<PAGE> 1
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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:
<TABLE>
<S> <C> <C>
[ ] 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.
</TABLE>
FISHER SCIENTIFIC INTERNATIONAL INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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: ...........................................................
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<PAGE> 2
FISHER SCIENTIFIC INTERNATIONAL INC.
LIBERTY LANE
HAMPTON, NEW HAMPSHIRE 03842
------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 9, 2000
------------------------------
To the Stockholders of Fisher Scientific International Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Fisher
Scientific International Inc. (the "Company") will be held at the Mellon Bank
Building, 8 Loockerman Street, Dover, Delaware, on Tuesday, May 9, 2000, at 9:00
a.m., local time, for the following purposes:
1. To elect three directors of the Company, each for a term of three years;
2. To ratify the appointment of Deloitte & Touche LLP as the independent
auditors of the Company for the current fiscal year; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Holders of record of the Company's Common Stock at the close of business on
April 3, 2000 are entitled to notice of and to vote at the meeting or any
adjournment thereof.
By Order of the Board of Directors,
/s/ Todd M. DuChene
Todd M. DuChene Vice President --
General Counsel and Secretary
Hampton, New Hampshire
April 7, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE,
DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
FISHER SCIENTIFIC INTERNATIONAL INC.
------------------------------
ANNUAL MEETING OF STOCKHOLDERS
------------------------------
PROXY STATEMENT
------------------------------
April 7, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Fisher Scientific International Inc., a
Delaware corporation ("Fisher" or the "Company"), for use at the Company's
Annual Meeting of Stockholders (the "Annual Meeting") to be held at the Mellon
Bank Building, 8 Loockerman Street, Dover, Delaware, on Tuesday, May 9, 2000 at
9:00 a.m., local time, and at any adjournment thereof. This proxy statement and
the related proxy card, together with the Company's Annual Report to
Stockholders for the year ended December 31, 1999, were first mailed by the
Company on or about April 7, 2000 to stockholders of record as of April 3, 2000.
All proxies in the enclosed form that are properly executed and returned to
the Company will be voted at the Annual Meeting or any adjournment thereof in
accordance with the specifications thereon, or, if no specification is made,
will be voted FOR approval of the proposals and FOR election of each of the
nominees for director set forth in the Notice of Annual Meeting of Stockholders.
A previously returned proxy may be revoked by any stockholder who attends the
Annual Meeting and gives oral notice of his or her intention to vote in person,
without compliance with any other formalities. In addition, any proxy given
pursuant to this solicitation may be revoked prior to the Annual Meeting by
delivering a written revocation or a duly executed proxy bearing a later date to
the Secretary of the Company at Liberty Lane, Hampton, New Hampshire 03842.
A proxy may confer discretionary authority to vote with respect to any
matter presented at the Annual Meeting, except as set forth in the proxy and
except for matters proposed by a stockholder who notifies the Company not later
than the close of business on the tenth day following the day on which such
stockholder's Notice of Annual Meeting of Stockholders was mailed by the
Company. At the date hereof, management has no knowledge of any business that
will be presented for consideration at the Annual Meeting and which would be
required to be set forth in this proxy statement or the related proxy card other
than the matters set forth in the Notice of Annual Meeting of Stockholders. If
any other matter is properly presented at the Annual Meeting for consideration,
it is intended that the persons named in the enclosed form of proxy and acting
thereunder will vote in accordance with their best judgment on such matter.
The expense of preparing, printing and mailing this proxy statement and the
proxies solicited hereby will be borne by the Company. In addition to the use of
the mails, proxies may be solicited by officers and directors and regular
employees of Fisher, without additional remuneration, by personal interview,
telephone, telegraph or otherwise. The Company will also request brokerage
firms, nominees, custodians and fiduciaries to forward proxy materials to the
beneficial owners of shares held of record on April 3, 2000 and will provide
reimbursement for the cost of forwarding the material in accordance with
customary charges.
<PAGE> 4
VOTING RIGHTS AND OUTSTANDING SHARES
Holders of record of Common Stock, at the close of business on April 3,
2000 are entitled to notice of and to vote at the Annual Meeting. Holders of
Common Stock are entitled to one vote per share on each of the matters properly
presented at the Annual Meeting. A stockholders' list will be available for
examination by Fisher stockholders at the Annual Meeting.
On April 3, 2000 there were 27,055,749 shares of Common Stock issued and
outstanding. In addition, the Company had 4,035,290 shares of Non-Voting Common
Stock ("Non-Voting Stock") and 9,000,000 shares of Series B Non-Voting Common
Stock ("Series B Stock") issued and outstanding, neither of which series is
eligible to vote at the meeting. The holders of a majority of the shares
entitled to vote, present in person or represented by proxy at the Annual
Meeting, will constitute a quorum for the transaction of business at the Annual
Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 3, 2000 certain information
concerning each person believed to be a beneficial owner of more than 5% of
Common Stock and beneficial ownership of Common Stock by each nominee, director,
named executive officer and all directors and executive officers as a group.
Chase Equity Associates, L.L.C. (successor to Chase Equity Associates, L.P.)
("CEA") is the beneficial owner of all 4,035,290 issued and outstanding shares
of Non-Voting Stock, and Thomas H. Lee Equity Fund III, L.P. ("Equity Fund
III"), THL FSI Equity Investors L.P. ("THL-FSI"), THL Foreign Fund III ("Foreign
Fund III"), THL-CCI Limited Partnership ("THL-CCI"), David V. Harkins, Anthony
J. DiNovi, Scott M. Sperling and Kent R. Weldon (collectively, the "THL
Directors"), certain persons affiliated with Thomas H. Lee Company or the THL
Directors (collectively, the "Additional THL Persons" and together with Equity
Fund III, THL-CCI, Foreign Fund III, THL FSI and the THL Directors, the "THL
Entities") are the beneficial owners of all 9,000,000 issued and outstanding
shares of Series B Stock.
<TABLE>
<CAPTION>
PERCENT OF
SHARES OF PERCENT OF SHARES OF NON- PERCENT OF
NAME AND BENEFICIAL OWNER COMMON STOCK VOTING NON-VOTING STOCK VOTING O/S STOCK
------------------------- ------------ ---------- ---------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Thomas H. Lee Equity Fund III,
L.P........................... 12,749,345(1)(2)(3) 44.47% 9,000,000(1)(4) 67.33% 52.15%
DLJ Merchant Banking Partners
II, L.P. et al................ 6,551,005(2)(5)(6) 23.81% 0 0 16.16%
Chase Equity Associates,
L.L.C......................... 0 0 4,367,335(7) 32.67% 10.82%
Paul M. Montrone................ 2,742,969(2)(8) 9.83% 0 0 6.70%
Paul M. Meister................. 1,724,575(2)(9) 6.26% 0 0 4.25%
David T. Della Penta............ 180,000(2)(10) * 0 0 *
Denis N. Maiorani............... 91,379(2)(11) * 0 0 *
David V. Harkins................ 63,433(2)(12) * 44,777(13) * *
Todd M. DuChene................. 60,640(2)(14) * 0 0 *
Scott M. Sperling............... 31,717(2)(15) * 22,388(16) * *
Anthony J. DiNovi............... 31,717(2)(17) * 22,388(18) * *
Robert A. Day................... 22,937(19) * 0 0 *
Kent R. Weldon.................. 4,756(2)(20) * 3,359(21) * *
Mitchell J. Blutt(7)............ 0 0 0 0 0
Michael D. Dingman(22).......... 0 0 0 0 0
All directors and executive
officers as a group (14
individuals).................. 5,039,162(2)(23) 17.56% 92,912 * 12.3%
</TABLE>
- ---------------
* Less than 1%
2
<PAGE> 5
(1) The address of Thomas H. Lee Equity Fund III, L.P. ("Equity Fund III") is
c/o Thomas H. Lee Partners, L.P., 75 State Street, Boston, Massachusetts
02109. The information is based on a Schedule 13D dated April 13, 1999
filed with the Securities and Exchange Commission ("SEC") by the THL
Entities; Thomas H. Lee Equity Advisors III Limited Partnership ("Advisors
III"), THL Equity Trust III ("Trust III") and THL Investment Management
Corp ("THL Investment"). Each of the THL Entities, Advisors III, Trust III
and THL Investment expressly disclaims beneficial ownership of shares of
Common Stock and Series B Stock held by others.
(2) The shares are subject to the terms and restrictions of an Amended and
Restated Investors' Agreement (the "Investors' Agreement") dated as of
March 29, 1999 among the Company; the THL Entities; DLJ Merchant Banking
Partners II, L.P. ("DLJ Partners II"); DLJ Merchant Banking Partners II-A,
L.P. ("DLJ Partners II-A"), DLJ Offshore Partners II, C.V. ("DLJ Offshore
II"); DLJ Diversified Partners, L.P. ("DLJ Diversified"); DLJ Diversified
Partners-A, L.P. ("DLJ Diversified-A"); DLJ Millennium Partners, L.P. ("DLJ
Millennium"); DLJ Millennium Partners-A, L.P. ("DLJ Millennium-A"); DLJMB
Funding II, Inc. ("DLJ Funding II"); UK Investment Plan 1997 Partners ("UK
Partners"); DLJ EAB Partners, L.P. ("DLJ EAB"); DLJ ESC II, L.P. ("DLJ ESC
II"), and DLJ First ESC, L.P. ("DLJ ESC" and, together with DLJ Partners
II, DLJ Partners II-A, DLJ Offshore II, DLJ Diversified, DLJ Diversified-A,
DLJ Millennium, DLJ Millennium-A, DLJ Funding II, UK Partners, DLJ EAB and
DLJ ESC II, the "DLJ Entities"); Chase Equity Associates, L.L.C., successor
in interest to Chase Equity Associates, L.P. ("CEA"); Merrill Lynch KECALP
L.P. 1997 ("ML KECALP"); KECALP Inc. ("KECALP"); ML IBK Positions, Inc.
("ML IBK" and together with ML KECALP and KECALP, the "ML Entities"); and
Paul M. Montrone, Paul M. Meister, Todd M. DuChene and certain other
members of Fisher management (collectively, the "Management Investors"),
whom collectively may constitute a "group" under the Securities Exchange
Act of 1934, as amended. Each of the parties to the Investors' Agreement
expressly disclaims beneficial ownership of shares of Common Stock held by
others.
(3) Includes 6,652,027 outstanding shares and 991,340 shares issuable upon the
exercise of warrants to purchase shares owned by Equity Fund III; 3,342,094
outstanding shares and 498,070 shares issuable upon the exercise of
warrants to purchase shares owned by THL-FSI; 411,607 outstanding shares
and 61,340 shares issuable upon the exercise of warrants to purchase shares
owned by Foreign Fund III; 409,667 outstanding shares and 61,045 shares
issuable upon the exercise of warrants to purchase shares owned by THL-CCI;
55,203 outstanding shares and warrants to purchase 8,230 shares owned by
Mr. Harkins and persons affiliated with Mr. Harkins (see footnote 12);
27,602 outstanding shares and warrants to purchase 4,115 shares issuable
upon the exercise of warrants to purchase shares owned by Mr. Sperling or a
limited partnership of which Mr. Sperling is a general partner (see
footnote 15); 27,602 outstanding shares and warrants to purchase 4,115
shares owned by Mr. DiNovi; 4,141 outstanding shares and warrants to
purchase 615 shares owned by Mr. Weldon; and 165,817 outstanding shares and
warrants to purchase 24,715 shares attributable to the Additional THL
Persons.
(4) Includes 5,395,598 shares of Series B Stock owned by Equity Fund III;
2,710,841 shares of Series B Stock owned by THL FSI; 333,862 shares of
Series B Stock owned by Foreign Fund III; 332,293 shares of Series B Stock
owned by THL-CCI; 44,777 shares of Series B Stock owned by Mr. Harkins and
persons affiliated with Mr. Harkins; 22,388 shares of Series B Stock owned
by Mr. Sperling and persons affiliated with Mr. Sperling; 22,388 shares of
Series B Stock owned by Mr. DiNovi, 3,359 shares of Series B Stock owned by
Mr. Weldon; and 134,494 shares of Series B Stock owned by the Additional
THL Persons, which stock is convertible on a one-to-one basis into shares
of Common Stock, as provided by the Company's Amended and Restated
Certificate of Incorporation, as amended.
3
<PAGE> 6
(5) The address of DLJ Partners II is 277 Park Avenue, New York, New York
10172. The information is based on a Schedule 13D dated January 21, 1998
filed with the SEC by the DLJ Entities and DLJ Merchant Banking II, LLC,
DLJ Merchant Banking II, Inc., DLJ Diversified Associates, L.P., DLJ
Diversified Partners, Inc., DLJ LBO Plans Management Corporation, DLJ
Capital Investors, Inc., UK Investment Plan 1997, Inc., Donaldson, Lufkin &
Jenrette, Inc., The Equitable Companies Incorporated, AXA-UAP, Finaxa, AXA
Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA Courtage
Assurance Mutuelle, Alpha Assurances Vie Mutuelle, and Claude Bebear,
Patrice Garnier and Henri de Clermont-Tonnerre, trustees pursuant to a
Voting Trust dated as of May 12, 1992, as amended (collectively, the
"Additional DLJ Persons"). Each of the DLJ Entities and the Additional DLJ
Persons expressly disclaims beneficial ownership of shares held by others.
(6) Includes 3,812,895 outstanding shares and 313,745 shares issuable upon the
exercise of warrants to purchase shares owned by DLJ Partners II; 676,965
outstanding shares and 55,700 shares issuable upon the exercise of warrants
to purchase shares owned by DLJ Funding II; 719,015 outstanding shares and
59,165 shares issuable upon the exercise of warrants to purchase shares
owned by DLJ ESC II; and 844,060 outstanding shares and 69,460 shares
issuable upon the exercise of warrants to purchase shares owned by the
remaining DLJ Entities.
(7) The address of CEA is 270 Park Avenue, New York, New York 10172. CEA is the
owner of 4,035,290 outstanding shares of Non-Voting Stock and warrants to
purchase 332,045 shares of Non-Voting Stock, which stock is convertible on
a one-to-one basis into shares of Common Stock, as provided by the
Company's Amended and Restated Certificate of Incorporation, as amended.
Mitchell J. Blutt, M.D. serves as a director of the Company and is a
general partner of Chase Capital Partners, the managing member of CCP-CMC
Consolidating, LLC ("Consolidating"), and pursuant to a master advisory
agreement with Consolidating, the manager by delegation of CEA. Dr. Blutt
expressly disclaims beneficial ownership of shares held by CEA.
(8) Includes 899,084 shares issuable upon exercise of options within 60 days of
April 3, 2000, 275,000 shares owned directly by Mr. Montrone, 362,500
shares which are held in the Fisher Scientific International Inc. Executive
Retirement and Savings Program Trust (the "Savings Trust") and 1,206,385
shares which are held in a rabbi trust established under agreement dated
January 21, 1998 (the "Rabbi Trust"). The address for Mr. Montrone is c/o
Fisher, Liberty Lane, Hampton, NH 03842.
(9) Includes 541,535 shares issuable upon exercise of options within 60 days of
April 3, 2000, 175,000 shares owned directly by Mr. Meister, 271,500 shares
which are held in the Savings Trust and 736,540 shares which are held in
the Rabbi Trust. The address for Mr. Meister is c/o Fisher, Liberty Lane,
Hampton, NH 03842.
(10) Includes 130,000 shares issuable upon exercise of options within 60 days of
April 3, 2000 and 50,000 shares owned directly by Mr. Della Penta. The
address for Mr. Della Penta is c/o Fisher, Liberty Lane, Hampton, NH 03842.
(11) Includes 30,589 shares issuable upon exercise of options within 60 days of
April 3, 2000 and 60,790 shares held in the Rabbi Trust. The address for
Mr. Maiorani is c/o Fisher, Liberty Lane, Hampton, NH 03842.
(12) Includes 49,682 outstanding shares and 7,405 shares issuable upon the
exercise of warrants to purchase shares owned directly by Mr. Harkins and
5,521 outstanding shares and 825 shares issuable upon the exercise of
warrants to purchase shares owned by the 1995 Harkins Gift Trust as to
which shares Mr. Harkins expressly disclaims any beneficial ownership. The
address for Mr. Harkins is c/o THL Partners, 75 State St., Boston, MA
02109.
(13) Includes 40,298 shares of Series B Stock owned by Mr. Harkins directly and
4,479 shares of Series B Stock owned by the 1995 Harkins Gift Trust as to
which shares Mr. Harkins expressly disclaims any beneficial ownership.
4
<PAGE> 7
(14) Includes 24,640 share issuable upon exercise of options with 60 days of
April 3, 2000 and 36,000 shares held in the Rabbi Trust. The address for
Mr. DuChene is c/o Fisher, Liberty Lane, Hampton, NH 03842.
(15) Includes 16,562 outstanding shares and warrants to purchase 2,470 shares
owned by Mr. Sperling directly, and 11,040 outstanding shares and warrants
to purchase 1,645 shares owned by the Sperling Family Limited Partnership
as to which shares and warrants Mr. Sperling expressly disclaims beneficial
interest. The address for Mr. Sperling is c/o THL Partners, 75 State St.,
Boston, MA 02109.
(16) Includes 13,433 shares of Series B Stock owned by Mr. Sperling directly and
8,955 shares of Series B Stock owned by the Sperling Family Limited
Partnership as to which shares Mr. Sperling expressly disclaims beneficial
interest.
(17) Includes 27,602 outstanding shares and warrants to purchase 4,115 shares
owned by Mr. DiNovi directly. The address for Mr. DiNovi is c/o THL
Partners, 75 State St., Boston, MA 02109.
(18) Shares of Series B Stock held by Mr. DiNovi directly.
(19) Shares held in Rabbi Trust. The address for Mr. Day is c/o Fisher, Liberty
Lane, Hampton, NH 03842.
(20) Includes 4,141 outstanding shares and 615 shares issuable upon the exercise
of warrants to purchase shares held by Mr. Weldon directly. The address for
Mr. Weldon is c/o THL Partners, 75 State St., Boston, MA 02109.
(21) Shares of Series B Stock held by Mr. Weldon directly.
(22) The address for Mr. Dingman is c/o Fisher, Liberty Lane, Hampton, NH 03842.
(23) Includes 1,659,897 shares issuable upon exercise of options within 60 days
of April 3, 2000, 622,333 shares held directly, 634,000 shares held
indirectly, 17,075 shares issuable upon the exercise of warrants and
2,105,857 shares deferred into the Rabbi Trust.
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors of Fisher (the "Board") consists of Paul M. Montrone
(Chairman), Paul M. Meister (Vice Chairman), Mitchell J. Blutt, M.D., Robert A.
Day, Michael D. Dingman, Anthony J. DiNovi, David V. Harkins, Scott M. Sperling
and Kent R. Weldon each of whom (other than Messrs. Montrone, Dingman and Day)
became a member of the Board in January 1998.
The Restated Certificate of Incorporation and By-laws of Fisher provide
that the Board shall be divided into three classes. Upon recommendation of the
Nominating Committee and in accordance with the Investors' Agreement, the Board
has nominated for election as directors at the Annual Meeting Messrs. DiNovi,
Montrone and Sperling, each of whom is currently a director whose term expires
at the Annual Meeting. If elected, the nominees will serve for a three-year term
expiring in 2003. Management does not contemplate that the nominees will be
unable to serve, but in that event, proxies solicited hereby will be voted for
the election of such other person as may be recommended by the Board in place of
such nominee.
The affirmative vote of a plurality of the votes cast is required to elect
the directors. Abstentions from voting on this proposal (including broker
non-votes) will have no effect on the outcome of the vote. As a result of the
Investors' Agreement, the holders of a majority of the outstanding shares of
Common Stock are obligated to vote for the nominees for election as directors.
It is expected, therefore, that the nominees for director will be elected
regardless of the vote by stockholders not a party to the Investors' Agreement.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES AS DIRECTORS.
Information about the nominees for election as directors and incumbent
directors, including biographical and employment information, is set forth
below.
5
<PAGE> 8
NOMINEES FOR ELECTION AS DIRECTORS
Anthony J. DiNovi, 37, for a term expiring in 2003. Mr. DiNovi has been
employed by Thomas H. Lee Partners, L.P., and its predecessor Thomas H. Lee
Company ("THL Partners") since prior to 1995 and currently serves as a Principal
Managing Director. Mr. DiNovi is also Vice President and Trustee of Trust III,
the general partner of the Advisors III, which is the general partner of the
Equity Fund III and Vice President of Thomas H. Lee Advisors I and T.H. Lee
Mezzanine II, affiliates of ML-Lee Acquisition Fund, L.P., and ML-Lee
Acquisition Fund II (Retirement Accounts) L.P., respectively. Mr. DiNovi also
serves as a director of Big Flower Holdings, Inc., Eye Care Centers of America,
Inc., MJD Communications, Inc., and Safelite Glass Corp.
Paul M. Montrone, 58, for a term expiring in 2003. Mr. Montrone has been
Chairman of the Board of Fisher since March 1998, Chief Executive Officer of
Fisher since prior to 1995, and served as President from prior to 1995 to 1998.
Since prior to 1995, he has been Chairman of the Board of The General Chemical
Group Inc. ("General Chemical") (producer of soda ash and calcium chloride). Mr.
Montrone is also Chairman of the Board of GenTek Inc. ("GenTek") (manufacturer
of telecommunications, automotive and performance products) and is a director of
Waste Management, Inc.
Scott M. Sperling, 42, for a term expiring in 2003. Mr. Sperling is a
Principal Managing Director of THL Partners. From prior to 1995 to 1999, Mr.
Sperling served as a Managing Director of THL Partners. He is also Vice
President and Trustee of Trust III, the general partner of Advisors III, which
is the general partner of Equity Fund III. For the ten years prior to 1994, Mr.
Sperling was Managing Partner of The Aeneus Group, Inc., the private capital
affiliate of the Harvard Management Company. Mr. Sperling is also a director of
Big Flower Holdings, Inc., GenTek, Safelite Glass Corp., and Wyndham
International.
INCUMBENT DIRECTORS
Robert A. Day, 56, term expires in 2001. Mr. Day has been Chairman of the
Board and Chief Executive Officer of Trust Company of the West (investments)
since prior to 1995 and Chairman and President of W.M. Keck Foundation
(philanthropic organization) since 1996. Mr. Day is also a director of
Freeport-McMoran Inc.
Michael D. Dingman, 68, term expires in 2001. Mr. Dingman was Chairman of
the Board of Fisher from prior to 1995 until 1998. He has been President of
Shipston Group Ltd. (international investments) since prior to 1995. Mr. Dingman
was Chairman of the Board and Chief Executive Officer of Abex from prior to 1995
until June 1995. Mr. Dingman is also a director of Ford Motor Company and Teekay
Shipping Ltd.
Kent R. Weldon, 32, term expires in 2001. Mr. Weldon has worked at THL
Partners since prior to 1995 and currently serves as a Principal Managing
Director. Mr. Weldon is a Vice President of Trust III, the General Partner of
Advisors III, which is the General Partner of Equity Fund III. Mr. Weldon also
serves as a director of MJD Communications, Inc. and Syratech Corporation.
Mitchell J. Blutt, M.D., 43, term expires in 2002. Dr. Blutt has been the
Executive Partner of Chase Capital Partners, the sole general partner of CEA
(global private equity financing) since prior to 1995, has been an Adjunct
Assistant Professor of Medicine at the New York Hospital/Cornell Medical Center
since prior to 1995, and is a Board Certified Internist. Dr. Blutt also serves
as a director of Hanger Orthopedic Group and La Petite Academy Inc. (education).
David V. Harkins, 59, term expires in 2002. Mr. Harkins has been employed
by THL Partners since prior to 1995 and currently serves as a Principal Managing
Director. Mr. Harkins is also the President and Trustee of Trust III, the
General Partner of Advisors III, which is the General Partner of Equity Fund
III; Principal Managing Director of TH Lee Putnam Capital Advisors, LLC and
Thomas H. Lee Advisors, LLC; President of THL Fund IV Bridge Corp. and THL
Investment Management Corp; Vice President of THL Equity Holdings III,
6
<PAGE> 9
Inc. Mr. Harkins has also served as Chairman of National Dentex Corporation
since 1983. Mr. Harkins is a director of Conseco Inc., Cott Corporation, Stanley
Furniture Company, Inc., Syratech Corporation, Freedom Securities Corp. and
Metris Companies.
Paul M. Meister, 47, term expires in 2002. Mr. Meister has been Vice
Chairman of the Board and Executive Vice President and Chief Financial Officer
of Fisher since March 1998, and was Senior Vice President and Chief Financial
Officer of Fisher from prior to 1995 to March 1998. Mr. Meister is a member of
the Board of Directors of M & F Worldwide Corp., General Chemical (Vice
Chairman), GenTek (Vice Chairman) and Minerals Technologies Inc.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 (collectively, "Section 16 reporting persons"),
to file with the SEC and The New York Stock Exchange ("NYSE") initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Section 16 reporting persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and on written representations that no other
reports were required, during the fiscal year ended December 31, 1999, the
Section 16 reporting persons complied with all Section 16(a) filing requirements
applicable to them.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board met three times during 1999. Each of the members of the Board
attended at least 75% of the meetings of the Board and of the Board committees
on which he served. The Board has four standing committees: the Audit Committee,
the Compensation Committee, the Executive Committee and the Nominating
Committee. During 1999, the Audit Committee met twice, the Compensation
Committee met twice, the Executive Committee did not meet and the Nominating
Committee met once.
Audit Committee. The Audit Committee of the Board consists of Messrs. Day,
Harkins and Weldon, with Mr. Day serving as Chairman. Each member of the Audit
Committee is "independent" within the meaning of the NYSE rules, and, as a
result, has no relationship with Fisher that may interfere with the exercise of
his independence from Fisher and Fisher's management.
On March 7, 2000, the Board adopted a new charter for the Audit Committee
(the "Charter"). The Charter contains the Committee's mandate, membership
requirements, and duties and obligations. A copy of the Charter is attached to
this Proxy Statement as Annex I. The Committee will annually review the Charter
to determine its adequacy and, if appropriate, recommend revisions to the Board.
Under the Charter, the Audit Committee is responsible for, among other tasks,
recommending the firm to be appointed as independent accountants to audit the
Company's financial statements and to perform services related to the audit;
reviewing with management and the independent accountants the Company's year-end
operating results; considering the adequacy of the internal accounting and
control procedures of Fisher; reviewing the non-audit services to be performed
accountants, if any; and considering the effect of such performance on the
accountants' independence.
Compensation Committee. The Compensation Committee of the Board consists of
Messrs. Day, Dingman and Sperling, with Mr. Dingman serving as Chairman. It is
responsible for the review and recommendation of compensation arrangements for
directors and officers, for the approval of such arrangements for other senior
level employees, and for the administration of certain benefit and compensation
plans of Fisher and its subsidiaries.
7
<PAGE> 10
Executive Committee. The Executive Committee of the Board consists of
Messrs. Montrone, DiNovi, Meister and Sperling, with Mr. Montrone serving as
Chairman. It has been delegated the powers of the full Board to the extent
permitted under Delaware Law.
Nominating Committee. The Nominating Committee of the Board consists of all
members of the Board, with Mr. Meister serving as Chairman. It is responsible
for the nomination of persons for election to the Board in accordance with the
Investors' Agreement. As a result of the provisions of the Investors' Agreement
regarding the nomination of directors, the Nominating Committee does not intend
to consider nominees recommended by stockholders that are not parties to the
Investors' Agreement.
The Bylaws of the Company prescribe an advance notice procedure with regard
to the nomination, other than by or at the direction of the Board or a committee
thereof, of candidates for election as directors (the "Nomination Procedure").
The Nomination Procedure requires that a stockholder give prior written notice,
in proper form, of a planned nomination to the Secretary of Fisher. The
requirements as to the form and timing of that notice are specified in the
Bylaws. The Company's Bylaws provide that any stockholder of record wishing to
nominate candidates for election as directors must provide written notice of
such proposal and appropriate supporting documentation, as set forth in the
Bylaws, to the Company at its principal executive office, not less than 30 days
nor more than 60 days prior to the meeting. In the event, however, that less
than 40 days' notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be timely must be so
received not later than the close of business on the tenth day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made. If the inspectors of election determine that a person was
not nominated in accordance with the Nomination Procedure, such person will not
be eligible for election as a director. Stockholder recommendations may be sent
to the Nominating Committee, c/o Secretary, Fisher Scientific International
Inc., Liberty Lane, Hampton, New Hampshire 03842.
REPORT OF THE AUDIT COMMITTEE
In the past year, the Audit Committee has, among other activities, (i)
reviewed and discussed with management the Company's audited annual financial
statements for the fiscal year ended December 31, 1999, (ii) discussed with
Deloitte & Touche, the Company's independent auditors, the matters required to
be discussed by American Institute of Certified Public Accountants Auditing
Standards Board on Auditing Standards No. 61 ("Communication with Auditing
Committees"), and (iii) assured the objectivity of Deloitte & Touche LLP, by
having the discussions and receiving the letter and other written disclosures
required by the International Standards Board Standard No. 1 ("Independence
Discussions with Audit Committees"). On the basis of its review and discussions,
the Audit Committee has recommended to the Board that the Company's audited
financial statements for the fiscal year ended December 31, 1999 be included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1999.
The Audit Committee
Of the Board of Directors
Robert A. Day, Chairman
David V. Harkins
Kent R. Weldon
8
<PAGE> 11
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
The non-employee directors of Fisher other than Messrs. DiNovi, Harkins,
Sperling and Weldon (the "THL Directors") and Dr. Blutt are entitled to receive
cash compensation and compensation pursuant to the plans described below.
Cash Compensation. Eligible directors receive compensation of $40,000
annually, with no additional fees for attendance at Board or committee meetings.
All directors are reimbursed for expenses incurred in attending Board and
committee meetings. Pursuant to the Deferred Compensation Plan for Non-Employee
Directors of Fisher Scientific International Inc., eligible directors may elect,
generally prior to the commencement of any calendar year, to have all or any
portion of the director's compensation for such calendar year credited to a
deferred compensation account. Amounts credited to the director's account will
accrue interest based upon the average quoted rate for ten-year U.S. Treasury
Notes. Deferred amounts will be paid in a lump sum or in installments commencing
on the first business day of the calendar year following the year in which the
director ceases to serve on the Board or of a later calendar year specified by
the director.
Retirement Plan for Non-Employee Directors. Pursuant to the Retirement Plan
for Non-Employee Directors of Fisher Scientific International Inc., an eligible
director, who retires from the Board with at least five years of service as a
non-employee director is eligible to receive an annual retirement benefit for
the remainder of the director's lifetime. The annual retirement benefit for a
director who retires with five years of service is equal to 50% of the
director's fee in effect at the date of the director's retirement. For directors
with more than five years of service, the annual benefit is increased by 10% of
the director's fee in effect at the date of the director's retirement for each
additional year of service, up to 100% of such fee for 10 or more years of
service as a director, or for directors who retire at age 70 regardless of the
length of service.
9
<PAGE> 12
COMPENSATION OF EXECUTIVE OFFICERS
I. SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid to the Chief Executive
Officer and each of Fisher's four other most highly compensated executive
officers (the "Named Executives") for services in all capacities to Fisher and
its subsidiaries during or with respect to 1997, 1998 and 1999.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) SECURITIES
----------------- UNDERLYING ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)(2)
--------------------------- ---- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Paul M. Montrone............................. 1999 640,000 640,000 0 240,362
Chairman of the Board and 1998 590,000 590,000 1,906,959 568,036
Chief Executive Officer 1997 540,000 0 0 53,880
Paul M. Meister.............................. 1999 460,000 460,000 0 74,712
Vice Chairman of the Board, Executive 1998 410,000 410,000 1,195,634 75,640
Vice President and Chief Financial Officer 1997 360,000 0 0 26,430
David T. Della Penta (3)..................... 1999 450,000 450,000 0 22,212
President and Chief Operating Officer 1998 316,442 316,000 650,000 313,378
Denis N. Maiorani (4)........................ 1999 330,000 200,000(5) 0 17,840
President, Fisher Scientific Worldwide 1998 300,000 250,000 186,474 8,018
1997 300,000 0 0 8,018
Todd M. DuChene.............................. 1999 225,000 335,000(5) 0 11,760
Vice President, General Counsel 1998 212,500 150,000 121,600 4,713
and Secretary 1997 200,000 0 0 2,500
</TABLE>
- ---------------
(1) Includes amounts deferred by each Named Executive under Fisher's Savings and
Profit Sharing Plan and Executive Retirement and Savings Program.
(2) Amounts listed in this column reflect Fisher's matching contributions to
Fisher's Savings and Profit Sharing Plan, the Executive Retirement and
Savings Program and the value of supplemental life insurance programs for
1999. Amounts attributable to such supplemental life insurance programs are
as follows: Mr. Montrone $208,872; Mr. Meister $53,312; Mr. Della Penta
$3,292; and Mr. DuChene $420. Amounts attributable to Fisher's matching
contributions under the Fisher Savings and Profit Sharing Plan and Executive
Retirement and Savings Program are as follows: Mr. Montrone $31,490; Mr.
Meister $21,400; Mr. Della Penta $18,920; Mr. Maiorani $17,840; and Mr.
DuChene $11,340.
(3) Mr. Della Penta joined the Company in April 1998.
(4) Mr. Maiorani's employment with the Company terminated in March 2000.
(5) Includes a one-time retention bonus of $200,000 and $150,000 paid to Mr.
Maiorani and Mr. DuChene in 1999, respectively.
II. OPTION GRANTS IN LAST FISCAL YEAR
There were no stock options granted by the Company to the Named Executives
during 1999.
10
<PAGE> 13
III. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information for each Named Executive with
regard to shares acquired on the exercise of options, the aggregate stock
options held on December 31, 1999, and the value of in-the-money stock options
held as of December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
(#) ($) (#) ($)
----------- -------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Paul M. Montrone.............. 0 0 449,542/1,457,417 11,969,056/30,922,900
Paul M. Meister............... 0 0 270,768/666,534 7,209,198/16,540,218
David T. Della Penta.......... 0 0 65,000/585,000 1,730,625/12,439,375
Denis N. Maiorani............. 0 0 15,294/171,180 407,203/3,496,168
Todd M. DuChene............... 0 0 12,320/109,280 328,020/2,330,580
</TABLE>
- ---------------
(1) Excess of the value of the underlying securities at December 31, 1999 of
$36.125 over the exercise price.
EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVES
Fisher has entered into an Amended and Restated Employment Agreement dated
January 21, 1998 with Mr. Montrone (the "Montrone Employment Agreement") and an
Amended and Restated Employment Agreement dated January 21, 1998 with Mr.
Meister (the "Meister Employment Agreement"). The Montrone Employment Agreement
and the Meister Employment Agreement provide for a five-year evergreen term, an
annual base salary at least equal to the basic salary in effect at the Effective
Time, and bonus compensation of at least $475,000 and $315,000, respectively.
Fisher has entered into an Employment Agreement dated March 31, 1998 with Mr.
Della Penta, which provides for a three-year evergreen term, annual base salary
of $450,000 and bonus target of 100% of base salary. Under the terms of the
Montrone Employment Agreement and the Meister Employment Agreement, each of
Messrs. Montrone and Meister may "put" all but not less than all of the
Executive Performance Options back to the Company in exchange for $5 million. If
the put is exercised, the Company will be obligated to pay the purchase price on
the date which is one year and two business days following exercise or the date
the executive is no longer a "covered employee" for purposes of Section 162(m)
of the Internal Revenue Code. Interest on the amount owed to the executive shall
accrue at the prime rate from the date of exercise until paid concurrently with
the $5 million payment. Mr. Meister exercised his "put" option during 1999. The
Company has also entered into a severance arrangement with Mr. DuChene which
provides that in the event that his employment is terminated in certain
circumstances, he is entitled to receive payment equal to the sum of two times
salary.
RETIREMENT PROGRAM
Fisher maintains two retirement benefit programs: a tax qualified defined
benefit plan available generally to all employees (the "Pension Plan") and the
Executive Retirement and Savings Program, a non-qualified supplemental benefit
plan (the "Supplemental Plan") pursuant to which retirement benefits are
provided to certain executive officers and other eligible key management
employees who are designated by the Compensation Committee.
11
<PAGE> 14
The following table shows the total estimated annual benefits payable under
the Supplemental Plan in the form of a straight life annuity to hypothetical
participants upon retirement at normal retirement age, with respect to the
compensation and years-of-service categories indicated in the table.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
ANNUALIZED --------------------------------------------------------------------------------
AVERAGE 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
EARNINGS OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<C> <S> <C> <C> <C> <C> <C> <C>
$ 100,000 ................ $ 15,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500
200,000 ................ 30,000 45,000 60,000 75,000 90,000 105,000
400,000 ................ 60,000 90,000 120,000 150,000 180,000 210,000
600,000 ................ 90,000 135,000 180,000 225,000 270,000 315,000
800,000 ................ 120,000 180,000 240,000 300,000 360,000 420,000
1,000,000 ................ 150,000 225,000 300,000 375,000 450,000 525,000
1,200,000 ................ 180,000 270,000 360,000 450,000 540,000 630,000
</TABLE>
The years of service recognized under the Supplemental Plan generally
include all service with Fisher and its predecessors. The credited years of
service as of December 31, 1999 under the Supplemental Plan for each of the
Named Executives, are as follows: Mr. Montrone, 32 years; Mr. Meister, 19 years;
Mr. Della Penta, 2 years; Mr. Maiorani, 4 years; and Mr. DuChene, 3 years.
Compensation recognized under the Retirement Program generally includes a
participant's base salary and annual bonus compensation (including any amounts
deferred). Retirement benefits are calculated based upon the average of a
participant's recognized compensation for any five years out of the final ten
consecutive years of credited service that produce the highest average and are
not subject to offset or reduction for social security benefits. Under this
formula, the average recognized compensation under the Supplemental Plan for
each of the Named Executives as of December 31, 1999 was: Mr. Montrone
$1,148,200, Mr. Meister $674,800, Mr. Della Penta $811,089, Mr. Maiorani
$501,250 and Mr. DuChene $336,192.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's compensation program is administered by the Compensation
Committee of the Board (the "Committee") which has responsibility for reviewing
all aspects of compensation paid by the Company to its executive officers. The
Committee's primary objectives with respect to executive compensation are to
attract and retain the best possible executive talent, incentivize these
executives to achieve Fisher's business objectives, and strengthen the link
between management and shareholder interests. To achieve these objectives, the
Committee expects to retain those compensation plans that tie a substantial
portion of an executive's overall compensation to Fisher's performance.
The principal elements of Fisher's executive compensation program consist
of base salaries and incentive variable compensation in the form of annual
bonus, stock options and other long-term compensation awards. The policies of
the Compensation Committee with respect to the base salary and incentive
compensation awarded to the Company's senior executives, including Mr. Montrone,
Fisher's Chairman of the Board and Chief Executive Officer, are discussed below.
Base Salaries. Base salaries for Company executive officers are determined
by the Committee and are subject to periodic review and evaluation based on
individual and Company performance, level of responsibility, and competitive,
inflationary and internal equity considerations. The Company has entered into an
Amended and Restated Employment Agreement with Mr. Montrone (the "Montrone
Employment Agreement") which provides
12
<PAGE> 15
for an annual base salary at least equal to the base salary in effect at the
Effective Time. Mr. Montrone's last salary increase was in 1998.
Annual Incentive Compensation. Pursuant to a component of the Fisher
Scientific International Inc. Incentive Compensation Plan (the "ICP") approved
by Fisher stockholders in 1994, annual cash incentive awards are payable to the
extent that annual Company and individual business performance objectives
specified by the Committee are attained. Company and individual performance
objectives may be based on a variety of factors, including stock price
appreciation; sales, net income and cash flow; and the level of individual
contribution to the success of the Company as well as compensation opportunities
under other Fisher incentive plans. Based on the performance of the Company in
1999, Mr. Montrone was awarded a bonus of $640,000.
Long-Term Incentive Compensation. The Committee has fostered an ownership
culture that encourages superior performance by Fisher's executive officers and
employees through the use of stock-based compensation plans designed to increase
stock ownership throughout the Company. In this regard, during 1999, pursuant to
the Fisher Scientific International Inc. 1998 Equity and Incentive Plan (the
"1998 Plan"), the Board of Directors awarded options to purchase 610,000 shares
of Common Stock of the Company having exercise price ranges of $11.73 to $25.00.
The Committee in its discretion will determine subsequent awards.
Compliance with Section 162(m). The Committee believes that, unless
circumstances warrant an exception, Fisher should only pay compensation to its
executive officers in excess of $1 million if such excess amount is
performance-based compensation exempt from the limit on deductibility under
Section 162(m) of the Internal Revenue Code of 1986, as amended. To this end,
Fisher stockholders approved at the 1998 Annual Meeting the 1998 Plan, in order
that any grants made to executive officers thereunder would be exempt from the
limitations contained in Section 162(m).
The Compensation Committee
of the Board of Directors
Michael D. Dingman, Chairman
Robert A. Day
Scott M. Sperling
13
<PAGE> 16
PERFORMANCE COMPARISON
The following graph illustrates the return that would have been realized
(assuming reinvestment of dividends) by an investor who invested $100 on
December 31, 1994 in each of (i) Fisher Common Stock, (ii) the Media General
Composite Market Value Index (the "Composite Market Index") and (iii) the Media
General Scientific/Technical Instrument Industry Index (the "Scientific/Tech
Instruments Index"):
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG FISHER COMMON STOCK, COMPOSITE MARKET INDEX
AND SCIENTIFIC/TECH INSTRUMENTS INDEX
[GRAPH]
<TABLE>
<S> <C> <C> <C>
FISHER SCIENTIFIC INTERNATIONAL SCIENTIFIC/TECH INSTRUMENTS COMPOSITE MARKET INDEX
12/31/94 100.00 100.00 100.00
12/31/95 135.19 137.35 129.66
12/31/96 190.76 160.36 156.58
12/31/97 194.06 198.48 203.33
12/31/98 405.14 199.57 248.56
12/31/99 734.07 322.44 303.21
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
---------------------------------------------------------------------------
COMPANY/INDEX/MARKET 12/31/1994 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999
-------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Fisher Scientific
International................ 100.00 135.19 190.76 194.06 405.14 734.07
Scientific/Tech Instruments
Index........................ 100.00 137.35 160.36 198.48 199.57 322.44
Composite Market Index......... 100.00 129.66 156.58 203.33 248.56 303.21
</TABLE>
14
<PAGE> 17
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into Management Agreements ("the "Management
Agreements") with each of Thomas H. Lee Company ("THL") and Equity Fund III.
Pursuant to the Management Agreements, each of THL and Equity Fund III will
provide Fisher with financial and strategic corporate planning and other
management services as may be mutually agreed. Pursuant to the Management
Agreements each of THL and Equity Fund III will be paid annually during the term
of the Management Agreements the sum of $300,000 and $700,000, respectively. The
Management Agreements have a seven-year term ending 2005, each renewing annually
thereafter until terminated by either party thereto on not less than ninety days
notice.
The Investors' Agreement, in addition to providing for the size of the
Board and the nomination and election of directors to serve thereon, contains
restrictions on transfer of shares held by the parties to the agreement. The
Investors' Agreement also provides to the THL Entities and the Management
Investors certain preemptive rights and limits the ability of the DLJ Entities,
CEA, the ML Entities and the Management Investors to purchase Common Stock other
than in accordance with the preemptive rights provisions of the agreement.
The Investors' Agreement provides certain registration rights to the THL
Entities which permit the THL Entities to require the Company to register for
sale under the Securities Act of 1933, as amended (the "Securities Act"), Common
Stock held by the THL Entities. The THL Entities may not require more than six
such registrations. Following the sale by the THL Entities of more than 20% of
Common Stock directly or indirectly held by them, the Management Directors may
require the Company to register for sale under the Securities Act Common Stock
held by them. The Investors' Agreement provides "piggyback" registration rights
to the remaining parties to the agreement. Under the terms of the Investors'
Agreement, the Company may not grant registration rights to third parties, which
conflict with or reduce the registration rights provided to the parties to the
Investors' Agreement.
The Company, The Chase Manhattan Bank, Merrill Lynch Capital Corporation
and DLJ Capital Funding, Inc. are parties to a credit agreement dated January
21, 1998, as amended (the "Credit Agreement") providing for $294.2 million in
term loans and a $175 million revolving credit facility. The proceeds of the
term loans, the proceeds of the $400 million 9% Senior Subordinated Notes due
2008 and proceeds under the Company's $150 million receivables securitization
facility were used to fund the recapitalization in connection with the Merger.
The Chase Manhattan Bank acts as administrative agent for the syndicate of
lenders providing the facility and Merrill Lynch Capital Corporation and DLJ
Capital Funding, Inc. acts as syndicate agent and documentation agent,
respectively.
Borrowings made under the revolving credit facility bear interest at a rate
equal to, at Fisher's option, LIBOR plus 225 basis points, or the Prime Rate
plus 125 basis points. The "Prime Rate" is a fluctuating interest rate equal to
the higher of (i) the rate of interest announced publicly by a reference bank as
its prime rate and (ii) a rate equal to 1/2% of 1% per annum above the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers.
Tranche A of the term loan facility bears interest at a rate equal to, at
Fisher's option, LIBOR plus 225 basis points or the Prime Rate plus 125 basis
points; Tranche B of the term loan facility bears interest at a rate equal to,
at Fisher's option, LIBOR plus 250 basis points or the Prime Rate plus 150 basis
points; and Tranche C of the term loan facility bears interest at a rate equal
to, at Fisher's option, LIBOR plus 275 basis points or the Prime Rate plus 175
basis points.
The LIBOR and Prime Rate margins will be subject to reductions, based on
various tests of the Company's financial performance. Prime Rate interest will
be payable monthly in arrears. LIBOR interest will be payable in arrears at the
earlier of (i) the end of the applicable interest period and (ii) quarterly.
LIBOR borrowings are available in 1-, 2-, 3- or 6-month interest periods. The
revolving credit term loan facility expires six (6) years
15
<PAGE> 18
from the Effective Time. The Tranche A, B and C facilities amortize
semi-annually beginning on June 30, 1999 and mature 6, 7 and 7.75 years,
respectively, after the Effective Date.
The obligations of Fisher and the subsidiary borrowers under the Credit
Agreement are secured by substantially all assets of the Company and its
material domestic subsidiaries, a pledge of the stock of all domestic
subsidiaries, and a pledge of 65% of the stock of material foreign subsidiaries,
which are direct subsidiaries of the Company or one of its material domestic
subsidiaries. Obligations of each foreign subsidiary borrower are secured by a
pledge of 100% of the shares of such borrower. Fisher and each material domestic
subsidiary of Fisher further guarantee the obligations of Fisher and the
subsidiary borrowers.
The Credit Agreement contains covenants of the Company and the subsidiary
borrowers, including, without limitation, restrictions on (i) indebtedness, (ii)
the sale of assets, (iii) mergers, acquisitions and other business combinations,
(iv) minority investments, (v) the payment of cash dividends to shareholders,
and (vi) various financial covenants. The financial covenants include
requirements to maintain certain levels of interest coverage, debt to earnings
before interest, taxes, depreciation and amortization and minimum EBITDA and to
limit capital expenditures. The Company is in compliance with all covenants at
December 31, 1999. Pursuant to the terms of the Credit Agreement, and subject to
applicable grace periods, in certain circumstances, the Company would be in
default upon the nonpayment of principal or interest when due under such
agreement or, upon the nonfulfillment of the covenants described above, certain
changes in control of the ownership of the Company or various other defaults
described therein. If such a default occurs, the lenders under the Credit
Agreement would be entitled to take all actions permitted to be taken by a
secured creditor under the Uniform Commercial Code and to accelerate the amounts
due under the Credit Agreement and may require all such amounts to be
immediately paid in full. Loans under the term loan facility are required to be
prepaid with 50% of excess cash flow (as defined in the Credit Agreement and
subject to certain limits as specified therein) and certain equity issuances of
the Company, and 100% of net-cash proceeds of certain asset sales, certain
insurance and condemnation proceeds and certain debt issuances of the Company.
The receivables securitization facility relates to the sale, on a revolving
basis, of certain of the accounts receivable of Fisher Scientific Company,
L.L.C., a Delaware limited liability corporation ("FSC"), to a bankruptcy remote
subsidiary of FSC that entered into an agreement to transfer, on a revolving
basis, an undivided percentage ownership interest in a designated pool of
accounts receivable up to a maximum amount based on a defined calculated
percentage of the outstanding accounts receivable balance. The facility size was
increased to $173 million on March 31, 1998. As of December 31, 1999, the
Company had sold $21.7 million under the receivables securitization facility.
The facility matures January 21, 2003, and the effective interest rate is
approximately LIBOR plus 50 basis points.
On January 21, and November 20, 1998, the Company issued $400 million and
$200 million, respectively, of 9% Senior Subordinated Notes ("9% Notes"). The 9%
Notes issued in January were issued at par while the 9% Notes issued in November
were issued net of a $7 million discount. The 9% Notes will mature on February
1, 2008 with interest payable semiannually in arrears on February 1 and August 1
of each year commencing August 1, 1998. The 9% Notes are unsecured senior
subordinated obligations of the Company, subordinated in right of payment to all
existing and future senior indebtedness and rank pari passu in light of payment
with all other existing and future senior subordinated indebtedness of the
Company. The 9% Notes are redeemable at the option of the Company at any time
after February 1, 2003 at an initial redemption price of 104.5%, declining
ratably to par on or after February 1, 2006. In addition, on or prior to
February 1, 2001, the Company may redeem up to 40% of the original principal
amount of the 9% Notes at a redemption price of 109% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of redemption
with the net cash proceeds of one or more public equity offerings, provided that
at least 60% of the aggregate principal amount of the 9% Notes originally issued
remains outstanding immediately after the occurrence of such redemption. Upon a
Change of Control Triggering Event (as defined in the Indenture under which the
9% Notes are issued), the
16
<PAGE> 19
Company will be required to make an offer to purchase all outstanding 9% Notes
at 101% of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of purchase.
The Indenture under which the 9% Notes are issued contains covenants that
restrict, among other things, (i) the ability of the Company and its
subsidiaries to incur additional indebtedness, (ii) pay dividends or make
certain other restricted payments, (iii) merge or consolidate with any other
person, (iv) make minority investments, and (v) other various covenants that are
customary for transactions of this type.
The Company currently leases space at its corporate headquarters to Latona
Associates Inc., a management advisory firm owned by Mr. Montrone. Under the
terms of the lease, the Company leases an aggregate 15,000 square feet of space
for $200,000 per year.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee of the Board, the Board has
appointed Deloitte & Touche LLP as the Company's independent auditors for the
2000 fiscal year and hereby requests that the stockholders ratify such
appointment.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting and will have an opportunity to make a statement if they so desire and
to respond to appropriate questions from stockholders.
SUBMISSION OF PROPOSALS FOR 2001 ANNUAL MEETING
Stockholders may submit proposals on matters appropriate for stockholder
action at Fisher's annual meetings, consistent with regulations adopted by the
SEC and the By-laws of the Company. Proposals to be considered for inclusion in
the proxy statement for the 2001 Annual Meeting of Stockholders must be received
by Fisher at its principal executive offices not later than December 14, 2000.
Proposals to be timely submitted for stockholder action at Fisher's 2001 Annual
Meeting must be received by Fisher at its principal executive offices not less
than 30 days nor more than 60 days prior to the 2001 Annual Meeting. Proposals
should be directed to the attention of the Secretary, Fisher Scientific
International Inc., Liberty Lane, Hampton, New Hampshire 03842.
ANNUAL REPORT
The Annual Report to Stockholders of the Company for the year 1999 and this
proxy statement are being mailed together to all stockholders of the Company of
record on April 3, 2000, the record date for voting at the Annual Meeting.
By Order of the Board of Directors,
TODD M. DUCHENE
Vice President --
General Counsel and Secretary
April 7, 2000
THE COMPANY'S 1999 ANNUAL REPORT ON FORM 10-K, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, IS AVAILABLE WITHOUT CHARGE BY WRITTEN REQUEST FROM THE
OFFICE OF THE SECRETARY, FISHER SCIENTIFIC INTERNATIONAL INC., LIBERTY LANE,
HAMPTON, NH 03842.
Additional information about the Company can be found at the Company's
internet site: http://www.fishersci.com.
17
<PAGE> 20
ANNEX I
FISHER SCIENTIFIC INTERNATIONAL INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing the quality
and integrity of the Corporation's financial reports; the Corporation's systems
of internal controls regarding finance and accounting; and the Corporation's
auditing, accounting and financial reporting processes generally. The Audit
Committee's primary duties and responsibilities are to:
- Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control
systems.
- Review and appraise the audit efforts of the Corporation's independent
accountants and internal accountants.
- Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board of
Directors.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section III of this Charter. While the
Committee has the responsibilities and duties set forth in this Charter, it is
not the Committee's duty (1) to plan or conduct audits, (2) to determine that
the Corporation's financial statements are complete and accurate and in
accordance with GAAP, which remains the responsibility of the Corporation's
management and independent accountants, or (3) to conduct investigations,
resolve disagreements, if any, between management and the independent
accountants or to assure compliance with laws and regulations or the
Corporation's Code of Business Conduct.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors. Subject
to the next paragraph, each of the members of the Committee shall be independent
directors, free from any relationship that, in the opinion of the Board, may
interfere with the exercise of his or her independent judgment as a member of
the Committee or independence from management and the Corporation. All members
of the Committee shall be financially literate (or must become financially
literate within a reasonable period of time after his or her appointment), and
at least one member of the Committee shall have accounting or related financial
management expertise.
Notwithstanding the previous paragraph, a person with a business
relationship with the Corporation may serve on the Audit Committee if the Board
determines in its business judgment that the relationship does not interfere
with the person's exercise of independent judgment as a director. In addition,
one director who is not a current employee (or an immediate family member of
such employee) of the Corporation, but is nonetheless not "independent" for the
purposes of the NYSE rules, may be appointed to the Committee, under exceptional
and limited circumstances, if the Board of Directors determines that membership
on the Committee by the individual is required in the best interests of the
Corporation and its shareholders, and the Corporation discloses, in the next
annual proxy statement subsequent to such determination, the nature of the
relationship and the reasons for that determination.
<PAGE> 21
III. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Audit Committee shall:
Review Financial Reports
1. Review and discuss the Corporation's audited financial statements with the
Corporation's management.
2. Review with management and the independent accountants the interim financial
statements prior to filing the 10-Q and publicly releasing quarterly
earnings. The Chair of the Committee may represent the entire Committee for
purposes of this review.
Independent Accountants
3. Review and recommend to the Board of Directors the engagement of independent
accountants, including approval of their fee and the scope and timing of
their audit of the Corporation's financial statements.
4. Review, with the independent accountants, the accountants' report on the
Corporation's financial statement.
5. Evaluate the performance of the independent accountants; where appropriate
recommend that the Board of Directors replace the independent accountants
and approve any proposed discharge of the independent accountants.
6. On an annual basis, obtain from the Corporation's independent public
accountants written disclosure delineating all relationships between such
accountant and the Corporation and its affiliates, including the written
disclosure and letter required by ISB Standard No. 1, as it may be modified
or supplemented.
7. From time to time, as appropriate, actively engage the Corporation's
independent public accountants in a dialogue with respect to any disclosed
relationships or services that may impact the objectivity and independence
of such accountants and recommend to the Board of Directors appropriate
action in response to the outside auditors' report to satisfy itself of the
auditors' independence.
8. Inform the independent accountant that it is ultimately accountable to the
Board of Directors and the Audit Committee, as representatives of the
shareholders.
9. Periodically discuss with the independent accountants out of the presence of
management the Corporation's internal controls, including their
recommendations, if any, for improvements in the Corporation's internal
controls and the implementation of such recommendations, the fullness and
accuracy of the Corporation's financial statement and certain other matters
required to be discussed by SAS 61*, as it may be modified, and information
that would be required to be disclosed by GAAS.
- ---------------
* SAS 61 requires independent auditors to communicate certain matters related to
the conduct of an audit to those who have responsibility for oversight of the
financial reporting process, specifically the audit committee. Among the
matters to be communicated to the audit committee are: (1) methods used to
account for significant unusual transactions; (2) the effect of authoritative
guidance or consensus; (3) the process used by management in formulating
particularly sensitive accounting estimates and the basis for the auditor's
conclusions regarding the reasonableness of those estimates; and (4)
disagreements with management over the application of accounting principles,
the basis for management's accounting estimates, and the disclosures in the
financial statements.
2
<PAGE> 22
Reviewing and Improving Processes
10. Review, with the independent accountants, any internal accountants and the
Company's management, policies and procedures with respect to internal
auditing and financial and accounting controls.
11. As part of its job to foster open communication, the Committee should meet
at least annually with the Corporation's management and the independent
accountants in separate executive sessions to discuss any matters that the
Committee or each of these groups believe should be discussed
confidentially.
12. In consultation with the independent accountants, review the integrity and
quality of the organization's financial reporting processes, both internal
and external, and the independent accountant's perception of the
Corporation's financial and accounting personnel.
13. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied and
significant judgments affecting its financial reporting.
14. Review any significant disagreement among management and the independent
accountants in connection with the preparation of the financial statements.
15. Review with the independent accountants and management the extent to which
changes or improvements in financial or accounting practices, as approved by
the Audit Committee, have been implemented.
16. Consider and recommend to the Board of Directors, if appropriate, major
changes to the Corporation's financial reporting, auditing and accounting
principles and practices as suggested by the independent accountants or
management.
Other
17. State in the Audit Committee's Report in the Corporation's Annual Proxy
Statement whether, based on the review and discussions referred to in items
1, 6, 7 and 9 above, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the
Corporation's Annual Report on Form 10-K for the last fiscal year.
18. Review and, if appropriate, recommend updates of this Charter annually.
19. Perform any other activities consistent with this Charter, the Corporation's
By-laws and applicable law, as the Committee or the Board deems necessary or
appropriate.
3
<PAGE> 23
FISHER SCIENTIFIC INTERNATIONAL INC.
Annual Meeting, May 9, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Messrs. Paul M. Meister, Todd M. DuChene and Robert J. Gagalis, each
with power of substitution, are hereby authorized to vote all shares of common
stock of Fisher Scientific International Inc., which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
Fisher Scientific International Inc. to be held on Tuesday, May 9, 2000, and at
any adjournments, as specified on the reverse side.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
(Please mark this Proxy and sign and date it on the
reverse side hereon and return it in the enclosed envelope.)
* FOLD AND DETACH HERE *
<PAGE> 24
<TABLE>
<CAPTION>
<S> <C>
A VOTE FOR PROPOSALS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS. PLEASE MARK
YOUR VOTES AS
INDICATED IN X
THIS EXAMPLE
1. Election of Directors for the term expiring at the Annual Meeting in 2003. 2. Ratify the appointment of Deloitte & Touche LLP
as independent public auditors of the Company.
FOR each WITHHOLD AUTHORITY Nominees: Anthony J. DiNovi, Paul M.
nominee to vote for each Montrone and Scott M. Sperling
listed. nominee listed.
/ / / / (Instructions: To withhold authority to FOR AGAINST ABSTAIN
vote for any individual nominee, / / / / / /
write the nominee's name on the space
provided below.)
-------------------------------------- 3. In their discretion, on such other business as
may properly come before the meeting.
A MAJORITY (OR IF ONLY ONE, THEN THAT ONE) OF
THE ABOVE PERSONS OR THEIR SUBSTITUTES WHO SHALL
BE PRESENT AND ACTING AT THE MEETING SHALL HAVE
THE POWERS CONFERRED HEREBY.
Dated: , 2000
-------------------------------------
------------------------------------------------
------------------------------------------------
Signature of Stockholder(s)--please sign name
exactly as imprinted (do not print). Please
indicate any change of address.
NOTE: Executors, administrators, trustees and
others signing in a representative capacity
should indicate the capacity in which they sign.
If shares are held jointly, EACH holder should
sign.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY.
</TABLE>
* FOLD AND DETACH HERE *
