<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12
AmeriSource Health Corporation
- --------------------------------------------------------------------------------
(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)(4) 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):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(4) Date filed:
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<PAGE> 2
[AMERISOURCE LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MARCH 2, 1998
------------------------
TO THE STOCKHOLDERS OF AMERISOURCE HEALTH CORPORATION:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of the Stockholders of
AMERISOURCE HEALTH CORPORATION will be held at The Desmond Great Valley Hotel
and Conference Center, One Liberty Boulevard, Malvern, Pennsylvania 19355 on
Monday, March 2, 1998, at 8:30 a.m. local time, for the purpose of:
(1) electing eight directors; and
(2) transacting such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on February 2, 1998
as the record date for determining the stockholders of the Company entitled to
notice of and to vote at the Annual Meeting and any adjournments thereof; only
holders of stock of the Company of record on that date are entitled to notice of
and to vote at the Annual Meeting and any adjournments. A list of stockholders
will be available at the time and place of the meeting, and during the 10 days
prior to the meeting, at the office of the Secretary, Teresa T. Ciccotelli,
Esq., at AmeriSource Health Corporation, 300 Chester Field Parkway, Malvern,
Pennsylvania 19355.
It is important that your shares be represented at the meeting regardless
of the number of shares that you own. Please complete and sign the enclosed
proxy card, which is being solicited by the Board of Directors of the Company,
and return it in the enclosed postage pre-paid envelope as soon as you can,
whether or not you expect to attend the Annual Meeting in person.
A proxy statement for your additional information is attached to this
notice.
You are cordially invited to attend the Annual Meeting.
Respectfully,
/s/ Teresa T. Ciccotelli
TERESA T. CICCOTELLI
Vice President, General Counsel and
Secretary
February 5, 1998
<PAGE> 3
AMERISOURCE HEALTH CORPORATION
P.O. BOX 959
VALLEY FORGE, PENNSYLVANIA 19482
------------------------
PROXY STATEMENT
------------------------
GENERAL INFORMATION
This proxy statement is furnished by the Board of Directors of AmeriSource
Health Corporation (the "Company") in connection with its solicitation of
proxies for use at the Annual Meeting of Stockholders to be held March 2, 1998
and at any adjournments thereof. The Company's annual report to stockholders,
including financial statements, accompanies this notice and proxy statement, but
is not incorporated as part of the proxy statement and is not to be regarded as
part of the proxy solicitation material. The proxy and this proxy statement are
being mailed to stockholders on or about February 5, 1998.
Proxies are solicited by the Board of Directors of the Company in order to
provide every stockholder an opportunity to vote on all matters scheduled to
come before the meeting, whether or not he or she attends the meeting in person.
When the enclosed proxy card is returned properly signed, the shares represented
thereby will be voted by the proxy holders named on the proxy card in accordance
with the stockholder's directions. You are urged to specify your choices by
marking the appropriate boxes on the enclosed proxy card. If the proxy is signed
and returned without specifying choices, the shares will be voted as recommended
by the Board of Directors.
Solicitation of proxies is made on behalf of the Board of Directors of the
Company, and the cost of preparing, assembling, and mailing the notice of Annual
Meeting, proxy statement, and form of proxy will be borne by the Company. In
addition to the use of the mail, proxies may be solicited by directors, officers
and regular employees of the Company, without additional compensation, in person
or by telephone or other electronic means. The Company will reimburse brokerage
houses and other nominees for their expenses in forwarding proxy material to
beneficial owners of the Company's stock.
REVOCABILITY OF PROXY
Execution of the enclosed proxy will not affect your right to attend the
Annual Meeting and vote in person. If you do attend, you may, if you wish, vote
by ballot at the meeting, thereby effectively canceling any proxies previously
given. In addition, a stockholder giving a proxy may revoke it at any time
before it is voted at the meeting by filing with the Secretary of the Company
any instrument revoking it, or by filing with the Company a duly executed proxy
bearing a later date.
VOTING AT THE ANNUAL MEETING
Only the holders of shares of Class A Common Stock, par value $.01 per
share (the "Common Stock") of the Company of record at the close of business on
February 2, 1998 are entitled to receive notice of, and to vote at, the Annual
Meeting. Each holder of Common Stock entitled to vote will have the right to one
vote for each share held on all matters to come before the meeting. On that
date, there were 20,951,284 shares of Common Stock issued and outstanding. There
were also 2,750,783 shares of the Class B Common Stock, par value $.01 per share
(the "Class B Common Stock"), and 163,906 shares of the Class C Common Stock,
par value $.01 per share (the "Class C Common Stock"), of the Company issued and
outstanding. Holders of the Class B Common Stock may elect at any time to
convert any and all of such shares into Class A Common Stock, on a
share-for-share basis, to the extent the holder thereof is not prohibited from
owning additional voting securities by virtue of regulatory restrictions. A
share of Class C Common Stock will automatically be
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<PAGE> 4
converted into a share of Class A Common Stock (a) immediately prior to its sale
in a future public offering or (b) at such time as such share of Class C Common
Stock has been sold publicly.
The holders of a majority of the shares of Common Stock entitled to vote
must be present in person or by proxy at the Annual Meeting to constitute a
quorum for the purpose of transacting business at the meeting. Except for the
election of directors, the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or by proxy at the meeting and entitled
to vote on a proposal is required to ratify and approve the proposal.
Abstentions are counted in tabulations of the votes cast by stockholders on the
proposals and will have the effect of a negative vote. Broker non-votes will not
be counted for purposes of determining whether any proposal has been approved.
Directors are elected by a plurality of the votes present or represented by
proxy at the meeting and entitled to vote on the election of directors. Because
directors are elected by a plurality of votes, abstentions and broker non-votes
will not have an impact on their election.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 15, 1998, certain information
regarding the beneficial ownership of Common Stock of the Company, including
shares of Common Stock as to which a right to acquire ownership within 60 days
exists, of each director, each nominee for director, each executive officer
named in the Summary Compensation Table, of all the directors and named
executive officers of the Company as a group, and of each person known to the
Company to have been the beneficial owner of more than 5% of the outstanding
Common Stock.
<TABLE>
<CAPTION>
AGGREGATE NUMBER
OF SHARES PERCENT
TITLE OF BENEFICIALLY OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNER OWNED(1) CLASS
- ------------------------------ --------------------------------------- ---------------- -------
<S> <C> <C> <C>
R. David Yost(2) President and Chief Executive
Officer................................ 239,900 1%
David M. Flowers(2) Executive Vice President, Marketing.... 117,900 *
Kurt J. Hilzinger(2) Sr. Vice President, Chief Financial
Officer................................ 104,750 *
Bruce C. Bruckmann(3) Director............................... 63,320 *
Michael A. Delaney(4) Director............................... 0 *
Richard C. Gozon(3) Director............................... 15,000 *
Lawrence C. Karlson(3) Chairman............................... 15,000 *
John F. McNamara(7) Director............................... 346,500 1.5%
George H. Strong(3) Director............................... 10,000 *
James A. Urry(4) Director............................... 0 *
Barton J. Winokur(3) Director............................... 29,750 *
All directors and named executive officers as a group
(11 persons)(2)(3)(4)................................................ 942,120 4%
399 Venture Partners, Inc. ("VPI")(5)(6)............................... 6,721,073 28.4%
1209 Orange Street
Wilmington, DE 19801
</TABLE>
- ---------------
* Less than 1%.
(1) Based on information furnished to the Company by the respective
stockholders. Except as indicated below, the Company is informed that the
beneficial owners have sole voting and investment power over the shares
shown opposite their names.
(2) Common Shares and the percent of class listed as being beneficially owned by
the Company's named executive officers include outstanding options to
purchase Common Stock which are exercisable within
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<PAGE> 5
60 days of January 15, 1998, as follows: Mr. Yost -- 48,750 shares; Mr.
Flowers -- 47,500 shares; and Mr. Hilzinger -- 31,000 shares.
(3) Common Shares and the percent of class listed as being beneficially owned by
the Company's Non-employee Directors include outstanding options to
purchase Common Stock which are exercisable within 60 days of January 15,
1998, as follows: Mr. Bruckmann -- 10,000 shares; Mr. Gozon -- 10,000
shares; Mr. Karlson -- 10,000 shares; Mr. Strong -- 10,000 shares; and Mr.
Winokur -- 10,000 shares. Pursuant to the Non-Employee Director Stock
Option Plan adopted by the Company in fiscal 1995, Messrs. Bruckmann,
Gozon, Karlson and Strong each received options, with limitations on
exercise, to acquire 5,000 shares of Common Stock. None of these options
are currently exercisable, and the options are not included in the
information set forth in the above table.
(4) Messrs. Delaney and Urry disclaim beneficial ownership relating to the
shares of Common Stock held by VPI.
(5) Includes 2,746,560 shares of Class B Common Stock, which is convertible into
Common Stock, owned by VPI.
(6) VPI disclaims beneficial ownership as to shares of Common Stock held by
investors currently or previously affiliated with VPI. VPI is a
wholly-owned, indirect subsidiary of Citicorp.
(7) Mr. McNamara resigned from the Board on January 22, 1998.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors consists of eight (8) directors each
serving annual terms. It is proposed that eight (8) directors be elected to hold
office until the next annual meeting of stockholders and until their successors
have been elected and qualified. Unless otherwise specified by the stockholders,
it is intended that the shares represented by proxies will be voted for the
eight (8) nominees for director listed below. All of the nominees are presently
serving as directors of the Company. Each nominee for director has consented to
his nomination and, so far as the Board of Directors and management are aware,
will serve as a director if elected. However, if any of the nominees should
become unavailable prior to the election, the shares represented by proxies may
be voted for the election of such other persons as the Board of Directors may
recommend, unless the Board of Directors chooses to reduce the number of
directors to be elected. There is no family relationship between any of the
directors or nominees. There is no arrangement or understanding between any
director or nominee for director and any other person(s) pursuant to which he
was or is to be selected as a director or nominee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE ELECTION OF THE NOMINEES SET FORTH IN THIS PROPOSAL. PROXIES WILL BE SO
VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS. THE EIGHT (8)
NOMINEES RECEIVING THE HIGHEST NUMBER OF AFFIRMATIVE VOTES OF THE SHARES OF
COMMON STOCK PRESENT OR REPRESENTED AND ENTITLED TO BE VOTED SHALL BE ELECTED AS
DIRECTORS.
BRUCE C. BRUCKMANN Age 44 Director since 1992
Managing Director, Bruckmann, Rosser, Sherrill & Co., Inc.
Mr. Bruckmann previously served as a director of the Company from 1989
to December 1991, and as a director of AmeriSource Corporation from 1988 to
December 1991, prior to his reelection as a director of the Company in
1992. Mr. Bruckmann is a Managing Director of Bruckmann, Rosser, Sherrill &
Co., Inc. Until January 1995, Mr. Bruckmann was a Managing Director of
Citicorp Venture Capital
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<PAGE> 6
Ltd. and of Court Square Capital Limited. Mr. Bruckmann serves as a
director of Chromcraft Revington, Inc., Cort Business Services Corporation,
Jitney Jungle Stores of America, Inc., Mohawk Industries, Inc., Town Sports
International, Inc. and Anvil Knitwear, Inc. Mr. Bruckmann is a member of
the Compensation Committee of the Company's Board of Directors.
MICHAEL A. DELANEY Age 43 Director since 1995
Vice President, Citicorp Venture Capital Ltd.
Mr. Delaney has been a Vice President of Citicorp Venture Capital Ltd.
since 1989. Mr. Delaney is also a director of GVC Holdings, JAC Holdings,
Delco Remy International, Inc., Enterprise Media Corporation, SC
Processing, Inc., Triumph Group, Inc., Cort Business Services Corporation,
Palomar Technologies Corporation, MSX International, IKS Corporation, CLARK
Material Handling Corporation and Aetna Industries Inc. Mr. Delaney is a
member of the Compensation Committee of the Company's Board of Directors.
RICHARD C. GOZON Age 59 Director since 1994
Executive Vice President, Weyerhaeuser Company
Mr. Gozon has been Executive Vice President of Weyerhaeuser Company
since June 1994. Mr. Gozon formerly was President and Chief Operating
Officer of Alco Standard Corporation from 1988 to 1993. He is also a
director of UGI Corp. and Triumph Group, Inc.. Mr. Gozon is Chairman of the
Compensation Committee and a member of the Audit Committee of the Company's
Board of Directors.
LAWRENCE C. KARLSON Age 55 Director since 1994
Non-executive Chairman of the Board of Directors of AmeriSource Health
Corporation and AmeriSource Corporation; Private Investor
In addition to serving as the Non-executive Chairman of the Board
since May 1997, Mr. Karlson is a private investor and serves as a director
of CDI Corporation and Spectra-Physics Lasers, Inc. Mr. Karlson is a member
of the Capital Appropriations Committee of the Company's Board of
Directors.
GEORGE H. STRONG Age 71 Director since 1994
Private Investor
Mr. Strong is a private investor and serves as a director of
Corefunds, Health South Rehabilitation Corp. and Integrated Health
Services, Inc. Mr. Strong is Chairman of the Audit Committee of the
Company's Board of Directors.
JAMES A. URRY Age 44 Director since 1995
Vice President, Citicorp Venture Capital Ltd.
Mr. Urry has been with Citibank, N.A. since 1981, serving as a Vice
President since 1986. He has been a Vice President of Citicorp Venture
Capital Ltd. since 1989. He is also a director of York International
Corporation, IKS Corporation, Hancor Holdings, CLARK Material Handling
Corporation, Cort Business Services Corporation, Airxcel, Inc. and Palomar
Technologies Corporation. Mr. Urry is a member of the Compensation
Committee of the Company's Board of Directors.
4
<PAGE> 7
BARTON J. WINOKUR Age 57 Director since 1990
Chairman, Dechert Price & Rhoads
Mr. Winokur is Chairman of the law firm of Dechert Price & Rhoads and
serves as a director of CDI Corporation and Davco Restaurants, Inc. Mr.
Winokur is Chairman of the Capital Appropriations Committee and a member of
the Audit Committee of the Company's Board of Directors.
R. DAVID YOST Age 50 Director since 1997
President and Chief Executive Officer, AmeriSource Health Corporation and
AmeriSource Corporation
Mr. Yost has been President and Chief Executive Officer and a director
of the Company since May 1997. Mr. Yost previously served as Executive Vice
President -- Operations of the Company since 1995. Prior to that, Mr. Yost
served as Group President -- Central Region of the Company since 1989. Mr.
Yost is a member of the Capital Appropriations Committee of the Company's
Board of Directors.
BOARD OF DIRECTORS
The Board of Directors of the Company held fourteen (14) meetings during
fiscal year 1997. All of the directors attended 75% or more of the meetings of
the Board of Directors and the Committees of the Board of Directors on which
they served.
COMMITTEES OF THE BOARD OF DIRECTORS
The standing committees of the Board of Directors are the Compensation,
Audit, and Capital Appropriations Committees.
The Compensation Committee reviews and recommends actions to the Board of
Directors on such matters as salary and other compensation of officers and the
administration of certain benefit plans. The Compensation Committee also has the
authority to administer, grant and award stock and stock options under the
Company's incentive equity plans. The Compensation Committee held four (4)
meetings during fiscal year 1997. The current Chairman of the Compensation
Committee is Mr. Gozon and its current members are Messrs. Delaney, Urry and
Bruckmann.
The Audit Committee meets with management, the Company's independent
auditors and its internal audit department to consider the adequacy of the
Company's internal controls and other financial reporting matters. The Audit
Committee recommends to the Board of Directors the engagement of the Company's
independent auditors, discusses with the independent auditors their audit
procedures, including the proposed scope of their audit, the audit results and
the accompanying management letters and, in connection with determining their
independence, reviews the services performed by the independent auditors. The
Audit Committee held six (6) meetings during fiscal year 1997. The current
Chairman of the Audit Committee is Mr. Strong and its current members are
Messrs. Gozon and Winokur.
The Capital Appropriations Committee authorizes and approves investments by
the Company, other than investments in the ordinary course of business. The
Capital Appropriations Committee did not hold any meetings during fiscal year
1997. The current Chairman of the Capital Appropriations Committee is Mr.
Winokur and its current members are Messrs. Yost and Karlson.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Executive Compensation Program. The role of the Compensation Committee
(the "Compensation Committee") is to recommend, establish, oversee and direct
the Company's executive compensation policies
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<PAGE> 8
and programs and to recommend to the Board of Directors compensation for
executive officers. In carrying out this role, we believe it is important to
align executive compensation with Company values and objectives, business
strategies, management initiatives, business financial performance and enhanced
stockholder value.
Our Compensation Committee is comprised of independent outside directors,
none of whom is or was an officer or employee of the Company or its
subsidiaries. Periodically we solicit and receive recommendations and advice
from independent third-party compensation consultants who have acted in this
capacity since 1994.
Our executive compensation program is designed to attract and retain key
executives with outstanding abilities and to motivate them to perform to the
full extent of their abilities. We believe that executives should have a greater
portion of their compensation at risk than other employees, and that executive
compensation should be tied directly to the performance of the business and be
aligned with benefits realized by the Company's stockholders.
Compensation for Company executives consists of both cash and equity-based
opportunities. The annual cash compensation consists of (i) base salary and (ii)
annual incentive opportunity. Equity-based opportunities are provided on a
long-term basis through the Company's stock option plans.
The Compensation Committee's compensation consultants have advised that the
salaries when coupled with annual incentive awards paid to the Company's chief
executive officer and other executive officers are consistent with industry
competitive practices. In making this determination, the consultants analyzed
the compensation payable at the pharmaceutical wholesale distribution companies
included in the Peer Group Index described in the discussion of Stockholder
Return Performance below, and also relied upon survey data covering a broader
range of wholesale and distribution companies. The Compensation Committee has
reviewed the base salaries of executive officers making adjustments that, in its
judgment, are appropriate. The Compensation Committee reviews executive officer
salaries annually, to make adjustments based on judgments of past performance,
changed job duties, scope and responsibilities, competitive pay data and
expected future contributions of each executive officer.
The Compensation Committee also oversees the Company's annual incentive
payments to executive officers. Each year we establish challenging objectives
based on business prospects for that year. For Messrs. Yost, Flowers and
Hilzinger, and for the other senior members of management, annual incentive
opportunities are based on achieving both current financial performance
objectives and individual strategic and operating objectives related to
longer-term earnings, with greater weight given to the current financial
performance objectives. Following the end of each fiscal year, after completion
of the audit of the Company's financial statements, the Compensation Committee
reviews business results and individual performance of each executive officer
and each senior member of management, and determines and recommends to the Board
of Directors annual incentive payments. In 1997, the Company exceeded its
financial performance goals. Strategic and operating objectives were met by
Messrs. Yost, Flowers and Hilzinger as well. Consequently, Messrs. Yost, Flowers
and Hilzinger earned their bonuses attributable to their respective financial
objectives and to their strategic and operating objectives.
The Company's long-term equity-based 1995 Option Plan was approved by the
Company's Board of Directors in February 1995 and approved by the stockholders
in March 1995, prior to the Company's public offering of its Common Stock. The
Compensation Committee oversees the 1995 Option Plan for executives. The 1995
Option Plan consists of non-qualified stock option grants, generally to be made
only at one time each year. The Compensation Committee believes that grants made
under the 1995 Option Plan will focus executives on increasing stockholder
value. No options were granted pursuant to the 1995 Option Plan to the named
executive officers in fiscal year 1997.
The Company's long-term equity-based 1996 Option Plan was approved by the
Company's Board of Directors in November 1996, and approved by the stockholders
in February 1997. The Compensation
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<PAGE> 9
Committee oversees the 1996 Option Plan for executives. The 1996 Option Plan
consists of non-qualified stock option grants, generally to be made only at one
time each year. The Compensation Committee believes that grants made under the
1996 Option Plan will focus executives on increasing stockholder value. A total
of 65,000 options were granted pursuant to the 1996 Option Plan to the named
executive officers in fiscal year 1997 as follows: 25,000 shares to Mr. Yost;
20,000 shares to Mr. Flowers; 20,000 shares to Mr. Hilzinger; and 40,000 shares
to Mr. McNamara. See "Management Stock Options." These awards are within the
same range that the Compensation Committee's compensation consultant advised was
reasonable for executive officers.
Management has initiated new stock ownership guidelines to support the
objective of closely aligning the interests of management level employees with
those of stockholders. The guidelines provide that within two fiscal years,
senior management members should attain an investment position in AmeriSource
stock that is equal to one to five times their base salary, depending on the
position of the executive.
1996-1997 Chief Executive Officer Compensation. The Compensation Committee
determined the 1996-1997 compensation for John F. McNamara, Chief Executive
Officer prior to May 19, 1997, and R. David Yost, Chief Executive Officer
thereafter, in accordance with the above discussion.
Deductibility of Compensation. Section 162(m) of the Internal Revenue Code
imposes a $1 million limit on the deductibility of compensation paid to certain
executive officers of public companies, unless the compensation meets certain
requirements for "performance based" compensation. The Compensation Committee
believes that all of the compensation awarded to the Company's executive
officers will be fully deductible in accordance with these rules.
COMPENSATION COMMITTEE
Richard C. Gozon, Chairman
Bruce C. Bruckmann
Michael A. Delaney
James A. Urry
COMPENSATION OF DIRECTORS
Directors who are full-time employees of the Company receive no additional
compensation for services as a director. Each outside director of the Company is
paid an annual fee of $15,000 for services as a director of the Company, plus an
additional fee of $1,000 for attendance in person at each meeting of the Board
of Directors in excess of four annually, and $500 per telephonic meeting of the
Board of Directors. Mr. Karlson is paid an annual fee of $50,000 for his
services as Chairman. There are no fees paid for attendance at committee
meetings.
Outside directors of the Company, other than Messrs. Delaney and Urry, may
also be entitled to receive stock options for Common Stock pursuant to the
AmeriSource Health Corporation Non-Employee Directors Stock Option Plan (the
"1996 Directors Plan"). The 1996 Directors Plan provides for non-discretionary,
automatic grants on an annual basis of an option to purchase shares of Common
Stock to certain non-employee directors. Such options become immediately fully
exercisable on the grant dates. The option exercise price is equal to 100% of
the fair market value of the Common Stock on the date of grant of the option. An
aggregate of 50,000 shares of Common Stock have been reserved for issuance under
the 1996 Directors Plan. Options granted to directors under the 1996 Directors
Plan are treated as nonstatutory stock options under the Code. The 1996
Directors Plan is administered by a committee of disinterested directors.
The 1996 Directors Plan permits, with the consent of the committee and if
permitted by the restrictions in the Company's financing agreements, the
exercise of options by delivery of shares of Common Stock owned by the option
holder, by withholding of such shares of Common Stock upon exercise of the
option in lieu of or in addition to cash or by financing made available by the
Company. The 1996 Directors Plan permits the
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<PAGE> 10
committee to adjust the number and kind of shares subject to options in the
event of a reorganization, merger, consolidation, recapitalization,
reclassification, stock split, stock dividend or combination of shares. The
Board of Directors may amend the 1996 Directors Plan at any time; provided,
however, that stockholder approval is required for any amendment to the 1996
Directors Plan that increases the number of shares for which options may be
granted or changes in any material respect the limitations or provisions of the
options subject to the 1996 Plan. However, no action by the Board of Directors
or stockholders may alter or impair any option previously granted to an option
holder without such option holder's consent.
During fiscal year 1997, the Company made the grant of stock options under
the 1996 Directors Plan as follows: Messrs. Bruckmann, Gozon, Karlson, Strong
and Winokur were each granted options to purchase 5,000 shares of Common Stock
at $48.625 per share, all of which were outstanding and exercisable at September
30, 1997.
Mr. McNamara received consulting payments of $188,700 during fiscal 1997.
See "Resignation of President, Chief Executive Officer and Chairman."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries. To the Company's knowledge,
there were no other relationships involving members of the Compensation
Committee requiring disclosure in this section of this Proxy Statement.
8
<PAGE> 11
MANAGEMENT
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE TITLE
- ----------------------------------------------- --- --------------------------------------------
<S> <C> <C>
R. David Yost.................................. 50 President and Chief Executive Officer
David M. Flowers............................... 50 Executive Vice President, Marketing
Kurt J. Hilzinger.............................. 37 Sr. Vice President, Chief Financial Officer
</TABLE>
Mr. Yost is described above as a nominee for director.
Mr. Flowers has been Executive Vice President, Marketing since December
1995. Prior to that he held the position of Group President -- Eastern Region
since 1989.
Mr. Hilzinger has served as Sr. Vice President, Chief Financial Officer
since 1997. Prior to that he served as Vice President, Chief Financial Officer
and Treasurer since February 1995. Prior to that he served as Vice President,
Finance, and Treasurer since October 1993, and as Vice President, Financial
Planning since March 1991.
There are no arrangements or understandings between any of the officers and
any other person pursuant to which he was elected an officer. There are no
family relationships between any director, executive officer, or nominee for
director.
SUMMARY COMPENSATION OF NAMED EXECUTIVE OFFICERS
The following table sets forth, for fiscal years ending September 30, 1995,
1996, and 1997, certain information regarding the cash compensation paid by the
Company, as well as certain other compensation paid or accrued for those years,
to each of the named executive officers of the Company, in all capacities in
which they served:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION
----------------------------------- AWARDS
OTHER ------------------------ PAYOUTS
ANNUAL RESTRICTED SECURITIES ---------- ALL OTHER
NAME AND PRINCIPAL COMPENSA- STOCK UNDERLYING LTIP COMPENSA-
POSITION YEAR SALARY($) BONUS($)(1) TION($) AWARD(S)($) OPTIONS(#) PAYOUTS($) TION($)
- ------------------------- ---- --------- ----------- --------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. David Yost............ 1997 359,600 315,000 -- -- 25,000 -- 40,806 (2)
President and Chief 1996 238,350 235,000 -- -- 20,000 -- 34,544 (2)
Executive Officer 1995 212,235 125,000 -- -- 65,000 -- 10,759 (2)
David M. Flowers......... 1997 264,600 253,200 -- -- 20,000 -- 42,050 (3)
Executive Vice 1996 224,600 200,000 -- -- 20,000 -- 36,635 (3)
President, 1995 202,145 110,000 -- -- 65,000 -- 13,095 (3)
Marketing
Kurt J. Hilzinger........ 1997 200,000 197,175 -- -- 20,000 -- 10,070 (4)
Sr. Vice President, 1996 160,167 150,000 -- -- 12,000 -- 5,842 (4)
Chief Financial Officer 1995 140,000 80,000 -- -- 40,000 -- 6,500 (4)
John F. McNamara......... 1997 186,517 220,000 -- -- 40,000 -- 2,739,485(5)
Chairman, President, 1996 444,600 445,000 -- -- 40,000 -- 56,703 (5)
and Chief Executive 1995 414,780 250,000 -- -- 100,000 -- 53,921 (5)
Officer (through 5/19/97)
</TABLE>
- ---------------
(1) The amounts shown consist of cash bonuses earned in the fiscal year
identified but paid in the subsequent fiscal year.
(2) "All Other Compensation" for Mr. Yost in 1997, 1996, and 1995, respectively,
includes the following: (i) $3,209, $2,421, and $2,209 in club dues, (ii)
$3,000, $1,900, and $1,800 in tax return preparation fees, (iii) $9,000,
$5,400, and $6,750 in contributions under the Company's Employee Investment
Plan,
9
<PAGE> 12
(iv) for fiscal 1997 and 1996, respectively, $1,497 and $144 for spousal
travel expenses, (v) for fiscal 1997, $1,500 for personal use of a
Company-owned condominium, (vi) for fiscal 1997 and 1996, $22,600 per year
in premiums for a split dollar life insurance policy, and (vii) for fiscal
1996, $2,079 in miscellaneous items.
(3) "All Other Compensation" for Mr. Flowers in 1997, 1996, and 1995,
respectively, includes the following: (i) $5,833, $7,885, and $6,345 in club
dues, (ii) for fiscal 1997, $4,200 in tax preparation fees, (iii) $9,000,
$5,400, and $6,750 in contributions under the Company's Employee Investment
Plan, (iv) for fiscal 1997, $417 for spousal travel expenses, (v) for fiscal
1997 and 1996, $22,600 per year in premiums paid for a split dollar life
insurance policy, and (vi) for fiscal 1996, $750 in miscellaneous items.
(4) "All Other Compensation" for Mr. Hilzinger in 1997, 1996 and 1995,
respectively, includes the following: (i) $10,070, $5,172, and $6,300 in
contributions under the Company's Employee Investment Plan, (ii) in fiscal
1995, $200 in club dues, and (iii) in fiscal 1996, $670 for spousal travel
expenses.
(5) "All Other Compensation" for Mr. McNamara in 1997, 1996, and 1995,
respectively, includes the following: (i) for fiscal 1996 and 1995,
respectively, $698, and $40,675 in club dues, (ii) $4,000, $4,900, and
$1,350 in tax return preparation fees, (iii) $9,000, $5,400, and $6,750 in
contributions under the Company's Employee Investment Plan, (iv) $2,561,
$6,206, and $2,438 for spousal travel expenses, (v) $850, $5,125 and $2,708
for personal use of a Company-owned condominium, (vi) for fiscal 1997 and
1996, $34,374 per year for premiums for a life insurance policy; and (vii)
for fiscal 1997, $2,500,000 and a payment of $188,700 relating to Mr.
McNamara's consulting arrangement. Mr. McNamara's consulting arrangement is
more fully described herein. See "Resignation of President, Chief Executive
Officer and Chairman."
STOCK OPTIONS
OPTION GRANTS IN FISCAL YEAR 1997
The following table sets forth certain information with respect to options
granted to and exercised by the named executive officers of the Company during
fiscal year 1997. The information set forth in these tables relates to options
granted to and exercised by the named executive officers of the Company to
purchase shares of Common Stock under the 1996 Option Plan.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS EXERCISE
OPTIONS/ GRANTED TO OR BASE
SARS EMPLOYEES IN PRICE EXPIRATION GRANT DATE
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE PRESENT VALUE($)(2)
- -------------------------------- ----------- ------------- ------- ------------------ -------------------
<S> <C> <C> <C> <C> <C>
R. David Yost................... 20,000(1) 5.25% $48.625 November 12, 2006 379,400(3)
5,000(2) 1.31% $49.375 February 26, 2007 96,300(4)
David M. Flowers................ 20,000(1) 5.25% $48.625 November 12, 2006 379,400(3)
Kurt J. Hilzinger............... 20,000(1) 5.25% $48.625 November 12, 2006 379,400(3)
John F. McNamara................ 40,000(1) 10.49% $48.625 November 12, 2006 758,800(3)
</TABLE>
- ---------------
(1) The Options granted under the 1996 Option Plan become exercisable at a rate
of 25% each year, beginning November 12, 1997.
(2) The option granted under the 1996 Option Plan becomes exercisable at a rate
of 25% each year, beginning February 26, 1998.
(3) Present values were calculated using the Black-Scholes American option
valuation method. The actual value, if any, that an executive officer may
receive is dependent on the excess of the stock price over the
10
<PAGE> 13
exercise price. Use of this model should not be viewed as a forecast of the
future performance of the Company's stock price. The estimated grant date
present value of each stock option is $18.97 based on the following defined
option terms and assumptions: (a) a stock price of $48.625; (b) an exercise
price of $48.625; (c) an expected life of 5 years; (d) a risk-free interest
rate of 6.00%, which represents the yield on Treasury Bonds with maturity
dates corresponding to that of the options; (e) a dividend yield of 0%
representing the stock's current yield; and (f) a stock price volatility
rate of .321, which reflects how much the stock price varied on a weekly
basis since the initial public offering of the Company's Common Stock on
April 4, 1995.
(4) Present values were calculated using the Black-Scholes American option
valuation method. The actual value, if any, that an executive officer may
receive is dependent on the excess of the stock price over the exercise
price. Use of this model should not be viewed as a forecast of the future
performance of the Company's stock price. The estimated grant date present
value of this stock option is $19.26 based on the following defined option
terms and assumptions: (a) a stock price of $49.375; (b) an exercise price
of $49.375; (c) a term of 10 years; (d) a risk-free interest rate of 6.00%,
which represents the yield on Treasury Bonds with maturity dates
corresponding to that of the options; (e) a dividend yield of 0%
representing the stock's current yield; and (f) a stock price volatility
rate of .321, which reflects how much the stock price varied on a weekly
basis since the initial public offering of the Company's Common Stock on
April 4, 1995.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997 AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information regarding the number of
exercised options and the value of unexercised in-the-money options held by the
named executive officers of the Company as of September 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END (#) AT FY-END ($)
VALUE -------------- --------------------
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE (1)
- --------------------------------------------- --------------- --------- -------------- --------------------
<S> <C> <C> <C> <C>
R. David Yost................................ 0 0 37,500/72,500 1,368,906/1,914,844
David M. Flowers............................. 0 0 37,500/67,500 1,368,906/1,869,531
Kurt J. Hilzinger............................ 0 0 23,000/49,000 840,063/1,281,938
John F. McNamara............................. 60,000(2) 1,550,000 0 0
</TABLE>
- ---------------
(1) Value calculated as the difference between the fair market value of the
Common Stock on September 30, 1997 and the option exercise price.
(2) Options exercised on August 18, 1997; remaining unexercisable options
expired.
PENSION PLANS
AMERISOURCE CORPORATION PARTICIPATING COMPANIES PENSION PLAN. AmeriSource
has a pension plan providing for continuation of pension benefit coverage for
salaried sales and office employees of AmeriSource previously covered under Alco
Standard's Participating Companies Pension Plan. The pension plan also covers
other salaried, sales, and office employees of AmeriSource who meet the plan's
eligibility requirements. Under AmeriSource's pension plan, the executive
officers compensated by AmeriSource are entitled to annual pension benefits at
age 65 equal to the number of years of credited service multiplied by 1% of
average annual compensation earned during the consecutive three years within the
last ten years of participation in the pension plan which yield the highest
average.
11
<PAGE> 14
All pension plan costs are paid by AmeriSource and the pension plan, and
benefits are funded on an actuarial basis. Compensation earned by executive
officers for purposes of the plan includes salaries and bonuses set forth in the
cash compensation table under "Summary Compensation Table" above, except that
compensation recognized under the plan may not exceed certain limits, as
required by the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Code. For 1997, the compensation limit was $160,000.
The years of credited service (with AmeriSource, predecessor companies or
Alco Standard) as of October 1, 1997 for each of the named executive officers of
the Company were R. David Yost -- 23.08 years; David M. Flowers -- 21.75 years;
Kurt J. Hilzinger -- 6.58 years; and John F. McNamara -- 16.00 years.
As required by ERISA and the Code, the pension plan limits the maximum
annual benefits payable at Social Security retirement age as a single life
annuity to the lesser of $90,000, with cost-of-living adjustments, or 100% of a
plan participant's average total taxable earnings during his highest three
consecutive calendar years of participation, subject to certain exceptions for
benefits which accrued prior to September 30, 1988. For 1997, the annual benefit
limit was $125,000.
SUPPLEMENTAL RETIREMENT PLAN. AmeriSource also has a Supplemental
Retirement Plan (the "Supplemental Plan"). Coverage under the Supplemental Plan
is limited to participants in AmeriSource's pension plan whose benefits under
the pension plan are limited due to (a) restrictions imposed by the Code on the
amount of benefits to be paid from a tax-qualified plan, (b) restrictions
imposed by the Code on the amount of an employee's compensation that may be
taken into account in calculating benefits to be paid from a tax-qualified plan,
or (c) any reductions in the amount of compensation taken into account under the
pension plan due to an employee's participation in certain deferred compensation
plans sponsored by AmeriSource or one of its subsidiaries. The Supplemental Plan
provides for a supplement to the annual pension benefit paid under AmeriSource's
pension plan to participants who attain early or normal retirement under such
pension plan or who suffer a total and permanent disability while employed by
AmeriSource or one of its subsidiaries and to the pre-retirement death benefits
payable under the pension plan on behalf of such participants who die with a
vested interest in AmeriSource's pension plan. The amount of the supplement will
be the difference, if any, between the pension or pre-retirement death benefit
paid under AmeriSource's pension plan and that which would otherwise have been
payable but for the restrictions imposed by the Code and any reduction in the
participant's compensation for purposes of AmeriSource's pension plan due to his
participation in certain deferred compensation plans of AmeriSource or one of
its subsidiaries.
The following table shows estimated annual retirement benefits that would
be payable to participants under AmeriSource's pension plan and, if applicable,
the Supplemental Plan, upon normal retirement at age 65 under various
assumptions as to final average annual compensation and years of credited
service and on the assumption that benefits will be paid in the form of a single
life annuity. The benefit amounts listed are not subject to any deduction for
Social Security benefits.
12
<PAGE> 15
ESTIMATED ANNUAL RETIREMENT BENEFITS ($)
<TABLE>
<CAPTION>
FINAL AVERAGE
COMPENSATION 10 20 30 35
-------------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
100,000.................................... 10,000 20,000 30,000 35,000
150,000.................................... 15,000 30,000 45,000 52,500
200,000.................................... 20,000 40,000 60,000 70,000
250,000.................................... 25,000 50,000 75,000 87,500
300,000.................................... 30,000 60,000 90,000 105,000
500,000.................................... 50,000 100,000 150,000 175,000
600,000.................................... 60,000 120,000 180,000 210,000
700,000.................................... 70,000 140,000 210,000 245,000
800,000.................................... 80,000 160,000 240,000 280,000
900,000.................................... 90,000 180,000 270,000 315,000
1,000,000................................... 100,000 200,000 300,000 350,000
</TABLE>
OTHER FORMS OF COMPENSATION
EMPLOYEE INVESTMENT PLAN. In fiscal year 1986, AmeriSource adopted a stock
participation plan pursuant to Section 401(k) of the Code, which plan was
amended and restated as a 401(k) Employee Investment Plan (the "EIP") effective
January 1, 1989. Participation in the EIP is generally available to salaried,
office, sales and certain hourly employees of AmeriSource. As of December 31,
1995, participation in the EIP was available to approximately 2,037 employees,
of whom approximately 1,592 were participants. A non-highly compensated
employee, as defined by the Code, that participates in the EIP may contribute
between 2% and 18% of his or her salary on a "before-tax" basis, entitling the
participant to contributions by his or her employer in an amount equal to
one-half of the participant's contributions up to 6% of his or her salary.
Highly compensated employees, as defined by the Code, may contribute between 2%
and 8% of his or her salary on a "before-tax" basis and may receive matching
employer contributions on up to 6% of his or her salary of less than one-half of
their participant contributions made after April 1, 1993. An additional employer
matching contribution, in an amount to be determined by AmeriSource but not to
exceed one-half of the participant's contributions up to 6% of his or her
salary, may be made to the EIP. The combined amount of employer matching
contributions for the plan year ending December 31, 1996 was 50% of each
participant's contribution. For calendar year 1997, a participant's
contributions could not exceed $9,500. The cost of the matching employer
contributions is ultimately charged to the division or subsidiary of AmeriSource
employing the participant. Matching employer contributions to the EIP are held
in trust and vest to the benefit of the participant over a period of five years,
measured from the date the participant's employment commenced (as long as the
participant continues as an employee). The EIP is administered by trustees who
have selected mutual funds managed by Fidelity Investments and AmeriSource
Health Corporation common stock among which participants may direct the
investment of their entire account balances.
DEFERRED COMPENSATION PLAN. In September 1985, AmeriSource adopted a
deferred compensation plan (the "1985 Deferred Compensation Plan") which
permitted eligible employees of AmeriSource to defer a portion of their
compensation during a period of up to 48 months after October 1, 1985 and, in
return, to receive retirement or survivor benefits, and in certain
circumstances, disability benefits. The amount of the benefits the participant
will be entitled to receive is based on the total number of years the
participant remains employed by AmeriSource or an affiliated company. A
participant's interest in the benefits vests over a period of five years. Mr.
McNamara is a participant in the 1985 Deferred Compensation Plan. Assuming Mr.
McNamara retires from employment with AmeriSource at or after age 65, his
monthly retirement benefits under the 1985 Deferred Compensation Plan would be
$2,901, payable over a 15-year period.
AGREEMENTS WITH EMPLOYEES
Effective August 1, 1997, the Company entered into employment contracts
(the "Employment Contracts") with Messrs. Yost, Flowers, and Hilzinger. The
Employment Contracts provide for three year terms
13
<PAGE> 16
of employment, each subject to a one year extension at the Company's discretion,
annual base salaries substantially commensurate with present levels, and
incentive compensation, bonuses and benefits in accordance with the Company's
then prevailing practices.
Each Employment Contract includes customary termination for cause
provisions, whereupon the Company's obligations under the respective Employment
Contract would cease. By a majority vote of the Board of Directors, the Company
would also be able to terminate the employment of the employee without cause,
whereupon the Company would remain obligated to pay the greater of (i) one year
of such employee's then current salary and (ii) the base salary of the employee
for the balance of the term of the Employment Contract. The Employment Contracts
also provide for acceleration of all or a portion of the employee's Company
stock options then outstanding upon a termination without cause that occurs
after September 5, 1999 and prior to other circumstances. Each Employment
Contract prohibits direct and indirect competition with the Company for a period
of one year after termination of employment. The Employment Contracts also
contain customary prohibitions against the disclosure of confidential
information and the solicitation of the Company's employees and customers.
The Employment Contracts provide for certain payments and other benefits
consequent to the termination of the Employment Contracts upon a change of
control of the Company. The Employment Contracts were filed with the Securities
and Exchange Commission as exhibits to the Company's Annual Report on Form 10-K
for the period ending September 30, 1997. The foregoing description is qualified
in its entirety by reference to such exhibits.
RESIGNATION OF PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN
On May 19, 1997, Mr. McNamara resigned as President, Chief Executive
Officer and Chairman of the Company. Mr. McNamara continued as director of the
Company until his resignation from the Board on January 22, 1998. In October of
1997, the Company and Mr. McNamara entered into a Consulting Agreement (the
"Consulting Agreement") whereby Mr. McNamara received a one time payment of
$2,500,000 and will receive $500,000 per year payment (the "Yearly Payment") for
the period beginning May 19, 1997 and ending June 1, 2000. Mr. McNamara received
$188,700 during fiscal 1997 pursuant to such arrangement. Mr. McNamara is
entitled to participate in certain benefits programs during the term of the
agreement. The Consulting Agreement was filed with the Securities and Exchange
Commission as an exhibit to the Company's Annual Report on Form 10-K for the
period ending September 30, 1997. The foregoing description is qualified in its
entirety by reference to such exhibit.
DIRECTORS FOLLOWING PROPOSED MERGER
Pursuant to the Agreement and Plan of Merger by and among McKesson
Corporation ("McKesson"), Patriot Acquisition Corp. and the Company, as amended
(the "Merger Agreement"), upon consummation of the proposed merger, the
Company's stockholders will become stockholders of McKesson, which will be under
the direction of the board of directors of McKesson. Pursuant to the Merger
Agreement, upon consummation of the proposed merger, the Board of Directors of
McKesson is obligated take all action necessary to elect James Urry, Michael
Delaney and R. David Yost as directors of McKesson. James Urry, Michael Delaney
and R. David Yost are each a current director of the Company and are each
nominated for director herein.
STOCKHOLDER RETURN PERFORMANCE
The following graph compares the percentage change in cumulative total
stockholder return on the Company's Common Stock against the cumulative total
return of the Standard & Poor's 500 Index and an index of peer companies
selected by the Company (the "Peer Group Index") from the market close on April
4, 1995 to September 30, 1997. April 4, 1995 is the first trading date on which
the Company's Common Stock was registered under Section 12 of the Exchange Act.
Cumulative total return to stockholders is
14
<PAGE> 17
measured by dividing (x) the sum of (i) total dividends for the period (assuming
dividend reinvestment) plus (ii) per-share price change for the period by (y)
the share price at the beginning of the period. The graph is based on an
investment of $100 at the market close on April 4, 1995 in the Common Stock and
in each index.
COMPARISON OF 30 MONTH CUMULATIVE TOTAL RETURN*
AMONG AMERISOURCE HEALTH CORPORATION, THE S & P 500 INDEX
AND A PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD AMERISOURCE
(FISCAL YEAR COVERED) HEALTH CORP PEER GROUP S&P 500
<S> <C> <C> <C>
4/4/95 100 100 100
SEP-95 129 109 117
SEP-96 212 140 141
SEP-97 278 222 198
</TABLE>
The Peer Group Index (which is weighted on the basis of market
capitalization) consists of the Company and the following companies which were
engaged primarily in the wholesale drug distribution business: Bergen Brunswig
Corporation, Bindley Western Industries, Inc., Cardinal Health, Inc., McKesson
Corporation, and Owens & Minor, Inc. FoxMeyer Corporation, which was included in
the Peer Group Index last year, was acquired by McKesson Corporation in November
1996.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
During fiscal year 1997, Dechert Price & Rhoads performed, and currently
does perform, legal services for the Company. Barton J. Winokur, Chairman of
Dechert Price & Rhoads and a director of the Company, beneficially owns 29,750
shares of the Common Stock of the Company.
INDEPENDENT PUBLIC AUDITORS
Since 1988, the Company has retained Ernst & Young LLP as its independent
public auditors and it intends to retain Ernst & Young LLP for the current year
ending September 30, 1998. Representatives of Ernst & Young LLP are expected to
be present at the Annual Meeting, and such representatives will have an
opportunity at the Annual Meeting to make a statement if they desire to do so
and will be available to respond to appropriate questions.
15
<PAGE> 18
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities (the "10% Stockholders") to file reports of
ownership and changes in ownership of Common Stock and other equity securities
of the Company with the Securities and Exchange Commission (the "SEC") and the
New York Stock Exchange. Officers, directors and 10% Stockholders are required
by SEC regulation to furnish the Company with copies of all forms they file
under Section 16(a). Based solely on its review of the copies of such forms
received by it and written representations from certain reporting persons that
no other reports were required from those persons, the Company believes that
during the period October 1, 1996 through September 30, 1997, its officers,
directors and 10% Stockholders complied with all applicable Section 16(a) filing
requirements, except that Mr. Yost inadvertently filed a Statement of Changes in
Beneficial Ownership on Form 5 for the year ended September 30, 1996, reflecting
a disposition of shares of the Company's Common Stock, after the applicable
filing period.
1999 STOCKHOLDER PROPOSALS
In the event that a stockholder desires to have a proposal included in the
proxy statement and form of proxy for the Annual Meeting of Stockholders to be
held in 1999, the proposal must be received by the Company in writing on or
before October 5, 1998, by certified mail, return receipt requested, and must
comply in all respects with applicable rules and regulations of the Securities
and Exchange Commission, the laws of the State of Delaware, and the By-Laws of
the Company relating to such inclusion. Stockholder proposals may be mailed to
the Secretary, AmeriSource Health Corporation, P.O. Box 959, Valley Forge, PA
19482.
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL YEAR
ENDED SEPTEMBER 30, 1997 MAY BE OBTAINED, WITHOUT CHARGE, BY ANY STOCKHOLDER,
UPON WRITTEN REQUEST DIRECTED TO INVESTOR RELATIONS DEPARTMENT, AMERISOURCE
HEALTH CORPORATION, P.O. BOX 959, VALLEY FORGE, PA 19482.
OTHER BUSINESS
The Company is not aware of any other business to be presented at the 1998
Annual Meeting of Stockholders. If any other matter should properly come before
the Annual Meeting, however, the enclosed proxy confers discretionary authority
with respect thereto.
By order of the Board of Directors,
/s/ Teresa T. Ciccotelli
TERESA T. CICCOTELLI
Vice President, General Counsel and
Secretary
Dated: February 5, 1998
Malvern, Pennsylvania
16
<PAGE> 19
AMERISOURCE HEALTH CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MARCH 2, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of
AMERISOURCE HEALTH CORPORATION, a Delaware corporation, does hereby constitute
and appoint R. David Yost and Teresa T. Ciccotelli, or any one of them, with
full power to act alone and to designate substitutes, the true and lawful
attorneys and proxies of the undersigned for and in the name and stead of the
undersigned, to vote all shares of Common Stock of AMERISOURCE HEALTH
CORPORATION, which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders to be held at The Desmond Great
Valley Hotel and Conference Center, One Liberty Boulevard, Malvern, Pennsylvania
19355, on March 2, 1998 at 8:30 a.m., and at any and all adjournments and
postponements thereof, as follows:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- FOLD AND DETACH HERE -
<PAGE> 20
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
Please mark your
vote as indicated in /X/
this example
VOTE WITHHELD
Item 1. ELECTION OF DIRECTORS FOR ALL* FOR ALL
Nominees:
Bruce C. Bruckmann / / / /
Michael A. Delaney
Richard C. Gozon
Lawrence C. Karlson
George H. Strong
James A. Urry
Barton J. Winokur
R. David Yost
*To withhold authority to vote for one or more nominee(s), write the
name(s) of the nominee(s) below:
- -------------------------------------------------------------------
Item 2. OTHER MATTERS
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the meeting or at any adjournments thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED,
THIS PROXY WILL BE VOTED FOR ITEM 1 AND WILL GRANT
DISCRETIONARY AUTHORITY PURSUANT TO ITEM 2.
NOTE: PLEASE DATE THIS PROXY, SIGN YOUR NAME EXACTLY AS
IT APPEARS HEREON, AND RETURN PROMPTLY USING THE ENCLOSED
POSTAGE PAID ENVELOPE. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
Signature(s) Date
------------------------------------------------------ ---------
-- FOLD AND DETACH HERE --
