them in mailing proxy materials to the beneficial owners of shares
held of record by such persons.
The enclosed proxy is solicited by the Board of Directors of the Company. It may
be revoked at any time prior to its exercise by giving written notice of
revocation to the Secretary of the Company, by executing a subsequent proxy and
delivering it to the Secretary of the Company, or by attending the meeting and
voting in person. Attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table presents certain information regarding beneficial ownership
of the Company's Common Stock as of April 12, 2000 by (i) each person known to
the Company to be the beneficial owner of more than 5% of the outstanding shares
of Common Stock, (ii) each director of the Company, (iii) each executive officer
named in the Summary Compensation Table on page 8 of this Proxy Statement and
(iv) all directors and executive officers as a group. Unless otherwise
indicated, each person in the table has sole voting and investment power as to
the shares shown as being beneficially owned by such person.
<TABLE>
<CAPTION>
Shares
Beneficially Owned
--------------------
Percent
Name and Address (1) Number of Class
- -------------------- ------ --------
<S> <C> <C>
Stanley M. Bergman (2)........................................... 6,145,779 14.9%
Marvin H. Schein, Individually and as Trustee (3)................ 6,145,779 14.9%
Leslie J. Levine, as Trustee (4)................................. 2,592,454 6.3%
Pamela Schein (5)................................................ 1,617,503 3.9%
Irving Shafran and Judith Shafran, as Trustees (5)............... 1,617,503 3.9%
Marion Bergman, as Trustee (6)................................... 908,069 2.2%
Lawrence O. Sneag, as Trustee (7)................................ 893,369 2.2%
Barry J. Alperin (8)............................................. 9,167 *
Gerald A. Benjamin (9)........................................... 96,194 *
James P. Breslawski (10)......................................... 145,603 *
Leonard A. David (11)............................................ 46,183 *
Larry M. Gibson (12)............................................. 427,817 1.0%
Pamela Joseph (13)............................................... 340,180 *
Donald J. Kabat (14)............................................. 8,167 *
Mark E. Mlotek (15).............................................. 56,912 *
Steven Paladino (16)............................................. 108,560 *
General Electric Company (17).................................... 2,762,292 6.7%
T. Rowe Price Associates, Inc. (18).............................. 3,716,600 9.0%
Heartland Advisors, Inc. (19).................................... 2,074,100 5.0%
Directors and Executive Officers as a Group (15 persons) (20).... 6,908,133 16.8%
</TABLE>
- --------------
* Represents less than 1%
(1) Unless otherwise indicated, the address for each person is c/o Henry
Schein, Inc., 135 Duryea Road, Melville, New York 11747.
(2) Represents 18,277 shares that Mr. Bergman owns directly and has the power
to vote and the power to dispose of in accordance with the HSI Agreement
(as defined below), 908,069 shares over which Marion Bergman, Mr. Bergman's
wife, has voting and dispositive power, subject to the HSI Agreement, as
trustee or co-trustee under certain trusts established by Mr. Bergman for
his benefit and/or the benefit of his family members, and 5,219,433 shares
held by certain other stockholders that are parties to the HSI Agreement.
All of the foregoing shares are required by the HSI Agreement to be voted
for certain nominees for election as directors of the Company selected by
Mr. Bergman in accordance with the HSI Agreement. See "ELECTION OF
DIRECTORS--Certain Voting Arrangements."
(3) Represents 415,132 shares that Mr. Schein owns directly, and has the power
to vote and the power to dispose of in accordance with the HSI Agreement,
2,592,454 shares owned by trusts for the benefit of Mr. Schein and members
of his family and/or charities of which Mr. Schein and Leslie J. Levine are
co-trustees, as to which Mr. Schein shares the power to vote and to dispose
of in accordance with the HSI Agreement, and 3,138,193 additional shares
held by certain stockholders that are parties to the HSI Agreement. If he
so elects, Mr. Schein has the right to nominate certain of the members of
the Board of Directors in accordance with the HSI Agreement. All of the
6,145,779 shares of Common Stock that are
(Footnotes continued on next page)
2
<PAGE>
(Footnotes continued from previous page)
subject to the HSI Agreement are required to be voted for the nominees for
election as directors selected in accordance with the HSI Agreement. See
"ELECTION OF DIRECTORS--Certain Voting Arrangements."
(4) Mr. Levine holds such shares as co-trustee of trusts for the benefit of
Marvin H. Schein and members of Mr. Schein's family and/or charities. Mr.
Levine shares the power to vote and to dispose of such shares in accordance
with the HSI Agreement. All of such shares must be voted for the nominees
for election as directors selected in accordance with the HSI Agreement.
See "ELECTION OF DIRECTORS--Certain Voting Arrangements."
(5) Represents shares owned by a revocable trust established by Ms. Schein of
which Mr. Shafran and Ms. Shafran are co-trustees. Mr. Shafran and Ms.
Shafran, as trustees, have the power to vote and dispose of such shares in
accordance with the HSI Agreement. Ms. Schein has the power to vote and
dispose of such shares upon her revocation of the trust, subject to the HSI
Agreement. All of such shares are required to be voted for the nominees for
election as directors selected in accordance with the HSI Agreement. See
"ELECTION OF DIRECTORS--Certain Voting Arrangements."
(6) Ms. Bergman holds such shares as a trustee or co-trustee of trusts
established by Stanley M. Bergman for the benefit of Mr. Bergman and/or his
family members. Ms. Bergman has the power to vote and to dispose of such
shares in accordance with the HSI Agreement. All of such shares must be
voted for the nominees for election as directors selected in accordance
with the HSI Agreement. See "ELECTION OF DIRECTORS--Certain Voting
Arrangements."
(7) Mr. Sneag holds such shares as a trustee or co-trustee of trusts
established by Stanley M. Bergman for the benefit of Mr. Bergman and/or his
family members. Mr. Sneag has the power to vote and to dispose of such
shares in accordance with the HSI Agreement. All of such shares must be
voted for the nominees for election as directors selected in accordance
with the HSI Agreement. See "ELECTION OF DIRECTORS--Certain Voting
Arrangements."
(8) Represents 2,000 shares owned directly and options to purchase 7,167 shares
that either are exercisable or will become exercisable within 60 days.
(9) Represents 20,660 shares owned directly and options to purchase 75,534
shares that either are exercisable or will become exercisable within 60
days.
(10) Includes 114,602 shares that Mr. Breslawski owns directly and has the power
to vote and dispose of in accordance with the HSI Agreement and must be
voted for the nominees for election as directors selected in accordance
with the HSI Agreement. In addition, Mr. Breslawski owns options to
purchase 31,001 shares of Common Stock that either are or will become
exercisable within 60 days, which shares will be subject to the HSI
Agreement upon issuance. See "ELECTION OF DIRECTORS--Certain Voting
Arrangements."
(11) Represents 5,620 shares owned directly and options to purchase 40,563
shares that either are exercisable or will become exercisable within 60
days.
(12) Represents 374,850 shares owned directly or indirectly and options to
purchase 52,967 shares that either are exercisable or will become
exercisable within 60 days.
(13) Ms. Joseph has the power to vote and dispose of such shares in accordance
with the HSI Agreement. All of such shares are required to be voted for the
nominees for election as directors selected in accordance with the HSI
Agreement. See "ELECTION OF DIRECTORS--Certain Voting Arrangements."
(14) Represents 1,000 shares owned directly and options to purchase 7,167 shares
that either are exercisable or will become exercisable within 60 days.
(15) Represents 1,612 shares owned directly, options to purchase 55,300 shares
that either are exercisable or will become exercisable within 60 days.
(Footnotes continued on next page)
3
<PAGE>
(Footnotes continued from previous page)
(16) Includes 21,360 shares that Mr. Paladino has the power to vote and dispose
of in accordance with the HSI Agreement and must be voted for the nominees
for election as directors selected in accordance with the HSI Agreement. In
addition, Mr. Paladino owns options to purchase 87,200 shares that either
are exercisable or will become exercisable within 60 days, which shares
will be subject to the HSI Agreement upon issuance. See "ELECTION OF
DIRECTORS--Certain Voting Arrangements."
(17) The principal address of General Electric Corporation is 3003 Summer
Street, Stamford, CT 06904. The information regarding the stock holdings of
General Electric Corporation and its affiliates is based on a Schedule 13G
filed by General Electric Company with the Securities and Exchange
Commission on February 14, 2000, on behalf of itself and its wholly owned
subsidiaries General Electric Investment Corporation ("GEIC"), GE Asset
Management Corporation ("GEAM"), and the Trustees of the General Electric
Pension Trust ("GEPT"). GEIC is a registered investment adviser and acts as
an Investment Manager of GEPT, and an investment advisor to other entities
and accounts, and may be deemed to be the beneficial owner of 1,909664
of the shares shown in the table. GEAM is a registered investment advisor
and acts as and Investment Advisor to certain entities and accounts, and
may be deemed to be a beneficial owner of 852,628 of the shares shown in
the table. GEIC, GEAM and GEPT each expressly disclaim that they are
members of a "group". According to the Schedule 13G, General Electric
Corporation disclaims ownership of all these shares.
(18) The principal office of T. Rowe Price Associates, Inc. ("Price Associates")
is 100 E. Pratt Street, Baltimore, MD 21202. The information regarding the
stock holdings of Price Associates and its affiliates is based on a
Schedule 13G filed by Price Associates with the Securities and Exchange
Commission on February 14, 2000. These securities are owned by various
individuals and investors which Price Associates serves as an investment
advisor with power to direct investments and/or sole power to vote
securities. For the purposes of the reporting requirements of the
Securities Act of 1934, Price Associates is deemed to be the beneficial
owner of such securities; however, Price Associates expressly disclaims
that it is, in fact, the beneficial owner of such securities.
(19) The principal office of Heartland Advisors, Inc. ("Heartland Advisors") is
789 North Water Street, Milwaukee, WI 53202. The information regarding the
stock holdings of Heartland Advisors and its affiliates is based on a
Schedule 13G filed by Heartland Advisors with the Securities and Exchange
Commission on January 20, 2000. These securities are owned by various
individuals and investors which Heartland Advisors serves as an investment
advisor with power to direct investments and/or sole power to vote
securities. For the purposes of the reporting requirements of the
Securities Act of 1934, Heartland Advisors is deemed to be the beneficial
owner of such securities.
(20) Includes (a) all shares described in the preceding notes (2) through (16),
and (b) 11,240 shares, and options to purchase 106,674 shares, that either
are exercisable or will become exercisable within 60 days, held by other
executive officers.
4
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
Eleven directors are to be elected at the Annual Meeting to serve until the 2001
Annual Meeting of Stockholders and until their successors are elected and
qualified. The Board of Directors has approved the persons named below as
nominees and the enclosed proxy, if executed and returned, will be voted for the
election of all of such persons except to the extent the proxy is specifically
marked to withhold such authorities with respect to one or more of such persons
as provided therein. Each of the nominees currently serves as a director and was
elected by the stockholders at the 1999 Annual Meeting. All of the nominees have
consented to be named and, if elected, to serve. In the event that any nominee
of the Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies may be voted in the discretion of the persons acting
pursuant to the proxy for the election of other nominees. Directors will be
elected by plurality vote. Set forth below is certain information concerning the
nominees:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Stanley M. Bergman...................................... 50 Chairman, Chief Executive Officer, President
and Director
James P. Breslawski..................................... 46 Executive Vice President, President of
Sullivan-Schein Dental and Director
Gerald A. Benjamin...................................... 47 Executive Vice President--Administration
and Director
Steven Paladino......................................... 43 Executive Vice President, Chief Financial
Officer and Director
Leonard A. David........................................ 51 Vice President--Human Resources, Special Counsel
and Director
Mark E. Mlotek.......................................... 44 Senior Vice President -- Business Development Group
Barry J. Alperin........................................ 59 Director
Pamela Joseph........................................... 57 Director
Donald J. Kabat......................................... 64 Director
Marvin H. Schein........................................ 58 Director
Irving Shafran.......................................... 56 Director
</TABLE>
STANLEY M. BERGMAN has been Chairman, Chief Executive Officer, and President
since 1989 and a director of the Company since 1982. Mr. Bergman held the
position of Executive Vice President of the Company and Schein Pharmaceutical,
Inc. from 1985 to 1989 and Vice President of Finance and Administration of the
Company from 1980 to 1985. Mr. Bergman is a certified public accountant.
JAMES P. BRESLAWSKI has been an Executive Vice President of the Company since
1990, with primary responsibility for the US Dental Group and a director of the
Company since 1990. Between 1980 and 1990, Mr. Breslawski held various positions
with the Company, including Chief Financial Officer, Vice President of Finance
and Administration and Controller. Mr. Breslawski is a certified public
accountant.
GERALD A. BENJAMIN has been Executive Vice President and Chief Administrative
Officer since February, 2000. Prior to holding his current position, Mr.
Benjamin was Senior Vice President of Administration and Customer Satisfaction
since January, 1993, and has been a director of the Company since September
1994. Mr. Benjamin was Vice President of Distribution Operations from 1990 to
December 1992, and Director of Materials Management from 1988 to 1990. Before
joining the Company in 1988, Mr. Benjamin was employed for 13 years in various
management positions at Estee Lauder, where his last position was Director of
Materials Planning and Control.
STEVEN PALADINO became an Executive Vice President in February 2000, has been
Chief Financial Officer of the Company since April 1993, and has served as a
director since December 1992. From April 1993
5
<PAGE>
until February, 2000, Mr. Paladino was a Senior Vice President of the Company.
From 1990 to April 1993, Mr. Paladino served as Vice President and Treasurer and
from 1987 to 1990 served as Corporate Controller of the Company. Before joining
the Company in 1987, Mr. Paladino was employed as a public accountant for seven
years and most recently was with the international accounting firm of BDO
Seidman, LLP. Mr. Paladino is a certified public accountant.
LEONARD A. DAVID has been Vice President of Human Resources and Special Counsel
since January 1995. Mr. David held the office of Vice President, General Counsel
and Secretary from 1990 to January 1995, and practiced corporate and business
law for eight years prior to joining the Company in 1990. Mr. David has been a
director of the Company since September 1994.
MARK E. MLOTEK became Senior Vice President of the Company's Business
Development Group in February, 2000. He joined the Company in December 1994 as
Vice President, General Counsel and Secretary and became a director of the
Company in September 1995. Prior to joining the Company, Mr. Mlotek was a
partner in the law firm of Proskauer Rose LLP, specializing in mergers and
acquisitions, corporate reorganizations and tax law from 1989.
BARRY J. ALPERIN has been a director of the Company since May 1996. Mr. Alperin
has been a private consultant since August 1995. Mr. Alperin served as Vice
Chairman of Hasbro, Inc. from 1990 through July 1995. Mr. Alperin served as
Co-Chief Operating Officer of Hasbro, Inc. from 1989 through 1990 and as its
Senior Vice President and Executive Vice President from 1985 through 1989. Mr.
Alperin currently serves as a director for Seaman Furniture Company, Inc., a
furniture retailing company, and K'nex Industries, Inc., a wholesale toy
company.
PAMELA JOSEPH has been a director of the Company since September 1994. For the
past five years, Ms. Joseph has been a self-employed artist and is President of
Anderson Ranch Arts Center. Ms. Joseph is also a trustee of Alfred University.
DONALD J. KABAT has been a director of the Company since May 1996. Mr. Kabat is
President of D.K. Consulting Services, Inc. and served as Chief Financial
Officer of Central Park Skaters, Inc. from September 1992 to September 1995.
From 1970 to 1992, Mr. Kabat was a partner in Andersen Consulting, an affiliate
of Arthur Andersen, LLP.
MARVIN H. SCHEIN has been a director of the Company since September 1994 and has
provided consulting services to the Company since 1982. Mr. Schein founded
Schein Dental Equipment Corp., a subsidiary of the Company. Prior to founding
Schein Dental Equipment Corp., Mr. Schein held various management and executive
positions with the Company.
IRVING SHAFRAN has been a director of the Company since September 1994. Mr.
Shafran has been an attorney in private practice for the past 25 years. From
1991 through December 1995, Mr. Shafran was a partner in the law firm of
Anderson Kill Olick and Oshinsky, PC.
Certain Voting Arrangements
The Amended and Restated HSI Agreement dated as of February 16, 1994, as amended
(the "HSI Agreement"), among certain stockholders of the Company, which was
entered into in connection with the Company's reorganization, provides that
until the earliest of (i) January 1, 2004, (ii) the first date on which Marvin
H. Schein and his family group no longer beneficially own at least 25% of the
outstanding Common Stock that they owned immediately after the reorganization,
or (iii) the date on which certain changes in the Company's management occur,
Stanley M. Bergman has the right to designate the nominees for election to the
Board of Directors; provided, however, that if Marvin H. Schein does not approve
such nominees, Mr. Bergman and Mr. Schein will each select that number of
nominees (of which one must be an Independent Nominee, as defined in the HSI
Agreement), equal to one-half of the entire Board, rounded down to the nearest
whole number, and the remaining nominee (if there is an odd number of directors)
will be elected by the two Independent Nominees. The parties to the HSI
Agreement, who have the right to vote approximately 14.9% of outstanding shares
of Common Stock eligible to vote at the 2000 Annual Meeting, are required to
vote for all such nominees. If any director previously nominated pursuant to the
HSI Agreement ceases to hold office, the individual who nominated such director
shall have the right to nominate his or her successor.
6
<PAGE>
Board Meetings and Committees
During the fiscal year ended December 25, 1999 ("fiscal 1999"), the Board of
Directors held six meetings.
The Company has an Executive Committee, which currently consists of Messrs.
Bergman, Benjamin, Breslawski, Paladino and Schein. The Executive Committee may
exercise all of the powers and authority of the Board of Directors, except that
it does not have the power or authority to adopt, approve or recommend to
stockholders any action or matter that is required by Delaware law to be
submitted to the stockholders for approval, or to adopt, amend or repeal any
bylaw of the Company. The Executive Committee did not meet in fiscal 1999.
The Board of Directors has an Audit Committee, which currently consists of
Messrs. Alperin and Kabat. The Audit Committee oversees the Company's financial
reporting process on behalf of the Board of Directors. In fulfilling its
responsibility, the Audit Committee recommends to the Board of Directors,
subject to stockholder approval, the selection of the Company's independent
public accountants. The Audit Committee also reviews the Company's consolidated
financial statements and the adequacy of the Company's internal controls. The
Audit Committee meets with the independent public accountants to discuss the
results of their audit of the Company, their evaluation of the Company's
internal controls and the overall quality of the Company's financial reporting.
The Audit Committee held three meetings in fiscal 1999.
The Board of Directors has a Compensation Committee, which currently consists of
Messrs. Alperin and Kabat. The Compensation Committee makes recommendations
regarding the compensation and benefit policies and procedures of the Company.
The Compensation Committee held five meetings during fiscal 1999.
The Board of Directors has a Stock Option Committee, which currently consists of
Messrs. Alperin and Kabat. The Stock Option Committee determines grants under
the Company's 1994 Stock Option Plan. The Stock Option Committee held five
meetings during fiscal 1999.
Each director attended more than 75% of the aggregate number of meetings held in
1999 by the Board of Directors and the Board Committees of which he or she was a
member.
Compensation of Directors
In fiscal 1999, Messrs. Alperin and Kabat each received a $25,000 annual
retainer and an additional $1,100 for each Board meeting, and $550 for each
Committee meeting attended (or $800 if such Committee meeting was held on a day
other than a day on which a Board meeting was held), and were each granted
options to purchase 6,500 shares of the Company's Common Stock at a weighted
average price of $14.05 per share.
7
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning annual and long-term
compensation for the fiscal years ended December 25, 1999, December 26, 1998 and
December 27, 1997 of the Company's Chief Executive Officer, the other four most
highly paid executive officers (based on salary and bonus for fiscal 1999)
serving as of December 25, 1999, and Bruce J. Haber, who was an executive
officer of the Company until his resignation on September 9, 1999 (collectively,
the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Other Annual Restricted Stock LTIP Other
Name and Principal Salary Bonus Compensation Stock Awards Options Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)(2)
- --------------------------- ---- --- --- --- --- --- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stanley M. Bergman........ 1999 559,050 87,048 19,300 -- -- -- 39,661
Chairman, Chief Executive 1998 544,050 313,000 19,300 -- -- -- 38,678
Officer and President 1997 519,050 358,230 19,343 -- -- -- 37,057
James P. Breslawski....... 1999 324,500 45,000 15,000 -- 28,500 -- 20,078
Executive Vice President 1998 312,500 65,000 15,000 -- 17,500 -- 21,151
and President of 1997 296,400 87,500 14,400 -- 15,000 -- 21,156
Sullivan-Schein Dental
Larry M. Gibson........... 1999 225,000 180,000 3,529 -- 26,000 -- --
President-- 1998 215,000 172,000 3,529 -- 10,500 -- --
Practice Management 1997(1) 170,322 75,000 2,553 -- -- -- --
Technologies Group
Steven Paladino........... 1999 263,000 75,000 15,000 -- 46,500 -- 18,781
Executive Vice President 1998 250,000 92,500 15,000 -- 16,500 -- 17,977
and Chief Financial 1997 233,200 80,000 14,400 -- 14,000 -- 16,732
Officer
Mark E. Mlotek 1999 263,000 65,500 15,000 -- 30,500 -- 18,781
Senior Vice President- 1998 252,500 77,500 15,000 -- 12,000 -- 15,780
Business Development Group 1997 237,500 65,000 14,400 -- 10,000 -- 16,732
Bruce J. Haber 1999 299,077 137,534 5,000 -- 9,400 -- 22,595
Former Executive Vice 1998 416,000 200,000 7,000 -- 7,400 -- 27,137
President and Former
President of 1997(3) 167,671 65,000 666 -- -- -- 214
Medical Group
</TABLE>
- ----------
(1) Represents compensation received by Mr. Gibson after he became an
executive officer in February 1997 in connection with the Company's
acquisition of Dentrix Dental Systems, Inc. ("Dentrix"). Does not include
the grant of options to purchase 42,300 shares of Common Stock under the
Company's 1994 Stock Option Plan that was made to Mr. Gibson upon the
commencement of his employment under the terms of his employment agreement
with the Company.
(2) The 1997 amounts shown in this column represent (i) profit sharing
contributions made by the Company on each executive's behalf of $6,400,
(ii) ESOP contributions of $4,800 made by the Company on behalf of Mr.
Bergman, Mr. Breslawski, Mr. Paladino and Mr. Mlotek, and (iii) excess life
insurance premiums and SERP contributions of $723 and $25,134 for Mr.
Bergman, $408 and $9,548 for Mr. Breslawski, $408 and $5,124 for Mr.
Paladino, and $408 and $5,124 for Mr. Mlotek, and excess life insurance
premiums of $214 for Mr. Haber. The 1998 amounts shown in this column
represent (i) profit sharing contributions made by the Company of $2,511
for Mr. Bergman, $1,442 for Mr. Breslawski, $1,154 for Mr. Paladino, $1,151
for Mr. Mlotek and $320 for Mr. Haber,(ii) matching contributions under The
Company's 401(k) plan of $3,515 for Mr. Bergman, $1,730 for Mr. Breslawski,
$1,615 for Mr. Paladino, $1,408 for Mr. Mlotek and $2,668 for Mr. Haber,
(iii) ESOP contributions of $4,227 for Mr. Bergman, $2,236 for Mr.
Breslawski, $1,942 for Mr. Paladino, $1,914 for Mr. Motek and $2,032 for
Mr. Haber, and (iv) excess life insurance premiums and
(Footnotes continued on next page)
8
<PAGE>
(Footnotes continued from previous page)
SERP contributions of $696 and $27,729 for Mr. Bergman, $478 and $15,264
for Mr. Breslawski, $478 and $12,788 for Mr. Paladino, $479 and $12,236 for
Mr. Mlotek and $816 and $21,280 for Mr. Haber. The 1999 amounts shown in
this column represent (i) matching contributions under The Company's 401(k)
plan of $10,000 for Mr. Bergman, $5,800 for Mr. Breslawski, $4,957 for Mr.
Paladino, $4,957 for Mr. Mlotek and $8,141 for Mr. Haber (40% of all
matching contributions are required to be invested in the plan's Common
Stock fund, and (iii) excess life insurance premiums and SERP contributions
of $528 and $29,133 for Mr. Bergman, $608 and $13,670 for Mr. Breslawski,
$371 and $13,453 for Mr. Paladino, $371 and $13,453 for Mr. Mlotek and
$497and $13,957 for Mr. Haber.
(3) Represents compensation received by Mr. Haber after he became an executive
officer in August 1997 in connection with the Company's acquisition of
Micro Bio-Medics, Inc. ("MBM"). Does not include an aggregate of $3,000,000
that was payable to Mr. Haber over a five-year period in respect of the
termination of his prior employment agreement with MBM, or the grant of
options to purchase 42,928 shares of Common Stock under the Company's 1994
Stock Option Plan and the grant of shares of restricted Common Stock with
an aggregate fair market value of $1,000,000 on the date of grant that were
made to Mr. Haber upon the commencement of his employment with the Company
under the terms of his employment agreement with the Company. Upon Mr.
Haber's resignation of his employment on September 9, 1999, the outstanding
balance of the $3,000,000 was paid to him and all such options and shares
of restricted stock became fully vested. To the extent not previously
exercised, all such options will terminate on September 9, 2000. Pursuant
to the merger agreement with MBM, all options to purchase shares of MBM
common stock outstanding on the merger date (including Mr. Haber's) were
converted into options to purchase shares of Common Stock, and such
converted options held by Mr. Haber were unaffected by his resignation.
Option Grants In Fiscal 1999
The following table sets forth information with respect to the options granted
during fiscal 1999 under the Company's 1994 Stock Option Plan to each of the
Named Executive Officers other than Mr. Haber and their potential value at the
end of the option terms assuming certain levels of appreciation of the Common
Stock. On April 6, 1999, Mr. Haber received options to purchase 9,400 shares of
Common Stock under the Company's 1994 Stock Option Plan (0.66% of the total
options granted to employees in fiscal 1999) at an exercise price of $21.50 per
share. As a result of his resignation, those options vested on September 9, 1999
will expire on September 9, 2000.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Number of Percent of Stock Price Appreciation
Securities Total Options Exercise for
Underlying Granted to or Option Term(3)
Options Employees In Base Price Expiration --------------------------
Name Granted Fiscal Year ($/Share) Date 5%($) 10%($)
---- ------- ----------- --------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Stanley M. Bergman................ -- -- -- -- -- --
James P. Breslawski............... 13,000(1) 0.93% 21.5000 04/06/09 175,776 445,451
15,500(2) 1.11% 11.8125 12/15/09 115,146 291,804
Larry M. Gibson................... 11,000(1) 0.79% 21.5000 04/06/09 148,733 376,920
15,000(2) 1.07% 11.8125 12/15/09 111,432 282,391
Steven Paladino................... 22,500(1) 1.61% 21.5000 04/06/09 304,227 770,973
24,000(2) 1.72% 11.8125 12/15/09 178,292 451,825
Mark E. Mlotek.................... 14,000(1) 1.00% 21.5000 04/06/09 189,297 479,716
16,500(2) 1.18% 11.8125 12/15/09 122,575 310,630
</TABLE>
- ---------
(1) Each of these options was granted on April 6, 1999 and becomes exercisable
as to one-third of the shares subject to such options on each of the first,
second and third anniversaries of the date of grant, subject to
acceleration under certain circumstances.
(Footnotes continued on next page)
9
<PAGE>
(Footnotes continued from previous page)
(2) Each of these options was granted on December 15, 1999 and becomes
exercisable as to one-third of the shares subject to such options on each
of the first, second and third anniversaries of the date of grant, subject
to acceleration under certain circumstances. These grants were made in
December 1999, but are intended to constitute each officer's stock option
grant for the year 2000.
(3) The dollar amounts under these columns are the result of calculations at
the hypothetical annual rates of stock price appreciation of 5% and 10% set
by the Securities and Exchange Commission for disclosure purposes and are
not intended to forecast possible future appreciation, if any, of the
Company's Common Stock price.
Aggregated Fiscal 1999 Year-End Option Values
The following table summarizes the number of all shares subject to options held
by the Named Executive Officers at the end of fiscal 1999, and their value at
that date if they were in-the-money. No stock options were exercised in fiscal
1999.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-The-Money Options at 12/25/99(1)
Underlying Unexercised -----------------------------------
Options at 12/25/99 Exercisable Unexercisable
------------------- ----------- -------------
Name Exercisable (#) Unexercisable (#) Shares(#) Total($) Shares(#) Total($)
- ---- --------------- ----------------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Stanley M. Bergman............... -- -- -- -- -- --
James P. Breslawski.............. 15,834 45,166 15,834 0 45,166 0
Larry M. Gibson.................. 31,700 47,100 31,700 0 47,100 0
Steven Paladino.................. 69,533 62,167 69,533 196,094 62,167 0
Mark E. Mlotek................... 43,134 42,166 43,134 130,729 42,166 0
Bruce J. Haber................... 436,270 -- 436,270 790,668 -- 0
</TABLE>
- ---------
(1) Represents the difference between the aggregate exercise prices of
such options and the aggregate fair market value of the shares issuable
upon exercise.
Employment and Other Agreements
The Company and Stanley M. Bergman entered into an employment agreement, dated
as of January 1, 2000 (the "Employment Agreement"), providing for his continued
employment as Chairman of the Board, President and Chief Executive Officer until
December 31, 2002. The Employment Agreement provides Mr. Bergman with a base
salary of $585,050 for 2000. In addition, the Employment Agreement provides for
incentive compensation to be determined by the Compensation Committee of the
Board of Directors (or, if there is no Compensation Committee, the Board of
Directors). The Compensation Committee awarded incentive compensation of $87,048
to Mr. Bergman for 1999. The Employment Agreement also provides that Mr. Bergman
will continue to participate in all benefit, welfare and perquisite plans,
policies and programs generally available to either the Company's employees or
the Company's senior executive officers. The Company provides Mr. Bergman with
the use of an automobile and expenses related thereto, and other miscellaneous
benefits. If Mr. Bergman's employment with the Company is terminated by the
Company without cause or is terminated by Mr. Bergman following a material
breach by the Company of the Employment Agreement which is not cured during the
requisite period for cure of such breach, Mr. Bergman will receive all amounts
then owed to him as salary and deferred compensation and any benefits accrued
and owed to him or his beneficiaries under the then applicable benefit plans,
programs and policies of the Company. In addition, Mr. Bergman will receive, as
severance pay, 200% of his then annual base salary plus 200% of Mr. Bergman"s
average annual incentive compensation paid or payable with respect to the
immediately preceding three fiscal years and a payment equal to the account
balance or accrued benefit Mr. Bergman would have been credited with under each
10
<PAGE>
pension plan maintained by the Company, in each case assuming the Company would
have continued contributions until the natural expiration of the Employment
Agreement, less Mr. Bergman's vested account balance or accrued benefits under
each pension plan. If Mr. Bergman resigns within one year following a change in
control of the Company, Mr. Bergman will receive, as severance pay, 300% of his
then annual base salary plus 300% of Mr. Bergman"s maximum incentive
compensation opportunity with respect to the year in which such termination
occurs and a payment equal to the account balance or accrued benefit Mr. Bergman
would have been credited with under each pension plan maintained by the Company,
in each case assuming the Company would have continued contributions until the
natural expiration of the Employment Agreement, less Mr. Bergman"s vested
account balance or accrued benefits under each pension plan. If the payments
described in the preceding sentence are subject to the excise tax imposed by
Internal Revenue Code Section 4999, the Company will pay Mr. Bergman an
additional amount such that the amount retained by him, after reduction for such
excise tax, equals the amounts described in the preceding sentence prior to
imposition of the excise tax. Unless the Employment Agreement is terminated for
cause or pursuant to Mr. Bergman's voluntary resignation, the Company will
continue the participation of Mr. Bergman and his family in the health and
medical plans, policies and programs in effect with respect to senior executive
officers of the Company and their families. Coverage for Mr. Bergman and his
spouse will continue from the end of Mr. Bergman's employment until their
respective deaths, and coverage for his children will continue until their
attainment of the age of twenty-one.
In September 1994, the Company, and Marvin Schein, a director and principal
stockholder of the Company, amended and restated the terms of a consulting
agreement (the "Consulting Agreement"), providing for Mr. Schein's consulting
services to the Company with respect to the marketing of dental supplies and
equipment, from time to time. The Consulting Agreement initially provided for
compensation of $283,200 per year, increasing $25,000 every fifth year beginning
in 2003. The Consulting Agreement also provides that Mr. Schein will participate
in all benefit, compensation, welfare and perquisite plans, policies and
programs generally available to either the Company's employees or the Company's
senior executive officers, excluding the Stock Option Plan, that Mr. Schein's
spouse, and his children until they attain the age of 21, will be covered by the
Company's health plan, and that the Company will provide Mr. Schein with the use
of an automobile and expenses related thereto. The original Consulting Agreement
was entered into as part of a recapitalization of the Company's predecessor in
1982 among Mr. Schein and its other stockholders, and to secure for the Company
the consulting services of Mr. Schein, who had served the Company in various
executive capacities for more than twenty years.
Mr. Haber resigned his employment with the Company on September 9, 1999.
Pursuant to his former employment agreement with the Company, Mr. Haber is
entitled to receive an amount equal to his base salary ($432,000 per annum) for
the remainder of his original five year term of employment, subject to limited
set-offs, and to continued receipt by him, his wife and his dependent children
in all health and medical benefits provided by the Company to its senior
executive officers generally (or the equivalent) through September 9, 2000. Mr.
Haber also received a prorated amount in lieu of bonus of $137,534.
The Company has entered into agreements with the Named Executive Officers, other
than Mr. Bergman and Mr. Haber, which provide that upon a change in control of
the Company, the Company will pay the executive an amount equal to the amount
paid per share for Company Common Stock in any transaction triggering the change
in control (not to exceed $40) multiplied by factor (ranging from 45,000 to
100,0000). The foregoing provision expires on June 30, 2001. The agreements also
provide that if the executive's employment is terminated by the Company without
cause or by the executive for good reason following a change in control of the
Company, the Company will pay to the executive severance pay equal to 300% of
the sum of the executive"s then base salary and target bonus. In the event any
payments to the executive become subject to the excise tax imposed by Internal
Revenue Service Section 4999, the Company will pay the executive an additional
amount such that the amount retained by the executive after reduction for such
excise tax equals the amount to be paid to the executive prior to imposition of
the excise tax.
Report of the Compensation Committee of the Board of Directors
The Compensation Committee, the members of which also serve as the Stock Option
Committee under the Company's 1994 Stock Option Plan, has responsibility for the
philosophy, competitive strategy, design, and administration of the Company"s
compensation program for its executive officers (including the Named Executive
Officers). The Compensation Committee seeks to ensure that the executive officer
compensation program is competitive in level and structure with the programs of
comparably-sized businesses and that it is supportive of the Company"s financial
and operating objectives and aligned with the financial interests of the
Company"s stockholders. The Company and the Compensation Committee have retained
the services of an independent executive compensation consulting firm for advice
regarding the competitive structure and administration of its executive officer
compensation program.
11
<PAGE>
Philosophy and Program Components
The Company"s executive officer compensation program is structured to enable the
Company to attract and retain the caliber of officers needed to ensure the
Company"s continued growth and profitability and to competitively compensate
them based on their and the Company"s performance and on the longer-term value
they create for the Company"s stockholders. The components of the officer
compensation program consist of base salary, annual bonuses paid under the
Company"s annual Performance Incentive Plan, and periodic grants of stock
options.
The Company measures the competitiveness of its compensation program relative to
the practices of other companies with annual revenues comparable to those of the
Company. The Committee has adopted a philosophy which would seek to set salaries
so as to be competitive within the 25th to 75th percentiles of practices at
companies with annual revenues comparable to those of the Company. The
philosophy also aims to structure annual Performance Incentive Plan award
opportunities so that an officer"s salary plus annual bonus will fall within the
25th to 75th percentiles of competitive practices, depending on the Company"s
achievement of annual financial performance targets established by the Committee
at the start of the year, and the achievements of the individual officer,
evaluated against pre-established goals and objectives. Similarly, stock option
grants are made with reference to competitive option granting practices for
companies of comparable revenue size.
Pearl Meyer & Partners, Inc., an independent executive compensation consulting
firm, was retained to evaluate the Company"s change in control arrangements for
the Company"s senior executives, other than the Chief Executive Officer. Pearl
Meyer & Partners concluded that changes were advisable and made certain
recommendations to the Committee. Working with Pearl Meyer & Partners, the
Committee developed proposed change in control arrangements which the Board of
Directors considered and adopted in 1999. See "Compensation of Executive
Officers --Employment and other Agreements" for a description of those
arrangements.
Base Salary
The Company annually reviews officer salaries and makes adjustments as warranted
based on competitive practices and the individual's performance. Salary
increases are generally approved during the first quarter of the calendar year
retroactive to January 1 of the year. Mr. Gibson and Mr. Haber who resigned his
employment prior to the end of the fiscal year had an employment agreement with
the Company which provided for an initial base salary and certain cost of living
and discretionary salary increases. The 1999 annual salaries of the Named
Executive Officers, excluding Mr. Bergman, the Company"s Chief Executive
Officer, and Mr. Haber, were increased by an average of 4.4% over annualized
1998 levels. The Committee was advised by its consultant that such officers"
average 1999 salaries approximated the 50th percentile of competitive practices.
Mr. Bergman"s 1999 salary was increased pursuant to the terms of his prior
employment agreement and approximated the 25th percentile of competitive
practice.
Annual Incentive Compensation
Annual incentive compensation for each of the Company's executive officers
other than Mr. Bergman for each year is paid under the Company"s Performance
Incentive Plan for such year ("PIP"), each of which is designed to reward the
achievement of pre-established corporate, business unit and individual
performance goals so as to compensate the Company"s senior officers for both
their individual performance and team financial results. At the beginning of
each year, the Chief Executive Officer determines which officers will
participate in the PIP for that year and such officers are notified of their
participation. The Chief Executive Officer determines that year"s PIP
performance goals for those officers who report directly to him and determines
goals for other participants in consultation with their supervisors. The
performance goals are reviewed at mid-year to ensure their continued relevance.
During the first quarter of the subsequent year, the Chief Executive Officer
reviews the relevant financial, operating and personal performance achievements
of the Company, its business units, and the participating officers against the
PIP performance goals that had been established, and submits proposed PIP awards
for the participating officers to the Compensation Committee, which must approve
such awards. PIP awards for 1999 performance for the Named Executive Officers
other than Mr. Bergman and Mr. Haber were based on (1) the
12
<PAGE>
Company's 1999 earnings per share measured against pre-established standards,
(2) achievement of financial goals in their respective areas of responsibility,
and (3) achievement of individual objectives. Mr. Gibson's employment agreement
provides for a minimum incentive compensation award, subject to satisfaction of
his PIP performance goals. As a result of his resignation, Mr. Haber's 1999
bonus amount was determined in accordance with his employment agreement, by pro
rating his 1998 incentive compensation award for the portion of 1999 for which
he served.
PIP payments for 1999 for the Four Named Executive Officers other than Mr.
Bergman and Mr. Haber ranged from 14% to 80% of salary and averaged 34%. The
Committee's compensation consultant has advised that the average 1999 salary
plus 1999 bonus for these four executive officers approximated the 25th
percentile of annual cash compensation at companies with of comparable annual
revenues.
Stock Options
The Company and the Compensation Committee believe that stock options directly
align the long-term financial interest of the Company"s officers and
stockholders and intend to make grants on an annual basis. The Committee"s
compensation consultant provides it with competitive option granting guidelines,
reflecting option granting practices at companies with comparable annual
revenues, which are used in determining the size of the Company"s stock option
grants. On December 15, 1999, the Committee granted options to purchase an
aggregate of approximately 760,000 shares, including the following options
granted to the Named Executive Officers serving on that date, for the year 2000
at an exercise price of $11.8125 per share: Mr. Breslawski, 15,500 shares, Mr.
Gibson, 15,000 shares, Mr. Paladino 24,000 shares, and Mr. Mlotek 16,500 shares.
The option grants shown in the table on page 9 under the caption "Option Grants
in Fiscal 1999" represent options granted in both March 1999 and December 1999.
The Chief Executive Officer
Mr. Bergman"s 1999 salary of $559,050 was set in accordance with the terms of
his prior employment contract and was 2.8% higher than his 1998 salary. The
contract also provided that Mr. Bergman"s bonus be within a specified range
based on the Company"s performance as determined by the Committee. The Committee
awarded Mr. Bergman an annual bonus of $87,048.00 with respect to 1999
performance. In making its bonus determination, the Committee evaluated the
Company"s 1999 earnings per share measured in relation to pre-established
performance standards and the average bonuses earned by the Corporation"s
executive officers (including the Named Executive Officers) in relation to their
target bonus opportunities. In anticipation of the expiration of the Chief
Executive Officer"s employment agreement with the Company on December 31, 1999,
the Committee developed a proposed agreement for Mr. Bergman"s continued
employment as Chief Executive Officer. This contract was considered and approved
by the Board of Directors in 1999. See "Compensation of Executive Officers
- --Employment and other Agreements" for a description of that contract.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code prohibits the Company from deducting
annual compensation in excess of $1 million paid to any of the Named Executive
Officers, unless such compensation is performance-based and paid pursuant to
criteria approved by the stockholders. Since the 1999 compensation paid to each
of the Named Executive Officers does not exceed $1 million, all of these
payments will be tax deductible by the Company. The Committee will continue to
consider 162(M) in making its compensation decisions so as to ensure the
deductibility of future compensation paid to Named Executive Officers.
THE COMPENSATION COMMITTEE
Barry J. Alperin
Donald J. Kabat
13
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's executive officers and directors are required under the Exchange
Act to file reports of ownership of Common Stock of the Company with the
Securities and Exchange Commission. Copies of those reports must also be
furnished to the Company. Based solely on a review of the copies of reports
furnished to the Company and written representations that no other reports were
required, the Company believes that during fiscal 1999 the executive officers
and directors of the Company timely complied with all applicable filing
requirements, except that the Company, which had undertaken the filing of each
director's (excluding Marvin Schein) and executive officer's Annual Statement of
Beneficial Ownership on Form 5 on his or her behalf, filed such Annual Reports
late.
Stock Performance Graph
The graph below compares the cumulative total stockholder return on $100
invested on November 3, 1995, the date of the initial public offering of the
Common Stock, through the end of the Company's 1999 fiscal year with the
cumulative total return on $100 invested for the same period in the Nasdaq Stock
Market (U.S. Companies) Composite Index and a group of five distribution
companies selected by the Company as appropriate for this purpose after
discussions with a number of investment analysts who follow the Common Stock and
are familiar with the Company's business (the "Peer Group Index"). There were
originally eleven companies in the Peer Group Index, but only five companies
continue to be publicly traded. The remaining companies in the Peer Group Index
are Owens & Minor, Inc., Patterson Dental Company, PSS World Medical Inc.,
Systemax, Inc. and U.S Office Products, Co.
[LINE GRAPH]
<TABLE>
<CAPTION>
November 3, December 30, December 28, December 27, December 26, December 25,
1995 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Henry Schein, Inc. 100.00 129.67 151.65 147.80 176.37 47.53
Peer Group Index 100.00 113.74 118.61 101.43 132.29 86.64
NASDAQ Market Index 100.00 101.13 125.67 153.73 216.82 382.41
</TABLE>
14
<PAGE>
PROPOSAL 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
selected BDO Seidman, LLP as independent auditors for the Company for the year
ending December 30, 2000, subject to ratification of such selection by the
stockholders at the Annual Meeting. If the stockholders do not ratify the
selection of BDO Seidman, LLP, another firm of independent public accountants
will be selected by the Board of Directors. Representatives of BDO Seidman, LLP
will be present at the Annual Meeting, will have an opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions from stockholders in attendance.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF
THE COMMON STOCK PRESENT IN PERSON OR REPRESENTED BY PROXY AND ENTITLED TO VOTE
AT THE ANNUAL MEETING IS REQUIRED TO RATIFY THE SELECTION OF BDO SEIDMAN, LLP AS
INDEPENDENT AUDITORS FOR THE COMPANY FOR THE YEAR ENDING DECEMBER 30, 1999.
VOTING OF PROXIES AND OTHER MATTERS
The Board of Directors recommends that an affirmative vote be cast in favor of
each of the proposals listed on the proxy card.
The Board of Directors knows of no other matter that may be brought before the
meeting that requires submission to a vote of the stockholders. If any other
matters are properly brought before the meeting, however, the persons named in
the enclosed proxy or their substitutes will vote in accordance with their best
judgment on such matters.
A complete list of stockholders entitled to vote at the Annual Meeting will be
available for inspection beginning May 16, 1999 at the Company's headquarters
located at 135 Duryea Road, Melville, New York 11747.
STOCKHOLDER PROPOSALS
Eligible stockholders wishing to have a proposal for action by the stockholders
at the 2001 Annual Meeting included in the Company's proxy statement must submit
such proposal at the principal offices of the Company not later than December
27, 2000. It is suggested that any such proposals be submitted by certified
mail, return receipt requested. Under the Company's Amended and Restated
Certificate of Incorporation, as amended, a stockholder proposal not included in
the Company's proxy statement may not be brought before the 2001 Annual Meeting
unless notice and a full description of such proposal (including all information
that would be required in connection with such proposal under the SEC's proxy
rules if such proposal were the subject of a proxy solicitation and the written
consent of each nominee for election to the Board of Directors named therein (if
any) to serve if elected) and the name, address and number of shares of Common
Stock held of record or beneficially as of the record date for such meeting by
the person proposing to bring such proposal before the 2001 Annual Meeting is
delivered in person or mailed to the Company and received by it not later than
April 16, 2001; provided, however, that such notice need not be received more
than 75 days prior to the date of the 2001 Annual Meeting. Under the SEC's proxy
rules, proxies solicited by the Board of Directors for the 2001 Annual Meeting
may be voted at the discretion of the persons named in such proxies (or their
substitutes) with respect to any shareholder proposal not included in the
Company's proxy statement if the Company does not receive notice of such
proposal on or before the deadline set forth in the preceding sentence.
BY ORDER OF THE BOARD OF DIRECTORS
STANLEY M. BERGMAN
Chairman, Chief Executive Officer and President
Melville, New York
April 26, 2000
15
<PAGE>
- --------------------------------------------------------------------------------
PROXY
HENRY SCHEIN, INC.
135 Duryea Road, Melville, New York 11747
This Proxy is solicited on behalf of the Board of Directors
The undersigned, having duly received the Notice of Annual Meeting of
Stockholders and the Proxy Statement, dated April 26, 2000, hereby appoints
Stanley M. Bergman and Mark E. Mlotek as proxies (each with the power to act
alone and with the power of substitution and revocation) to represent the
undersigned and to vote, as designated below, all shares of Common Stock of
Henry Schein, Inc. held of record by the undersigned on April 12, 2000, at the
Annual Meeting of Stockholders to be held at 4:00 p.m. on Wednesday, May 31,
2000 at the Huntington Hilton, 598 Broadhollow Road, Melville, New York and at
any adjournments or postponements thereof. The undersigned hereby revokes any
previous proxies with respect to the matters covered by this Proxy.
HENRY SCHEIN, INC.'S BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE FOLLOWING PROPOSALS
1. PROPOSAL TO ELECT ELEVEN DIRECTORS FOR TERMS EXPIRING AT THE 2001 ANNUAL
MEETING.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all nominees
listed below
Stanley M. Bergman, James P. Breslawski, Gerald A. Benjamin, Leonard A. David,
Mark E. Mlotek, Steven Paladino, Barry J. Alperin, Pamela Joseph, Donald J.
Kabat, Marvin H. Schein and Irving Shafran
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, WRITE THAT
NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.
- --------------------------------------------------------------------------------
(See reverse side)
<PAGE>
2. PROPOSAL TO RATIFY THE APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 30, 2000
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED ON THE
PROXY BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ELECTION OF ALL NOMINEES FOR DIRECTOR LISTED IN PROPOSAL 1 AND FOR
PROPOSAL 2.
Please sign exactly as names appear on this Proxy. Where
shares are held by joint tenants, both should sign. If
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by president or other
authorized person. If a partnership, please sign in
partnership name by an authorized person.
Dated:_____________________________
(Signature)________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
