UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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Check the appropriate box:
[_] Preliminary Proxy Statement
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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
DANAHER CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
DANAHER CORPORATION
1250 24th Street, N.W.
Washington, D.C. 20037
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 20001, 2001
To the Shareholders:
Notice is hereby given that the 20002001 Annual Meeting of Shareholders of
Danaher Corporation, a Delaware corporation (the "Company"), will be held at
the Washington MonarchMayflower Hotel, 2401 M Street,1127 Connecticut Avenue, NW, Washington, D.C. 20037, on
May 2,
20001, 2001 at 3:00 p.m., local time, for the following purposes:
1. To elect threetwo Directors to hold office for a term of three years and
until their successors are elected and qualified.
2. To approve the appointment of Arthur Andersen LLP as the Company's
independent auditors for the year ending December 31, 2000.2001.
3. To amend the Company's 1998 Stock Option Plan to increase the
aggregate number of shares that may be issued pursuant to the
exercise of stock options from fifteen million (15,000,000) shares to
twenty-two million five hundred thousand (22,500,000) shares.
4. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of capital stock of the
Company to a total of six hundred million (600,000,000) shares,
consisting of five hundred million (500,000,000) shares of Common
Stock, $.01 par value per share (Common Stock) and one hundred
million (100,000,000) shares of Preferred Stock, without par value
(Preferred Stock).
5. To consider and act upon such other business as may properly come
before the meeting.
The Board of Directors has fixed the close of business on March 17, 200023, 2001 as
the record date for determination of shareholders entitled to notice of and to
vote at the meeting and any adjournment thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card as promptly as possible in the enclosed stamped envelope,
the postage on which will be valid if mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Patrick W. Allender
PATRICK W. ALLENDER
Secretary
March 29, 200030, 2001
EVERY SHAREHOLDER'S VOTE IS IMPORTANT. PLEASE MARK, SIGN, DATE AND MAIL THE
ENCLOSED PROXY CARD AT YOUR EARLIEST CONVENIENCE, WHETHER OR NOT YOU PLAN TO
ATTEND THE DANAHER CORPORATION ANNUAL MEETING.
PROXY STATEMENT
DANAHER CORPORATION
1250 24th Street, N.W.
Washington, D.C. 20037
(202) 828-0850
20002001 ANNUAL MEETING OF SHAREHOLDERS
MAY 2, 20001, 2001
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Danaher Corporation, a Delaware corporation (the
"Company"), of proxies for use at the 20002001 Annual Meeting of Shareholders
("Annual Meeting") to be held at the Washington MonarchMayflower Hotel on May 2, 20001, 2001 at 3:00
p.m., local time, and at any and all adjournments thereof. The Company's
principal address is 1250 24th Street, N.W., Washington, D.C. 20037. The date
of mailing of this Proxy Statement is on or about March 29, 2000.April 2, 2001. The purpose
of the meeting is to elect threetwo directors of the Company; to approve the
appointment of Arthur Andersen LLP as the Company's independent auditors for
the current year; to approve an amendment to the Company's 1998 Stock Option
Plan; to approve an amendment to the Company's Certificate of Incorporation to
increase the total number of authorized shares of capital stock to six hundred
million; and to transact such other business as may properly come before the
meeting.
OUTSTANDING STOCK AND VOTING RIGHTS
In accordance with the By-laws of the Company, the Board of Directors has
fixed the close of business on March 17, 200023, 2001 as the record date for
determining the shareholders entitled to notice of, and to vote at, the Annual
Meeting. Only shareholders of record on that date will be entitled to vote. A
shareholder who submits a proxy on the accompanying form has the power to
revoke it by notice of revocation directed to the proxy holders of the Company
at any time before it is voted. A subsequently dated proxy, when filed with
the Secretary of the Company, will constitute revocation. Proxies will be
voted as specified on the proxy card and, in the absence of specific
instructions, will be voted for the proposals described in this Proxy
Statement and in the discretion of the proxy holders on any other matter which
properly comes before the meeting. A shareholder who has given a proxy may
nevertheless attend the meeting, revoke the proxy and vote in person. The
Board of Directors has selected Steven M. Rales and Mitchell P. Rales to act
as proxies with full power of substitution.
Solicitation of proxies may be made by mail, personal interview, telephone
and telegraph by officers and other management employees of the Company, who
will receive no additional compensation for their services. The total expense
of the solicitation will be borne by the Company and may include reimbursement
paid to brokerage firms and others for their expenses in forwarding material
regarding the Annual Meeting to beneficial owners.
1
The only outstanding securities of the Company entitled to vote at the
Annual Meeting are shares of Common Stock. As of the close of business on
March 17, 2000,23, 2001, the record date for determining the shareholders of the
Company entitled to vote at the Annual Meeting, 141,349,860142,519,415 shares of the
Common Stock of the Company, $.01 par value ("Company Common Stock"), were
issued and outstanding. Each outstanding share of Company Common Stock
entitles the holder to one vote on all matters brought before the Annual
Meeting. The quorum necessary to conduct business at the Annual Meeting
consists of a majority of the outstanding shares of Company Common Stock as of
the record date.
The election of directors nominated will require a plurality of the votes
cast in person or by proxy at the Annual Meeting by holders of shares of the
Company's Common Stock. In the election of directors, each stockholder is
entitled to cast one vote for each director to be elected; cumulative voting
is not permitted. Approval of the appointment of the Company's auditors will
require the affirmative vote of the holders of a majority of the shares of the
Company's Common Stock cast at the Annual Meeting in person or by proxy.
1
Approval of (i) the amendment to the Company's 1998 Stock Option Plan, and
(ii) the amendment to the Company's Certificate of Incorporation to increase
the number of authorized shares of capital stock to a total of six hundred
million shares, requires the affirmative vote of the holders of a majority of
the shares of the Company's Common Stock present, or represented, and entitled
to vote at the annual meeting.
Abstentions and "broker non-votes" are counted as present in determining
whether the quorum requirement is satisfied. For purpose of the election of
directors, abstentions and broker non-votes are not considered to be votes
cast and do not affect the plurality vote required for elections of directors.
For purposes of the appointment of the Company's auditors, abstentions and
broker non-votes will not be considered votes cast for the foregoing purposes.
For purposes of approval of the amendment to the Company's 1998 Stock Option
Plan, abstentions are treated as present and entitled to vote on the matter
and have the effect of a vote against the proposal and broker non-votes will
not be considered entitled to vote and will have no effect on the vote
required for approval.
2
BENEFICIAL OWNERSHIP OF COMPANY COMMON STOCK BY
DIRECTORS, OFFICERS AND PRINCIPAL SHAREHOLDERS
As of March 17, 2000,23, 2001, the beneficial ownership of Company Common Stock by
directors and the nominees for director, by each of the executive officers
named in the Summary Compensation Table, by any principal shareholders
beneficially owning more than five percent of the Company's Common Stock and
by all present executive officers and directors of the Company as a group, was
as follows:
2
Number of Shares Percent
Name Beneficially Owned** Of Class
- ---- ---------------------- ----------------------------- --------
Mortimer M. Caplin.......... 195,748 (9)Caplin............................. 157,874(8) *
Donald J. Ehrlich........... 60,000 (7)Ehrlich.............................. 62,000(6) *
Walter G. Lohr, Jr.......... 168,000 (8)Jr. ........................... 170,000(7) *
Mitchell P. Rales........... 45,077,264 (1) 31.1%Rales.............................. 39,398,277(1) 27.5%
Steven M. Rales............. 45,077,264 (1) 31.1%Rales................................ 41,074,638(1) 28.7%
George M. Sherman........... 3,529,088 (4) 2.4%Sherman.............................. 3,306,114(3) 2.3%
Alan G. Spoon............... 4,000(13)Spoon.................................. 6,000(12) *
A. Emmet Stephenson, Jr. 212,120 (2) *
Patrick W. Allender......... 570,804 (6)...................... 190,120(2) *
H. Lawrence Culp, Jr........ 114,939 (5)Jr. ......................... 132,937(4) *
James H. Ditkoff............ 253,949 (3)Patrick W. Allender............................ 566,236(5) *
Philip W. Knisely.............................. 2,500 *
Steven E. Simms............. 171,137(10)Simms................................ 98,435(9) *
FMR Corp.................... 9,963,665(11) 6.9%Corp....................................... 12,861,724(10) 9.0%
All executive officers and directors as a group
(includes 2221 persons) 50,828,773 (1)(2)(12) 35.1%......................... 48,588,012(1)(11) 33.2%
- --------
(1) The aggregate holdings for Steven and Mitchell Rales include (I)(i) all of
the 40,064,88837,064,888 shares of Company Common Stock owned by Equity Group
Holdings LLC, Equity Group Holdings II LLC, and Equity Group Holdings III
LLC, of which Steven Rales and Mitchell Rales are the only members, and
(ii) 2,509,3534,009,750 and 2,503,0232,333,389 shares of Company Common Stock owned
directly or through the Danaher 401(k) Plan by Steven Rales and Mitchell
Rales, respectively. Steven and Mitchell Rales each disclaim beneficial
ownership of those shares of Company Common Stock that are owned directly
or through the Danaher 401(k) Plan by the other. Combined, Steven and
Mitchell Rales beneficially own 43,408,027 shares, or 30.3% of common
shares outstanding. Their business address, and that of Equity Group
Holdings LLC, Equity Group Holdings II LLC, and Equity Group Holdings III
LLC, is 1250 24th Street, N.W., Washington, D.C. 20037.
(2) Includes shares of Company Common Stock held in the namesname of Stephenson
Ventures, a limited partnership of which the sole general partner is A.
Emmet Stephenson, Jr. Mr. Stephenson has the optionoptions to acquire 16,00018,000 shares
of Company stock.
(3) Mr. Ditkoff has the option to acquire 31,100 shares of Company Common
Stock. Includes sharesstock which are also held by family members and family trusts of which
Mr. Ditkoff disclaims beneficial ownership.
(4)Stephenson Ventures.
(3) Mr. Sherman has the option to acquire 2,000,0002,600,000 shares of Company Common
Stock. Includes shares held by Sherman Investors Limited Partnership, a
partnership for the benefit of his family. Mr. Sherman controls the
general partner.
(5)(4) Mr. Culp has the option to acquire 114,000132,000 shares of Company Common
Stock.
3
(6)(5) Mr. Allender has the option to acquire 334,000344,400 shares of Company Common
Stock. Includes shares held by family members and a family limited
partnership of which Mr. Allender disclaims beneficial ownership.
(7)(6) Mr. Ehrlich has the option to acquire 16,00018,000 shares of Company Common
Stock.
(7) Mr. Lohr has the option to acquire 18,000 shares of Company Common Stock.
(8) Mr. LohrCaplin has the option to acquire 16,00014,000 shares of Company Common
Stock.
(9) Mr. Caplin has the option to acquire 12,000 shares of Company Common Stock.
(10) Mr. Simms has the option to acquire 168,40095,200 shares of Company Common
Stock.
(11)(10) FMR Corp.'s address is 82 Devonshire Street, Boston, MA 02109.
(12)(11) Includes 2,986,4703,474,310 shares underlying options exercisable within 60 days.
(13)(12) Mr. Spoon has the option to acquire 2,0004,000 shares of Company Common Stock.
* Represents less than 1% of the outstanding Company Common Stock.
** All options are exercisable within 60 days and shares underlying such
options are included in the table.
Apart from Steven M. Rales, Mitchell P. Rales and FMR Corp., the Company
knows of no other person that beneficially owns 5% or more of its Common
Stock.
43
PROPOSAL 1.
ELECTION OF DIRECTORS OF THE COMPANY
The Company's Certificate of Incorporation provides that the Board of
Directors shall be divided into three classes with the number of directors in
each class to be as equal as possible. The Board has fixed the number of
directors of the Company at eight. At the 20002001 Annual Meeting of Shareholders,
shareholders will elect threetwo directors to serve until the 20032004 Annual Meeting
of Shareholders and until their successors are duly elected and qualified. The
Board of Directors has nominated Messrs. Alan G. Spoon and Steven M. Rales to
serve as directors in the class whose term expires in 2004. Messrs. Mortimer
M. Caplin, Donald J. Ehrlich, and Walter G. Lohr, Jr. will continue to serve
as directors in the class whose term expires in 2003. Messrs. Mitchell P.
Rales George M. Sherman and A. Emmet Stephenson Jr.
will continue to serve as directors in the class whose term expires in 2002.
Messrs. Steven M. Rales and Alan G. Spoon will continue to serve as directors until their
terms expire in 2002. As previously announced on January 8, 2001, Mr. George
M. Sherman will retire from the Company and resign his position as director
effective May 1, 2001. At the May 1, 2001 meeting, the Board of Directors
plans to elect Mr. H. Lawrence Culp, Jr. to replace Mr. Sherman as director
and serve until that term expires in 2002.
The names of the nominees and the directors continuing in office, their
principal occupations, the years in which they became directors and the years
in which their terms expire are set forth below. In the event a nominee shall
decline or be unable to serve, it is intended that the proxies will be voted
in the discretion of the proxy holders. The Company knows of no reason to
anticipate that this will occur.
5
NOMINEES FOR ELECTION AT THIS YEAR'S ANNUAL MEETING
TO SERVE IN THE CLASS WHOSE TERM EXPIRES IN 20032004
Director Term
Name Age Principal Occupation Since Expires
- ---- --- ------------------------- ----------- ---------------------------------- -------- -------
Alan G. Spoon (a).......... 49 General Partner of Polaris 1999 2004
Venture Partners; Director
of American Management
Systems, Inc., Human Genome
Sciences, Inc. and
Ticketmaster Online-
CitySearch, Inc.
Steven M. Rales (b,d,e).... 49 Chairman of the Board of 1983 2004
the Company since 1984;
during the past five years
he has been a principal in
a number of private
business entities with
interests in manufacturing
companies, media operations
and publicly traded
securities; Director of Imo
Industries Inc.
CURRENT DIRECTORS WHOSE TERM WILL CONTINUE AFTER THIS MEETING
Director Term
Name Age Principal Occupation Since Expires
---- --- -------------------- -------- -------
Mortimer M.Caplin(a,M.Caplin (a,c) 83.... 84 Senior Member of Caplin & 1990 2003
&
Drysdale, a law firm in
Washington, D.C., for over
five years; Director of
Fairchild Corporation and
Presidential Realty
Corporation.
Donald J. Ehrlich(a,Ehrlich (a,c) 62.... 63 President, Chairman and 1985 2003
Chief Executive Officer of
Wabash National Corp. for
over five years; Director
of Indiana Secondary Market
for Educational Loans, Inc.
and INB National Bank, N.W.
Walter G. Lohr, Jr.(c,e) 56.. 57 Partner of Hogan & Hartson, 1983 2003
a law firm in Baltimore,
Maryland, for over five
years.
CURRENT DIRECTORS WHOSE TERM WILL CONTINUE AFTER THIS MEETING4
Director Term
Name Age Principal Occupation Since Expires
- ---- --- ------------------------- ----------- --------------
-------------------- -------- -------
Mitchell P. Rales (b,d,e) 43..... 44 Chairman of the Executive 1983 2002
Executive Committee of
the Company since 1990;
during the past five
years he has been a
principal in a number of
private business
entities with interests
in manufacturing
companies, media
operations and publicly
traded securities;
Director of Imo
Industries Inc.
George M. Sherman (d,e) 58e,f)..... 59 President and Chief 1990 2002
Executive Officer of the
Company since 1990;
Director of the Company since
1990; Director of
Campbell Soup Company.
6
Director Term
Name Age Principal Occupation Since Expires
- ---- --- ------------------------- ----------- --------------
A.EmmetCampbell
Soup Company.
A. Emmet Stephenson,Jr.(a) 54.. 55 Chairman of StarTek, Inc. 1986 2002
Inc. for more than five
years; President of
Stephenson and Co., a
private investment firm
in Denver, Colorado for
more than five years;
President of Stephenson
and Co., a private
investment firm in Denver,
Colorado for more than five
years.
Alan G. Spoon (a) 48 President of the Washington 1999 2001
Post Company; Director of
American Management Systems,
Inc., Human Genome Sciences,
Inc. and Ticketmaster Online-
CitySearch, Inc.
Steven M. Rales (b,d,e) 48 Chairman of the Board of the 1983 2001
Company since 1984; during
the past five years he has
been a principal in a number
of private business entities
with interests in
manufacturing companies,
media operations and publicly
traded securities; Director
of Imo Industries Inc.
- --------
(a) Member of the Compensation and Organization Committee of the Board of
Directors.
(b) Mitchell P. Rales and Steven M. Rales are brothers.
(c) Member of the Audit Committee of the Board of Directors.
(d) Member of the Executive Committee of the Board of Directors.
(e) Member of the Finance Committee of the Board of Directors.
(f) As previously announced, George M. Sherman will resign his board position
effective May 1, 2001 and the Board of Directors plans to elect H.
Lawrence Culp, Jr. to fill that position.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors had a total of six meetings during 1999.2000. All
directors attended at least 75% of the meetings of the Board of Directors and
of the Committees of the Board of Directors on which they served during 1999.2000.
The Executive Committee acts on behalf of the Board of Directors of the
Company between meetings of the Board of Directors. The Executive Committee
comprised of Messrs. George M. Sherman, Steven M. Rales and Mitchell P. Rales
met twicethree times in 1999.
7
2000.
The Audit Committee reviews the financial statements of the Company to
confirm that they reflect fairly the financial condition of the Company and to
appraise the soundness, adequacy and application of accounting and operating
controls. The Audit Committee recommends independent auditors to the Board of
Directors, reviews the scope of the audit function of the independent auditors
and reviews audit reports rendered by the independent auditors. The members of
the Audit Committee are independent as defined in the New York Stock Exchanges
listing standards. The Audit Committee met twicesix times during 1999.2000.
The Compensation and Organization Committee reviews the Company's
Compensationcompensation philosophy and programs, and exercises authority with respect to
the payment of direct salaries and incentive compensation to Company officers.
The Compensation Committee is also responsible for the oversight of the stock
option plans of the Company. The Compensation committeeand Organization Committee met
twicefour times in 1999.2000.
The Finance Committee was formed in December, 1999 to oversee the financial
affairs and policies of the Company including matters relating to the
Company's capital structure and the policies and practices relating to the
Company's retirement and pension plans. The Finance Committee did not meetmet once in
1999.2000.
The Company has no Nominating Committee of its Board of Directors.
85
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
Executive Officers of the Company are:
Officer
Name Age Position Since
---- ----- ---------------------------------- -------- -------
Steven M. Rales 48Rales......... 49 Chairman of the Board 1984
Mitchell P. Rales 43Rales....... 44 Chairman of the Executive Committee 1984
George M. Sherman 58Sherman....... 59 Chief Executive Officer, President and Director 1990
H. Lawrence Culp, Jr. .. 38 Executive Vice President, Chief Operating Officer 1995
Patrick W. Allender 53Allender..... 54 Executive Vice President, Chief Financial Officer and Secretary 1987
H. Lawrence Culp, Jr. 36Philip W. Knisely....... 46 Executive Vice President 1995
Brian M. McNeill 40 Executive Vice President 19992000
Steven E. Simms 44Simms......... 45 Executive Vice President 1996
William J. Butler 44 Vice President and Group
Executive 1999
Dennis D. Claramunt 54 Vice President and Group
Executive 1994
Thomas S. GrossButler....... 45 Vice President and Group Executive 1999
Elmar F. Illek 49Thomas S. Gross......... 46 Vice President and Group Executive 1999
Daniel L. Comas 35Comas......... 37 Vice President-Corporate Development 1996
Mark C. DeLuzio 42W. Bruce Graham......... 46 Vice President-Danaher Business System 19962000
James H. Ditkoff 53Ditkoff........ 54 Vice President-Finance and Tax 1991
Dennis A. Longo 43Longo......... 44 Vice President-Human Resources 1997
ChristpherChristopher C. McMahon 37McMahon.. 38 Vice President-Controller 1999
Daniel A. Pryor......... 33 Vice President-Strategic Development 2000
Uldis K. Sipols 49Sipols......... 50 Vice President- ProcurementPresident-Procurement 1999
Steven M. Rales has served as Chairman of the Board since January 1984. In
addition, during the past five years he has been a principal in a number of
private business entities with interests in manufacturing companies, media
operations and publicly traded securities. He is also a director of Imo
Industries, Inc.
9
Mitchell P. Rales has served as a director of the Company since January
1984. In addition, during the past five years he has been a principal in a
number of private business entities with interests in manufacturing companies,
media operations and publicly traded securities. He is also a director of Imo
Industries, Inc.
George M. Sherman has served as President and Chief Executive Officer and a
director of the Company since February 1990. He is also a director of Campbell
Soup Company. Patrick W. Allender has served as Chief Financial Officer ofAs previously announced, Mr. Sherman will retire from the
Company since March, 1987 and was appointed Executive Vice President and Chief Financial
Officer in 1999.effective May 1, 2001.
H. Lawrence Culp, Jr. was appointed Chief Operating Officer in 2000 and
Executive Vice President in 1999. He has served in general management
positions within the Company for more than the past five years. Brian M. McNeillMr. Culp will
be appointed President and Chief Executive Officer upon Mr. Shermans
retirement effective May 1, 2001.
Patrick W. Allender has served as Chief Financial Officer of the Company
since March, 1987 and was appointed Executive Vice President in 1999.
Philip W. Knisely was appointed Executive Vice President in 2000. He had
previously served Ingersoll-RandColfax Corporation most recently(a diversified industrial manufacturing
company) as President Architectural Hardware.and Chief Executive Officer. Colfax Corporation is
majority-owned by Steven and Mitchell Rales.
Steven E. Simms was appointed Executive Vice President in 1999. He joined
the Company in 1996 as Vice President and Group Executive, and had previously
served Black & Decker, most recently as President - WorldwidePresident--Worldwide Accessories
Business.
William J. Butler was appointed Vice President and Group Executive in 1999.
He has served in general management positions within the Company for more than
the past five years.
Dennis D. Claramunt was appointed Vice President and Group Executive in
1994.
Thomas S. Gross was appointed Vice President and Group Executive in 1999. He
had previously served Xycom Automation Inc. (a provider of automation hardware
and software) as President, and prior to joining
6
Xycom in 1998, he served Allen-Bradley/Rockwell Automation (a provider of
industrial control and automation products) in various management positions.
Elmar F. Illek was appointed Vice President and Group Executive in November
1999. He joined the Company in March 1999 as President- Dr. Bruno Lange, and
had previously served WTW GmbH as Chairman of the Management Board.
10
positions
for more than five years.
Daniel L. Comas was appointed Vice President-Corporate Development in 1996.
He has served the Company in an executive capacity in the corporate
development area for more than the past five years.
Mark C. DeLuzioW. Bruce Graham was appointed Vice President-Danaher Business Systems (DBS)
in 1996.2000. He haspreviously served in general management positions within the
Company as Director-DBS and in financial and
operating positions with Jacobs Vehicle Systems, Inc.Company's Hand Tool Group for more than the past five years.
James H. Ditkoff has served as Vice President-Finance and Tax since January,
1991.
Dennis A. Longo was appointed Vice President-Human Resources in 1997. He has
served the Company as a human resources executive for more than the past five
years.
Christopher C. McMahon was appointed Vice President-ControllerPresident- Controller in 1999. He
has served in financial management positions within the Company for more than
the past five years.
Daniel A. Pryor was appointed Vice President- Strategic Development in 2000.
He has served in general management positions within the Company for more than
the past five years.
Uldis K. Sipols was appointed Vice President- Procurement in 1999. He had
previously served AMP, Inc. (an electronic products manufacturer) as Vice
President, Global Procurement, and before joining AMP in 1997 held various
procurement management positions with Ford Motor Company.
11Company for more than five
years.
7
COMPENSATION OF DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning the
compensation for the last three completed fiscal years of the Chief Executive
Officer and the executive officers of the Company who, in addition to the
Chief Executive Officer, received the highest compensation during 1999.2000.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
-------------------
AWARDS
ANNUAL COMPENSATION
- ----------------------------------------------------------------------------------------------------------------------
(a) (b) (C) (d)Long Term
Annual Compensation Compensation Awards
----------------------------------- ---------------------
(e) (f) (g)
(h)(a) Other Restricted Securities All Other(h)
Name and (c) (d) Annual Stock Underlying Compensation(2)All Other
Principal (b) Salary Bonus Compensation Awards(1) Options ($)Compensation(2)
Position Year ($) ($) ($) ($) (#) - ----------------------------------------------------------------------------------------------------------------------($)
--------- ---- ------- --------- ------------ ---------- ---------- ---------------
George M. ShermanSherman....... 2000 675,000 1,691,000 -- -- -- $80,000
President and CEO 1999 675,000 1,550,000 - - - $69,000
President and CEO-- -- -- 69,000
1998 675,000 1,625,000 - - --- -- -- 87,000
1997 675,000 1,457,500 - - 1,200,000 61,000
- ----------------------------------------------------------------------------------------------------------------H. Lawrence Culp, Jr.... 2000 480,000 830,000 -- -- 1,000,000 $25,000
Executive Vice President 1999 315,000 340,000 -- -- 20,000 14,000
and COO 1998 264,000 232,000 -- -- -- 22,000
Patrick W. AllenderAllender..... 2000 370,000 525,000 -- -- 300,000 $45,000
Executive Vice President 1999 352,500 441,000 - --- -- 22,000 $29,00029,000
and CFO 1998 317,000 380,000 -- -- -- 22,000
Steven E. Simms......... 2000 378,000 400,000 -- -- 500,000 $26,000
Executive Vice President 1998 317,000 380,000 - - - 22,000
and CFO 1997 296,000 325,000 - - 200,000 22,000
- ----------------------------------------------------------------------------------------------------------------
Steven E. Simms 1999 324,000 340,000 - --- -- 20,000 $17,00017,000
1998 298,000 240,000 -- -- -- 22,000
Philip W. Knisely....... 2000 191,000 350,000 -- -- 500,000 $11,000
Executive Vice President 1999 -- -- -- -- -- --
1998 298,000 240,000 - - - 22,000
1997 280,000 200,000 - - 170,000 22,000
- ----------------------------------------------------------------------------------------------------------------
H. Lawrence Culp, Jr. 1999 315,000 340,000 - - 20,000 $14,000
Executive Vice President 1998 264,000 232,000 - - - 22,000
1997 217,000 180,000 - - 170,000 22,000
- ----------------------------------------------------------------------------------------------------------------
James H. Ditkoff 1999 223,000 205,000 - - 6,000 $10,000
Vice President - 1998 213,000 195,000 - - 7,500 22,000
Finance and Tax 1997 204,000 175,000 - - 12,000 22,000
================================================================================================================-- -- -- -- -- --
- --------
(1) Mr. Sherman received a grant of 800,000 shares in 1990 ; 400,000 have been
issued and 400,000 are deferred until retirement. Issued shares
participate in dividends ($24,00026,000 in 2000, $24,000 in 1999 and $22,000 in
1998 and $20,000 in
1997)1998) on a non-preferential basis. The value of the 800,000 shares at
December 31, 19992000 was $38,600,000.$54,700,000.
(2) Includes contributions to the Company's 401(k) and executive retirement
plans and financial consulting fees for all individuals; in the case of
Mr. Sherman, it also includes supplemental term life insurance ($ 22,00025,000
for 1999)2000) and financial consulting fees ($ 37,00041,000 for 1999)2000).
128
Grants in Last Fiscal Year
--------------------------
The following table sets forth certain information relating to options
granted to purchase shares of the Company Common Stock.
================================================================================================================
Potential Realizable Value at
Assumed Annual Rates of
Individual Grants Stock Price Appreciation for
Individual Grants Option Term (3)
- ----------------------------------------------------------------------------------------------------------------
(a)-------------------------------------------- -------------------------------
(b)
(C) (d) (e) (f) (g) (h)
No. of (c)
Securities % of Total Securities(d)
underlying Options Exercise
underlyingOptions Granted to or Base Options/SAR(e)
(a) Granted Employees in Price Expiration (f) (g) (h)
Name S(#) (1) Fiscal Year ($/Sh)(2) Date 0%($) 5%($) 10%($)
Granted
(#) (1)
- -------------------------------------------------------------------------------------------------------------------- ---------- ------------ --------- ---------- ------------------ ------------
Patrick W.Allender 22,000 2.6% 49.1875 12-2-09 0 680,000 1,725,000
H. Lawrence Culp, Jr. 20,000 2.3% 49.1875 12-2-09.. 1,00,000 30.6% 46.625 7-18-10 0 619,000 1,568,00029,322,000 133,027,000
Patrick W. Allender..... 300,000 9.2% 46.625 7-18-10 0 8,797,000 39,908,000
Philip W. Knisely....... 500,000 15.3% 48.0625 4-14-10 0 15,113,000 68,564,000
Steven E. Simms 20,000 2.3% 49.1875 12-2-09Simms......... 500,000 15.3% 46.625 7-18-10 0 619,000 1,568,000
James H. Ditkoff 6,000 0.7% 49.1875 12-2-09 0 186,000 470,000
================================================================================================================14,661,000 66,513,000
- --------
(1) Options become exercisable ratably over five years.Mr. Culp's, Mr. Allender's, Mr. Knisely's and 400,000 of Mr. Simms'
options are exerciseable 50% on the fourth anniversary and 50% on the
fifth anniversary of the grant date. 100,000 of Mr. Simms' options are
exerciseable on the second anniversary of the grant date.
(2) Options were granted at fair market value on the date of grant.
(3) The dollar amounts set forth under these columns are the result of
calculations of assumed annual rates of stock price appreciation from the
date of the grant to the date of expiration of such options of 0%, 5%, and
10%. These assumptions are not intended to forecast future price
appreciation of the Company's stock price. The Company's stock price may
increase or decrease in value over the time period set forth above.
13
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
------------------------------------------------------------------------
The following table sets forth certain information concerning the number of
unexercised options and the value of unexercised options at the end of 19992000
for the executive officers whose compensation is reported in the Summary
Compensation Table. Value is considered to be, in the case of unexercised
options, the difference between the exercise price and the market price at
December 31, 1999.2000.
Number of Securities Value of Unexercised
Shares Underlying Unexercised Value of UnexercisedIn-the-Money
Acquired on Value Options at FY-End (#) In-the-Money
NameOptions at FY-End($)
Exercise Realized Exercisable/ Options at FY-End($)Exercisable/
Name # $ Unexercisable Exercisable/
Unexercisable
- ------------------------------------------------------------------------------------------------------------------------ ----------- -------- -------------------------- ----------------------
George M. Sherman -0- -0- 2,480,000 /(1)/ 1,320,000 /(1)/ 103,505,000 35,407,500
- --------------------------------------------------------------------------------------------------------------------
Patrick W. Allender 6,000 376,000 388,000 /(2)/ 248,000 /(2)/ 15,030,000 5,589,500
- --------------------------------------------------------------------------------------------------------------------Sherman....... 1,200,000 47,925,000 2,000,000(1) 600,000(1) 109,413,000 27,750,000
H. Lawrence Culp, Jr. 20,000 1,190,000 114,000 210,000 4,039,000 4,716,000
- --------------------------------------------------------------------------------------------------------------------.. -0- -0- 132,000 1,192,000 7,108,000 29,898,000
Patrick W. Allender..... 24,000 1,121,000 344,400(2) 527,000(2) 19,583,000 16,223,000
Philip W. Knisely....... -0- -0- -0- 500,000 -0- 10,156,000
Steven E. SimmsSimms......... -0- -0- 128,400 275,600 3,863,000 6,719,000
- --------------------------------------------------------------------------------------------------------------------
James H. Ditkoff 30,000 1,739,000 75,100 24,400 2,735,000 296,000
- --------------------------------------------------------------------------------------------------------------------95,200 688,800 4,633,000 18,876,000
- --------
(1) Includes options to acquire 80,000 shares transferred in trust to family
members. Mr. Sherman disclaims beneficial ownership of these options.
(2) Includes options to acquire 250,000 shares held by family limited
partnerships.
9
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company receive meeting attendance
fees of $750$1,000 per meeting (excluding($500 for telephonic meetings), together with
quarterly fees of $3,000.$6,250. A grant of an option to acquire 2,000 shares of
Company Common Stock at $49.1875$68.3125 (fair market value at date of grant) per
share was made to these directors.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
Pursuant to the terms of termination agreements between the Company and Mr.
Sherman, if the Company were to terminate his employment without cause, as
defined therein, Mr. Sherman's salary and benefits would continue for an
additional 24 months. See "Report of the Compensation and Organization
Committee of the Board of Directors on Executive Compensation" for further
discussion of Mr. Sherman's contract.
14
In July 2000, the Company appointed H. Lawrence Culp, Jr. Chief Operating
Officer, and in October 2000, the Company and Mr. Culp executed an employment
agreement. The major provisions of the agreement are: (i) the term of
employment continues until October 13, 2003, unless sooner terminated or
extended; (ii) annual base salary for the first year of the agreement is
$600,000, plus a target bonus of 100% of base salary; (iii) an interest-free
loan in the amount of $500,000 that is forgiven ratably through October 13,
2003; (iv) reimbursement for taxes incurred as a result of the terms of the
$500,000 loan; (v) a non-competition provision that extends for three years
after Mr. Culp's termination of employment; and (vi) continuation of salary
and bonus payments for 24 months upon a termination of employment without
cause or in the event of a change in control of the Company.
COMPENSATION AND ORGANIZATION COMMITTEE
Messrs. Steven M. Rales, Mitchell P. Rales and George M. Sherman receive a
salary set by the Compensation and Organization Committee of the Board of
Directors and also serve as directors. However, they do not participate in
deliberations regarding their own compensation. The members of the
Compensation and Organization Committee are A. Emmet Stephenson, Jr., Mortimer
M. Caplin, Alan G. Spoon and Donald J. Ehrlich.
REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE OF THE BOARD OF
DIRECTORS ON EXECUTIVE COMPENSATION
The report is not deemed to be "soliciting material" or to be "filed" with
the Securities and Exchange Commission (the "SEC") or subject to the SEC's
proxy rules or to the liabilities of Section 18 of the Securities Exchange Act
of the 1934 (the "1934 Act"), and the report shall not be deemed to be
incorporated by reference into any prior or subsequent filing by the
Corporation under the Securities Act of 1933 or the Securities Exchange Act of
1934.
Total executive officer compensation is comprised of three principal
components: annual salary, annual incentive compensation, and grants of
options to purchase Company Common Stock. In the case of Mr. Sherman, this
included a restricted stock grant at the time of his hire. The Committee
endeavors to establish total compensation packages for each executive officer
equal to the value of that executive's services determined by both what other
companies have or might pay the executive for his services and his
relationship to other executive positions within the Company, as negotiated at
the date of hire. This base is then adjusted annually based on the Committee's
assessment of individual performance.
A fundamental element of the Company's compensation policy is that a
substantial portion of each executive's compensation be directly related to
the success of the Company. This is accomplished in two ways. First, the
annual incentive compensation program requires that the Company, or the
Company's businesses for which the executive is directly responsible, achieve
certain minimum targets in earnings level (earnings per share which has a
majority weighting), working capital management (working capital turnover) and
economic value added. If performance for the year is below minimum targeted
levels (generally approximately three-quarters of
10
the earnings target must be achieved and working capital management must
exceed
15
target levels) there would be no payment. If the minimum targets are
met or exceeded, each executive receives a formula-based payout taking into
account the Company's performance and his or her personal contribution
thereto.
Second, executives and other key employees who, in the opinion of the
Committee, contribute to the growth, development and financial success of the
Company are eligible to be awarded options to purchase Company Common Stock.
These grants are normally made at the fair market value on the date of grant
with vesting over a five year period. In addition to the factors discussed
above, the amount of options granted is impacted both by the level of the
employee within the Company's management and the amount of options previously
granted to the employee. Thus the compensation value of this element is
directly related to the performance of the Company as measured by its returns
to shareholders over at least a five year period.
Mr. Sherman's compensation is governed by a written contract dated January
2, 1990, whereby he agreed to serve as President and Chief Executive Officer.
The contract provides for Mr. Sherman to be paid a base salary of $675,000 per
year and an annual formula-based incentive compensation award, if earned, as
determined by the Compensation Committee. The Committee and subsequently the
Board of Directors recommended, and Mr. Sherman agreed, that his base salary,
which has not increased since he joined the Company, would not be increased
during the remainder of the term of his contract. Therefore, during the
remaining term of his contract with the Company, any increases in Mr. Sherman's
compensation will be tied directly to the financial performance of the Company
and the Company's stock price. He also received 800,000
shares of restricted stock (see Summary Compensation Table) and an option to
acquire 2,000,000 shares (see Year End Option Value Table) of the Company
Common Stock, and has received, or will receive, tax gross-up payments related
to these items. Mr. Sherman's contract requires the Company to provide
supplemental term life insurance and financial consulting services to him (see
Summary Compensation Table) and to provide severance benefits discussed
previously.
The Committee evaluated each executive's annual incentive compensation
awards for 1999.2000. The Committee assessed their performance in light of the
targets referenced above, which were substantially exceeded, and awarded to
executives (other than the operating level Executive Vice Presidents and Group
Executives) total incentive compensation payments of $2,810,000$4,058,000 for 1999.2000. For
the years 2000-2002, the Committee has established a maximum bonus payment of
up to $2,500,000 per executive. The Company's
16
shareholders approved the
performance goals for these periods, which are applicable to all of the
Company's executive officers (other than the operating level Executive Vice
Presidents and Group Executives) at the 1998 annual meeting.
The Committee has considered the impact of provisions of the federal income
tax laws that in certain circumstances disallow compensation deductions in
excess of $1 million for any year with respect to the executive officers named
in proxy statements of publicly traded companies. The Securities and Exchange
Commission requires compensation committees of public companies to state their
compensation policies relative to this $1 million deduction limit.
With respect to the Company's Chief Executive Officer, a portion of his
compensation is determined pursuant to a binding contract dated January 2,
1990 and, accordingly, is not subject to the deduction limit. In addition, the
Committee has designed the program for awarding 1998-2002 incentive
compensation to executive officers (other than the operating level Executive Vice Presidents
and Group
Executives) so that such bonuses will comply with an exception to the $1
million deduction limit for performance-based compensation. Accordingly, the
full amount of any such bonus payments for 1998-2002 should be deductible. One
of the requirements of this exception is that shareholders approve certain
material terms under which the bonus is to be paid. In this regard, the
Company's shareholders approved the material terms used for calculating the
1998-2002 bonus awards for the Company's executive officers, other than Group
Executives, at the 1998 annual meeting.
COMPENSATION AND ORGANIZATION COMMITTEE OF THE BOARD OF DIRECTORS
A. Emmet Stephenson, Jr.
Mortimer M. Caplin
Donald J. Ehrlich
Alan G. Spoon
11
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The report is not deemed to be "soliciting material" or to be "filed" with
the Securities and Exchange Commission (the "SEC") or subject to the SEC's
proxy rules or to the liabilities of Section 18 of the Securities Exchange Act
of 1934 (the "1934 Act"), and the report shall not be deemed to be
incorporated by reference into any prior or subsequent filing by the
Corporation under the Securities Act of 1933 or the Securities Exchange Act of
1934.
The Audit Committee (the Committee) comprises three independent directors
and operates under a written charter, which is attached as Exhibit B. The
Committee recommends to the Board of Directors the selection of the Company's
independent auditors.
In fulfilling its responsibilities, the Committee has reviewed and discussed
the audited consolidated financial statements of the Company for the fiscal
year ended December 31, 2000 with the Company's management and Arthur Andersen
LLP (Arthur Andersen), the Company's independent auditors.
The Committee has discussed with Arthur Andersen the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees. In addition, the Committee has received the written disclosures
and the letter from Arthur Andersen required by Independence Standards Board
Standard No. 1, Indepdendence Discussions with Audit Committees and has
discussed with Arthur Andersen its independence from the Company and its
management.
In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors that the audited consolidated financial
statements for the Company for the fiscal year ended December 31, 2000 be
included in the 2000 Annual Report to Stockholders which will be included in
the Annual Report on Form 10-K for the year ended December 31, 2000 for filing
with the Securities and Exchange Commission.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Walter G. Lohr, Jr.
Mortimer M. Caplin
Donald J. Ehrlich
12
STOCK PERFORMANCE CHART
As part of proxy statement disclosure requirements mandated by the
Securities and Exchange Commission, the Company is required to provide a five-yearfive-
year comparison of the cumulative total shareholder return on its Common Stock
with that of a broad equity market index and either a published industry index
or a Company constructed peer group index. This graph is not deemed to be
"soliciting material" or to be "filed" with the SEC or
17
subject to the SEC's
proxy rules or to the liabilities of Section 18 of the 1934 Act, and the graph
shall not be deemed to be incorporated by reference into any prior or
subsequent filing by the Corporation under the Securities Act of 1933 or the
1934 Act.
The following chart compares the yearly percentage change in the cumulative
total shareholder return in the Company's Common Stock during the five years
ended December 31, 19992000 with the cumulative total return on the S & P 500
Index (the equity index) and the S&P Manufacturing Index (the peer index). The
comparison assumes $100 was invested on December 31, 19941995 in the Company's
Common Stock and in each of the above indices with reinvestment of dividends.
12/94 12/95 12/96 12/97 12/98 12/99
Danaher Corporation 100.0 121.9 179.3 243.3 419.2 372.8
S&P 500 INDEX 100.0 137.5 169.1 225.5 289.9 350.9
S&P Manufacturing Index 100.0 140.8 187.8 258.6 317.2 355.3
Danaher S&P
Corporation S&P 500 Index Manufacturing Index
12/31/95 100 100 100
12/31/96 147 123 133
12/31/97 199 164 183
12/31/98 343 211 225
12/31/99 305 255 252
12/31/00 433 232 281
13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 5, 2000 the Company purchased the motion control businesses of
Warner Electric Group, Inc. for $144 million in cash. Steven M. Rales and
Mitchell P. Rales, the Company's Chairman of the Board and Chairman of the
Executive Committee, respectively, own a majority share of Warner Electric
Group, Inc., and Philip W. Knisely, an Executive Vice President of the
Company, owns 5% of Warner Electric Group, Inc. This transaction was
unanimously recommended by an independent committee of the Company's Board of
Directors, who received an opinion from UBS Warburg, an independent financial
advisor, as to the fairness of the transaction. The members of the independent
committee included Mortimer M. Caplin, Donald J. Ehrlich, Alan G. Spoon, and
A. Emmet Stephenson, Jr.
The Company, from time to time, has been involved in transactions with
Equity Group Holdings LLP and its affiliates. The Company has received legal
services from the firm of Caplin & Drysdale, of which Mr. Caplin, a Director,
is a principal, and from the firm of Hogan & Hartson, of which Mr. Lohr, a
Director, is a partner. The amount of such fees for 19992000 was less than five-percentfive-
percent of each firm's gross revenues. These transactions, which are conducted
on an arms length basis, are not material, either individually or in the
aggregate. 18
The Company has provided H. Lawrence Culp, Jr. with a $500,000
loan, as discussed in the Employment Contracts and Termination of Employment
section of this proxy statement.
PROPOSAL 2.
APPROVAL OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, an international
accounting firm of independent certified public accountants, to act as
independent accountants for the Company and its consolidated subsidiaries for
2000.2001. Arthur Andersen LLP has been the Company's auditors since 1976 and has
advised the Company that the firm does not have any direct or indirect
financial interest in the Company or any of its subsidiaries, nor has such
firm had any such interest in connection with the Company during the past five
years other than its capacity as the Company's independent certified public
accountants. A representative of Arthur Andersen LLP is expected to be present
at the Annual Meeting and will have an opportunity to make a statement if he
desires to do so and to be available to answer questions from shareholders.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR RATIFICATION AND APPROVAL FOR THE SELECTION OF ARTHUR
ANDERSEN LLP TO SERVE AS INDEPENDENT AUDITORS FOR THE COMPANY FOR 2000.2001.
PROPOSAL 3.
AMEND THE COMPANY'S 1998 STOCK OPTION PLAN
The Company's 1998 Stock Option Plan (the Plan) was approved by the
shareholders at the 1998 Annual Meeting. On March 1, 2001, the Board of
Directors approved an amendment to the Plan, which would increase the
aggregate number of shares of common stock that may be issued under the
options from 15,000,000 to 22,500,000.
The Plan has been important in the Company's efforts to attract and retain
qualified employees. As of March 23, 2001, a total of 403,000 shares were
available for issuance. In order to provide sufficient shares for the future
issuance of shares to our current and prospective employees, the Board of
Directors seeks shareholder approval to amend the Plan to increase the maximum
number of shares that may be issued under the options by 7,500,000 shares to
an aggregate maximum number of shares of 22,500,000.
All employees and non-employee directors of the Company and eligible
subsidiaries are eligible for option grants under the Plan. The Plan is
subject to approval by the Compensation and Organization Committee of the
14
Board of Directors, which approves the recipients of option grants and the
terms of the options. The shares of common stock used under the plan may come
from treasury shares, authorized but unissued shares, or previously issued
shares that the Company reacquires, including shares it purchases on the open
market. If any option expires, is canceled, or terminates for any other
reason, the shares available under that option will again be available for the
granting of new options. The Plan will terminate on May 4, 2008. Options
granted under the Plan are non-qualified stock options for federal income tax
purposes. This is only a summary of the terms of the plan. A copy of the
entire Plan may be obtained by writing to Danaher Corporation, Attn: Vice
President and Controller, 1250 24th Street, N.W., Suite 800, Washington, D.C.
20037.
The closing price of the Company's stock on the New York Stock Exchange on
March 22, 2001 was $54.77. All eligible participants, including the Company's
executive officers and directors, will be eligible for grants of options for
the additional authorized shares.
Approval requires the affirmative vote of the holders of a majority of the
shares of common stock of the Company, present, or represented, and entitled
to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS APPROVE THE
AMENDMENT TO THE 1998 STOCK OPTION PLAN.
PROPOSAL 4.
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED CAPITAL STOCK
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of capital stock of the Company to a total of six hundred
million (600,000,000) shares, consisting of five hundred million (500,000,000)
shares of Common Stock, $.01 value per share (Common Stock) and one hundred
million (100,000,000) shares of preferred stock, without par value (Preferred
Stock). The capital stock of the Company, prior to the approval of the
amendment, consists of 315,000,000 shares, consisting of three hundred million
(300,000,000) shares of Common Stock, $.01 par value per share and fifteen
million (15,000,000) shares of preferred stock, without par value.
The Board of Directors believes that it is in the Company's best interests
to have additional shares of Common Stock authorized to meet the Company's
future business needs as they arise. In particular, a portion of the shares of
Common Stock that would become available for issuance if the proposal were
adopted could be used by the Company in connection with the following possible
future events: (i) a split of the outstanding Common Stock; (ii) stock option
exercises; (iii) share-for-share acquisitions; or (iv) conversion of
outstanding and future debt securities into Common Stock.
The Company's management and the Board of Directors have no present
arrangement, agreements, understandings or plans for the additional shares
proposed to be authorized.
If the proposal is adopted, it will become effective upon filing of a
Certificate of Amendment to the Companys Certificate of Incorporation. The
text of the proposed amendment is set forth in Exhibit A hereto.
The affirmative vote of the majority of the votes entitled to be cast by all
holders of outstanding Common Stock of the Company is required for approval of
this amendment to the Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOREGOING PROPOSAL AND
SIGNED PROXIES WHICH ARE RETURNED WILL BE SO VOTED UNLESS A CONTRARY VOTE IS
DESIGNATED ON THE PROXY CARD.
15
OTHER MATTERS
The management of the Company is not aware of any other business that may
come before the meeting. However, if additional matters properly come before
the meeting, proxies will be voted at the discretion of the proxy holders.
FEES PAID TO INDEPENDENT AUDITORS
Audit Fees: The aggregate fees billed for professional services rendered by
Arthur Andersen LLP, the Company's independent auditors, in connection with
the audit and review of the 2000 financial statements, including quarterly
reviews, was $465,000.
Financial Information Systems Design and Implementation Fees: The aggregate
fees billed for professional services rendered in connection with financial
information systems design and implementation by Arthur Andersen LLP was
$100,000.
All Other Fees: The aggregate of all other fees billed for professional
services during 2000 by Arthur Andersen LLP, including statuatory audits of
foreign subsidiaries, was $576,000.
The Audit Committee has considered whether the services rendered by the
independent auditors with respect to the foregoing fees are compatible with
maintaining their independence.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 20012002 Annual Meeting of
Shareholders of the Company must be received by the Company at its principal
executive offices, Danaher Corporation, 1250 24th Street, N.W., Washington,
D.C. 20037, no later than November 26, 200030, 2001 for inclusion in the Proxy
Statement and Proxy relating to the 20012002 Annual Meeting of Shareholders.
Shareholder proposals submitted other than pursuant to Rule 14(a)-8 under the
Securities Exchange Act are considered untimely if received after February 13,
2001.2002.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Patrick W. Allender
PATRICK W. ALLENDER
Secretary
Dated: March 29, 200030, 2001
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 19992000 MAY BE OBTAINED, WITHOUT CHARGE, BY WRITING TO THE COMPANY.
16
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF DANAHER CORPORATION
----------------
Pursuant to Secton 242 of the General
Corporation Laws of the State of Delaware
----------------
Danaher Corporation, a corporation organized and existing under the laws of
the State of Delaware (the Corporation), does hereby certify:
FIRST: That Paragraph I. Of Article FOURTH of the Certificate of
Incorporation of the Corporation be amended and read in its entirety as
follows:
FOURTH: I. The total number of shares of stock which the Corporation shall
have authority to issue is 600,000,000 shares of which 500,000,000 shares,
$.01 par value per share, shall be of a class designated Common Stock and of
which 100,000,000 shares, without par value, shall be designated Preferred
Stock.
SECOND: That the foregoing amendment has been duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
17
EXHIBIT B
DANAHER CORPORATION
AUDIT COMMITTEE CHARTER
A.Policy Statement
The Charter of the Audit Committee is to assist the board of directors in
monitoring:
1. The reliability and integrity of the financial information which is
provided to the shareholders and other.
2. The Company's system of internal control.
3. A system to provide an open avenue of communication between management,
internal audit, the external auditors, and the board of directors.
4. Compliance by the Company with all applicable laws, regulations, and
company policy.
5. Independence and performance of the Company's external auditors.
B.Organization
The Audit Committee is a committee within the board of directors.
The members of the committee shall meet the independence and experience
requirements of the New York Stock Exchange and the Securities and Exchange
Commission. Initially the committee shall consist of at least three and no
more than six independent, nonexecutive board members.
All members shall have working familiarity with basic finance and accounting
practices, including internal controls and regulatory requirements. The
committee chairperson shall be selected by the committee members.
The committee shall meet at least four times annually and shall meet and
consult with the members of management, counsel, internal audit, and/or
external auditors as necessary to carry out the committee responsibilities. It
is understood that either the internal or external auditors, or counsel, may,
at any time, request a meeting with the audit committee or committee
chairperson with or without management attendance. In any case, the committee
shall meet in executive session separately with the CFO, internal auditors,
and external auditors at least annually.
The committee shall have the authority to obtain special legal, accounting,
or other consultants to advise the committee.
The committee shall make regular reports to the full board of directors.
C.Relationship with External and Internal Auditors
The committee shall annually recommend to the board the appointment of
independent external auditors, who in their capacity as independent public
accountants, shall be accountable to the board of directors and the audit
committee. The committee shall review the planning and staffing of the annual
audit and shall discuss with the external auditors matters required to be
discussed relating to the conduct of the audit.
The committee shall meet with the external auditors who shall report all
relevant issues identified during their review of financial information to the
committee. The committee shall review any management letter form the external
auditors and the companys response thereto.
The committee shall annually review the performance (effectiveness,
objectivity, and independence) of the external and internal auditors. The
committee shall insure the receipt of a formal written statement from the
18
external auditors consistent with the standards set by the Independence
Standards Board. In addition, the committee shall discuss with the external
auditor any relationship(s) or services that may affect auditor objectivity or
independence. If the committee is not satisfied with external auditors
assurances of independence, it shall take or recommend to the full board
appropriate action to ensure the independence of the external auditor.
The committee shall evaluate the performance of the external auditors and,
if necessary, recommend to the full Board the replacement of the external
auditors.
The internal audit function shall be responsible to the board of directors
through the committee.
The committee shall establish a policy whereby if either the internal or
external auditors identify significant issues relative to the items enumerated
under Paragraph A above, whether or not communicated to management, they
should communicate these issues to the committee. A change in the director of
internal audit shall be subject to committee approval.
D.Other Primary Committee Responsibilities
The committee should monitor matters related to financial reporting and risk
control through review and assessment of:
1. The company's business and financial risk management process.
2. All major financial reports in advance of filings and distribution.
3. SEC inquiries and the results of examinations by other regulatory
authorities in terms of important findings, recommendations, and
managements response.
4. The company's system of internal controls for detecting accounting and
reporting financial errors, fraud and defalcations, legal violations,
and noncompliance with the corporate code of conduct.
5. The annual internal audit plan and the process used to develop the plan.
The status of activities, significant findings, recommendations, and
managements responses.
6. The independence of the external auditor. The overall scope and focus of
the annual/interim audit which includes the scope and level of their
involvement with unaudited quarterly or other interim-period
information.
7. Significant internal and external auditor recommendations on financial
reporting, controls, other matters, and managements responses. Views of
management and auditors on the overall quality of annual and interim
financial reporting.
8. Key financial issues and risks and their impact or potential effect on
reported financial information. The processes used by management to
address these matters and related auditor views including the basis for
their conclusions. Important conclusions on interim and/or year-end
audit work in advance of the public release of financial information.
In addition, the committee should review, assess, and approve:
1. The code of ethical conduct.
2. The internal audit scope and responsibilities.
3. Changes in important accounting principles and their application in
interim and annual financial reports.
4. Significant conflicts of interest and related-party transactions.
5. Changes in key financial management.
19
The committee shall regularly review with counsel legal matter that may have
a material impact on financial statements, the Company's compliance with law
and material reports or inquiries from regulators or government agencies.
The committee shall review this Charter at least every three years to
determine the need for changes, if any, to fulfill their role.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditor or to assure compliance with laws and regulations and the Company's
Code of Conduct.
20
Danaher Corporation
1998 Stock Option Plan
Effective as of May 5, 1998
And as Proposed to be Amended as of May 1, 2001
Purpose Danaher Corporation, a Delaware corporation ("Danaher" or the
"Company"), wishes to recruit, reward, and retain key employees
and outside directors. To further these objectives, the
Company hereby sets forth the Danaher Corporation 1998 Stock
Option Plan (the "Plan"), effective as of May 5, 1998 and
amended as of May 1, 2001, to provide options ("Options") to
employees to purchase shares of the Company's common stock (the
"Common Stock"). The Plan constitutes an amendment to, and
substitution for, the Danaher Corporation 1987 Stock Option
Plan (the "1987 Plan").
Optionees All Employees and non-Employee directors ("Eligible Directors")
of Danaher and Eligible Subsidiaries are eligible for option
grants under this Plan. Eligible employees and directors
become "optionees" when the Administrator grants them an option
under this Plan. The term optionee also includes, where
appropriate, a person authorized to exercise an Option in place
of the original recipient.
Employee means any person employed as a common law employee of
the Company or an Eligible Subsidiary.
Administrator The Administrator will be the Compensation Committee of the
Board of Directors of Danaher (the "Compensation Committee"),
unless the Board specifies another committee. The Board may
also act under the Plan as though it were the Compensation
Committee.
The Administrator is responsible for the general operation and
administration of the Plan and for carrying out its provisions
and has full discretion in interpreting and administering the
provisions of the Plan. Subject to the express provisions of
the Plan, the Administrator may exercise such powers and
authority of the Board as the Administrator may find necessary
or appropriate to carry out its functions. The Administrator
may delegate its functions (other than those described in the
Granting of Options section) to officers or employees.
The Administrator's powers will include, but not be limited to,
the power to amend, waive, or extend any provision or
limitation of any Option. The Administrator may act through
meetings of a majority of its members or by unanimous consent.
Granting of Subject to the terms of the Plan, the Administrator will, in
Options its sole discretion, determine
the recipients of option grants,
the terms of such grants,
the schedule for exercisability (including any requirements
that the optionee or the Company satisfy performance
criteria),
the time and conditions for expiration of the Option, and
the form of payment due upon exercise.
The Administrator's determinations under the Plan need not be
uniform and need not consider whether possible optionees are
similarly situated.
Options granted to employees are not intended to qualify as
"incentive stock options" ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended
from time to time (the "Code"), or the corresponding provision
of any subsequently enacted tax statute.
The Administrator may not reduce the Exercise Price of any
outstanding Option, other than as provided under Adjustments
upon Changes in Capital Stock.
Substitutions The Administrator may also grant Options in substitution for
options or other equity interests held by individuals who
become Employees of the Company or of an Eligible Subsidiary as
a result of the Company's acquiring or merging with the
individual's employer. If necessary to conform the Options to
the options for which they are substitutes, the Administrator
may grant substitute Options under terms and conditions that
vary from those the Plan otherwise requires.
Date of Grant The Date of Grant will be the date as of which the
Administrator awards an Option to an optionee, as specified in
the Administrator's minutes.
Exercise Price The Exercise Price is the value of the consideration that an
optionee must provide in exchange for one share of Common
Stock. The Administrator will determine the Exercise Price
under each Option and may set the Exercise Price without regard
to the Exercise Price of any other Options granted at the same
or any other time. The Company may use the consideration it
receives from the optionee for general corporate purposes.
The Exercise Price per share for the Options may not be less
than 100% of the Fair Market Value of a share on the Date of
Grant.
Fair Market Fair Market Value of a share of Common Stock for purposes of
Value the Plan will be determined as follows:
if the Common Stock is traded on a national securities
exchange, the closing sale price on that date;
if the Common Stock is not traded on any such exchange, the
closing sale price as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") for such date;
if no such closing sale price information is available, the
average of the closing bid and asked prices as reported by
Nasdaq for such date; or
if there are no such closing bid and asked prices, the
average of the closing bid and asked prices as reported by
any other commercial service for such date.
For any date that is not a trading day, the Fair Market Value
of a share of Common Stock for such date shall be determined by
using the closing sale price or the average of the closing bid
and asked prices, as appropriate, for the immediately preceding
trading day.
Exercisability The Administrator will determine the times and conditions for
exercise of each Option but may not extend the period for
exercise beyond the tenth anniversary of its Date of Grant.
Options will become exercisable at such times and in such
manner as the Administrator determines and the Option
Certificate indicates; provided, however, that the
-------- -------
Administrator may, on such terms and conditions as it
determines appropriate, accelerate the time at which the
optionee may exercise any portion of an Option.
If the Administrator does not specify otherwise, Options for
Employees will become exercisable as to one-fifth of the
covered shares on each of the first five anniversaries of the
Date of Grant, and Options for Eligible Directors will become
exercisable in full as of the Date of Grant. Unless the
Administrator provides otherwise, the passage of time after an
optionee's Retirement will continue to count for purposes of
determining the extent to which an Option is exercisable.
` No portion of an Option that is unexercisable at an optionee's
termination of employment for any reason other than Retirement
(as defined below) will thereafter become exercisable, unless
the Option Certificate provides otherwise, either initially or
by amendment. All unexpired Options become fully exercisable
at age 65 irrespective of whether the person then retires.
Method of To exercise any exercisable portion of an Option, the optionee
Exercise must:
Deliver a written notice of exercise to the Secretary of
the Company (or to whomever the Administrator designates),
in a form complying with any rules the Administrator may
issue, signed by the optionee, and specifying the number of
shares of Common Stock underlying the portion of the Option
the optionee is exercising;
Pay the full Exercise Price by cashier's or certified check
for the shares of Common Stock with respect to which the
Option is being exercised, unless the Administrator
consents to another form of payment (which could include
the use of Common Stock); and
Deliver to the Administrator such representations and
documents as the Administrator, in its sole discretion, may
consider necessary or advisable.
Payment in full of the Exercise Price need not accompany the
written notice of exercise provided the notice directs that the
stock certificates for the shares issued upon the exercise be
delivered to a licensed broker acceptable to the Company as the
agent for the individual exercising the option and at the time
the stock certificates are delivered to the broker, the broker
will tender to the Company cash or cash equivalents acceptable
to the Company and equal to the Exercise Price.
If the Administrator agrees to payment through the tender to
the Company of shares of Common Stock, the individual must have
held the stock being tendered for at least six months at the
time of surrender. Shares of stock offered as payment will be
valued, for purposes of determining the extent to which the
optionee has paid the Exercise Price, at their Fair Market
Value on the date of exercise. The Administrator may also, in
its discretion, accept attestation of ownership of Common Stock
and issue a net number of shares upon Option exercise.
Option No one may exercise an Option more than ten years after its
Expiration Date of Grant. Unless the Option Certificate provides
otherwise, either initially or by amendment, no one may
exercise an Option after the first to occur of:
Employment The 30th day after the date of termination of employment
Termination (other than for death, Disability, or Retirement), where
termination of employment means the time when the employer-
employee or other service-providing relationship between the
employee and the Company ends for any reason, including
retirement. Unless the Option Certificate provides otherwise,
termination of employment does not include instances in which
the Company immediately rehires a common law employee as an
independent contractor. The Administrator, in its sole
discretion, will determine all questions of whether
particular terminations or leaves of absence are terminations
of employment;
Retirement For either Early or Normal Retirement (both as defined below
and both collectively referred to as "Retirement"), the fifth
anniversary of Retirement. Solely for purposes of this Plan,
"Normal Retirement" occurs on the date an employee
voluntarily ceases to be an Employee at or after reaching age
65, and "Early Retirement" occurs on the date an employee
voluntarily ceases to be an Employee if both (i) the
employment termination occurs before the Employee reaches age
65 and (ii) the Administrator determines that the cessation
constituted "retirement" for purposes of this Plan. In
deciding whether a termination of employment of employment is
an Early Retirement, the Administrator need not consider the
definition under any other Company Plan;
Gross For the Company's termination of the optionee's employment as
Misconduct a result of the optionee's Gross Misconduct, the time of such
termination. For purposes of this Plan, "Gross Misconduct"
means the optionee has
committed fraud, misappropriation, embezzlement, or
willful misconduct that has resulted or is likely to
result in material harm to the Company;
committed or been indicted for or convicted of, or
pleaded guilty or no contest to, any misdemeanor
(other than for minor infractions or traffic
violations) involving fraud, breach of trust,
misappropriation, or other similar activity, or any
felony; or
committed an act of gross negligence or otherwise
acted with willful disregard for the Company's best
interests in a manner that has resulted or is likely
to result in material harm to the Company.
Disability For disability, the earlier of (i) the first anniversary of
the optionee's termination of employment for disability and
(ii) 60 days after the optionee no longer has a disability,
where "disability" means the inability to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than
twelve months; or
Death The date 12 months after the optionee's death.
If exercise is permitted after termination of employment, the
Option will nevertheless expire as of the date that the former
employee violates any covenant not to compete or other post-
employment covenant in effect between the Company and the
former employee.
Nothing in this Plan extends the term of an Option beyond the
tenth anniversary of its Date of Grant, nor does anything in
this Option Expiration section make an Option exercisable that
has not otherwise become exercisable.
Option Option Certificates will set forth the terms of each Option and
Certificates will include such terms and conditions, consistent with the
Plan, as the Administrator may determine are necessary or
advisable. To the extent the certificate is inconsistent with
the Plan, the Plan will govern. The Option Certificates may
contain special rules. The Administrator may, in its
discretion, require Option agreements rather than certificates.
Stock Subject Except as adjusted below under Corporate Changes, the aggregate
to Plan number of shares of Common Stock that may be issued under the
Options may not exceed 22.5 million shares and the maximum
number of shares that may be subject to Options for a single
individual may not exceed 5.0 million shares. The Common Stock
may come from treasury shares, authorized but unissued shares,
or previously issued shares that the Company reacquires,
including shares it purchases on the open market. If any Option
expires, is canceled, or terminates for any other reason, the
shares of Common Stock available under that Option will again
be available for the granting of new Options.
No adjustment will be made for a dividend or other right for
which the record date precedes the date of exercise.
The optionee will have no rights of a stockholder with respect
to the shares of stock subject to an Option except to the
extent that the Company has issued certificates for, or
otherwise confirmed ownership of, such shares upon the exercise
of the Option.
The Company will not issue fractional shares pursuant to the
exercise of an Option, but the Administrator may, in its
discretion, direct the Company to make a cash payment in lieu
of fractional shares.
Person who During the optionee's lifetime and except as provided under
may Exercise Transfers, Assignments, and Pledges, only the optionee or his
duly appointed guardian or personal representative may exercise
the Options. After his death, his personal representative or
any other person authorized under a will or under the laws of
descent and distribution may exercise any then exercisable
portion of an Option. If someone other than the original
recipient seeks to exercise any portion of an Option, the
Administrator may request such proof as it may consider
necessary or appropriate of the person's right to exercise the
Option.
Adjustments Subject to any required action by the Company (which it shall
upon Changes promptly take) or its stockholders, and subject to the
in Capital provisions of applicable corporate law, if, after the Date of
Stock Grant of an Option,
the outstanding shares of Common Stock increase or decrease
or change into or are exchanged for a different number or
kind of security by reason of any recapitalization,
reclassification, stock split, reverse stock split,
combination of shares, exchange of shares, stock dividend,
or other distribution payable in capital stock, or
some other increase or decrease in such Common Stock occurs
without the Company's receiving consideration,
the Administrator will make a proportionate and appropriate
adjustment in the number of shares of Common Stock underlying
each Option, so that the proportionate interest of the optionee
immediately following such event will, to the extent
practicable, be the same as immediately before such event.
Unless the Administrator determines another method would be
appropriate, any such adjustment to an Option will not change
the total price with respect to shares of Common Stock
underlying the unexercised portion of the Option but will
include a corresponding proportionate adjustment in the
Option's Exercise Price.
The Administrator will make a commensurate change to the
maximum number and kind of shares provided in the Stock Subject
to Plan section.
Any issue by the Company of any class of preferred stock, or
securities convertible into shares of common or preferred stock
of any class, will not affect, and no adjustment by reason
thereof will be made with respect to, the number of shares of
Common Stock subject to any Option or the Exercise Price except
as this Adjustments section specifically provides. The grant
of an option under the Plan will not affect in any way the
right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure, or to merge or to consolidate, or to
dissolve, liquidate, sell, or transfer all or any part of its
business or assets.
Substantial Upon a Substantial Corporate Change, the Plan and the Options
Corporate will terminate unless provision is made in writing in
Change connection with such transaction for
the assumption or continuation of outstanding Options, or
the substitution for such options or grants of any options
or grants covering the stock or securities of a successor
employer corporation, or a parent or subsidiary of such
successor, with appropriate adjustments as to the number
and kind of shares of stock and prices, in which event the
Options will continue in the manner and under the terms so
provided.
Unless the Board determines otherwise, if an Option would
otherwise terminate pursuant to the preceding sentence,
optionees will have the right, at such time before the
consummation of the transaction causing such termination as the
Board reasonably designates, to exercise any unexercised
portions of the Option, whether or not they had previously
become exercisable. However, unless the Board determines
otherwise, the acceleration will not occur if it would render
unavailable "pooling of interest" accounting for any
reorganization, merger, or consolidation of the Company.
A Substantial Corporate Change means the
dissolution or liquidation of the Company,
merger, consolidation, or reorganization of the Company
with one or more corporations in which the Company is not
the surviving corporation,
the sale of substantially all of the assets of the Company
to another corporation, or
any transaction (including a merger or reorganization in
which the Company survives) approved by the Board that
results in any person or entity (other than any affiliate
of the Company as defined in Rule 144(a)(1) under the
Securities Act) owning 100% of the combined voting power of
all classes of stock of the Company.
Subsidiary Employees of Company Subsidiaries will be entitled to
Employees participate in the Plan, except as otherwise designated by
the Board of Directors or the Committee.
Eligible Subsidiary means each of the Company's Subsidiaries,
except as the Board otherwise specifies. Subsidiary means any
corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time an
Option is granted to a Participant under the Plan, each of the
corporations (other than the last corporation in the unbroken
chain) owns stock possessing 20% or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
Legal The Company will not issue any shares of Common Stock under an
Compliance Option until all applicable requirements imposed by Federal and
state securities and other laws, rules, and regulations, and by
any applicable regulatory agencies or stock exchanges, have
been fully met. To that end, the Company may require the
optionee to take any reasonable action to comply with such
requirements before issuing such shares. No provision in the
Plan or action taken under it authorizes any action that is
otherwise prohibited by Federal or state laws.
The Plan is intended to conform to the extent necessary with
all provisions of the Securities Act of 1933 ("Securities Act")
and the Securities Exchange Act of 1934 ("Exchange Act") and
all regulations and rules the Securities and Exchange
Commission issues under those laws. Notwithstanding anything
in the Plan to the contrary, the Administrator must administer
the Plan, and Options may be granted and exercised, only in a
way that conforms to such laws, rules, and regulations. To the
extent permitted by applicable law, the Plan and any Options
will be deemed amended to the extent necessary to conform to
such laws, rules, and regulations.
Purchase for Unless a registration statement under the Securities Act covers
Investment the shares of Common Stock an optionee receives upon exercise
and Other of his Option, the Administrator may require, at the time of
Restrictions such exercise, that the optionee agree in writing to acquire
such shares for investment and not for public resale or
distribution, unless and until the shares subject to the Option
are registered under the Securities Act. Unless the shares are
registered under the Securities Act, the optionee must
acknowledge:
that the shares purchased on exercise of the Option are not
so registered,
that the optionee may not sell or otherwise transfer the
shares unless
the shares have been registered under the Securities
Act in connection with the sale or transfer thereof,
or
counsel satisfactory to the Company has issued an
opinion satisfactory to the Company that the sale or
other transfer of such shares is exempt from
registration under the Securities Act, and
such sale or transfer complies with all other
applicable laws, rules, and regulations, including all
applicable Federal and state securities laws, rules,
and regulations.
Additionally, the Common Stock, when issued upon the exercise
of an Option, will be subject to any other transfer
restrictions, rights of first refusal, and rights of repurchase
set forth in or incorporated by reference into other applicable
documents, including the Company's articles or certificate of
incorporation, by-laws, or generally applicable stockholders'
agreements.
The Administrator may, in its sole discretion, take whatever
additional actions it deems appropriate to comply with such
restrictions and applicable laws, including placing legends on
certificates and issuing stop-transfer orders to transfer
agents and registrars.
Tax Withholding The optionee must satisfy all applicable Federal, state, and
local income and employment tax withholding requirements before
the Company will deliver stock certificates upon the exercise
of an Option. The Company may decide to satisfy the
withholding obligations through additional withholding on
salary or wages. If the Company does not or cannot withhold
from other compensation, the optionee must pay the Company,
with a cashier's check or certified check, the full amounts
required for withholding. Payment of withholding obligations
is due at the same time as is payment of the Exercise Price.
If the Committee so determines, the optionee may instead
satisfy the withholding obligations by directing the Company to
retain shares from the Option exercise, by tendering previously
owned shares, or by attesting to his ownership of shares (with
the distribution of net shares), or by having a broker tender
to the Company cash equal to the withholding taxes.
Transfers, Unless the Administrator otherwise approves in advance in
Assignments, writing or as set forth below, an Option may not be assigned,
and Pledges pledged, or otherwise transferred in any way, whether by
operation of law or otherwise or through any legal or equitable
proceedings (including bankruptcy), by the optionee to any
person, except by will or by operation of applicable laws of
descent and distribution. If Rule 16b-3 under the Exchange Act
then applies to an Option, the optionee may not transfer or
pledge shares of Common Stock acquired upon exercise of an
Option until at least six months have elapsed from (but
excluding) the Date of Grant, unless the Administrator approves
otherwise in advance in writing. The Administrator may, in its
discretion, expressly provide that an optionee may transfer his
Option, without receiving consideration, to (i) members of the
optionee's immediate family (children, grandchildren, or
spouse), (ii) trusts for the benefit of such family members, or
(iii) partnerships whose only partners are such family members.
Amendment or The Board may amend, suspend, or terminate the Plan at any
Termination time, without the consent of the optionees or their
of Plan and beneficiaries; provided, however, that no amendment will
Options -------- -------
deprive any optionee or beneficiary of any previously declared
Option. Except as required by law or by the Corporate Changes
section, the Administrator may not, without the optionee's or
beneficiary's consent, modify the terms and conditions of an
Option so as to adversely affect the optionee. No amendment,
suspension, or termination of the Plan will, without the
optionee's or beneficiary's consent, terminate or adversely
affect any right or obligations under any outstanding Options.
Privileges of No optionee and no beneficiary or other person claiming under
Stock Ownership or through such optionee will have any right, title, or
interest in or to any shares of Common Stock allocated or
reserved under the Plan or subject to any Option except as to
such shares of Common Stock, if any, that have been issued to
such optionee.
Effect on All options outstanding under the 1987 Plan will remain subject
Outstanding to the terms of the 1987 Plan before its amendment into this
Options Plan; provided, however, that limitations imposed on such
options by Rule 16b-3 will continue to apply only to the extent
Rule 16b-3 so requires.
Effect on Whether exercising an Option causes the optionee to accrue or
Other Plans receive additional benefits under any pension or other plan is
governed solely by the terms of such other plan.
Limitations on Notwithstanding any other provisions of the Plan, no individual
Liability acting as a director, employee, or agent of the Company shall
be liable to any optionee, former optionee, spouse,
beneficiary, or any other person for any claim, loss,
liability, or expense incurred in connection with the Plan, nor
shall such individual be personally liable because of any
contract or other instrument he executes in such other
capacity. The Company will indemnify and hold harmless each
director, employee, or agent of the Company to whom any duty or
power relating to the administration or interpretation of the
Plan has been or will be delegated, against any cost or expense
(including attorneys' fees) or liability (including any sum
paid in settlement of a claim with the Board's approval)
arising out of any act or omission to act concerning this Plan
unless arising out of such person's own fraud or bad faith.
No Employment Nothing contained in this Plan constitutes an employment
Contract contract between the Company and the optionee. The Plan does
not give the optionee any right to be retained in the Company's
employ, nor does it enlarge or diminish the Company's right to
terminate the optionee's employment.
Applicable Law The laws of the State of Delaware (other than its choice of law
provisions) govern this Plan and its interpretation.
Duration of Unless the Board extends the Plan's term, the Administrator may
Plan not grant Options after May 4, 2008. The Plan will then
terminate but will continue to govern unexercised and unexpired
Options.
Approval of The Plan must be submitted to the shareholders of the Company
Shareholders for their approval within 12 months after the Board of
Directors of the Company adopts the Plan. The adoption of the
Plan is conditioned upon the approval of the shareholders of
the Company, and failure to receive their approval will render
the Plan and any outstanding options thereunder void and of no
effect.
DANAHER CORPORATION
PROXY FOR 20002001
ANNUAL MEETING OF SHAREHOLDERS -- MAY 2, 2000SHAREHOLDERS--MAY 1, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DANAHER
CORPORATION
The undersigned acknowledges receipt of the Proxy Statement and Notice, dated
March 29, 2000,30, 2001, of the Annual Meeting of Shareholders and hereby appoints
Steven M. Rales and Mitchell P. Rales, and each of them, with full power of
substitution, the attorneys, agents and proxies of the undersigned, to act for
and in the name of the undersigned and to vote all the shares of Common Stock
of the undersigned which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of Danaher Corporation (the "Company") to be held May
2, 2000,1, 2001, and at any adjournment or adjournments thereof, for the following
matters:
Proxies will be voted in the manner directed herein by the undersigned. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3, 4 AND 3.5.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
1. ELECTION OF DIRECTORS Nominee Messrs. MortimerSteven M. Caplin,
Donald J. EhrlichRales and WalterAlan G. Lohr, Jr.Spoon to
serve as directors with a term expiring in 2003.2004.
WITHHOLD
AUTHORITY To withhold authority to vote for an individual
FOR all for all Nominee, write that Nominee's name on the line below.
WITHHOLD
AUTHORITY
FOR all Nominees for all nominees
[ ] [ ] ____________________________Nominees
[_] [_]
------------------------------------------------------
2. APPROVAL OF APPOINTMENT OF AUDITORS
[ ][_] For [ ][_] Against [ ][_] Abstain
3. AMEND THE COMPANY'S 1998 STOCK OPTION PLAN
[_] For [_] Against [_] Abstain
4. AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
[_] For [_] Against [_] Abstain
5. IN THEIR DISCRETION on any other matter which may properly come before the
meeting, including any adjournment thereof.
Dated:__________________ 2000
_______________________________
_______________________________, 2001
________________________________
________________________________
Signature of Shareholder(s)
Please sign, date and promptly return this proxy in the enclosed envelope. No
postage is required if mailed in the United States. Please sign exactly as your
name appears in the space on the left. If stock is registered in more than one
name, each holder should sign. When signing as an attorney, administrator,
executor, guardian or trustee, please add your title as such. If executed by a
corporation, the proxy must be signed by a duly authorized officer, and his
title should appear next to his signature.
PLEASE MARK YOUR CHOICE LIKE THIS [ ] IN[X] BLUE OR BLACK INK