View:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Micro Bio-Medics, Inc.
- -----------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.03
- ----------------------------------------------------------------
(Title of Class of Securities)
59490320
- ----------------------------------------------------------------
(CUSIP Number of Class of Securities)
Mark E. Mlotek, Esq.
Vice President and General Counsel
Henry Schein, Inc.
135 Duryea Road
Melville, New York 11747
(516) 843-5906
- ----------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Robert A. Cantone, Esq.
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
(212) 969-3235
March 7, 1997
- ----------------------------------------------------------------
(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following: [ ]
Schedule 13D
- -------------------------------------
CUSIP No. 59490320
- -------------------------------------
- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Henry Schein, Inc.
11-3136595
- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
- ----------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- ----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ----------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF ----------------------------------------------------
SHARES 8 SHARED VOTING POWER 479,162
BENEFICIALLY ----------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH
REPORTING
PERSON WITH ----------------------------------------------------
10 SHARED DISPOSITIVE POWER 348,436
- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
479,162
- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES*
[ ]
- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8%
- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ----------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS)
OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Item 1. Security and Issuer.
This statement relates to the common stock, par value
$0.03 (the "MBM Common Stock"), of Micro Bio-Medics, Inc., a New
York corporation ("MBM"), the principal executive offices of
which are located at 846 Pelham Parkway, Pelham Manor, New York
10803.
Item 2. Identity and Background.
This statement is filed on behalf of Henry Schein,
Inc., a corporation organized under the laws of the State of
Delaware (the "Reporting Person").
The address of the principal offices and principal
business of the Reporting Person is 135 Duryea Road, Melville,
New York 11747. Set forth on Schedule A attached hereto and
incorporated herein by reference are the names, addresses,
citizenships and present principal occupations or employment of
the executive officers and directors of the Reporting Person, and
the names and addresses of the employers of such persons (if
other than the Reporting Person).
The Reporting Person is the largest direct marketer of
healthcare products and services to office-based healthcare
practitioners in the combined North American and European
markets. The Reporting Person's customers are primarily dental
practices and dental laboratories, as well as physician
practices, veterinary clinics and institutions.
Neither the Reporting Person nor, to its best
knowledge, any of the persons named on Schedule A attached
hereto, has during the last five years: (i) been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors); or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration.
On March 7, 1997, the Reporting Person, HSI Acquisition
Corp., a New York corporation and a wholly owned subsidiary of
the Reporting Person ("Merger Sub"), and the Company entered into
an Agreement and Plan of Merger, dated as of March 7, 1997 (the
"Merger Agreement"). As described more fully in Item 4 below,
pursuant to the Merger Agreement, at the effective time of the
merger (the "Effective Time"), Merger Sub will be merged with and
into MBM (the "Merger"), with MBM continuing as the corporation
surviving the Merger, and each issued and outstanding share of
MBM Common Stock will be converted into the right to receive 0.62
shares of the common stock, par value $0.01, of the Reporting
Person (the "Schein Common Stock"). Completion of the Merger is
subject to, among other things, regulatory approvals and approval
of MBM shareholders.
In connection with the Merger Agreement, the Reporting
Person and the individuals serving as the members of the Board
of Directors of MBM (collectively, the "Shareholders" and each a
"Shareholder"), entered into an Option and Proxy Agreement dated
as of March 7, 1997 (the "Option Agreement"). As described more
fully in Item 4 below, pursuant to the Option Agreement, each
Shareholder has granted to the Reporting Person (i) an option,
exercisable under certain circumstances, to purchase (subject to
certain exceptions) the shares of MBM Common Stock owned by such
Shareholder or receivable by such Shareholder upon the exercise
of rights to purchase shares of MBM Common Stock, and (ii) an
irrevocable proxy to vote all of the shares of Common Stock that
such Shareholder has the right to vote at any meeting or in
connection with any written consent of MBM's shareholders in
favor of the Merger and the Merger Agreement.
Item 4. Purpose of Transaction.
The Reporting Person has entered into the Merger
Agreement and Option Agreement for the purpose of acquiring MBM.
Set forth below is a description of certain of the material terms
of the Merger Agreement and the Option Agreement. Such
description does not purport to be complete and is qualified in
its entirety by reference to the text of the Merger Agreement and
the Option Agreement, which are attached hereto as Exhibit 1 and
Exhibit 2, respectively, and are incorporated by reference
herein.
The Merger Agreement provides, among other things, that
at the Effective Time, Merger Sub will be merged with and into
MBM, the separate corporate existence of Merger Sub will cease,
and MBM will continue as the surviving corporation under the laws
of the State of New York under the name of "Micro Bio-Medics,
Inc." (the "Surviving Corporation").
The Merger Agreement further provides that (i) at the
Effective Time, the Certificate of Incorporation of MBM shall be
amended and restated in its entirety so that upon such amendment
it shall in all respects be equivalent in its content to the
Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, except that the name of
the Surviving Corporation shall be "Micro Bio-Medics, Inc." and
(ii) the By-Laws of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the By-Laws of the Surviving
Corporation.
Pursuant to the Merger Agreement, the directors of
Merger Sub at the Effective Time will be the directors of the
Surviving Corporation until their respective successors shall be
duly elected or appointed and qualified, and the officers of MBM
at the Effective Time will be the officers of the Surviving
Corporation until their respective successors shall be duly
elected or appointed and qualified.
The Merger Agreement also provides that, at the
Effective Time, by virtue of the Merger and without any action on
the part of the holder of any shares of MBM Common Stock or any
holder of capital stock of Merger Sub:
(a) Each issued and outstanding share of MBM Common
Stock (other than treasury shares to be canceled as set
forth below and shares as to which appraisal rights have
been duly demanded under the New York Business Corporation
Law) shall be converted into the right to receive 0.62
shares of Schein Common Stock (the "Exchange Ratio"),
payable upon the surrender of the certificate formerly
representing such share of MBM Common Stock;
(b) All shares of MBM Common Stock that are owned by
MBM as treasury stock shall be canceled and retired and
shall cease to exist and no securities of the Reporting
Person or other consideration shall be delivered in exchange
therefor;
(c) Each share of the common stock, par value $0.01, of
Merger Sub then issued and outstanding shall become one
fully paid and nonassessable share of the common stock,
$0.01 par value, of the Surviving Corporation, which shares
shall be issued to the Reporting Person and shall constitute
the only outstanding shares of capital stock of the
Surviving Corporation; and
(d) Each outstanding option to purchase MBM Common
Stock disclosed to the Reporting Person in the Merger
Agreement and each warrant to purchase MBM Common Stock
disclosed to the Reporting Person in the Merger Agreement
will be assumed by the Reporting Person as provided in the
Merger Agreement and shall be exercisable, in accordance
with its terms, for shares of Schein Common Stock.
Upon consummation of the Merger, the MBM Common Stock
will cease being quoted on the NASDAQ National Market, and
registration of the MBM Common Stock under the Securities
Exchange Act of 934 will be terminated.
Pursuant to the Option Agreement, each Shareholder has
granted to the Reporting Person an option (collectively, the
"Options") to purchase all but not less than all of that
Shareholder's shares of MBM Common Stock (exclusive of certain
shares of MBM Common Stock beneficially owned by one Shareholder
that are currently held in pension plans and approximately 20,000
shares currently held by that Shareholder in margin accounts
subject to the terms thereof (the "Excluded Shares"). Except as
otherwise described below, the consideration for the purchase of
each Shareholder's shares of MBM Common Stock shall be the
issuance to such Shareholder of the number of shares of Schein
Common Stock that such Shareholder would have been entitled to
receive by virtue of the Merger had the Effective Time (as
defined in the Merger Agreement) occurred at the time of the
exercise of the Options. Each of the Shareholders has also
agreed not to dispose of any of the Shares of MBM Common Stock
owned by such Shareholder prior to the termination of the Option
Agreement.
Each Shareholder has also agreed to exercise all
options, warrants or other rights to acquire any Shares of MBM
Common Stock , and to convert or exchange any securities or other
rights that are convertible into or exchangeable for shares of
MBM Common Stock, whether now owned or hereafter acquired by such
Shareholder (collectively, "Rights"), in connection with any
exercise by the Reporting Person of the Options in order to
permit the acquisition by the Reporting Person of the Shares
receivable upon such exercise, conversion or exchange (the
"Additional MBM Shares") pursuant to the exercise of the Options.
To the extent that a Shareholder is obligated to pay any
consideration in connection with the exercise, conversion or
exchange of such Shareholder's Rights (the "Rights
Consideration"), such Rights Consideration shall be paid in such
form as is permitted under the Rights as the Reporting Person
shall direct. If payment of the Rights Consideration is to be
made in cash, the Reporting Person shall fund such payment; if
payment of a Shareholder's Rights Consideration may be made by
delivery of shares of MBM Common Stock, at Reporting Person's
direction such Shareholder shall deliver that number of shares
owned by him or her in payment (or partial payment, as the case
may be) of the Rights. If any Right is to be exercised by means
of a "cashless exercise," the Shareholder exercising such Right
shall cause the net number of shares from such cash less exercise
to be issued and delivered to the Reporting Person. In the event
that the Reporting Person funds any Rights Consideration payment
on behalf of any Shareholder (i) the number of shares of Schein
Common Stock to be issued by the Reporting Person in respect of
the Additional Shares that were acquired pursuant to the payment
of such Rights Consideration shall be reduced by that number of
shares (rounded to the nearest whole share) as is equal to the
quotient obtained by dividing the aggregate amount of Rights
Consideration so paid by the Reporting Person by the closing
sales prices of the Schein Common Stock on the last trading date
prior to the exercise of the Options; and (ii) if the funding of
the Rights Consideration payment on behalf of such Shareholder
subjects such Shareholder to income tax in respect of such
payment, the Reporting Person shall pay to such Shareholder the
amount of such income tax, provided such Shareholder shall
cooperate with the Reporting Person (at the Reporting Person's
expense) in disputing the imposition of such income tax; and
provided further, that if the Reporting Person determines in good
faith that there is a basis for disputing all or any amount of
the income tax imposed, the Reporting Person shall be entitled to
direct any such dispute, but shall indemnify the Shareholder
against any additional income tax for which he or she may become
liable as a result.
Each Shareholder further agreed not to acquire any
Right that provides, whether contingent or otherwise, for any
reduction in the amount of the Rights Consideration payable upon
the exercise, conversion or exchange of such Right, whether or
not such reduction is contingent or fixed as to occurrence or
amount, and shall immediately decline in writing any such Right
that may be granted to him or her.
The options may be exercised (during the exercise
periods provided in the Option and Proxy Agreement) only if the
Merger Agreement terminates under certain circumstances,
including as a result of MBM's Board of Directors withdrawing its
recommendation to MBM's shareholders that the Merger be approved
or the consummation, under certain circumstances, by MBM of an
Acquisition Transfer with any person other than the Reporting
Person or the Merger Sub.
Pursuant to the Option Agreement, each Shareholder has
irrevocably agreed to constitute and appoint the Reporting Person
or any designee of the Reporting Person as the lawful agent,
attorney and proxy of such Shareholder to vote all of his or her
shares of MBM Common Stock (excluding the Excluded Shares but
including additional shares as to which one Shareholder has an
irrevocable proxy to vote) at any meeting or in connection with
any written consent of MBM's shareholders (i) in favor of the
Merger, (ii) in favor of the Merger Agreement, as it may be
modified or amended from time to time, (iii) against any
Acquisition Transaction, (as defined below) (other than the
Merger) or other proposal which provides for any merger, sale of
assets or other business combination between MBM and any other
person or entity or which would make it impractical for the
Reporting Person to effect a merger or other business combination
of MBM with the Reporting Person or a Merger Sub, and (iv)
against any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other
obligation or agreement of MBM under the Merger Agreement or
which would result in any of MBM's obligations under the Merger
Agreement not being fulfilled. An "Acquisition Transaction"
means any merger, consolidation or other business combination
involving MBM or any subsidiary of MBM (excluding certain
acquisitions by MBM expressly permitted under the Merger
Agreement) or the acquisition of all or any significant assets or
capital stock of MBM and its subsidiaries, taken as a whole.
The Option Agreement terminates on the earlier of (i)
the Effective Time and (ii) the termination of the last period of
time during which the Reporting Person could have exercised the
Options; provided, however, that the appointment of the
Reporting Person or any designee of the Reporting Person as
agent, attorney and proxy automatically terminates upon the
termination of the Merger Agreement.
Except as set forth above, the Reporting Person does
not have any present plans or proposals that relate to or would
result in any of the actions required to be described in Item 4
of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Pursuant to the Option Agreement, the Reporting
Person may be deemed to have acquired beneficial ownership of
479,162 shares of MBM Common Stock. Based on MBM's
representation and warranty in the Merger Agreement that, as of
March 7, 1997, 5,072,848 shares of MBM Common Stock were
outstanding, pursuant to Rule 13d-3 of the Act, the 479,162
shares that may be deemed beneficially owned by the Reporting
Person constitute 9.8% of the outstanding shares of MBM Common
Stock. The foregoing share figures do not include the
approximately 1,151,334 shares of MBM Common Stock that are, in
the aggregate, subject to options held by the Shareholders.
Except as set forth herein, neither the Reporting
Person nor, to its best knowledge, any of the persons named on
Schedule A attached hereto, beneficially owns any shares of MBM
Common Stock.
(b) Pursuant to the Option Agreement, the Reporting
Person may be deemed to have shared dispositive power with
respect to 348,436 of the shares of MBM Common Stock beneficially
owned by the Reporting Person as set forth in Item 5(a) above and
shared voting power with respect to all 479,162 such shares of
MBM Common Stock.
(c) Except as set forth herein, no transactions in the
shares of MBM Common Stock have been effected during the past
sixty (60) days by the Reporting Person nor, to its best
knowledge, any of the persons named on Schedule A attached
hereto.
(d) Neither the Reporting Person nor, to its best
knowledge, any of the Persons named on Schedule A attached
hereto, has or knows of any other person who has the right to
receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, any shares of MBM Common Stock
that may be beneficially owned by the Reporting Person.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
There are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in
Item 2 or between any of such persons and any other person with
respect to any securities of MBM except as referred to or
described herein.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Agreement and Plan of Merger, dated as of March 7,
1997, by and among Henry Schein, Inc., HSI Acquisition
Corp. and Micro Bio-Medics, Inc., incorporated by
reference to Exhibit 10.(b)(b) to Micro Bio-Medics,
Inc.'s Annual Report on Form 10-K for the fiscal year
ended November 30,1997.
Exhibit 2 Option and Proxy Agreement, dated as of March 7, 1997,
by and among Henry Schein, Inc. and the persons listed
on Schedule A thereto, each a shareholder of Micro
Bio-Medics, Inc.
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: March 17, 1997
HENRY SCHEIN, INC.
By: /s/ Mark Mlotek
Name: Mark Mlotek
Title: Vice President and General
Counsel
SCHEDULE A
Directors and Executive Officers of the Reporting Person
Unless otherwise indicated, (a) the positions of the
listed individuals are with Henry Schein Inc. at 135 Duryea Road
Melville, New York 11747 and (b) the listed individuals are
United States citizens.
DIRECTORS
Stanley M. Bergman
Chairman, Chief Executive Officer, President and Director
James P. Breslawski
Executive Vice President and Director
Gerald A. Benjamin
Senior Vice President - Administration and Customer Satisfaction
and Director
Leonard A. David
Vice President - Human Resources, Special Counsel and Director
Mark E. Mlotek
Vice President, General Counsel, Secretary and Director
Steven Paladino
Senior Vice President, Chief Financial Officer and Director
Barry J. Alperin
Director and Consultant
Director: Seaman Furniture Co.
Director: K'nex Industries, Inc.
P.O. Box 142
Waccabuc, New York 10597
Pamela Joseph
Director
President: MA Nose Studios, Inc.
407 Aspen Oak Drive
Aspen, Colorado 81611
Donald J. Kabat
Director
President: D.K. Consulting Services, Inc.
c/o Hasbro Inc.
32 West 23rd Street
New York, New York 10010
Marvin H. Schein
Director and Consultant
President: Schein Dental Equipment
135 Duryea Road
Melville, New York 11747
Irving Shafran
Director
Attorney At Law
805 Third Avenue
Sixth Floor
New York, New York 10022
EXECUTIVE OFFICERS (other than those listed above who are also
serving as directors)
Diane Forrest
Senior Vice President - Information Services and Chief
Information Officer
Stephen R. LaHood
Senior Vice President - Distribution Services
Jeffrey P. Gasparini
Senior Vice President, Medical Group
Ian G. Rosmarin
President - Professional Services Group
Mr. Rosmarin is a citizen of Canada
James W. Stahly
President - North American Dental Group
Michael Zack
Senior Vice President - International Group
Exhibit 2
OPTION AND PROXY AGREEMENT
OPTION AND PROXY AGREEMENT dated as of March 7, 1997,
by and among Henry Schein, Inc., a Delaware corporation
("Parent"), and the persons listed on Schedule A hereto
(collectively, the "Shareholders" and each a "Shareholder"), each
a shareholder of Micro Bio-Medics, Inc. a New York corporation
(the "Company").
Contemporaneously with the execution of this Agreement,
the Company, Parent and HSI Acquisition Corp., a New York
corporation and wholly-owned subsidiary of Parent ("Sub"), are
entering into an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which it is contemplated that Sub will be
merged with and into the Company (the "Merger") and the holders
of the Company's Common Stock, par value $.03 per share (the
"Company Common Stock"), will be entitled to receive shares of
Parent's Common Stock, par value $.01 per share ("Parent Common
Stock"), for such shares of Company Common Stock.
Parent, as a condition to its willingness to enter into
the Merger Agreement, has required the Shareholders to grant
Parent an option and an irrevocable proxy with respect to all of
the shares of Company Common Stock owned by the Shareholders
(except as expressly noted below), together with any additional
shares of Company Common Stock hereafter acquired by the
Shareholders (pursuant to Section 10, by exercise of options or
warrants, by conversion of debentures or otherwise and including
any Additional Shares (as defined below) acquired by such
Shareholder) (such specified number of shares, and any additional
shares when and if acquired, being referred to as the "Shares")
on the terms and conditions hereinafter set forth.
The parties hereto agree as follows:
1. Grant of Option.
(a) Each Shareholder hereby grants to Parent an
option (collectively, the "Options") to purchase all but not less
than all of that Shareholder's Shares (exclusive of those Shares
beneficially owned by Deane Reade that are currently held in
pension plans and approximately 20,000 shares currently held in
Deane Reade margin accounts subject to the terms thereof (the
"Excluded Reade Shares"). Except as otherwise provided in
Section 1(b), the consideration for the purchase of such
Shareholder's Shares shall be the issuance to such Shareholder of
the number of shares of Parent Common Stock that such Shareholder
would have been entitled to receive by virtue of the Merger had
the Effective Time (as defined in the Merger Agreement) occurred
at the time of the exercise of the Options.
(b) Each Shareholder hereby agrees to exercise
all options, warrants or other rights to acquire any Shares, and
to convert or exchange any securities or other rights that are
convertible into or exchangeable for Shares, whether now owned or
hereafter acquired by such Shareholder (collectively, "Rights"),
in connection with any exercise by Parent of the Options in order
to permit the acquisition by Parent of the Shares receivable upon
such exercise, conversion or exchange (the "Additional Shares")
pursuant to the exercise of the Options. To the extent that a
Shareholder is obligated to pay any consideration in connection
with the exercise, conversion or exchange of such Shareholder's
Rights (the "Rights Consideration"), such Rights Consideration
shall be paid in such form as is permitted under the Rights as
Parent shall direct. If payment of the Rights Consideration is
to be made in cash, Parent shall fund such payment; if payment of
a Shareholder's Rights Consideration may be made by delivery of
shares of Company Common Stock, at Parent's direction such
Shareholder shall deliver that number of shares owned by him or
her in payment (or partial payment, as the case may be) of the
Rights. If any Right is to be exercised by means of a "cashless
exercise," the Shareholder exercising such Right shall cause the
net number of shares from such cashless exercise to be issued and
delivered to Parent. In the event that Parent funds any Rights
Consideration payment on behalf of any Shareholder (i) the number
of shares of Parent Common Stock to be issued by Parent in
respect of the Additional Shares that were acquired pursuant to
the payment of such Rights Consideration shall be reduced by that
number of shares (rounded to the nearest whole share) as is equal
to the quotient obtained by dividing the aggregate amount of
Rights Consideration so paid by Parent by the closing sales
prices of the Parent Common Stock on the last trading date prior
to the exercise of the Options; and (ii) if the funding of the
Rights Consideration payment on behalf of such Shareholder
subjects such Shareholder to income tax in respect of such
payment, the Parent shall pay to such Shareholder the amount of
such income tax, provided such Shareholder shall cooperate with
Parent (at Parent's expense) in disputing the imposition of such
income tax; and provided further, that if Parent determines in
good faith that there is a basis for disputing all or any amount
of the income tax imposed, Parent shall be entitled to direct any
such dispute, but shall indemnify the Executive against any
additional income tax for which he or she may become liable as a
result.
(c) Each Shareholder agrees not to acquire any
Right that provides, whether contingent or otherwise, for any
reduction in the amount of the Rights Consideration payable upon
the exercise, conversion or exchange of such Right, whether or
not such reduction is contingent or fixed as to occurrence or
amount, and shall immediately decline in writing any such Right
that may be granted to him or her.
2. Exercise of Option. The Options, in each case,
shall be exercisable, in whole, but not in part, by Parent as
follows:
(a) If the Merger Agreement is terminated by
Parent pursuant to Sections 9.1(d)(iii), 9.1(d)(iv) or 9.1(d)(v)
of the Merger Agreement, or by the Company pursuant to
Section 9.1(e)(iii) of the Merger Agreement, then Parent may
exercise the Options at any time during the six month period
beginning on the date of such termination, provided, however,
that if the Company is the terminating party, Parent's right to
exercise the Options shall commence on the earlier of Parent's
receipt of notice of such termination and such time as knowledge
of such termination becomes publicly available.
(b) If (i) the Merger Agreement is terminated by
Parent pursuant to Sections 9.1(d)(i), 9.1(d)(ii) or 9.1(f) of
the Merger Agreement, or by either Parent or the Company pursuant
to Section 9.1(b), and the Company (or any of its Subsidiaries
shall have, directly or indirectly, entered into a definitive
agreement for, or shall have consummated, an Acquisition
Transaction, as that term is defined in the Merger Agreement,
within one year of such termination, then Parent may exercise the
Options during the period beginning on the earlier of the date on
which Parent first receives notice of the occurrence of the event
triggering HSI's right to exercise the Options and the date on
which such event becomes publicly known and (except as otherwise
provided below) ending on the date three business days after the
date that the Acquisition Transaction (or any successive
Acquisition Transaction or any other Acquisition Transaction made
in response thereto) occurs.
At any time when Parent wishes to exercise the Options, Parent
shall give written notice (the "Notice") to the Shareholders
specifying a place and a date not less than two nor more than 20
business days from the date of the Notice for the closing of such
purchase (the "Closing"); provided, however, that such date may
be extended to the extent necessary to comply with the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and applicable regulations thereunder. The date on
which the Parent gives the Notice shall be deemed to be the date
on which the Options are exercised. Each Shareholder agrees to
the use his or her reasonable best efforts (subject to any
applicable fiduciary duties) to give Parent at least five
business days prior written notice of the occurrence of any event
triggering Parent's right to exercise the Options.
3. Payment and delivery of Certificate(s). At the
Closing hereunder:
(a) Parent will deliver to the Shareholders the
shares of Parent Common Stock to be issued in consideration for
the Shares being purchased upon exercise of the Options as
provided in Section 1; and
(b) the Shareholders will deliver to Parent
against receipt of the shares of Parent Common Stock as provided
in Section 3(a), a certificate or certificates representing the
number of Shares so purchased by Parent duly endorsed or with
executed blank stock powers attached, in either event with
signature guaranteed such that registered ownership of the Shares
may be registered for transfer on the books of the Company.
4. Irrevocable Proxy. Each Shareholder hereby
irrevocably constitutes and appoints Parent or any designee of
Parent the lawful agent, attorney and proxy of such Shareholder
during the term of this Agreement, to vote all of his, her or its
Shares (excluding the Excluded Reade Shares") and Additional
Shares and, in the case of Bruce Haber, all shares of Company
Common Stock owned by Andrew D. Stone that he has an irrevocable
proxy to vote (the "Stone Shares") at any meeting or in
connection with any written consent of the Company's shareholders
(a) in favor of the Merger, (b) in favor of the Merger Agreement,
as such may be modified or amended from time to time, (c) against
any Acquisition Transaction (other than the Merger) or other
merger, sale, or other business combination between the Company
and any other person or entity or any other action which would
make it impractical for Parent to effect a merger or other
business combination of the Company with Parent or Sub, and (d)
against any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement
or which would result in any of the Company's obligations under
the Merger Agreement not being fulfilled. This proxy shall not
authorize Parent to vote the Shares of the Stone Shares on any
matters other than those specified above which may be presented
to the Company's shareholders at any meeting or in connection
with any written consent of the Company's shareholders. This
power of attorney is irrevocable, is granted in consideration of
Parent entering into the Merger Agreement and is coupled with an
interest sufficient in law to support an irrevocable power. This
appointment shall revoke all prior attorneys and proxies
appointed by any Shareholder at any time with respect to the
Shares or the Stone Shares and the matters set forth in clauses
(a) through (d) above and no subsequent attorneys or proxies will
be appointed by such Shareholder, or be effective, with respect
thereto.
5. Representations and Warranties of the
Shareholders. Each Shareholder represents and warrants to Parent
as follows:
(a) Ownership of Shares and Rights. That
Shareholder is the sole beneficial owner of the number of Rights
set forth as being granted to that Shareholder on Schedule A.
The Rights set forth opposite that Shareholder's name on Schedule
A constitute all the Rights owned beneficially or of record by
that Shareholder. The Shares owned by that Shareholder are
validly issued, fully paid and nonassessable and such Shares
(excluding the Excluded Reade Shares) and/or the Rights set forth
opposite that Shareholder's name on Schedule A, are held by that
Shareholder, or by a nominee or custodian for the benefit of that
Shareholder, free and clear of all liens, claims, security
interests, agreements and other encumbrances, except for
encumbrances arising under this Agreement.
(b) Power; Binding Agreement. That Shareholder
has the legal capacity to enter into and perform all of that
Shareholder's obligations under this Agreement. The execution,
delivery and performance of this Agreement by that Shareholder
will not violate any other agreement to which that Shareholder is
a party, including, without limitation, any voting agreement,
shareholders agreement or voting trust. This Agreement has been
duly and validly executed and delivered by that Shareholder and
constitutes a valid and binding obligation of that Shareholder,
enforceable against that Shareholder in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject to general principles of equity. If
that Shareholder is married and that Shareholder's Shares
constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid
and binding obligation of, that Shareholder's spouse, enforceable
against that spouse in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and subject to general principles of equity.
(c) Consents and Approvals; No Violation.
Neither the execution and delivery of this Agreement by that
Shareholder nor the consummation of the transactions contemplated
by this Agreement will: (i) require any consent, approval,
authorization or permit of, or filing with or notification to,
any person or entity or any governmental or regulatory authority,
except in connection with the HSR Act or pursuant to the
Securities Exchange Act of 1934; (ii) conflict with, result in a
breach of, or result in a default (or give rise to a right of
termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, license, agreement
or other instrument or obligation to which that Shareholder is a
party or by which that Shareholder or any of that Shareholder's
assets may be bound; or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to
that Shareholder or by which any of that Shareholder's assets are
bound.
(d) Brokers. No broker, finder or other
investment banker is entitled to any broker's, finder's or other
similar fee or commission in connection with this Agreement or
the transactions contemplated by this Agreement based upon
agreements made by or on behalf of that Shareholder.
6. Representations and Warranties of Parent. Parent
represents and warrants to each Shareholder that:
(a) Power; Binding Agreement. Parent has the
corporate power and authority to enter into and perform all its
obligations under this Agreement. The execution, delivery and
performance of this Agreement by Parent will not violate any
other agreement to which Parent is a party. This Agreement has
been duly and validly authorized, executed and delivered by
Parent and constitutes a valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and subject to general principles of equity.
(b) Consents and Approvals; No Violation.
Neither the execution and delivery of this Agreement by Parent
nor the consummation by Parent of the transactions contemplated
by this Agreement will: (i) require any consent, approval,
authorization or permit of, or filing with or notification to,
any person or entity or any governmental or regulatory authority,
except in connection with the HSR Act or pursuant to the
Securities Exchange Act of 1934; (ii) conflict with, result in a
breach of, or result in a default (or give rise to a right of
termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, license, agreement
or other instrument or obligation to which Parent is a party or
by which Parent or any of its assets may be bound; or (iii)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent or by which any of its assets are
bound.
(c) Brokers. No broker, finder or other
investment banker is entitled to any broker's, finder's or other
similar fee or commission in connection with this Agreement or
the transactions contemplated by this Agreement based upon
agreements made by or on behalf of Parent.
7. Additional Covenants of the Shareholders. Each
Shareholder hereby covenants and agrees that:
(a) that Shareholder will not enter into any
transaction, take any action, or by inaction permit any event to
occur that would (i) result in any of the representations or
warranties of such Shareholder herein contained not being true
and correct at and as of the time immediately after the
occurrence of such transaction, action or event; or (ii) have the
effect of preventing or disabling that Shareholder from
performing that Shareholder's obligations under this Agreement;
(b) that Shareholder will not grant any proxies
or powers of attorney with respect to any shares, deposit any
Shares into a voting trust or enter into a voting agreement with
respect to such Shares; provided, however, that the Shareholders
may grant proxies to third parties provided that such proxies are
expressly made subject to the terms of this Agreement;
(c) until the termination of this Agreement, such
Shareholder will at all times use his, her or its best efforts in
his, her or its capacity as a shareholder of the Company to
prevent the Company from taking any action in violation of the
Merger Agreement;
(d) from and after the date hereof until the
termination of this Agreement, other than under the circumstances
contemplated by Section 10 hereof, the Shares will not be sold,
transferred, pledged, hypothecated, transferred by gift, or
otherwise disposed of in any manner whatsoever without notifying
Parent in advance and obtaining and delivering to Parent any
evidence that Parent may reasonably request to evidence the
transferee's agreement to be bound by this Agreement; provided,
however, that in the event of such Shareholder's death during the
term of this Agreement, the Shares and Rights may be transferred
in accordance with the Shareholder's last will and testament, or
if none, in accordance with the applicable laws of intestate
succession, in either of which cases, the Shares shall remain
subject in all respects to the terms of this Agreement; and
(e) the Shareholder will execute and deliver any
additional documents reasonably necessary or desirable, in the
opinion of Parent's or the Company's counsel, to evidence the
irrevocable proxy granted in Section 4 with respect to the Shares
or otherwise implement and effect the provisions of this Agree-
ment.
8. No Solicitation. No Shareholder shall, in that
Shareholder's capacity as such, directly or indirectly, (a)
solicit, initiate, facilitate or encourage (including by way of
furnishing or disclosing non-public information) any inquiries or
the making of any proposal with respect to any Acquisition
Transaction, (b) negotiate, explore or otherwise engage in
discussion with any person (other than Parent and its
representatives) with respect to any Acquisition Transaction, (c)
agree to or endorse an Acquisition Transaction with any person
(other than Parent or Sub) or any agreement, arrangement or
understanding with respect to any such Acquisition Transaction or
which would require the Company to abandon, terminate or fail to
consummate the Merger or any other transaction contemplated by
this Agreement, or (d) authorize or permit any person or entity
acting on behalf of that Shareholder to do any of the foregoing.
If any Shareholder receives any inquiry or proposal regarding any
Acquisition Transaction, that Shareholder shall promptly inform
Parent of that inquiry or proposal.
9. Legending of Certificates; Nominee Shares. Each
Shareholder agrees to submit to Parent contemporaneously with or
promptly following execution of this Agreement (or promptly
following receipt of any additional certificates representing any
additional Shares) all certificates representing the Shares so
that Parent may note thereon a legend referring to the option and
proxy granted to it by this Agreement. If any of the Shares
beneficially owned by a Shareholder are held of record by a
brokerage firm in "street name" or in the name of any other
nominee (a "Nominee," and, as to such Shares, "Nominee Shares"),
the Shareholder agrees that, upon written notice by Parent
requesting it, such Shareholder will within five days of the
giving of such notice execute and deliver to Parent a limited
power of attorney in such form as shall be reasonably satis-
factory to Parent enabling Parent to require the Nominee to grant
to Parent an option and irrevocable proxy to the same effect as
Sections 1, 2 and 4 hereof with respect to the Nominee Shares
held by such Nominee and to submit to Parent the certificates
representing such Nominee Shares for notation of the above-
referenced legend thereon.
10. Adjustments to Prevent Dilution, Etc. In the
event of a stock dividend or distribution, or any change in
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like,
the term "Shares" shall be deemed to refer to and include the
Shares as well as all such stock dividends and distributions and
any shares into which or for which any or all of the Shares may
be changed or exchanged.
11. Shareholder Capacity. No person executing this
Agreement who is or becomes during the term of this Agreement a
director of the Company makes any agreement in his or her
capacity as a director. Each Shareholder is executing and
delivering this Agreement solely in that Shareholder's capacity
as the record and beneficial owner of that Shareholder's Shares.
Notwithstanding anything to the contrary in this Agreement, no
action or inaction by a Shareholder in his capacity as a
director, officer, or employee of the Company shall be deemed to
contravene Section 8, as long as the action or inaction does not
contravene Section 7.2 of the Merger Agreement.
12. Termination. This Agreement shall terminate on
the earlier of (i) the Effective Time of the Merger, (ii) the
termination of the last period of time during which Parent could
have exercised the Options pursuant to Section 2; provided,
however, that the appointment of Parent or any designee of Parent
as agent, attorney and proxy pursuant to Section 4 hereof, and
any proxy or other instrument executed pursuant thereto, shall in
any event automatically terminate upon the termination of the
Merger Agreement. Notwithstanding the foregoing, in the event
that Parent is at any time prohibited from exercising the Options
as a result of any actions by the Federal Trade Commission or the
Department of Justice in connection with the HSR Act, then this
Agreement shall not terminate until (i) the earlier of 30 days
from the date such prohibition is removed by the Federal Trade
Commission or the Department of Justice, or (ii) six months after
the date Parent's right to exercise the Options would otherwise
have terminated.
13. Miscellaneous.
(a) No Waiver. The failure of any party to
exercise any right, power or remedy under this Agreement or
otherwise available in respect of this Agreement at law or in
equity, or to insist upon compliance by any other party with that
party's obligations under this Agreement, shall not constitute a
waiver of any right to exercise any such or other right, power or
remedy or to demand such compliance.
(b) Notices. All notices and other
communications hereunder shall be in writing and shall be
delivered personally or by next-day courier or telecopied with
confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of
address shall be effective only upon receipt thereof). Any such
notice shall be effective upon receipt, if personally delivered
or telecopied, or one day after delivery to a courier for next-
day delivery.
(i) If to Parent, to:
Henry Schein, Inc.
135 Duryea Road
Melville, New York 11747
Attn: Mark E. Mlotek, Esq.
with a copy to:
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
Attention: Robert A. Cantone, Esq.
(ii) if to a Shareholder, to:
c/o Bruce Haber
Micro Bio-Medics
846 Pelham Manor
New York, NY 10803
with a copy to:
Otterbourg, Steindler, Houston & Rosen
230 Park Avenue
New York, New York 10169
Fax: (212) 682-6104
Attention: Donald N. Gellert, Esq.
(a) Descriptive Headings; Interpretation. The
headings contained in this Agreement are for reference purposes
only and shall not affect in way the meaning or interpretation of
this Agreement. References in this Agreement to Sections and
Schedules mean a Section or Schedule of this Agreement unless
otherwise indicated. The terms "beneficially own" and
"beneficial owner" with respect to any securities shall have the
same meaning as in, and shall be determined in accordance with,
Rule 13d-3 under the Securities Exchange Act of 1934.
(b) Entire Agreement; Assignment. This Agreement
(including the schedule and other documents and instruments
referred to herein), together with the Merger Agreement,
constitute the entire agreement and supersede all other prior
agreements and understandings, both written and oral, among the
parties or any of them, with respect to the subject matter
hereof. Except as otherwise expressly provided herein, this
Agreement is not intended to confer upon any person not a party
hereto any rights or remedies hereunder. Except as otherwise
expressly provided herein, this Agreement shall not be assigned
by operation of law or otherwise; provided that Parent or Sub may
assign its rights and obligations hereunder to a direct or
indirect subsidiary of Parent, but no such assignment shall
relieve Parent or Sub, as the case may be, of its obligations
hereunder.
(c) Liability After Transfer. Each Shareholder
agrees that, notwithstanding any transfer of that Shareholder's
Shares in accordance with Section 7(d), that Shareholder shall
remain liable for his or her performance of all obligations under
this Agreement.
(d) Injunctive Relief; Remedies Cumulative.
(i) Parent, on the one hand, and the
Shareholders, on the other hand, acknowledge that the other party
will be irreparably harmed and that there will be no adequate
remedy at law for a violation of any of the covenants or
agreements of such party that are contained in this Agreement.
It is accordingly agreed that, in addition to any other remedies
that may be available to the non-breaching party upon the breach
by any other party of such covenants and agreements, the non-
breaching party shall have the right to obtain injunctive relief
to restrain any breach or threatened breach of such covenants or
agreements or otherwise to obtain specific performance of any of
such covenants or agreements.
(ii) No remedy conferred upon or reserved to
any party herein is intended to be exclusive of any other remedy
and every remedy shall be cumulative and in addition to every
other remedy herein or now or hereafter existing at law, in
equity or by statute.
(e) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York without giving effect to the provisions thereof
relating to conflicts of laws.
(f) Effect of Partial Invalidity. Whenever
possible, each provision of this Agreement shall be construed in
such a manner as to be effective and valid under applicable law.
If any provision of this Agreement or the application thereof to
any party or circumstance shall be prohibited by or invalid under
applicable law, such provisions shall be ineffective to the
extent of such prohibition without invalidating the remainder of
such provision or any other provisions of this Agreement or the
application of such provision to the other party or other circum-
stances.
(g) Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be
an original but all of which shall constitute one and the same
agreement.
IN WITNESS WHEREOF, this Agreement has been executed by
the parties as of the date first above written.
THE SHAREHOLDERS:
_____________________________
BRUCE HABER
_____________________________
MARVIN CALIGOR
_____________________________
RENEE STEINBERG
_____________________________
DEANE READE
HENRY SCHEIN, INC.
By:__________________________
Authorized Officer