As filed with the Securities and Exchange Commission on November 10, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Henry Schein, Inc.
(Exact name of registrant as specified in its charter)
Delaware 135 Duryea Road 11-3136595
(State or other jurisdiction of Melville, New York 11747 (I.R.S. Employer
incorporation or organization) (516) 843-5500 Identification Number)
Stanley M. Bergman
Chairman, Chief Executive
Officer and President
Henry Schein, Inc.
135 Duryea Road
Melville, New York 11747
(516) 843-5500
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
Copies to:
Robert A. Cantone, Esq. Mark E. Mlotek, Esq.
Proskauer Rose LLP Vice President, General Counsel and Secretary
1585 Broadway Henry Schein, Inc.
New York, New York 10036 135 Duryea Road
(212) 969-3000 Melville, New York 11747
(516) 843-5500
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered in connection with
dividend or interest reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: / /
--------------------------------------------
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
HENRY SCHEIN, INC.
1,064,596 SHARES OF COMMON STOCK
($0.01 Par Value)
This Prospectus has been prepared for use in connection with proposed
sales of up to 1,060,002 shares (the "Offered Shares") of the common stock, par
value $0.01 (the "Common Stock"), of Henry Schein, Inc. (the "Company"), which
may be made from time to time by or for the account of certain stockholders of
the Company (the "Selling Stockholders"). See "The Selling Stockholders". The
Company will receive no part of the proceeds of this offering. The Offered
Shares were acquired by the Selling Stockholders in connection with various
acquisitions by the Company of businesses that were owned or managed by one or
more of the Selling Stockholders. This Prospectus also covers the offer and sale
of up to approximately 4,594 shares of Common Stock that will become issuable
pursuant to the exercise of certain options granted by Sullivan Dental Products,
Inc. ("Sullivan") upon the consummation of the Merger described below. See "The
Options".
The Common Stock is traded on the Nasdaq National Market under the
symbol "HSIC". On November 7, 1997, the closing sale price of the Common Stock
was $35.00. Sales of Offered Shares may be made through brokers, dealers or
agents or directly to purchasers, and may be effected in the over-the-counter
market or otherwise, and at market prices prevailing at the time of sale, fixed
prices or negotiated prices. See "Manner of Sale".
The Selling Stockholders will bear all commissions, and other
compensation paid to brokers in connection with the sale of the Offered Shares.
The Company will bear the expense of registering the Offered Shares issued and
the shares issuable upon exercise of the options referred to above.
The Company is the largest direct marketer of healthcare products and
services to office-based healthcare practitioners in the combined North American
and European markets. On August 3, 1997, the Company and a wholly-owned
subsidiary entered into an Agreement and Plan of Merger (the "Merger Agreement")
with Sullivan pursuant to which the Company's subsidiary will be merged into
Sullivan (the "Merger") and Sullivan will become a wholly-owned subsidiary of
the Company. Pursuant to the Merger, each outstanding share of Sullivan's common
stock will be converted into 0.735 shares of Common Stock. In 1996, Sullivan had
net sales of approximately $242 million and earnings of approximately $8.7
million, and approximately 7,600,000 shares of Common Stock (approximately 21.7%
of the outstanding shares of Common Stock when issued) will be issued pursuant
to the conversion of the outstanding shares of Sullivan Stock. The Merger is
subject to the satisfaction or waiver of various conditions, including the
approval of the Merger Agreement by Sullivan's shareholders and the approval of
the issuance of shares of Common Stock in the Merger by the Company's
shareholders. Although it is currently anticipated that the Merger occur on
November 12, 1997, no assurance can be given that all of these conditions will
be satisfied or waived and the Merger consummated.
See "Risk Factors" beginning on page 3 for a discussion of certain
factors that should be considered by prospective purchasers of the Offered
Shares.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 10, 1997
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports, proxy statements and other information
with the Securities and Exchange Commission (the "SEC").
The Company has filed, through the Electronic Data Gathering, Analysis
and Retrieval System ("EDGAR"), a Registration Statement on Form S-3 (the
"Registration Statement") with the SEC under the Securities Act of 1933 (the
"Securities Act") with respect to the Offered Shares. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits thereto, certain portions of which have been omitted as permitted by
the rules and regulations of the SEC. Copies of the Registration Statement
(including such omitted portions) are available from the SEC upon payment of
prescribed rates. For further information, reference is made to the Registration
Statement and the exhibits filed therewith. Statements contained in this
Prospectus relating to the contents of any contract or other document referred
to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or such other document, each such
statement being qualified in all respects by such reference.
This filed material can be inspected and copied at the public reference
facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the SEC:
Chicago Regional Office (Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661) and New York Regional Office (Seven World Trade Center,
New York, New York 10048). Copies of such material may be obtained by mail from
the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, such material can be inspected at
the offices of the National Association of Securities Dealers, Inc. (the
"NASD"), 1735 K Street, N.W., Washington, DC 20006. Material filed
electronically through EDGAR may also be accessed through the SEC's home page on
the World Wide Web at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
SEC, are incorporated by reference in this Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December
28, 1996 (File No. 0-27028);
(b) Amended Annual Report on Form 10-K/A for the fiscal year
ended December 28, 1996;
(c) Current Report on Form 8-K dated June 24, 1997;
(d) Quarterly Report on Form 10-Q for the fiscal quarter ended
March 29, 1997;
(e) Current Report on Form 8-K dated August 1, 1997;
(f) Quarterly Report on Form 10-Q for the fiscal quarter ended
June 28, 1997;
(g) Registration Statement on Form 8-A dated October 27, 1995;
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Offered Shares shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document that is incorporated or deemed incorporated by reference herein
modifies, supersedes or replaces such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon written or oral request of such person, a
copy of any and all of the information that has been incorporated by reference
in this Prospectus (excluding exhibits unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
the Company at 135 Duryea Road, Melville, New York 11747, Attention: Mark E.
Mlotek, telephone number (516) 843-5500.
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RISK FACTORS
In addition to other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the
Offered Shares. The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward looking statements. Any forward looking statements
contained in this Prospectus are subject to, among other things, the following
factors.
Competition
The healthcare products distribution business is intensely competitive.
The Company competes with numerous other companies, including several major
manufacturers and distributors. Some of these competitors have greater financial
and other resources than the Company. Most of the Company's products are
available from several sources, and their customers tend to have relationships
with several distributors. In addition, such competitors could obtain rights to
market particular products to the exclusion of the Company. Manufacturers also
could increase their efforts to sell directly to end-users, thereby by-passing
distributors such as the Company. Consolidation among healthcare products
distributors could result in existing competitors increasing their market
position through acquisitions or joint ventures, which may materially adversely
affect operating results. In addition, new competitors may emerge which could
materially adversely affect the Company's operating results. There can be no
assurance the Company will not face increased competition in the future.
Expansion Through Acquisitions and Joint Ventures
The Company intends to expand in its domestic and international
markets, in part through acquisitions and joint ventures. However, the Company's
ability to successfully expand through acquisitions and joint ventures will
depend upon the availability of suitable acquisition or joint venture candidates
at prices acceptable to the Company, the Company's ability to consummate such
transactions, and the availability of financing (in the case of non-stock
transactions) on terms acceptable to the Company. There can be no assurance that
the Company will be effective in making acquisitions or joint ventures. Such
transactions involve numerous risks, including possible adverse short-term
effects on the Company's operating results or the market price of the Common
Stock. Certain of the Company's acquisitions and future acquisitions may also
give rise to an obligation by the Company to make contingent payments or to
satisfy certain repurchase obligations, which payments could have an adverse
financial effect on the Company. In addition, integrating acquired businesses
and joint ventures may result in a loss of customers or product lines of the
acquired businesses or joint ventures, and also requires significant management
attention and may place significant demands on the Company's operations,
information systems and financial resources. In 1996, the Company completed the
acquisition of (or entered into definitive agreements to acquire) 17 companies
and has acquired or entered into definitive agreements to acquire 16 companies
so far in 1997, including Sullivan. The failure to effectively integrate
Sullivan or future acquired businesses and joint ventures with the Company's
operations could adversely affect the Company.
Control by Insiders
As of November 3, 1997, Stanley M. Bergman, Chairman of the Board,
Chief Executive Officer and President of the Company, owned, directly or
indirectly, approximately 5.0% of the outstanding shares of the Company Common
Stock and, by virtue of a Voting Trust Agreement (which expires December 31,
1998 unless terminated earlier) with certain of the Company's current principal
stockholders, will have the right
3
to vote up to an aggregate of approximately 15.6% of the outstanding shares of
Common Stock. In addition, until December 31, 1998, under certain circumstances,
Mr. Bergman has the right to direct the nomination of a majority of the nominees
to the Company's Board of Directors and, from January 1, 1999 until December 31,
2003, Mr. Bergman has the right to direct the nomination of all, or, under
certain circumstances, certain, of the nominees to the Company's Board of
Directors, and in all such events certain of the current principal stockholders
are required to vote for such nominees. Because of these voting arrangements,
Mr. Bergman has significant influence over matters requiring the approval of the
Company's Board of Directors or the stockholders of the Company. Under certain
circumstances, these voting arrangements may terminate prior to December 31,
1998. In that event, certain of the Company's current principal stockholders may
be able to significantly influence all matters requiring stockholder approval,
including the election of directors. See "THE COMPANY--Reorganization."
Fluctuations in Quarterly Earnings
The Company's business has been subject to seasonal and other quarterly
influences. Net sales and operating profits have been generally higher in the
fourth quarter due to the timing of sales of software, year-end promotions, and
purchasing patterns of office-based healthcare practitioners, and have been
generally lower in the first quarter due primarily to increased purchases in the
prior quarter. Quarterly results may also be adversely affected by a variety of
other factors, including the timing of acquisitions and related costs, the
release of software enhancements, promotions, adverse weather, and fluctuations
in exchange rates associated with international operations. Similarly, strikes
(such as the recent United Parcel Service of America, Inc. ("UPS") strike) or
other service interruptions could adversely affect the Company's ability to
deliver products on a timely basis and result in incremental shipping and
payroll costs, thereby adversely impacting quarterly results. The Company uses
UPS for delivery of substantially all of its domestic orders.
In August 1997, the Teamsters' Union striked against UPS, thereby
substantially reducing UPS's ability to fulfill shipments of its customers'
orders. In order to maintain customer service levels, the Company had to make
alternative arrangements for its deliveries. The Company's transportation costs
associated with the alternative arrangements for delivery were substantially
higher than that which would have been incurred if UPS had been able to fulfill
substantially all of the Company's domestic orders. In addition, the Company
experienced increases in other operating costs, primarily payroll, as a result
of having to sort customer orders for distribution to various regional couriers.
Additionally, after the strike payroll costs continued to run at rates higher
than would otherwise be expected for several days in order to handle inbound
freight that was backlogged as a result of the UPS strike. None of these
incremental costs incurred by the Company were passed along to its customers.
The Company estimates that it incurred approximately $1.3 million of
additional one-time operating expenses during the third quarter of 1997, which
consists primarily of incremental freight and payroll costs. The UPS strike did
not significantly impact sales. After the strike, freight and payroll costs
returned to normal pre-strike levels.
Practice Management Software and Other Value Added Products
During 1996, approximately $31.0 million, or 3.7%, and $21.4 million,
or 8.5%, of the Company's net sales and gross profit, respectively, were derived
from sales of the Company's Easy Dental(R) Plus, Dentrix Dental System, and
AVImark(R) practice management software and other value added products to United
States dental and veterinary office-based healthcare practitioners. Competition
among companies supplying practice management software is intense and
increasing. The Company's future sales of practice
4
management software will depend, among other factors, upon the effectiveness of
the Company's sales and marketing programs, the Company's ability to enhance its
products and its ability to provide ongoing technical support. There can be no
assurance that the Company will be successful in introducing and marketing
software enhancements or new software, or that such software will be released on
time or accepted by the market. The Company's software products, like software
products generally, may contain undetected errors or bugs when introduced or as
new versions are released. There can be no assurance that problems with
post-release software errors or bugs will not occur in the future. Any such
defective software may result in increased expenses related to the software and
could adversely affect the Company's relationship with the customers using such
software. The Company does not have any patents on its software and relies upon
copyright, trademark and trade secret laws; there can be no assurance that such
legal protections will be available or enforceable to protect its software
products. The Company's software products are generally distributed under
"shrink-wrap" licenses that are not signed by the customer and, therefore, may
be unenforceable in certain jurisdictions.
Foreign Operations
During 1996, approximately 17.5% and 18.1% of the Company's net sales
and gross profit, respectively, were derived from sales to customers located
outside the United States and Canada. The Company's international businesses are
subject to a number of inherent risks, including difficulties in opening and
managing foreign offices and distribution centers; establishing channels of
distribution; fluctuations in the value of foreign currencies; import/export
duties and quotas; and unexpected regulatory, economic and political changes in
foreign markets. There can be no assurance that these factors will not adversely
affect the Company's operating results.
Dependence on Senior Management
The Company's future performance will depend, in part, upon the efforts
and abilities of certain members of its existing senior management, particularly
Stanley M. Bergman, Chairman, Chief Executive Officer and President, James P.
Breslawski and Bruce J. Haber, Executive Vice Presidents, Steven Paladino,
Senior Vice President and Chief Financial Officer, and, if the Merger is
consummated, Robert J. Sullivan, the Chairman and Chief Executive Officer of
Sullivan, who will serve as Vice Chairman of the Company. The loss of service of
one or more of these persons could have an adverse effect on the Company's
business. The Company has entered into employment agreements with Mr. Bergman,
Mr. Haber and (effective upon the consummation of the Merger) Mr. Sullivan. The
success of certain acquisitions and joint ventures effected by the Company may
depend, in part, on the Company's ability to retain key management of the
acquired business or joint venture.
Changes in Healthcare Industry
In recent years, the healthcare industry has undergone significant
change driven by various efforts to reduce costs, including potential national
healthcare reform, trends toward managed care, cuts in Medicare, consolidation
of healthcare distribution companies and collective purchasing arrangements by
office-based healthcare practitioners. If the Company is unable to react
effectively to these and other changes in the healthcare industry, its operating
results could be adversely affected. The Company cannot predict whether any
healthcare reform efforts will be enacted and what effect any such reforms might
have on the Company or its customers and suppliers.
5
Government Regulation
The Company and its customers and suppliers are subject to extensive
Federal and state regulation in the United States, as well as regulation by
foreign governments, and the Company cannot predict the extent to which future
legislative and regulatory developments concerning their practices and products
or the healthcare industry may affect the Company. In addition, the Company, as
a marketer, distributor and manufacturer of healthcare products (including
through, among other entities, its 50%-owned company, HS Pharmaceutical, Inc.,
which distributes and manufactures generic pharmaceuticals), are required to
obtain the approval of Federal and foreign governmental agencies, including the
Food and Drug Administration, prior to marketing, distributing and manufacturing
certain of those products, and it is possible that the Company may be prevented
from selling new manufactured products should a competitor receive prior
approval. Further, the Company's plants and operations are subject to review and
inspection by local, state, Federal and foreign governmental entities. The
Company's suppliers are subject to similar governmental requirements.
Risk of Product Liability Claims and Insurance
The sale, manufacture and distribution of healthcare products involves
a risk of product liability claims and adverse publicity. Although the Company
has not been subject to a significant number of such claims or incurred
significant liabilities due to such claims, there can be no assurance that this
will continue to be the case. In addition, the Company maintains product
liability insurance coverage and have certain rights to indemnification from
third parties, but there can be no assurance that claims outside of or exceeding
such coverage will not be made, that the Company will be able to continue to
obtain insurance coverage or that they will be successful in obtaining
indemnification from such third parties. The Company also may not be able to
maintain existing insurance coverage or obtain, if it determines to do so,
insurance providing additional coverage at reasonable rates.
Cost of Shipping
Shipping is a significant expense in the operation of the Company's
business. The Company ships almost all of its orders by United Parcel Service
and other delivery services, and typically bears the cost of shipment.
Accordingly, any significant increase in shipping rates could have an adverse
effect on the Company's operating results. Similarly, strikes or other service
interruptions by such shippers could cause the Company's operating expenses to
rise and adversely affect the Company's ability to deliver products on a timely
basis. See "--Fluctuations in Quarterly Earnings" with respect to the recent UPS
strike.
Reliance on Telephone and Computer Systems
The Company believes that its success depends, in part, upon its
telesales and direct marketing efforts and its ability to provide prompt,
accurate and complete service to their customers on a price-competitive basis.
Any continuing disruption in either the Company's computer system or telephone
system could adversely affect its ability to receive and process customer orders
and ship products on a timely basis. Any such disruption could adversely affect
its relations with their customers.
Potential Volatility of Common Stock Prices
The market price of the Common Stock may be subject to fluctuations in
response to quarter-to-quarter variations in operating results, changes in
earnings estimates by investment analysts or changes in
6
business or regulatory conditions affecting the Company, its customers, its
suppliers or its competitors. The stock market historically has experienced
volatility which has particularly affected the market prices of securities of
many companies in the healthcare industry and which sometimes has been unrelated
to the operating performances of such companies. These market fluctuations may
adversely affect the market price of the Common Stock. From December 31, 1996
through November 7, 1997, the closing market price of the Common Stock as
reported on the Nasdaq National Market has ranged from a high of $40.50 to a low
of $24.50.
Anti-takeover Provisions; Possible Issuance of Preferred Stock
Certain provisions of the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated By-laws, as amended, as currently in
effect may make it more difficult for a third party to acquire, or may
discourage acquisition bids for, the Company and could limit the price that
certain investors might be willing to pay in the future for shares of Common
Stock. These provisions, among other things: (i) require the affirmative vote of
the holders of at least 60% of the shares entitled to vote to approve a merger
or a sale, lease, transfer or exchange of all or substantially all of the assets
of the Company, (ii) require the affirmative vote of the holders of at least
66 2/3% of the shares entitled to vote to remove a director or to fill a
vacancy on the Board of Directors, (iii) require the affirmative vote of the
holders of at least 80% of the shares entitled to vote to amend or repeal
certain provisions of the Company's Amended and Restated Certificate of
Incorporation and (iv) require the affirmative vote of at least 66 2/3% of the
Company's Board of Directors to amend or repeal the By-laws of the Company. In
addition, the rights of holders of Common Stock will be subject to, and may be
adversely affected by, the rights of any holders of preferred stock of the
Company that may be issued in the future and that may be senior to the rights of
the holders of Common Stock. Under certain conditions, Section 203 of the
Delaware General Corporation Law would prohibit the Company from engaging in a
"business combination" with an "interested stockholder" (in general, a
stockholder owning 15% or more of the Company's outstanding voting stock) for a
period of three years. In addition, the Company's 1994 Stock Option Plan and
1996 Non-Employee Director Stock Option Plan provide for accelerated vesting of
stock options upon a change in control of the Company, and in certain instances,
agreements between the Company and its executive officers provide for increased
severance payments if such executive officers are terminated without cause
within two years after a change in control of the Company. At the Special
Meeting of the holders of Common Stock to be held on November 12, 1997, such
holders will be asked to vote on proposed amendments to the Company's Amended
and Restated Certificate of Incorporation (the "Certificate of Incorporation
Amendments") that would (i) authorize the Board of Directors to establish from
time to time the number of directors constituting the entire Board and enable
the Board of Directors to amend or repeal certain By-laws, and (ii) reduce the
80% supermajority voting requirement referred to above. These provisions of the
Amended and Restated Certificate of Incorporation (whether or not the
Certificate of Incorporation Amendments are adopted) may make it more difficult
for a third party to acquire, or may discourage acquisition bids for, the
Company and could limit the price that certain investors might be willing to pay
in the future for shares of Common Stock.
Shares Eligible for Future Sale
Future sales of substantial amounts of Common Stock in addition to the
Offered Shares (including shares issued upon the exercise of stock options) by
the Company's current stockholders (including certain executive officers,
employees and affiliates of the Company), or the perception that such sales
could occur, could adversely affect the market price for the Common Stock.
Approximately 7,917,301 shares of Common Stock owned by certain executive
officers, employees and affiliates of the Company, constituting approximately
28.8% of the shares of Common Stock outstanding as of November 3, 1997, were
eligible for
7
immediate resale in the public market pursuant to Rule 144 under the Securities
Act as of that date. Additional shares of Common Stock that were issued in
connection with certain acquisitions are eligible for immediate resale in the
public market pursuant to Rule 145 under the Securities Act, and more shares
will become eligible as a result of the Merger and future acquisitions by the
Company. In connection with the reorganization described under
"--Reorganization" below, the Company entered into a Registration Rights
Agreement with certain of its stockholders. The Company granted registration
rights to the holders of the Offered Shares in connection with the acquisitions
in which such shares were issued, and may grant additional registration rights
in connection with future acquisitions. In addition, an aggregate of 2,408,460
shares of Common Stock are available for issuance upon the exercise of
outstanding options to purchase shares of Common Stock. If the Merger is
consummated, approximately 1,578,000 additional shares of Common Stock will be
owned by affiliates of Sullivan that will be eligible for sale under Rule 145
under the Securities Act, and approximately an additional 1,231,000 shares of
Common Stock will be issuable upon the exercise of options granted by Sullivan
and assumed by the Company pursuant to the Merger.
Reorganization
In connection with the reorganization of the Company's ownership and
the various agreements entered into in connection therewith between 1992 and
1994 (the "Reorganization"), certain stockholders of the Company made customary
representations, warranties and covenants and provided for indemnification with
respect to the structure of the transaction and for breaches of such
representations, warranties and covenants. No claims for such indemnification
have arisen to date. Applicable accounting rules provide that certain amounts
paid or assumed by such stockholders on behalf of the Company in satisfaction of
indemnity obligations may be required to be recorded by the Company for
financial reporting purposes as an expense. Accordingly, although any such
payment or assumption may not materially impact the Company's cash flow, the
Company's results of operations would be negatively impacted in the period
incurred. In addition, there can be no assurance that such stockholders will
have the resources in the future to meet their respective indemnification
obligations, if any, under such agreements.
THE COMPANY
General.
The Company is the largest direct marketer of healthcare products and
services to office-based healthcare practitioners in the combined North American
and European markets. The Company has operations in the United States, Canada,
the United Kingdom, The Netherlands, Belgium, Germany, France, the Republic of
Ireland and Spain, and sells products and services to over 230,000 office-based
healthcare practitioners in North America and Europe, primarily dental practices
and dental laboratories, as well as physician practices, veterinary clinics and
institutions. In 1996, the Company sold products to over 65% of the estimated
100,000 dental practices in the United States. The Company believes that there
is strong awareness of the Henry Schein name among office-based healthcare
practitioners due to its more than 60 years of experience in distributing
healthcare products.
Through its comprehensive catalogs and other direct sales and marketing
programs, Schein offers its customers a broad product selection of both branded
and private brand products which include approximately 50,000 stock keeping
units ("SKUs") in North America and approximately 40,000 SKUs in Europe at
published prices that Schein believes are below those of many of its
competitors. Schein also offers various value-added products and services, such
as practice management software. As of December
8
28, 1996, Schein had sold over 18,000 dental practice management software
systems, more than any of its competitors. On February 28, 1997, Schein acquired
all of the outstanding common stock of Dentrix Dental Systems, Inc., a leading
provider of clinically-based dental practice management systems, and on August
1, 1997, Schein acquired all of the outstanding common stock of Micro
Bio-Medics, Inc., a distributor of medical supplies to physicians and other
healthcare providers, primarily in the Northeastern United States.
Recent Developments
On August 3, 1997, the Company and a wholly-owned subsidiary entered
into the Merger Agreement with Sullivan pursuant to which the Company's
subsidiary will be Merged into Sullivan and Sullivan will become a wholly-owned
subsidiary of the Company. Pursuant to the Merger, each outstanding share of
Sullivan's common stock will be converted into 0.735 shares of Common Stock. In
1996, Sullivan had net sales of approximately $242 million and earnings of
approximately $8.7 million, and approximately 7,600,000 shares of Common Stock
(approximately 21.7% of the outstanding shares of Common Stock when issued) will
be issued pursuant to the conversion of the outstanding shares of Sullivan
Stock. Although the Company anticipates that the Merger will occur on November
12, 1997, the Merger is subject to the satisfaction or waiver of various
conditions, including the approval of the Merger Agreement by Sullivan's
shareholders and the approval of the issuance of shares of Common Stock in the
Merger by the Company's shareholders. No assurance can be given that all of
these conditions will be satisfied or waived and the Merger consummated.
Sullivan distributes consumable dental supplies to dentists using a
marketing strategy which combines personal visits with a catalog of
approximately 12,000 competitively priced items, and also sells, installs and
services dental equipment through 52 sales and service centers located
throughout the United States. The Company's acquisition of Sullivan is intended
to qualify for pooling of interests accounting.
On August 1, 1997, the Company acquired all of the outstanding common
stock of Micro Bio-Medics, Inc., a distributor of medical supplies to physicians
and other healthcare providers, primarily in the Northeastern United States,
with 1996 net sales of approximately $150 million. On February 28, 1997, the
Company acquired all of the outstanding common stock of Dentrix Dental Systems,
Inc., a leading provider of clinically-based dental practice management systems,
with 1996 net sales of approximately $10.2 million and a 3,500 installed user
base. Both of these transactions were accounted for as a pooling of interests.
Reorganization
The Company was formed on December 23, 1992 as a wholly-owned
subsidiary of Schein Holdings, Inc. ("Schein Holdings"). At that time, Schein
Holdings conducted the business in which the Company is now engaged and owned
100% of the outstanding capital stock of Schein Pharmaceutical, Inc. ("Schein
Pharmaceutical"), a company engaged in the manufacture and distribution of
multi-source pharmaceutical products.
In December 1992, Schein Holdings separated the Company's business from
Schein Pharmaceutical by transferring to the Company all of the assets and
liabilities of the healthcare distribution business now conducted by the
Company, including Schein Holdings' 50% interest in HS Pharmaceutical, Inc. ("HS
Pharmaceutical"), a manufacturer and distributor of generic pharmaceuticals
(together with the events described below, the "Reorganization"). No other
assets or liabilities, including the assets and liabilities associated with
Schein Pharmaceutical's business, were transferred to the Company. In connection
with the Reorganization, the Company agreed to indemnify Schein Holdings for all
of the liabilities assumed by the
9
Company, and Schein Holdings agreed to indemnify the Company for the liabilities
associated with Schein Pharmaceutical's business of manufacturing and
distributing generic pharmaceuticals. Other than certain common stockholders,
there is no affiliation between the Company and Schein Pharmaceutical, and all
transactions between the Company and Schein Pharmaceutical are on an
arm's-length basis.
In February 1994, the Company, Schein Holdings, Stanley M. Bergman,
Marvin H. Schein, Pamela Joseph, Pamela Schein, Steven Paladino, James P.
Breslawski, Martin Sperber (the Chief Executive Officer of Schein
Pharmaceutical) and certain other parties entered into a number of agreements as
part of the Reorganization (the "Reorganization Agreements"). In September 1994,
pursuant to the Reorganization Agreements, all of the shares of Common Stock
held by Schein Holdings was distributed to certain of the current stockholders
of the Company. Marvin H. Schein, Pamela Schein and Pamela Joseph have agreed to
severally indemnify the Company against certain potential costs and claims, if
any, which might be incurred by the Company in the future from the transactions
related to the Reorganization. The Company and Schein Pharmaceutical also agreed
that, after September 1994, the Company would be entitled to use the "Henry
Schein" name in activities involving non-pharmaceutical products and
pharmaceuticals for dental and veterinary purposes, which activities may include
marketing, distributing, labeling, packaging, and manufacturing (such as HS
Pharmaceutical's manufacturing of generic pharmaceuticals and the Company's
Schein Dental Equipment subsidiary's manufacturing of large dental equipment),
which are the principal manufacturing activities currently conducted by the
Company, its subsidiaries and 50%-or-less owned entities selling such products.
The Company and Schein Pharmaceutical also agreed that after September 1994,
Schein Pharmaceutical would be entitled to use the "Schein Pharmaceutical" name
in similar activities involving pharmaceuticals for non-dental human treatment.
Schein Pharmaceutical is not permitted to use the name "Henry Schein."
One of the Reorganization Agreements, a Voting Trust Agreement (the
"Voting Trust"), gives Stanley M. Bergman (or his successor trustee), as Voting
Trustee, the right to vote all of the shares of Common Stock owned by certain
stockholders of the Company, approximately 15.6% of the outstanding shares of
Common Stock. Another of the Reorganization Agreements, the Amended and Restated
HSI Agreement (the "Global Agreement"), provides that the Company's Board of
Directors consist of up to 11 members, and that until the earlier of January 1,
1999 or the termination of the Voting Trust, Mr. Bergman (or his successor
trustee) has the right to nominate all but three of the nominees to the
Company's Board of Directors. Marvin H. Schein, Pamela Joseph and Pamela Schein
have the right to serve as or nominate the remaining three directors. In
general, from January 1, 1999 (at which time the number of directors
constituting the entire Board of Directors will be reduced to nine unless the
proposed Certificate of Incorporation Amendments are adopted), unless the Voting
Trust has terminated prior thereto, until the earlier of January 1, 2004 or the
first date on which Marvin H. Schein and his family group no longer beneficially
own at least 25% of the outstanding Common Stock that they owned immediately
after the Reorganization or the date of certain changes in the Company's
management, Mr. Bergman (or his successor trustee) has the right to nominate all
of the nominees to the Company's Board of Directors, provided, that if Marvin H.
Schein does not approve such nominations, Mr. Bergman (or his successor trustee)
and Mr. Schein will each nominate four nominees (of which one will be an
independent nominee) and the ninth nominee will be selected by the two
independent nominees. As a result of the foregoing, until December 31, 1998, Mr.
Bergman, as a practical matter, will be able to significantly influence all
matters requiring stockholder approval, including the election of directors, and
until January 1, 2004, Mr. Bergman will have the ability to significantly
influence the election of all or a substantial number of the directors of the
Company.
10
The Global Agreement also requires the parties to the Voting Trust and
Marvin H. Schein to vote in favor of the individuals so nominated as first
described above until the earlier of January 1, 1999 or the termination of the
Voting Trust, and thereafter (assuming no prior termination of the Voting Trust)
to vote their shares in favor of the nominees of Stanley M. Bergman and, if
applicable, Marvin H. Schein, until January 1, 2004. The Voting Trust terminates
on December 31, 1998, but is subject to earlier termination if, among other
things, Stanley M. Bergman ceases to be employed by or serve as a director of
the Company (unless certain other members of current management are serving as
senior executives of the Company) or the Company consummates a business
combination which results in Marvin H. Schein (including his family members)
owning less than 5% of the voting securities of the surviving corporation.
The Global Agreement affords Marvin H. Schein or his designee the right
to serve on each committee of the Board of Directors to which the Company's
Board of Directors has delegated decision-making authority and the right to call
a special meeting of the Company's Board of Directors. The Global Agreement also
limits the Company's ability to adopt a stockholder rights plan or "fair price
amendment," if such plan or amendment would affect Marvin H. Schein or Pamela
Schein (including their respective family members), as long as Marvin H. Schein
or Pamela Schein own certain specified percentages of the outstanding Common
Stock. The Global Agreement also limits the ability of Marvin H. Schein, Pamela
Schein and Pamela Joseph to participate in any solicitation of proxies or any
election contest.
The Global Agreement places certain restrictions on the ability of the
parties thereto to transfer any of the shares of Common Stock owned by them and
further provides that the Company may not, prior to the earlier of December 31,
2003 or the first date on which neither Marvin H. Schein nor Pamela Schein
(including their respective family members) own at least 5% of the outstanding
shares of Common Stock; (i) issue in one or more private transactions securities
having more than 20% of the total votes that can be cast in any election of
directors of the Company without first offering Marvin H. Schein and Pamela
Schein (including their respective family members) the right to purchase such
securities; (ii) issue securities in connection with a business combination
having more than 20%, or resulting in a person owning more than 20%, of the
total votes that can be cast in any election of directors without the consent of
Marvin H. Schein; or (iii) issue preferred stock having the right to cast more
than 20% of the total votes that can be cast in any election of directors of the
Company. In addition, certain members of management have agreed not to transfer
their shares until November 3, 1998, subject to acceleration in Mr. Bergman's
discretion. Restrictions on the ability of stockholders to transfer their stock
may make it more difficult for a third party to acquire, or may discourage
acquisition bids for, the Company, and could limit the price that certain
investors might be willing to pay in the future for the Common Stock.
The Global Agreement provides that the Company will indemnify each of
the other parties to the Reorganization agreements, and their family groups,
from damages resulting from (i) claims asserted by third parties relating to the
Reorganization agreements and (ii) any material breach of a representation,
warranty or covenant made by the Company in any of the Reorganization
agreements. Marvin H. Schein has agreed to consult with Pamela Schein prior to
the exercise of certain of his rights of approval and consent under the
Reorganization agreements.
As described above in "RISK FACTORS--Anti-takeover Provisions; Possible
Issuances of Preferred Stock", the Company has proposed the Certificate of
Incorporation Amendments that would, among other things, allow the Board of
Directors to increase the number of directors. If the Certificate of
Incorporation Amendments are adopted, it is anticipated that the parties to the
Voting Trust and the Global Agreement will amend such agreements to take the
Certificate of Incorporation Amendments into account.
11
SELLING STOCKHOLDERS
The following table lists the names and business addresses of each
Selling Stockholder, the number of shares of Common Stock beneficially owned by
each Selling Stockholder as of November 3, 1997, the percentage that such shares
represented of the total number of outstanding shares of Common Stock as of that
date, and the number of Offered Shares being offered by each Selling Stockholder
pursuant to this Prospectus. Assuming the sale of all of the Offered Shares,
each of the Selling Stockholders would beneficially own less than 1% of the
outstanding shares of Common Stock upon completion of the Offering. Each Selling
Stockholder acquired the Offered Shares in connection with the Company's
acquisition of a business owned, in whole or in part, or managed by such Selling
Stockholder. Unless otherwise indicated, each Selling Person in the table has
sole voting and investment power as to the Offered Shares shown as being owned
by such person.
Shares
Beneficially Owned
Prior to Offering
-------------------
Name and Address Number Percent Offered Shares
- ---------------------------------- ----- ------- --------------
John Bigler 117,986(1) * 117,986
321 East 25th Street
Tacoma, Washington 98421
Larry M. Gibson 535,000 1.9% 107,000
Dentrix Dental Systems, Inc.
732 East Utah Valley Drive
Suite 500
American Fork, Utah 84003
Kimball K. Wirig 160,500 * 107,000
Dentrix Dental Systems, Inc.
732 East Utah Valley Drive
Suite 500
American Fork, Utah 84003
James Pack 53,500 * 33,500
Dentrix Dental Systems, Inc.
732 East Utah Valley Drive
Suite 500
American Fork, Utah 84003
- -------------
(1) Includes 25,000 held by Global Distributors LLC, a limited liability
company wholly-owned by Mr. Bigler.
* Less than one percent.
12
Shares
Beneficially Owned
Prior to Offering
-------------------
Name and Address Number Percent Offered Shares
- ---------------------------------- ----- ------- --------------
James V. Hughes 160,500 * 107,000
Dentrix Dental Systems, Inc.
732 East Utah Valley Drive
Suite 500
American Fork, Utah 84003
Andrew Parker 62,500 * 56,250
275 Oser Avenue
Hauppauge, New York 11768
Glenn Meltzer 62,500 * 56,250
275 Oser Avenue
Hauppauge, New York 11768
Paul F. Aller 32,679 * 18,500
1979 Stout Drive
Bldg. Five
Ivyland, Pennsylvania 19874
Louis D. Simmers 32,574 * 20,000
1979 Stout Drive
Bldg. Five
Ivyland, Pennsylvania 19874
William C. Standerwick 32,574 * 15,000
1979 Stout Drive
Bldg. Five
Ivyland, Pennsylvania 19874
Garland E. Webb 23,907 * 21,516
c/o Kevin E. Mclaughlin, Esq.
Ford, Gourley, Roeberg & McLaughlin, P.C.
583 Skippack Pike
Suite 200
Blue Bell, Pennsylvania 19422
Ralph L. Falls, Jr. 600,132 2.2% 400,000
526 Congarle Road
Greenville, South Carolina 29606
- -------------
* Less than one percent.
13
THE OPTIONS
Options to purchase an aggregate of 6,250 shares of Sullivan's common stock were
issued to several independent sales representatives of Sullivan in January 1996
or January 1997. Upon the consummation of the Merger, these options will
automatically be assumed by the Company and will thereafter represent the right
to purchase an aggregate of approximately 4,594 shares of Common Stock at
exercise prices of, subject to further adjustment, $13.61 per share, in the case
of the options granted in January 1996, and $17.69 per share, in the case of
options granted in January 1997.
Each of the assumed options may be exercised during a nine-year period
commencing on the first anniversary of the issuance of the original option,
subject to earlier termination. Each option shall terminate upon the first to
occur of: (i) 90 days after the termination of the optionee's engagement as an
independent sales representative of Sullivan, except as a result of death or
total permanent disability; (ii) the expiration of 365 days after the
termination of the optionee's engagement as an independent sales representative
of Sullivan as a result of the optionee's total permanent disability; and (iii)
90 days after the death of the optionee. None of the assumed options may be
transferred except by will or pursuant to the laws of descent and distribution,
and during the optionee's lifetime may be exercised only by the optionee.
Each of the assumed options may be exercised in full or in multiples of 500
shares of Common Stock. The aggregate exercise price of each option may be paid
in cash or by delivery of shares of Common Stock having an aggregate fair market
value equal to the exercise price. Notwithstanding the foregoing, the Company
may, in its sole discretion, pay to the optionee in cash an amount equal to the
difference between the aggregate number of shares for which the option is being
exercised and the aggregate exercise price, and, in such event, the Company
shall not be obligated to issue any shares of Common Stock upon such exercise.
The Company may require the optionee to pay to the Company (by deduction or
otherwise) the amount of any tax required by law to be held with respect to such
exercise.
In general, an optionee will recognize ordinary income at the time an assumed
option is exercised in an amount equal to the difference between the fair market
value of the shares of Common Stock on the date of exercise and the aggregate
exercise price. Upon a subsequent sale of the Common Stock by the optionee, any
gain or loss recognized upon the subsequent sale of such stock will be
short-term or long-term capital gain or loss, depending on the optionee's
holding period. The Company generally will be allowed a deduction equal to the
amount recognized by the optionee as ordinary income in connection with the
exercise of the option.
The options are not subject to any of the requirements of the Employee
Retirement Income Security Act of 1974, as amended, and are not, nor are they
intended to be, qualified under Section 401(a) of the Code.
MANNER OF SALE
This Prospectus, as appropriately amended or supplemented, may be used
from time to time by the Selling Stockholders to offer and sell the Offered
Shares in transactions in which they and any broker-dealer through whom such
shares are sold may be deemed to be underwriters within the meaning of the
Securities Act. The Company will receive none of the proceeds from any such
sales. There presently are no arrangements or understandings, formal or
informal, pertaining to the distribution of the shares of Common Stock described
herein. Upon the Company being notified by a Selling Stockholder that any
material
14
arrangement has been entered into with a broker-dealer for the sale of shares of
Common Stock bought through a block trade, special offering, exchange
distribution or secondary distribution, a supplemented Prospectus will be filed,
pursuant to Rule 424(b) under the Securities Act, setting forth (i) the name of
each Selling Stockholder and the participating broker-dealer(s), (ii) the number
of shares involved, (iii) the price at which the shares were sold, (iv) the
commissions paid or the discounts allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out in this Prospectus and (vi) other facts material
to the transaction.
Selling Stockholders may sell the shares being offered hereby from time
to time in transactions (which may involve crosses and block transactions) on
the Nasdaq National Market (the "NMS"), in negotiated transactions or otherwise,
at market prices prevailing at the time of the sale or at negotiated prices.
Selling Stockholders may sell some or all of the shares in transactions
involving broker-dealers, who may act solely as agent and/or may acquire shares
as principal. Broker-dealers participating in such transactions as agent may
receive commissions from Selling Stockholders (and, if they act as agent for the
purchaser of such shares, from such purchaser), such commissions computed in
appropriate cases in accordance with the applicable rules of the NMS, which
commissions may be at negotiated rates where permissible under such rules.
Participating broker-dealers may agree with Selling Stockholders to sell a
specified number of shares at a stipulated price per share and, to the extent
such broker-dealer is unable to do so acting as an agent for the Selling
Stockholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer's commitment to Selling Stockholders. Broker-dealers
who acquire shares as principal may thereafter resell such shares from time to
time in transactions (which may involve crosses and block transactions and which
may involve sales to or through other broker-dealers, including transactions of
the nature described in the preceding two sentences) on the NMS, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
commissions from the purchaser of such shares.
The Company has agreed to indemnify each Selling Stockholder under the
Securities Act against certain liabilities, including liabilities arising under
the Securities Act. Each Selling Stockholder may indemnify any broker-dealer
that participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
15
EXPERTS
The consolidated financial statements and schedule included in the
Company's Annual Report on Form 10-K, Amended Annual Report on Form 10-K/A, and
Form 8-K dated June 24, 1997 for the year ended December 28, 1996, which are
incorporated by reference in this Prospectus, have been audited by BDO Seidman,
LLP, independent certified public accountants, to the extent and for the periods
indicated in their reports with respect thereto and are incorporated herein in
reliance upon such reports given the authority of said firm as experts in
accounting and auditing.
The financial Statements and schedule of Micro Bio-Medics, Inc.
included in Micro Bio-Medics, Inc.'s Amended Annual Report on Form 10-K/A for
the fiscal year ended November 30, 1996 incorporated by reference the Company's
Form 8-K dated June 24, 1997 and in this Prospectus have been audited by Miller,
Ellin & Company, independent public accountants, to the extent and for the
periods indicated in this report with respect thereto and are incorporated
herein in reliance upon such report given to authority of said firm as experts
in accounting and auditing.
LEGAL MATTERS
The validity of Offered Shares of Common Stock has been passed upon
for the Company by Proskauer Rose LLP, counsel to the Company.
16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses in connection with the distribution of the securities
being registered hereunder (all of which are already outstanding) are:
Securities and Exchange Commission registration fee $ 10,404.01
Accounting fees and expenses................................. 5,000.00
Legal fees and expenses (other than Blue Sky fees
and expenses)............................................... 15,000.00
Miscellaneous................................................. 2,000.00
-----------
Total................................................ $ 32,404.01
===========
All amounts except the Securities and Exchange Commission registration
fee are estimated.
Item 15. Indemnification of Directors and Officers
Article TENTH of the Company's Amended and Restated Certificate of
Incorporation provides that the Company shall indemnify and hold harmless, to
the fullest extent authorized by the Delaware General Corporation Law, its
officers and directors against all expenses, liability and loss actually and
reasonably incurred in connection with any civil, criminal, administrative or
investigative action, suit or proceeding. The Amended and Restated Certificate
of Incorporation also extends indemnification to those serving at the request of
the Company as directors, officers, employees or agents of other enterprises.
In addition, Article NINTH of the Company's Amended and Restated
Certificate of Incorporation[, as amended] provides that no director shall be
personally liable for any breach of fiduciary duty. Article NINTH does not
eliminate a director's liability (i) for a breach of his or her duty of loyalty
to the Company or its stockholders, (ii) for acts or omissions of intentional
misconduct, (iii) under Section 174 of the Delaware General Corporation Law for
unlawful declarations of dividends or unlawful stock purchases or redemptions,
or (iv) for any transactions from which the director derived an improper
personal benefit.
Section 145 of the Delaware General Corporation Law permits a
corporation to indemnify its directors and officers against expenses (including
attorney's fees), judgments, fines and amounts paid in settlements actually and
reasonably incurred by them in connection with any action, suit or proceeding
brought by third parties, if such directors or officers acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reason to believe their conduct was unlawful. In a derivative
action, i.e., one by or in the right of the corporation, indemnification may be
made only for expenses actually and reasonably incurred by directors and
officers in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant officers or directors are
reasonably entitled to indemnity for such expenses despite such adjudication of
liability.
II-1
Section 102(b)(7) of the Delaware General Corporation Law provides that
a corporation may eliminate or limit the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) for liabilities arising under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. No such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the date when
such provision becomes effective.
Item 16. Exhibits and Financial Statements
All exhibits required by Item 601 of Regulation S-K and schedules are
omitted as the required information is presented in the financial statements or
related notes incorporated by reference in the Prospectus or are not applicable.
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
II-2
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suite or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Melville, State of New York on November 10, 1997.
Henry Schein, Inc.
By: /S/ STEVEN PALADINO
---------------------------
Steven Paladino
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Capacity Date
- --------- -------- ----
* Chairman, Chief Executive Officer, November 10, 1997
- ---------------------- President and Director (principal
Stanley M. Bergman executive officer)
/S/ STEVEN PALADINO Senior Vice President, Chief Financial November 10, 1997
- ------------------- Officer and Director (principal financial and
Steven Paladino accounting officer)
* Director November 10, 1997
- -----------------------
James P. Breslawski
* Director November 10, 1997
- ----------------------
Gerald A. Benjamin
II-4
* Director November 10, 1997
- --------------------
Leonard A. David
* Director November 10, 1997
- ------------------
Mark E. Mlotek
* Director November 10, 1997
- -----------------
Pamela Joseph
* Director November 10, 1997
- --------------------
Marvin H. Schein
* Director November 10, 1997
- --------------------
Irving Shafran
* Director November 10, 1997
- --------------------
Barry J. Alperin
* Director November 10, 1997
- -------------------
Donald J. Kabat
*By: /S/ STEVEN PALADINO
---------------------------
Steven Paladino
Attorney-in-fact
II-5
EXHIBIT INDEX
Exhibit No. Description Page No.
3.1 Form of Amended and Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.1 to Henry Schein,
Inc.'s Registration Statement on Form S-1, Reg. No. 33-96528)
3.2 Form of Amended and Restated Bylaws. (Incorporated by reference
to Exhibit 3.2 to Henry Schein, Inc.'s Registration Statement
on Form S-1, Reg. No. 33-96528)
3.3 Amendments to Amended and Restated By-laws adopted July 15,
1997. (Incorporated by reference to Exhibit 3.3 to Henry
Schein, Inc.'s Registration Statement on Form S-4, Reg. No.
333-36081)
5.1 Opinion of Proskauer Rose LLP regarding legality (filed
herewith).
11.1 Statements regarding computation of per share income (filed
as part of Henry Schein, Inc.'s Current Report on Form 8-K
dated June 24, 1997 and incorporated by reference in the Proxy
Statement/Prospectus included in this Registration Statement)
23.1 Consent of BDO Seidman, LLP (previously filed).
23.2 Consent of Miller, Ellin & Company (previously filed).
23.3 Consent of Proskauer Rose LLP (included in exhibit 5.1).
24.1 Powers of Attorney (included as part of the signature pages on
page II-4 of the Registration Statement).
II-6
Exhibit 5
November 10, 1997
Henry Schein, Inc.
135 Duryea Road
Melville, New York 11747
Ladies and Gentlemen:
We are acting as counsel to Henry Schein, Inc., a Delaware corporation (the
"Company"), in connection with the Registration Statement on Form S-3, as
amended (the "Registration Statement"), filed by the Company under the
Securities Act of 1933, relating to the registration of 1,064,596 shares (the
"Shares") of the common stock, par value $.01 (the "Common Stock"), of the
Company. The Registration Statement relates to the offer and sale of up to
1,060,002 of the Shares by certain selling stockholders or the issuance of up to
4,594 shares (the "Option Shares") of Common Stock issuable upon the exercise of
certain stock options (the "Options").
We have examined and relied upon originals or copies, certified or
otherwise authenticated to our satisfaction, of all such corporate records,
documents, agreements and instruments relating to the Company, and certificates
of public officials and of representatives of the Company, and have made such
investigations of law, and have discussed with representatives of the Company
and such other persons such questions of fact, as we have deemed proper or
necessary as a basis for rendering this opinion.
Based upon and subject to the foregoing, we are of the opinion that the
Shares are (or, in the case of the Option Shares, when issued upon due exercise
of the Options, including payment of the option exercise price provided for
therein, will be) legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
PROSKAUER ROSE LLP
By: /s/ ROBERT A. CANTONE
-----------------------------
A member of the firm
