<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission File Number 0-12591
-------------- -------
CARDINAL HEALTH, INC.
(formerly known as Cardinal Distribution, Inc.)
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-0958666
---- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
655 METRO PLACE SOUTH, SUITE 925, DUBLIN, OHIO 43017
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (614) 761-8700
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Shares, without par value
--------------------------------
Class A 27,659,355 (Outstanding at April 12, 1994)
Class B 2,377,100 (Outstanding at April 12, 1994)
<PAGE> 2
<TABLE>
PART I. FINANCIAL INFORMATION
CARDINAL HEALTH, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(In Thousands)
<CAPTION>
March 31, 1994 June 30, 1993
-------------- -------------
<S> <C> <C>
ASSETS
- - - ------
Current Assets:
Cash and equivalents $ 311 $ 61,210
Marketable securities 71,988
Trade receivables 326,149 257,901
Merchandise inventories 909,391 628,566
Prepaid expenses and other 9,482 13,237
----------- -----------
Total 1,245,333 1,032,902
Property and Equipment - at cost 115,384 107,326
Accumulated depreciation and amortization (55,511) (45,731)
----------- -----------
Property and equipment-net 59,873 61,595
Other assets 50,485 55,926
----------- -----------
Total $ 1,355,691 $1,150,423
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- - - ------------------------------------
Current Liabilities:
Notes payable - banks $ 92,300 $
Current portion of long-term obligations 3,188 3,733
Accounts payable 624,360 524,617
Other accrued liabilities 75,171 65,838
----------- -----------
Total 795,019 594,188
Long - term obligations - less current portion 210,277 274,908
Other liabilities 2,464 3,010
Redeemable preferred stock 20,400
Shareholders Equity:
Common shares-without par value 250,451 175,200
Retained earnings 104,668 88,866
Common shares in treasury, at cost (3,283) (3,083)
Unamortized restricted stock award (3,905) (3,066)
----------- -----------
Total shareholders' equity 347,931 257,917
----------- -----------
Total $ 1,355,691 $1,150,423
=========== ===========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE> 3
<TABLE>
CARDINAL HEALTH, INC.
AND SUBSIDIARIES
Consolidated Statements of Earnings
(Unaudited)
(In thousands, except per share data)
<CAPTION>
3-Months Ended 9-Months Ended
--------------------------- ---------------------------
March 31, March 31, March 31, March 31,
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $1,510,674 $ 1,205,873 $4,199,913 $ 3,395,873
COST OF PRODUCTS SOLD 1,412,303 1,123,514 3,940,455 3,176,501
--------- --------- --------- ---------
GROSS MARGIN 98,371 82,359 259,458 219,372
SELLING, GENERAL & ADMINISTRATIVE
EXPENSES (61,531) (51,664) (169,942) (150,526)
UNUSUAL ITEMS
Merger costs (35,880) (35,880)
Termination fee 13,466
Nonrecurring charges (9,022) (18,904)
--------- --------- --------- ---------
OPERATING EARNINGS 960 21,673 53,636 63,408
OTHER INCOME (EXPENSE):
Interest expense (5,255) (7,371) (13,793) (19,665)
Other, net 441 1,002 2,702 4,076
--------- --------- --------- ---------
EARNINGS (LOSS) BEFORE INCOME TAXES (3,854) 15,304 42,545 47,819
PROVISION FOR INCOME TAXES (5,076) (5,643) (24,056) (18,155)
--------- --------- --------- ---------
NET EARNINGS (LOSS) (8,930) 9,661 18,489 29,664
PREFERRED DIVIDENDS DECLARED/ACCRETION (166) (719) (1,205) (2,157)
--------- --------- --------- ---------
NET EARNINGS (LOSS) AVAILABLE
FOR COMMON SHARES $ (9,096) $ 8,942 $ 17,284 $ 27,507
========= ========= ========= =========
EARNINGS (LOSS) PER COMMON SHARE:
Primary $ (.29) $ .33 $ .55 $1.00
Fully diluted $ (.29) $ .32 $ .55 $ .97
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
Primary 31,704 27,473 31,453 27,460
Fully diluted 31,704 30,928 31,516 30,906
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE> 4
<TABLE>
CARDINAL HEALTH, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
<CAPTION>
9-Months Ended
------------------------------------
March 31, March, 31
1994 1993
------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 18,489 $ 29,664
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 12,319 13,020
Stock compensation charge 5,247
Provision for bad debts 5,372 3,059
Change in operating assets and liabilities
net of effects from acquisitions:
Trade receivables (65,554) (30,021)
Merchandise inventories (273,361) (152,741)
Accounts payable 89,038 84,893
Other operating items 15,193 (3,249)
--------- ---------
Net cash used in operating activities (198,504) (50,128)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment 952 94
Additions to property and equipment (7,389) (9,757)
Purchase of marketable securities (115,241) (233,465)
Proceeds from sale of marketable securities 187,229 251,203
--------- ---------
Net cash provided by investing activities 65,551 8,075
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net short-term borrowings 92,300
Reduction of short-term borrowings of an acquired subsidiary (5,226)
Proceeds from long-term obligations 100,000 59,448
Reduction of long-term obligations (91,774) (3,697)
Proceeds from issuance of common shares 403 1,018
Dividends paid (3,036) (2,763)
Redemption of preferred stock (20,400)
Purchase of treasury shares (200) (690)
Debenture conversion costs charged to common shares (13)
--------- ---------
Net cash provided by financing activities 72,054 53,316
--------- ---------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (60,899) 11,263
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 61,210 55,465
--------- ---------
CASH AND EQUIVALENTS AT END OF PERIOD $ 311 $ 66,728
========= =========
Supplemental Disclosure of Noncash Investing &
Financing Activities:
Capital lease obligations incurred $ 830 $ 2,351
Debentures converted to common shares 74,920
Unamortized debenture offering costs charged
to common shares (1,767)
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE> 5
CARDINAL HEALTH, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. The accompanying unaudited financial statements of Cardinal
Health, Inc. (formerly known as Cardinal Distribution, Inc.) and
subsidiaries, all collectively referred to as "Cardinal" or the
"Company", have been prepared to give retroactive effect to the
merger of a wholly owned subsidiary of Cardinal with and into
Whitmire Distribution Corporation ("Whitmire") on February 7, 1994
(see Note 3). On March 1, 1994, the Company made the decision to
change its fiscal year end from March 31 to June 30. As such, the
prior period comparative unaudited consolidated balance sheet
presented herein combines the consolidated balance sheet of
Cardinal as of June 30, 1993, with the balance sheet of Whitmire
as of July 3, 1993. The prior period comparative unaudited
consolidated statements of earnings presented herein combine the
consolidated statements of earnings of Cardinal for the three and
nine months ended March 31, 1993, with the statements of earnings
of Whitmire for the three and nine months ended March 27, 1993.
The prior period comparative unaudited statement of cash flows
presented herein combines the statement of cash flows of Cardinal
for the nine months ended March 31, 1993, with the statement of
cash flows of Whitmire for the nine months ended March 27, 1993.
The unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and include all of
the information and disclosures required by generally accepted
accounting principles for interim reporting. In the opinion of
management, all adjustments considered necessary for a fair
presentation have been included.
Certain customer service costs, historically reported by Cardinal
in Cost of Products Sold, have been reclassified to Selling,
General, and Administrative Expenses in the consolidated
statements of earnings in order to conform with Whitmire's
presentation.
Note 2. Primary earnings per common share are based on the weighted
average number of shares outstanding during each period and the
dilutive effect of stock options and warrants from the date of
grant computed using the treasury stock method.
Fully diluted earnings per common share reflect: (a) the dilutive
effect of stock options and warrants from the date of grant
computed using the treasury stock method; and (b) the full
conversion of the 7 1/4% Convertible Subordinated Debentures due
2015 (the "Subordinated Debentures") since issuance in July 1990
(see Note 6).
Note 3. On January 27, 1994, shareholders of Cardinal and Whitmire
approved and adopted the Agreement and Plan of Reorganization
dated October 11, 1993 (the "Reorganization Agreement"), pursuant
to which Cardinal Merger Corporation, a wholly owned subsidiary of
Cardinal, was merged with and into Whitmire effective February 7,
1994 (the "Effective Time"). In the merger, which was accounted
for as a pooling of interests, holders of outstanding Whitmire
stock at the Effective Time received an aggregate of approximately
5,442,000 Cardinal common shares, without par value ("Common
Shares"), and approximately 1,488,000 shares of Cardinal's newly
authorized Class b common shares, without par value ("Class B
Shares"), in exchange for all of the previously outstanding stock
of Whitmire. In addition, Whitmire stock options outstanding at
the Effective Time were converted into options to purchase an
aggregate of approximately 1,377,000 additional Cardinal Common
Shares pursuant to the terms of the Reorganization Agreement.
Note 4. In the three-month period ended September 30, 1992, Cardinal
received a termination fee of approximately $13,466,000, resulting
from the termination by Durr-Fillauer Medical, Inc. of its
agreement to merge with the Company.
<PAGE> 6
Cardinal recorded nonrecurring charges of approximately $9,882,000
in the three-month period ended September 30, 1992, and Whitmire
recorded nonrecurring charges of approximately $3,775,000 in the
three-month period ended March 27, 1993. The nonrecurring charges
primarily related to the closing of certain non-core operations
and the rationalization of selected distribution operations,
information systems and support functions and included the
write-down of certain assets, moving costs and other costs
associated with the affected operations, and modification costs
necessary to centralize and standardize certain information
systems and support functions.
In the three-month period ended March 27, 1993, Whitmire recorded
a one-time stock option compensation charge of approximately
$5,247,000 related to the modification of the terms of certain of
its stock options.
In the three-month period ended March 31, 1994, the Company
recorded a nonrecurring charge to reflect the estimated Whitmire
merger costs of approximately $28.2 million (net ot tax). The
merger costs include (a) fees and other transaction costs related
to the merger and (b) other nonrecurring costs expected to be
incurred in connection with the subsequent integration of the two
companies' business operations. These estimated expenses include
approximately $7 million for anticipated investment banking,
legal, accounting, and other related transaction fees and costs
associated with the merger; $13 million for corporate
restructuring and distribution rationalization; $6 million for
integration of information systems; and $2 million for
restructuring Whitmire's revolving credit agreement. Of these
estimated expenses, approximately $7 million pertain to the
revaluation of certain operating assets and $2 million pertain to
employee relocation, retraining and termination costs. These
amounts are based on a preliminary estimate of expenses to be
incurred by Whitmire and Cardinal, and actual expenses may differ
from such estimate.
The following supplemental information summarizes the results of
operations of the Company, adjusted on a pro forma combined basis
to reflect (a) the elimination of the effect of the unusual items
discussed above, and (b) the redemption of Whitmire's preferred
stock pursuant to the terms of the Reorganization Agreement.
Solely for purposes of the summary presented below, such
redemption is assumed to have been funded from the liquidation of
Cardinal's investments in tax-exempt marketable securities.
<TABLE>
<CAPTION>
3-Months Ended 9-Months Ended
------------------------------------------- ---------------------------------------
March 31, March 31, March 31, March
1994 1993 1994 1993
----------------- ----------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Operating earnings $ 36,840 $ 30,695 $ 89,516 $ 68,846
Net earnings $ 19,228 $ 14,650 $ 46,397 $ 32,125
Net earnings per common share
Primary $ .61 $ .53 $ 1.48 $ 1.17
Fully Diluted $ .61 $ .50 $ 1.47 $ 1.12
</TABLE>
Note 5. On May 4, 1993, Cardinal acquired all of the outstanding capital
stock of Solomons Company, a wholesale drug distributor based in
Savannah, Georgia, in exchange for 849,358 of the Company's Common
Shares. The Solomons transaction was accounted for by the
purchase method. Had the acquisition occurred at the beginning of
fiscal 1993, operating results on a pro forma basis would not have
been significantly different.
Note 6. On June 11, 1993, Cardinal called for redemption, effective as of
July 2, 1993, the $75 million outstanding principal amount of its
Subordinated Debentures. Following this call, $74,920,000 of
Subordinated Debentures outstanding as of March 31, 1993, were
converted at the conversion price of $21.89 per share, into
3,422,521 Common Shares of Cardinal. The
<PAGE> 7
remaining $80,000 of Subordinated Debentures outstanding as of
March 31, 1993 were redeemed for cash. The pro forma primary net
earnings per share of the Company, as if the above conversion and
redemption had occurred at July 1, 1992 (the beginning of Fiscal
1993), would have been $0.32 and $0.97 for the three and nine
months ended March 31, 1993.
Note 7. On December 17, 1993, Cardinal issued 236,626 Common Shares in a
merger transaction for all of the capital stock of PRN Services,
Inc. ("PRN"), a distributor of pharmaceuticals and medical
supplies to oncologists and oncology clinics. The PRN transaction
was accounted for as a pooling of interests. The impact of the
PRN merger, on both an historical and pro forma basis, is not
significant. Accordingly, prior periods have not been restated
for the PRN merger.
Note 8. On February 23, 1994, the Company sold $100 million of 6 1/2%
Notes Due 2004 (the "Notes"). The Company used the proceeds of
this sale for general corporate purposes, including the repayment
of bank lines of credit incurred as part of the Whitmire merger.
In anticipation of the sale of the Notes, the Company entered into
an interest rate hedge agreement, which was terminated at the
approximate time of the issuance of the Notes, resulting in a
deferred gain of approximately $1.3 million which will be
amortized as a reduction of interest expense over the period the
Notes are outstanding.
Note 9. On April 27, 1994, the Company entered into an agreement to
acquire all of the capital stock of Humiston-Keeling, Inc. in a
cash purchase transaction. Humiston-Keeling is a Calumet City,
Illinois, based wholesale drug distributor serving independent and
retail chain pharmacies, hospitals, and managed care facilities
located in Illinois, Indiana, Wisconsin, Michigan, and portions of
adjoining states. The Humiston-Keeling transaction is currently
expected to be completed by July, 1994.
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Management's discussion and analysis presented below is for Cardinal
Health, Inc. (formerly known as Cardinal Distribution, Inc.) and subsidiaries,
all collectively referred to as "Cardinal" or the "Company", and has been
prepared to give retroactive effect to the merger of a wholly owned subsidiary
of Cardinal with and into Whitmire Distribution Corporation ("Whitmire") on
February 7, 1994 (see Note 3 of "Notes to Consolidated Financial Statements").
The discussion and analysis presented below is concerned with material changes
in financial condition and results of operations for the Company's consolidated
balance sheets as of March 31, 1994 and June 30, 1993, and for the consolidated
statements of earnings for the three and nine months ended March 31, 1994 and
March 31, 1993. On March 1, 1994, the Company made the decision to change its
fiscal year end from March 31 to June 30. As such, the prior period
comparative unaudited consolidated balance sheet presented herein combines the
consolidated balance sheet of Cardinal as of June 30, 1993, with the balance
sheet of Whitmire as of July 3, 1993. The prior period comparative unaudited
consolidated statements of earnings presented herein combine the consolidated
statements of earnings of Cardinal for the three and nine months ended March
31, 1993, with the statements of earnings of Whitmire for the three and nine
months ended March 27, 1993. The prior period comparative unaudited statement
of cash flows presented herein combines the statement of cash flows of Cardinal
for the nine months ended March 31, 1993 with the statement of cash flows of
Whitmire for the nine months ended March 27, 1993. Unless indicated to the
contrary for purposes of this discussion, all references to "1994" and "1993"
shall mean the three and nine-month periods ended June 30, 1994 and June 30,
1993, respectively.
NET SALES. Net sales increased 25% for the third quarter of 1994 and
24% for the nine-month period. The increase in the third quarter was due to
internal growth of 20% and sales resulting from the acquisitions of Solomons
Company ("Solomons") on May 4, 1993 (see Note 5 of "Notes to Consolidated
Financial Statements"), and PRN Services, Inc. ("PRN") on December 17, 1993.
(See Note 7 of "Notes to Consolidated Financial Statements"). The increase in
the nine-month period was due to internal business growth of 19% and sales
resulting from the acquisitions of Solomons and PRN. The internal business
growth in both the third quarter and nine-month period resulted primarily from
the addition of new customers (partially as a result of expanded sales
territories), increased sales to existing customers and price increases.
GROSS MARGIN. As a percentage of net sales, gross margin for the
third quarter was 6.51% versus 6.83% last year. For the nine-month period,
gross margin was 6.18% versus 6.46% last year. The decreases in the gross
margin percentages were due to (a) lower selling margin rates, reflecting a
more competitive market and a greater mix of higher volume customers, where a
lower cost of distribution and better asset management and cash flow enabled
the Company to offer lower selling margins, and (b) reduced purchasing gains
associated with lower drug price inflation. The reduced purchasing gains were
partially offset by a lower LIFO charge. The Company expects the decline in
gross margin rates to be a continuing trend in the immediate but not the
long-term future.
The above gross margin percentages reflect the fact that certain
customer service costs, historically reported by Cardinal in Cost of Products
Sold, have been reclassified to Selling, General, and Administrative expenses
in the consolidated statements of earnings in order to conform with Whitmire's
presentation (see "Selling, General, and Administrative Expenses" below).
<PAGE> 9
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. For the third quarter,
selling, general, and administrative expenses improved as a percentage of net
sales to 4.07% from 4.28%. For the nine-month period, selling, general and
administrative expenses improved to 4.05% from 4.43% last year. The
improvements are due primarily to economies associated with the Company's
significant sales growth, particularly with major customers where support costs
are generally lower, and to productivity improvements.
The above selling, general, and administrative expenses percentages
reflect the fact that certain customer service costs, historically reported by
Cardinal in Cost of Products Sold, have been reclassified to Selling, General,
and Administrative Expenses in the consolidated statements of earnings in order
to conform with Whitmire's presentation.
UNUSUAL ITEMS. In the three-month period ended March 31, 1994, the
Company recorded a nonrecurring charge to reflect estimated Whitmire merger and
subsequent integration costs of approximately $28.2 million (net of tax).
These costs include (a) fees and other transaction costs related to the merger,
and (b) other nonrecurring costs expected to be incurred in connection with the
subsequent integration of the two companies' business operations. These
estimated expenses include approximately $7 million for anticipated investment
banking, legal, accounting, and other related transaction fees and costs
associated with the merger; $13 million for corporate restructuring and
distribution rationalization; $6 million for integration of information
systems; and $2 million for restructuring Whitmire's revolving credit
agreement. Of these estimated expenses, approximately $7 million pertain to
the revaluation of certain operating assets and $2 million pertain to employee
relocation, retraining and termination costs. These amounts are based on a
preliminary estimate of expenses to be incurred by Whitmire and Cardinal, and
actual expenses may differ from such estimate. (See Note 4 of "Notes to
Consolidated Financial Statements").
In the three-month period ended September 30, 1992, Cardinal received
a termination fee of approximately $13.5 million, resulting from the
termination by Durr-Fillauer Medical, Inc. of its agreement to merge with the
Company.
Cardinal recorded nonrecurring charges of approximately $9.9 million
in the three-month period ended September 30, 1992, and Whitmire recorded
nonrecurring charges of approximately $3.8 million in the three-month period
ended March 27, 1993. The nonrecurring charges primarily related to the
closing of certain non-core operations and the rationalization, standardization
and improvement of selected distribution operations, information systems and
support functions. The charges include the write-down of certain assets,
moving costs and other costs associated with the affected operations, and
modification costs necessary to centralize and standardize certain information
systems and support functions.
In the three-month period ended March 27, 1993, Whitmire also recorded
a one-time stock option compensation charge of approximately $5.2 million
related to the modification of the terms of certain of its stock options.
INTEREST EXPENSE. The decrease in interest expense of $2.1 and $5.9
million in the third quarter and nine-month period of 1994, respectively, was
due primarily to (a) the conversion of debt to equity following the call for
redemption, effective July 2, 1993, of the Company's $75 million face amount of
7-1/4% Convertible Subordinated Debentures Due 2015 (the "Subordinated
Debentures") (see Note 6 of "Notes to Consolidated Financial Statements"), and
(b) reduced borrowings under Whitmire's revolving credit arrangements. The
reductions in interest expense as discussed above were partially offset by
increased interest expense resulting from the sale by the Company of $100
million of 6 1/2% Notes Due 2004 (the "Notes") on February 23, 1994. (See Note
8 of "Notes to Consolidated Financial Statements").
PROVISION FOR INCOME TAXES. The Company's provision for income taxes
relative to pretax earnings increased significantly in both the third quarter
and nine month-period of 1994 versus the same periods of 1993. The increase in
both the third quarter and nine-month period was primarily due to (a) the 1993
Omnibus Budget Reconciliation Act's 1% tax rate increase enacted on August 11,
1993 retroactive to
<PAGE> 10
January 1, 1993, (b) the reduction of income from tax-advantaged investments in
1994 versus 1993, and (c) certain nondeductible merger costs recorded in the
third quarter of 1994.
LIQUIDITY AND CAPITAL RESOURCES. Net working capital increased to
$450.3 million at March 31, 1994, from $438.7 million at June 30, 1993, and
included increased investments in merchandise inventories and trade receivables
of $273.4 million and $60.2 million respectively, offset primarily by (a) a
reduction in cash and equivalents and marketable securities of $132.9 million,
(b) an increase in notes payable-banks of $92.3 million, and (c) an increase in
accounts payable of $89.0 million. The increases in merchandise inventories
and accounts payable reflect the timing of seasonal purchases and related
payments. The increase in trade receivables was due primarily to increased
sales. The decrease in cash and marketable securities and the increase in
notes payable-banks resulted primarily from (a) the increased investments in
merchandise inventories and trade receivables (net of the increase in accounts
payable) as described above, (b) the repayment of amounts outstanding under
Whitmire's revolving credit arrangements at the time of the merger
(approximately $120 million, including a prepayment penalty of approximately
$1.2 million), and (c) the redemption of Whitmire's preferred stock
(approximately $20.4 million).
Long-term obligations decreased from $274.9 million at June 30, 1993,
to $210.3 million at March 31, 1994, due primarily to (a) the conversion of
debt to equity following the call for redemption, effective July 2, 1993, of
the $75 million Subordinated Debentures, and (b) the repayment of amounts
outstanding under Whitmire's revolving credit arrangements, offset primarily by
the sale of the $100 million Notes described above.
Shareholders' equity increased to $347.9 million at March 31, 1994,
from $257.9 million at June 30, 1993, due primarily to (a) the issuance of
additional Common Shares upon the conversion of $74.9 million of the
Subordinated Debentures, offset by approximately $1.8 million of unamortized
debenture offering costs charged to Common Shares, and (b) net earnings of
approximately $18.5 million, offset by dividends paid of approximately $3.0
million.
The Company has line-of-credit agreements with various bank sources
aggregating $326 million, of which $95 million is represented by committed
line-of-credit agreements and the balance is uncommitted. The Company drew
upon $92.3 million of the available lines-of-credit at March 31, 1994, leaving
$233.7 million available under the Company's existing lines-of-credit
agreements.
On May 6, 1993, the Company filed with the Securities and Exchange
Commission a Registration Statement for the public offering, from time-to-time,
of its debt securiities (the "Debt Securities") issuable in one or more series
in an aggregate principal amount not to exceed $150 million. On February 23,
1994, the Company sold $100 million of the Notes (see Note 8 of "Notes to
Consolidated Financial Statements"), the net proceeds of which were used for
general corporate purposes, including the repayment of bank lines of credit
incurred as part of the Whitmire merger. At March 31, 1994, $50 million of the
Debt Securities remain issuable.
The Company believes that it has adequate resources at its disposal to
meet currently anticipated capital expenditures, routine business growth and
expansion, and current and projected debt service, including the additional
liquidity and capital resources associated with recent and prospective business
combinations.
<PAGE> 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As disclosed in the Company's Report on 10-Q for the quarter ended
December 31, 1993 (No. 0-12591), in November 1993, the Company and
Whitmire Distribution Corporation, a wholly-owned subsidiary of the
Company ("Whitmire"), were each named as defendants in a series of
nine purported class action lawsuits (the "Brand Name Prescription
Drug Litigation") filed in the United States District Court for the
Southern District of New York, together with 24 pharmaceutical
manufacturers and six other wholesale distributors. The Southern
District of New York cases were very similar to over 50 other cases
filed throughout the United States. Only the Southern District of New
York cases named wholesalers as defendants. The Judicial Panel for
Multi-District Litigation has ordered all of the cases consolidated
and transferred to the United States District Court for the Northern
District of Illinois. Subsequent to the consolidation, a new
consolidated complaint was filed which included allegations that the
wholesaler defendants, including the Company and Whitmire, conspired
with manufacturers to inflate prices by using a chargeback pricing
system. The Company and Whitmire have filed answers denying the
allegations in the complaint. The Company and Whitmire believe that
the allegations are without merit, and they intend to contest such
allegations vigorously.
Item 4. Submission of Matters to Security Holders.
(a) A Special Meeting of the Company's shareholders was held on
January 27, 1994.
(b) Proxies were solicited by the Company's management pursuant to
Regulation 14 under the Securities Exchange Act of 1934; there was
no solicitation in opposition to management's nominees as listed
in the proxy statement, and all director nominees were elected
pursuant to the vote of the Company's shareholders.
(c) Matters voted on at the Special Meeting were as follows:
(1) Approval and adoption of the Agreement and Plan of
Reorganization dated as of October 11, 1993, by and among the
Company, Cardinal Merger Corp. ("Subcorp."), Whitmire
Distribution Corporation ("Whitmire"), and the other persons
named therein providing for the merger of Subcorp with and
into Whitmire (the "Merger"). The results of the shareholder
vote on this proposal were: 20,157,359 for; 20,476 against;
91,558 abstained; and 959,435 broker non-vote.
(2) Approval of three proposals to amend the Company's Articles of
Incorporation, as Amended and Restated, as follows:
(i) To establish the terms and preferences of the new
Class B Common Shares issuable in the Merger. The
results of the shareholder vote on this proposal were:
20,061,520 for; 100,571 against; 107,301 abstained;
and 959,436 broker non-vote.
(ii) To increase the number of the Company's authorized
Common Shares, without par value, from 40 million to
60 million. The results of the shareholder vote on
this proposal were: 20,834,064 for; 300,123 against;
94,641 abstained; and 0 broker non-vote.
(iii) To change the Company's name to Cardinal Health, Inc.
The results of the shareholder vote on this proposal
were: 21,137,888 for; 22,781 against; 68,159
abstained; and 0 broker non-vote.
<PAGE> 12
(3) Approval of a proposal to amend the Company's Restated Code
of Regulations, as amended, to increase the size of the
Company's Board of Directors from ten to fourteen members and
to authorize the Company's Board of Directors to establish
from time to time the size of the Company's Board of
Directors between nine and fourteen members. The results of
the shareholder vote on this proposal were: 21,072,960 for;
128,167 against; 72,701 abstained; and 0 broker non-vote.
(4) Election of Mitchell J. Blutt, M.D., John F. Finn, Michael S.
Gross, and Melburn G. Whitmire to the Company's Board of
Directors. The results of the shareholder vote on this
proposal were: Dr. Blutt, 21,173,952 for, 54,876 withheld,
and 0 broker non-vote; Mr. Finn, 21,176,463 for, 52,365
withheld, and 0 broker non-vote; Mr. Gross, 21,175,970 for,
52,858 withheld, and 0 broker non-vote; and Mr.Whitmire,
21,175,751 for, 53,077 withheld, and 0 broker non-vote.
Item 6. Exhibits and reports on Form 8-K
(a) Listing of Exhibits:
Exhibit 3.01 Amended and Restated Articles of Incorporation of
the Company, as amended.
Exhibit 3.02 Restated Code of Regulations of the Company, as
amended.
Exhibit 4.01 See Exhibit 3.01, Amended and Restated Articles of
Incorporation, as amended, for the terms and
preferences of the new Class B Common Shares of
the Company.
Exhibit 4.02 Indenture between the Company and Bank One
Indianapolis, NA relating to the Company's
6 1/2% Notes Due 2004.
Exhibit 10.01 Employment Agreement dated October 11, 1993, among
Whitmire, James Clare, and the Company.
Exhibit 10.02 Form of Amended and Restated Stock Option
Agreement entered into February 7, 1994, by the
Company, Whitmire, and certain officers of the
Company.
Exhibit 10.03 Form of Amended and Restated Stock Option
Agreement entered into February 7, 1994, by the
Company, Melco Managers, a California corporation,
and certain officers of the Company.
Exhibit 11.01 Computation of Fully Diluted Earnings Per Share.
(b) Reports on Form 8-K:
(i) On February 11, 1994, the Company filed a current report on
Form 8-K containing restated supplemental consolidated
financial statements of the Company pursuant to Part I Item
II (b) (iii) of Form S-3 in conjunction with the Company's
shelf registration statement previously filed on Form S-3
(file No. 33-62198).
(ii) On March 8, 1994, the Company filed a current report on Form
8-K reporting that on March 1, 1994, the Company made the
decision to change its fiscal year end to June 30.
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARDINAL HEALTH, INC.
Date: May 9, 1994 By: /s/ Robert D. Walter
--------------------------
Robert D. Walter
Chairman and Chief Executive Officer
By: /s/ David Bearman
--------------------------
David Bearman
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
<PAGE> 14
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
___________________
CARDINAL HEALTH, INC.
---------------------
(Exact name of Registrant as specified in its charter)
___________________
EXHIBIT VOLUME
___________________
<PAGE> 15
<TABLE>
Exhibit Index
-------------
<CAPTION>
Exhibit
Number Exhibit Description
------ -------------------
<S> <C>
3.01 Amended and Restated Articles of Incorporation of the Company, as amended.
3.02 Restated Code of Regulations of the Company, as amended.
4.01 See Exhibit 3.01, Amended and Restated Articles of Incorporation, as
amended, for the terms and preferences of the new Class B Common Shares of
the Company.
4.02 Indenture between the Company and Bank One Indianapolis, NA relating to the
Company's 6 1/2% Notes Due 2004.
10.01 Employment Agreement dated October 11, 1993, among Whitmire, James Clare,
and the Company.
10.02 Form of Amended and Restated Stock Option Agreement entered into February
7, 1994, by the Company, Whitmire, and certain officers of the Company.
10.03 Form of Amended and Restated Stock Option Agreement entered into February
7, 1994, by the Company, Melco Managers, a California corporation, and
certain officers of the Company.
11.01 Computation of Fully Diluted Earnings Per Share.
</TABLE>
<PAGE> 1
Exhibit 3.01
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CARDINAL DISTRIBUTION, INC.
These constitute the amended and restated articles of incorporation
of Cardinal Distribution, Inc., a corporation for profit formed under
the Ohio General Corporation Law, which amended and restated articles
of incorporation supersede the previously existing articles of incorporation
of the corporation, as heretofore amended:
FIRST: The name of the corporation shall be "Cardinal Dis-
tribution, Inc."
SECOND: The place in Ohio where the principal office of the
corporation is to be located is the City of Columbus, Franklin County.
THIRD: The purpose or purposes for which the corporation
is formed are to engage in any lawful act or activity for which corpora-
tions may be formed under Sections 1701.01 to 1701.98, inclusive, of
the Ohio Revised Code and any amendments heretofore or hereafter made
thereto.
FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate
number of shares which the corporation is authorized to have outstanding
is 10,500,000, consisting of 10,000,000 common shares without par value
and 500,000 nonvoting preferred shares without par value.
Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors
is authorized at any time, and from time to time, to provide for the
issuance of nonvoting preferred shares in one or more series, and to
determine to the extent permitted by law the designations, preferences,
limitations, and relative or other rights of the nonvoting preferred
shares or any series thereof. For each series, the board of directors
shall determine, by resolution or resolutions adopted prior to
issuance of any shares thereof, the designations, preferences, limitations,
and relative or other rights thereof, including but not limited to
the following relative rights and preferences, as to which there may
be variations among different series:
(a) the division of such shares into series and the designation
and authorized number of shares of each series,
(b) the dividend rate,
<PAGE> 2
(c) the dates of payment of dividends and the dates from which
they are cumulative,
(d) liquidation price,
(e) redemption rights and price,
(f) sinking fund requirements,
(g) conversion rights, and
(h) restrictions on the issuance of such shares.
Prior to the issuance of any shares of a series, but after
adoption by the board of directors of the resolution establishing such
series, the appropriate officers of the corporation shall file such
documents with the State of Ohio as may be required by law including,
without limitation, an amendment to these Articles of Incorporation.
Section 3. COMMON SHARES. Each common share shall entitle
the holder thereof to one vote, in person or by proxy, at any and all
meetings of the shareholders of the corporation, on all propositions
before such meetings. Subject to the preferences of any outstanding
preferred shares, each common share shall be entitled to participate
equally in such dividends as may be declared by the board of directors
out of funds legally available therefor, and to participate equally
in all distributions of assets upon liquidation.
FIFTH: The amount of stated capital with which the corporation
will begin business shall be not less than five hundred dollars ($500).
SIXTH: The board of directors may fix and determine, and
vary, the amount of working capital of the corporation; determine whether
any (and, if any, what part) of the surplus, however created or arising,
shall be used or disposed of or declared in dividends or paid to share-
holders; and, without action by the shareholders, use and apply such
surplus, or any part thereof, or such part of the stated capital of
the corporation as is permitted under the laws of the State of Ohio,
at any time or from time to time, in the purchase or acquisition of
shares of any class, voting-trust certificates for shares, bonds, deben-
tures, notes, scrip, warrants, obligations, evidence of indebtedness
of the corporation, or other securities of the corporation, to such
extent or amount and in such manner and upon such terms as the board
of directors shall deem expedient and without regard to any provisions
which may hereafter be contained in the corporation's articles of incor-
poration with respect to the redemption of shares of any class at the
option of the corporation.
SEVENTH: Every statute of the State of Ohio hereafter enacted,
whereby rights or privileges of the shareholders of a corporation organ-
-2-
<PAGE> 3
ized under the Ohio General Corporation Law are increased, diminished,
or in any way affected, or whereby effect is given to any action author-
ized, ratified, or approved by less than all the shareholders of any
such corporation, shall apply to the corporation and shall bind every
shareholder to the same extent as if such statute had been in force
at the date of the filing of these articles of incorporation.
EIGHTH: A director or officer of the corporation shall not
be disqualified by his office from dealing or contracting with the
corporation as a vendor, purchaser, employee, agent, or otherwise.
No transaction or contract or act of the corporation shall be void
or voidable or in any way affected or invalidated by reason of the
fact that any director or officer, or any firm of which any director
or officer is a shareholder, director, or trustee, or any trust of
which any director or officer is a trustee or beneficiary, is in any
way interested in such transaction or contract or act. No director
or officer shall be accountable or responsible to the corporation for
or in respect to any transaction or contract or act of the corporation
or for any gains or profits directly or indirectly realized by him
by reason of the fact that he or any firm of which he is a member or
any corporation of which he is a shareholder, director, or trustee,
or any trust of which he is a trustee or beneficiary, is interested
in such transaction or contract or act; provided the fact that such
director or officer or such firm or corporation or such trust is so
interested shall have been disclosed or shall have been known to the
board of directors or such members thereof as shall be present at any
meeting of the board of directors at which action upon such contract
or transaction or act shall have been taken. Any director may be counted
in determining the existence of a quorum at any meeting of the board
of directors which shall authorize or take action in respect to any
such contract or transaction or act, and may vote thereat to authorize,
ratify, or approve any such contract or transaction or act, and any
officer of the corporation may take any action within the scope of
his authority respecting such contract or transaction or act with like
force and effect as if he or any firm of which he is a member, or any
corporation of which he is a shareholder, director, or trustee, or
any trust of which he is a trustee or beneficiary, were not interested
in such transaction or contract or act. Without limiting or qualifying
the foregoing, if in any judicial or other inquiry, suit, cause, or
proceeding, the question of whether a director or officer of the corpora-
tion has acted in good faith is material, then notwithstanding any
statute or rule of law or of equity to the contrary (if any there be),
his good faith shall be presumed, in the absence of proof to the contrary
by clear and convincing evidence.
NINTH: No holder of shares of any class of the corporation
shall be entitled as such, as a matter of right, to subscribe for or
purchase shares of any class, now or hereafter authorized, or to purchase
or to subscribe for securities convertible into or exchangeable for
shares of the corporation, or to which shall appertain or be attached
-3-
<PAGE> 4
any warrants or rights entitling the holder thereto to subscribe for
or purchase shares, except such rights of subscription or purchase,
if any, at such price or prices, and upon such terms and conditions
as the board of directors in its discretion may from time to time deter-
mine.
TENTH: Except as otherwise provided in these Articles of
Incorporation or the Code of Regulations of the corporation, notwithstand-
ing any provision of any statute of the State of Ohio, now or hereafter
in force, requiring for any purpose the vote, consent, waiver, or release
of the holders of shares entitling them to exercise two-thirds or any
other proportion of the voting power of the corporation or of any class
or classes of shares thereof, any action may be taken by the vote of
the holders of shares entitling them to exercise a majority of the
voting power of the corporation, or of such class or classes, unless
the proportion designated by such statute cannot be altered by these
articles.
<PAGE> 5
CERTIFICATE OF AMENDMENT
TO THE AMMENDED AND RESTATED ARTICLES OF INCORPORATION OF
CARDINAL DISTRIBUTION, INC.
Robert D. Walter and Michael E. Moritz hereby certify that they are the
duly elected and acting chairman and secretary, respectively, of Cardinal
Distribution, Inc., an Ohio corporation (the "Company"), and further certify
that the following is a true copy of a resolution amending the Company's
Amended and Restated Articles of Incorporation duly adopted by the affirmative
vote of the holders of shares of the Company entitling them to exercise a
majority of the voting power of the Company at the annual meeting of
shareholders duly held on August 30, 1989:
RESOLVED, That the Amended and Restated Articles of
Incorporation of the Company be amended by deleting ARTICLE
FOURTH thereof in its entirety and by substituting in lieu
thereof following ARTICLE FOURTH:
FOURTH: Section 1. AUTHORIZED SHARES. The
maximum aggregate number of shares which the
corporation is authorized to have outstanding is
20,500,000, consisting of 20,000,000 common shares
without par value and 500,000 nonvoting preferred
shares without par value.
Section 2. ISSUANCE OF PREFERRED SHARES.
The board of directors is authorized at any time,
and from time to time, to provide for the issuance
of nonvoting preferred shares in one or more
series, and to determine to the extent permitted
by law the designations, preferences, limitations,
and relative or other rights of the nonvoting
preferred shares or any series thereof. For each
series, the board of directors shall determine, by
resolution or resolutions adopted prior to the
issuance of any shares thereof, the designations,
preferences, limitations, and relative or other
rights thereof, including but not limited to the
following relative rights and preferences, as to
which there may be variations among different
series:
(a) the division of such shares into series
and the designation and authorized
number of shares of each series,
(b) the dividend rate,
(c) the dates of payment of dividends and
the dates from which they are
cumulative,
(d) liquidation price,
<PAGE> 6
(e) redemption rights and price,
(f) sinking fund requirements,
(g) conversion rights, and
(h) restrictions on the issuance
of such shares.
Prior to the issuance of any shares of a series,
but after adoption by the board of directors of
the resolution establishing such series, the
appropriate officers of the corporation shall file
such documents with the State of Ohio as may be
required by law including, without limitation, an
amendment to these Articles of Incorporation.
Section 3. COMMON SHARES. Each common share
shall entitle the holder thereof to one vote, in
person or by proxy, at any and all meetings of the
shareholders of the corporation, on all
propositions before such meetings. Subject to the
preferences of any outstanding preferred shares,
each common share shall be entitled to participate
equally in such dividends as may be declared by
the board of directors out of funds legally
available therefor, and to participate equally in
all distributions of assets upon liquidation.
August 30, 1989 CARDINAL DISTRIBUTION, INC.
By /s/ Robert D. Walter
------------------------------
Robert D. Walter, Chairman
By /s/ Michael E. Moritz
------------------------------
Michael E. Moritz, Secretary
<PAGE> 7
CERTIFICATE OF AMENDMENT
TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
CARDINAL DISTRIBUTION, INC.
Robert D. Walter and George H. Bennett, Jr. hereby certify that they
are the duly elected and acxting chairman and assistant secretary,
respectively, of Cardinal Distribution, Inc., an Ohio corporation (the
"Company"), and further certify that the following is a true copy of a
resolution amending the Company's Amended and Restated Articles of
Incorporation duly adopted by the affirmative vote of the holder of shares of
the Company entitling them to exercise a majority of the voting power of the
Company at the annual meeting of shareholders duly held on August 15, 1991:
REVOLVED, that Article FOURTH of the Company's Amended and
Restated Articles of Incorporation be, and the same hereby is,
deleted in its entirety and there is substituting the following:
FOURTH: Section 1. AUTHORIZED SHARES. The
maximum aggregate number of shares which the
corporation is authorized to have outstanding
is 40,500,000 consisting of 40,000,000 common
shares without par value and 500,000 nonvoting
preferred shares without par value.
Section 2. ISSUANCE OF PREFERRED SHARES. The
board of directors is authorized at any time,
and from time to time, to provide for the
issuance of nonvoting preferred shares in one
or more series, and to determine to the extent
permitted by law the designations, preferences,
limitations, and relative or other rights of
the nonvoting preferred shares or any other
series thereof. For each series, the board of
directors shall determine, by resolution or
resolutions adopted prior to the issuance of any
shares thereof, the designations, preferences,
limitations, and relative or other rights thereof,
including but not limited to the following
relative rights and preferences, as to which
there may be variations among different series:
(a) the division of such shares into
series and the designation and
authorized number of shares of
each series,
(b) the divided rate,
(c) the dates of payment of dividends and
the dates from which they are cumulative,
<PAGE> 8
(d) liquidation price,
(e) redemption rights and price,
(f) sinking fund requirements,
(g) conversion rights, and
(h) restrictions on the issuance of such shares.
Prior to the issuance of any shares of a series, but after
adoption by the board of directors of the resolution
establishing such series, the appropriate officers of the
corporation shall file such documents with the State of Ohio
as may be required by law including, without limitation, an
amendment to these Articles of Incorporation.
Section 3. COMMON SHARES. Each common share shall
entitle the holder thereof to one vote, in person or by proxy,
at any and all meetings of the shareholder of the corporation,
on all propositions before such meetings. Subject to the
preferences of any outstanding preferred shares, each common
share shall be entitled to participate equally in such dividends
as may be decalred by the board of directors out of funds
legally available therefor, and to participate equally in all
distributions of assets upon liquidation.
August 15, 1991 CARDINAL DISTRIBUTION, INC.
By /s/ Robert D. Walter
---------------------------
Robert D. Walter, Chairman
By /s/ George H. Bennett, Jr.
---------------------------
George H. Bennett, Jr., Assistant
Secretary
<PAGE> 9
EXHIBIT A
TO
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED
OF
CARDINAL DISTRIBUTION, INC.
Resolved, that Article FIRST, of the Amended and Restated Articles of
Incorporation, as amended, of Cardinal Distribution, Inc. be, and the same
hereby is, deleted in its entirety and there is substituted therefor the
following:
FIRST: The name of the corporation shall be "Cardinal Health, Inc."
Resolved, that Article FOURTH of the Amended and Restated Articles of
Incorporation, as amended, of Cardinal Distribution, Inc. be, and the same
hereby is, deleted in its entirety and there is substituted therefor the
following:
FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate
number of shares which the corporation is authorized to have
outstanding is 65,500,000, consisting of 60,000,000 common shares,
without par value ("Class A Common Shares"), 5,000,000 Class B common
shares, without par value ("Class B Common Shares") (the Class A Common
Shares and the Class B Common Shares are sometimes referred to herein
collectively as the "Common Shares"), and 500,000 nonvoting preferred
shares, without par value.
Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors
is authorized at any time, and from time to time, to provide for the
issuance of nonvoting preferred shares in one or more series, and to
determine to the extent permitted by law the designations, preferences,
limitations, and relative or other rights of the nonvoting preferred
shares or any series thereof. For each series, the board of directors
shall determine, by resolution or resolutions adopted prior to the
issuance of any shares thereof, the designations, preferences,
limitations, and relative or other rights thereof, including but not
limited to the following relative rights and preferences, as to which
there may be variations among different series:
(a) the division of such shares into series and the
designation and authorized number of shares of each series,
(b) the dividend rate,
(c) the dates of payment of dividends and the dates from which
they are cumulative,
(d) liquidation price,
(e) redemption rights and price,
(f) sinking fund requirements,
(g) conversion rights, and
(h) restrictions on the issuance of such shares.
Prior to the issuance of any shares of a series, but after adoption by
the board of directors of the resolution establishing such series, the
appropriate officers of the corporation shall file such documents with
the State of Ohio as may be required by law including, without
limitation, an amendment to these Articles of Incorporation.
Section 3. COMMON SHARES.
All common shares shall be identical and will entitle the holders
thereof to the same rights and privileges, except as otherwise provided
herein.
A. VOTING RIGHTS.
1. CLASS A COMMON SHARES. Exchept as set forth herein or as
otherwise required by law, each outstanding Class A Common Share shall
entitle the holder thereof to one vote, in person or by
<PAGE> 10
proxy, at any and all meetings of the shareholders of the corporation,
on all propositions before such meetings.
2. CLASS B COMMON STOCK. Except as set forth herein or as
otherwise required by law, each outstanding Class B Common Share shall
entitle the holder thereof to one-fifth (1/5) of one vote, in person
or by proxy, at any and all meetings of shareholders of the corporation,
on all propositions before such meetings. Notwithstanding the
foregoing, holders of the Class B Common Shares shall be entitled to
vote as a separate class on any amendment to this paragraph 2 of this
Section A, on the issuance in the aggregate by the corporation of
additional Class B Common Shares in excess of the number of Class B
Common Shares held by Chemical Equity Associates and its Affiliates or
issuable pursuant to Section 3(c) hereof and on any amendment, repeal
or modification of any provision of these Articles that adversely
affects the powers, preferences or special rights of the holders of the
Class B Common Shares.
B. DIVIDENDS; LIQUIDATION. Subject to the preferences of any
preferred shares, each Common Share shall be entitled to participate equally in
such dividends as may be declared by its board of directors out of funds
legally available therefor or to participate equally in all distributions of
assets upon liquidation; provided, that in the case of dividends payable in
Common Shares of the Corporation, or options, warrants or rights to acquire
such Common Shares, or securities convertible into or exchangeable for such
Common Shares, the shares, options, warrants, rights or securities so payable
shall be payable in shares of, or options, warrants or rights to acquire, or
securities convertible into or exchangeable for, Common Shares of the same
class upon which the dividend or distribution is being paid.
C. CONVERSION.
1. CONVERSION OF CLASS A COMMON SHARES. Any Regulated Shareholder
(defined below) shall be entitled to convert, at any time and from time
to time, any or all of the Class A Common Shares held by such
shareholder into the same number of Class B Common Shares.
2. CONVERSION OF CLASS B COMMON SHARES. Each holder of Class B
Common Shares may convert such shares into Class A Common Shares if
such holder reasonably believes that such converted shares will be
transferred within fifteen (15) days pursuant to a Conversion Event
(defined below) and such holder agrees not to vote any such Class A
Common Shares prior to such Conversion Event and undertakes to
promptly convert such shares back into Class B Common Shares if such
shares are not transferred pursuant to a Conversion Event. Each
Regulated Shareholder may provide for further restrictions or
limitations upon the conversion of any Class B Common Shares by
providing the corporation with signed, written instructions specifying
such additional restrictions and legending such shares as to the
existence of such restrictions.
3. CONVERSION PROCEDURE. Each conversion of Copmmon Shares of the
corporation into shares of another class of Common Shares of the
Corporation shall be effected by the surrender of the certificate or
certificates representing the shares to be converted (the "Converting
Shares") at the principal office of the corporation (or such other
office or agency of the corporation as the corporation may designate
by written notice to the holders of common shares) at any time during
its usual business hours, together with written notice by the holder
of such Converting Shares, stating that such holder desires to convert
the Converting Shares, or a stated number of the shares represented by
such certificate or certificates, into an equal number of shares of the
class into which such shares may be converted (the "Converted Shares").
Such notice shall also state the name or names (with addresses) and
denominations in which the certificate or certificates for Converted
Shares are to be issued and shall include instructions for the delivery
thereof. Promptly after such surrender and the receipt of such written
notice, the corporation will issue and deliver in accordance with the
surrendering holder's intructions the certificate or certificates
evidencing the Converted Shares issuable upon such conversion, and the
corporation will deliver to the converting holder a certificate
representing any shares which were represented by the certificate or
certificates that were delivered to the coropration with such
conversion, but which were not converted.
<PAGE> 11
Such conversion shall be deemed to have been effected as of the
close of business on the date on which such certificate or certificates
shall have been surrendered and such notice shall have been received by
the corporation, and at such time the rights of the holder of the
Converting Shares as such holder shall cease and the person or persons
in whose name or names the certificate or certificates for the
Converted Shares are to be issued upon such conversion shall be deemed
to have become the holder or holders of record of the Converted Shares.
Upon issuance of shares in accordance with this Section C, such
Converted Shares shall be deemed to be duly authorized, validly issued,
fully paid and non-assessable.
Each holder of Class B Common Shares shall be entitled to convert
Class B Common Shares in connection with any Conversion Event if such
holder reasonably believes that such Conversion Event will be
consummated, and a written request for conversion from any holder of
Class B Common Shares to the corporation stating such holder's
reasonable belief that a Conversion Event shall occur shall be
conclusive and shall obligate the corporation to effect such
conversion in a timely manner so as to enable each such holder to
participate in such Conversion Event. The corporation will not cancel
the Class B Common Shares so converted before the 15th day following
such Conversion Event and will reserve such shares until such 15th day
for reissuance in compliance with the next sentence. If any Class B
Common Shares are converted into Class A Common Shares in connection
with a Conversion Event and such Class A Common Shares are not
actually distributed, disposed of or sold pursuant to such Conversion
Event, such Class A Common Shares shall be promptly converted back
into the same number of Class B Common Shares.
4. STOCK SPLITS; ADJUSTMENTS. If the Corporation shall in any
manner subdivide (by stock split, stock dividend or otherwise) or
combine (by reverse stock split or otherwise) the outstanding Class A
Common Shares or the Class B Common Shares, then the outstanding
shares of each other class of common shares shall be subdivided or
combined, as the case may be, to the same extent, share and share
alike, and effective provision shall be made for the protection of the
conversion rights hereunder.
In the case of any reorganization, reclassification or change of
shares of the Class A Common Shares or Class B Common Shares (other
than a change in par value or from par to no par value as a result of
a subdivision or combination), or in case of any consolidation of the
corporation with one or more corporations or a merger of the
corporation with another corporation (other than a consolidation or
merger in which the corporation is the resulting or surviving
corporation and which does not result in any reclassification or
change of outstanding Class A Common Shares or Class B Common Shares),
each holder of Class A Common Shares or Class B Common Shares shall
have the right at any time thereafter, so long as the conversion right
hereunder with respect to such share would exist had such event not
occurred, to convert such share into the kind and amount of shares of
stock and other securities and properties (including cash) receivable
upon such reorganization, reclassification, change, consolidation or
merger by a holder of the number of Class A Common Shares or Class B
Common Shares into which such Class A Common Shares or Class B Common
Shares, as the case may be, might have been converted immediately
prior to such reorganization, reclassification, change, consolidation
or merger. In the event of any such reorganization, reclassification,
change, consolidation or merger which will have the effect of causing
any Regulated Shareholder's direct or indirect ownership of shares of
capital stock of the resulting or surviving corporation immediately
following such transaction to equal or exceed 5% of the voting power
thereof (calculated as if all such Regulated Shareholder's Class B
Common Shares were converted to Class A Common Shares immediately prior
to consummation of such transaction) then provision shall be made in
the certificate of incorporation of the resulting or surviving
corporation for the protection of the conversion rights of Class A
Common Shares and Class B Common Shares that shall be applicable, as
nearly as reasonably may be, to any such other shares of stock and
other securities and property deliverable upon conversion of such
Class A Common Shares or Class B Common Shares ionto which such Class
A Common Shares or Class B Common Shares might have been converted
prior to such event.
<PAGE> 12
5. RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available out of its authorized but unissued Class A
Common Shares and Class B Common Shares or its treasury shares, for
the purpose of issuance upon the conversion of Class A Common Shares
and Class B Common Shares, such number of shares of such class as are
then issuable upon the conversion of all outstanding shares of Class A
Common Shares and Class B Common Shares which may be converted.
6. NO CHARGE. The issuance of certificates for shares of any class
of common shares upon conversion of shares of any other class of common
shares shall be made without charge to the holders of such shares for
any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related
issuance of common shares; provided, however, that the Corporation
shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the common
shares converted.
D. As used herein, the following terms shall have the meanings shown
below:
1. "AFFILIATES" shall mean with respect to any Person, any other
person, directly or indirectly controlling, controlled by or under
common control with such Person. For the purpose of the above
definition, the term "control" (including with correlative meaning,
the terms "controlling", "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
2. "CONVERSION EVENT" shall mean (a) any public offering or public
sale of securities of the Corporation (including a public offering
registered under the Securities Act of 1933 and a public sale pursuant
to Rule 144 of the Securities and Exchange Commission or any similar
rule then in force), (b) any sale of securities of the corporation to
a person or group of persons (withing the meaning of the Securities
Exchange Act of 1934, as amended (the "1934 Act")) if, after such sale,
such person or group of persons in the aggregate would own or control
securities which possess in the aggregate the ordinary voting power to
elect a majority of the corporation's directors (provided that such
sale has been approved by the corporation's Board of Directors or a
committee thereof), (c) any sale of securities of the corporation to a
person or group of persons (within the meaning of the 1934 Act) if,
after such sale, such person or group of persons in the aggregate would
own or control securities of the corporation (excluding any Class B
Common Shares being converted and disposed of in connection with such
Conversion Event) which possess in the aggregate the ordinary voting
power to elect a majority of the corporation's directors, (d) any sale
of securities of the corporation to a person or group of persons
(within the meaning of the 1934 Act) if, after such sale, such person
or group of persons would not, in the aggregate, own, control or have
the right to acquire more than two percent (2%) of the outstanding
securities or any class of voting securities of the corporation (for
purposes of this clause, treating Class A Common Stock and Class B
Common Stock as a single class), and (e) a merger, consolidation or
similar transaction involving the corporation if, after such
transaction, a person or group of persons (within the meaning of the
1934 Act) in the aggregate would own or control securities which
possess in the aggregate the ordinary voting power to elect a majority
of the surviving corporation's directors (provided that the
transaction has been approved by the corporation's Board of Directors
or a committee thereof).
3. "PERSON" or "PERSON" shall mean an individual, a partnership, a
corporation, a trust, a joint venture, an unincorporated organization
or a government or any department or agency thereof.
4. "REGULATED SHAREHOLDER" shall mean Chemical Equity Associates
and its Affiliates.
<PAGE> 1
Exhibit 3.02
RESTATED CODE OF REGULATIONS
----------------------------
OF
--
CARDINAL HEALTH, INC.
---------------------------
ADOPTED JUNE 14, 1983
AMENDED SEPTEMBER 14, 1984
AMENDED JANUARY 27, 1994
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
Article 1: Meetings of Shareholders ----
------------------------
+SC1.1 Annual Meeting 1
+SC1.2 Special Meetings 1
+SC1.3 Place of Meetings 1
+SC1.4 Notice of Meetings 1
+SC1.5 Waiver of Notice 2
+SC1.6 Quorum 2
+SC1.7 Organization 2
+SC1.8 Order of Business 2
+SC1.9 Voting 2
+SC1.10 Proxies 3
+SC1.11 Inspectors of Elections 3
+SC1.12 Record Date 3
+SC1.13 List of Shareholders at Meeting 3
+SC1.14 Action in Writing in Lieu of Meeting 3
Article 2: Board of Directors
------------------
+SC2.1 General Powers of Board 3
+SC2.2 Number and Qualifications 4
+SC2.3 Compensation and Expenses 4
+SC2.4 Election of Directors 4
+SC2.5 Term of Office 4
+SC2.6 Resignations 4
+SC2.7 Removal of Directors 4
+SC2.8 Vacancies 5
+SC2.9 Organization of Meetings 5
+SC2.10 Place of Meetings 5
+SC2.11 Regular Meetings 5
+SC2.12 Special Meetings 5
+SC2.13 Notices of Meetings 5
+SC2.14 Notice of Adjournment of Meeting 6
+SC2.15 Quorum and Manner of Acting 6
+SC2.16 Order of Business 6
+SC2.17 Action in Writing in Lieu of Meeting 6
+SC2.18 Executive and Other Committees 6
Article 3: Officers
--------
+SC3.1 Number and Titles 7
+SC3.2 Election, Terms of Office, Qualifications, and
Compensation 7
<PAGE> 3
+SC3 3 Additional Officers, Agents, Etc. 8
+SC3.4 Removal 8
+SC3.5 Resignations 8
+SC3.6 Vacancies 8
+SC3.7 Powers, Authority, and Duties of Officers 8
Article 4: Shares and Their Transfer
-------------------------
+SC4.1 Certificates for Shares 8
+SC4.2 Transfer of Shares 9
+SC4.3 Regulations 9
+SC4.4 Lost, Destroyed, and Stolen Certificates 9
Article 5: Examination of Books by Shareholders 10
------------------------------------
Article 6: Indemnification and Insurance
-----------------------------
+SC6.1 Costs Incurred 10
+SC6.2 Indemnification Procedure 11
+SC6.3 Advance Payment of Costs 11
+SC6.4 Non-Exclusive 11
+SC6.5 Insurance 11
+SC6.6 Survival 11
+SC6.7 Successors 11
Article 7: Seal 12
----
Article 8: Fiscal Year 12
-----------
Article 9: Control Share Acquisitions 12
--------------------------
Article 10: Amendment of Regulations 12
------------------------
ii
<PAGE> 4
ARTICLE 1
Meetings of Shareholders
------------------------
+SC 1.1 ANNUAL MEETING. The annual meeting of the shareholders,
for the purpose of electing directors and transacting such other business as
may come before the meeting, shall be held on such date and at such time
during the first six months of each fiscal year of the Company as may be fixed
by the board of directors and stated in the notice of the meeting.
+SC1.2 SPECIAL MEETINGS. A special meeting of the shareholders
may be called by the chairman of the board, or the president, or a majority of
the directors acting with or without a meeting, or the holders of shares
entitling them to exercise twenty-five percent of the voting power of the
Company entitled to be voted at the meeting. Upon delivery to the chairman,
president, or secretary of a request in writing for a shareholders' meeting by
any persons entitled to call such meeting, the officer to whom the request is
delivered shall give notice to the shareholders of such meeting. Any such
request shall specify the purposes and the date and hour for such meeting.
The date shall be at least 14 and not more than 65 days after delivery of the
request. If such officer does not call the meeting within five days after any
such request, the persons making the request may call the meeting by giving
notice as provided in +SC1.4 or by causing it to be given by their designated
representative.
+SC1.3 PLACE OF MEETINGS. All meetings of shareholders shall be
held at such place or places, within or without the State of Ohio, as may be
fixed by the board of directors or, if not so fixed, as shall be specified in
the notice of the meeting.
+SC 1.4 NOTICE OF MEETINGS. Every shareholder shall furnish the
secretary of the Company with an address at which notices of meetings and all
other corporate notices may be served on or mailed to him. Except as other-
wise expressly required by law, notice of each shareholders' meeting, whether
annual or special, shall, not more than 60 days and at least 7 days before the
date specified for the meeting, be given by the chairman, president, or
secretary or, in case of their refusal or failure to do so, by the person or
persons entitled to call such meeting, to each shareholder entitled to notice
of the meeting, by delivering a written or printed notice to him personally or
by mailing the notice in a postage-prepaid envelope addressed to him at his
address furnished by him as above provided, or, if he shall not have furnished
such address, at his post office address last known to the sender. Except
when expressly required by law, no publication of any notice of a sharehold-
ers' meeting shall be required. If shares are transferred after notice has
been given, notice need not be given to the transferee. A record date may be
fixed for determining the shareholders entitled to notice of any meeting of
shareholders, in accordance with the provisions of +SC 1.12. Every notice of
a shareholders' meeting, besides stating the time and place of the meeting,
shall state briefly the purposes of the meeting as may be specified by the
<PAGE> 5
person or persons requesting or calling the meeting. Only the business
provided for in such notice shall be considered at the meeting. Notice of the
adjournment of a meeting need not be given if the time and place to which it
is adjourned are fixed and announced at the meeting.
+SC 1.5 WAIVER OF NOTICE. Any shareholder, either before or after
any meeting, may waive any notice required by law, the articles, or these
regulations. Waivers must be in writing and filed with or entered upon the
records of the meeting. Notice of a meeting will be deemed to have been
waived by any shareholder who attends the meeting either in person or by
proxy, and who does not, before or at the commencement of the meeting, protest
the lack of proper notice.
+SC 1.6 QUORUM. The holders of shares entitling them to exercise
a majority of the voting power of the Company entitled to vote at a meeting,
present in person or by proxy, shall constitute a quorum for the transaction
of business, except when a greater number is required by law, the articles of
incorporation, or these regulations. In the absence of a quorum at any
meeting or any adjournment of the meeting, the holders of shares entitling
them to exercise a majority of the voting power of the shareholders present in
person or by proxy and entitled to vote may adjourn the meeting from time to
time. At any adjourned meeting at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
called.
+SC 1.7 ORGANIZATION. At each shareholders' meeting the chairman
of the board, or, in his absence, the president, or, in the absence of both of
them, a chairman chosen by the holders of shares entitling them to exercise a
majority of the voting power of the shareholders present in person or by proxy
and entitled to vote, shall act as chairman, and the secretary of the Company,
or, in his absence, any assistant secretary, or, in the absence of all of
them, any person whom the chairman of the meeting appoints, shall act as
secretary of the meeting.
+SC 1.8 ORDER OF BUSINESS. The order of business at each share-
holders' meeting shall be fixed by the chairman of the meeting at the begin-
ning of the meeting but may be changed by the vote of the holders of shares
entitling them to exercise a majority of the voting power of the shareholders
present in person or by proxy and entitled to vote.
+SC 1.9 VOTING. Each holder of a share or shares of the class or
classes entitled to vote by law or the articles of incorporation shall be
entitled to one vote in person or by proxy for each such share registered in
his name on the books of the Company. As provided in +SC 1.12, a record date
for determining which shareholders are entitled to vote at any meeting may be
fixed. Shares of its own stock belonging to the Company shall not be voted
directly or indirectly. Persons holding voting shares in a fiduciary capacity
shall be entitled to vote the shares so held. A shareholder whose shares are
pledged shall be entitled to vote the shares standing in his name on the books
of the Company. Upon a demand by any shareholder present in person or by proxy
at any meeting and entitled to vote, any vote shall be by ballot. Each ballot
shall be signed by the shareholder or his proxy and shall state the number of
shares voted by him. Otherwise, votes shall be made orally.
-2-
<PAGE> 6
+SC1.10 PROXIES. Any shareholder who is entitled to attend or vote at
a shareholders' meeting shall be entitled to exercise such right and any other
of his rights by proxy or proxies appointed by a writing signed by such
shareholder, which need not be witnessed or acknowledged. Except as otherwise
specifically provided in these regulations, actions taken by proxy shall be
governed by the provisions of +SC1701.48. Ohio Revised Code, or any future
statute of like tenor or effect, including the provisions relating to the
sufficiency of the writing, duration of the validity of the proxy, power of
substitution, revocation, and all other provisions.
+SC1.11 INSPECTORS OF ELECTIONS. Inspectors of elections may be
appointed and act as provided in +SC1701.50, Ohio Revised Code, or any future
statute of like tenor or effect.
+SC1.12 RECORD DATE. The board of directors may fix a record date for
any lawful purpose, including without limitation the determination of
shareholders entitled to: (a) receive notice of or to vote at any meeting, (b)
receive payment of any dividend or other distribution, (c) receive or exercise
rights of purchase of, subscription for, or exchange or conversion of, shares
or other securities, subject to any contract right with respect thereto, or (d)
participate in the execution of written consents, waivers, or releases. Any
such record date shall not be more than sixty days preceding the date of such
meeting, the date fixed for the payment of any dividend or other distribution,
or the date fixed for the receipt or the exercise of rights, as the case may
be.
+SC1.13 LIST OF SHAREHOLDERS AT MEETING. Upon request of any
shareholder at any meeting of shareholders, there shall be produced at the
meeting an alphabetically arranged list, or classified lists, of the
shareholders of record as of the applicable record date who are entitled to
vote, showing their respective addresses and the number and classes of shares
held by them.
+SC1.14 ACTION IN WRITING IN LIEU OF MEETING. Any action which may be
authorized or be taken at a meeting of the shareholders, may be authorized or
taken without a meeting with the affirmative vote or approval of, and in a
writing or writings signed by, all the shareholders who would be entitled to
notice of a meeting of the shareholders held for that purpose.
ARTICLE 2
Board of Directors
------------------
+SC2.1 GENERAL POWERS OF BOARD. The powers of the Company shall be
exercised, its business and affairs shall be conducted, and its property shall
be controlled by the board of directors, except as otherwise provided by law of
Ohio, the articles, or these regulations.
- 3 -
<PAGE> 7
+SC 2.2 NUMBER AND CLASSIFICATION. The number of directors of the
Corporation shall be fourteen (14). The number of directors may be increased
or decreased by action of the board of directors upon the vote of a majority of
the board; provided, however, that in no case shall the number of directors be
fewer than nine (9) or more than fourteen (14) without an amendment to this
+SC 2.2 approved in the manner specified in Article 10 of these regulations;
and provided further that no decrease in the numbers of directors shall have
the effect of removing any director prior to the expiration of his term of
office. The directors shall be divided into three classes. Initially, two of
such classes shall consist of five members each and one shall consist of four
members. The term of office of the first class (initially having four members)
shall expire at the 1994 annual meeting of shareholders, the term of office of
the second class (initially having five members) shall expire at the 1995
annual meeting of shareholders, and the term of office of the third class
(initially having five directors) shall expire at the 1996 annual meeting of
shareholders. At each annual meeting of shareholders after the 1994 annual
election of directors, directors elected to succeed those whose terms then
expire shall be elected for a term of office expiring at the annual meeting of
shareholders during the third year after their election. In case of any
increase in the number of directors (after a reduction below fourteen), the
additional directors shall be distributed among the several classes so as to
make the classes as nearly equal in number as possible. [As amended January 27,
1994.]
+SC 2.3 COMPENSATION AND EXPENSES. The directors shall be enti-
tled to such compensation, on a monthly or annual basis, or on the basis of
meetings attended, or on both bases, as the board of directors may from time
to time determine and establish. No director shall be precluded from serving
the Company as an officer or in any other capacity, or from receiving compen-
sation for so serving. Directors may be reimbursed for their reasonable
expenses incurred in the performance of their duties, including the expense of
traveling to and from meetings of the board, if such reimbursement is autho-
rized by the board of directors.
+SC2.4 ELECTION OF DIRECTORS. At each meeting of the sharehold-
ers for the election of directors of a particular class at which a quorum is
present, the persons receiving the greatest number of votes shall be deemed
elected the directors of that class. Any shareholder may cumulate his votes
at an election of directors upon fulfillment of the conditions prescribed in
+SC 1701.55, Ohio Revised Code, or any future statute of like tenor or effect.
+SC2.5 TERM OF OFFICE. Each director shall hold office until the
annual meeting of shareholders in the year of the expiration of his term of
office, or, if the election of directors shall not be held at that annual
meeting, until a special meeting of the shareholders for the purpose of
electing directors is held as provided in +SC1.2, or the taking of action by
all the shareholders in writing in lieu of either such meetings, and in any
case until his successor is elected and qualified or until his earlier
resignation, removal from office, or death.
+SC2.6 RESIGNATIONS. Any director may resign by giving written
notice to the chairman, the president, or the secretary of the Company. Such
resignation shall take effect at the time specified therein. Unless otherwise
specified therein, the acceptance of a resignation shall not be necessary to
make it effective.
+SC2.7 REMOVAL OF DIRECTORS. All the directors, or all the
directors of a particular class, or any individual director may be removed
from office, without assigning any cause, by the affirmative vote of the
holders of record of not less than 75% of the shares having voting power of
the Company with respect to the election of directors, provided that unless
- 4 -
<PAGE> 8
all the directors, or all the directors of a particular class, are removed, no
individual director shall be removed in case the votes of a sufficient number
of shares are cast against his removal which, if cumulatively voted at an
election of all the directors, or all the directors of a particular class, as
the case may be, would be sufficient to elect at least one director. In case
of any such removal, a new director may be elected at the same meeting for the
unexpired term of each director removed. Any director may also be removed by
the board of directors for any of the causes specified in +SC 1701.58(B), Ohio
Revised Code, or any future statute of like tenor or effect. [As amended
September 14, 1984.]
+SC2.8 VACANCIES. A vacancy in the board of directors may be
filled by majority vote of the remaining directors, even though they are less
than a quorum, until the shareholders hold an election to fill the vacancy.
Shareholders entitled to elect directors may elect a director to fill any
vacancy in the board (whether or not the vacancy has previously been tempo-
rarily filled by the remaining directors) at any shareholders' meeting
called for that purpose.
+SC2. 9 ORGANIZATION OF MEETINGS. At each meeting of the board of
directors, the chairman of the board, or, in his absence, the president, or,
in his absence, a chairman chosen by a majority of the directors present,
shall act as chairman. The secretary of the Company, or, if the secretary
shall not be present, any person whom the chairman of the meeting shall
appoint, shall act as secretary of the meeting.
+SC2.10 PLACE OF MEETINGS. Meetings of the board shall be held at
such place or places, within or without the State of Ohio, as may from time to
time be fixed by the board of directors or as shall be specified or fixed in
the notice of the meeting.
+SC2.11 REGULAR MEETINGS. Regular meetings of the board will not
be held unless this code of regulations shall be amended to provide therefor.
+SC2.12 SPECIAL MEETINGS. Special meetings of the board of
directors shall be held whenever called by the chairman of the board, if
any, or by the president, or by any two directors.
+SC2.13 NOTICES OF MEETINGS. Every director shall furnish the
secretary of the Company with an address at which notices of meetings and all
other corporate notices may be served on or mailed to him. Unless waived
before, at, or after the meeting as hereinafter provided, notice of each board
meeting shall be given by the chairman, the president, the secretary, an
assistant secretary, or the persons calling such meeting, to each director in
any of the following ways:
(a) By orally informing him of the meeting in
person or by telephone not later than two days before the
date of the meeting.
(b) By delivering written notice to him not
later than two days before the date of the meeting.
-5-
<PAGE> 9
(c) By mailing written notice to him, or by
sending notice to him by telegram, cablegram, or radio-
gram, postage or other costs prepaid, addressed to him at
the address furnished by him to the secretary of the
Company, or to such other address as the person sending
the notice shall know to be correct. Such notice shall be
posted or dispatched a sufficient length of time before
the meeting so that in the ordinary course of the mail or
the transmission of telegrams, cablegrams, or radiograms,
delivery would normally be made to him not later than two
days before the date of the meeting.
Unless otherwise required by the articles of incorporation, this
code of regulations, or the laws of the State of Ohio (for example, see the
provisions of the code of regulations with respect to the election or removal
of directors), the notice of any meeting need not specify the purposes of the
meeting. Notice of any meeting of the board may be waived by any director,
either before, at, or after the meeting, in writing, or by telegram, cable-
gram, or radiogram.
+SC2.14 NOTICE OF ADJOURNMENT OF MEETING. Notice of adjournment
of a meeting need not be given if the time and place to which it is adjourned
are fixed and announced at the meeting.
+SC2.15 QUORUM AND MANNER OF ACTING. A majority of the number of
directors fixed or established pursuant to +SC2.2 as of the time of any meeting
of the board of directors must be present in person at such meeting in order
to constitute a quorum for the transaction of business, provided that meetings
of the directors may include participation by directors through any communica-
tions equipment if all directors participating can hear each other, and such
participation in a meeting shall constitute presence at such meeting. The act
of a majority of the directors present at any meeting at which a quorum is
present shall be the act of the board of directors. In the absence of a
quorum, a majority of those present may adjourn a meeting from time to time
until a quorum is present. Notice of an adjourned meeting need not be given.
The directors shall act only as a board. Individual directors shall have no
power as such.
+SC2.16 ORDER OF BUSINESS. The order of business at meetings of
the board shall be such as the chairman of the meeting may prescribe or
follow, subject, however, to his being overruled with respect thereto by a
majority of the members of the board present.
+SC2.17 ACTION IN WRITING IN LIEU OF MEETING. Any action which
may be authorized or taken at a meeting of the directors, may be authorized or
taken without a meeting with the affirmative vote or approval of, and in a
writing or writings signed by all the directors.
+SC2.18 EXECUTIVE AND OTHER COMMITTEES. The directors may create
and from time to time abolish or reconstitute an executive committee and any
other committee or committees of directors each to consist of not less than
- 6 -
<PAGE> 10
three directors, and may delegate to any such committee or committees any or
all of the authority of the directors, however conferred, other than that of
filling vacancies in the board of directors or in any committee of directors.
Each such committee shall serve at the pleasure of the directors, and shall act
only in the intervals between meetings of the board of directors, and shall be
subject to the control and direction of the board of directors. The directors
may adopt or authorize the committees to adopt provisions with respect to the
government of any such committee or committees which are not inconsistent with
applicable law, the articles of incorporation of the Company, or these
regulations. An act or authorization of any act by any such committee within
the authority properly delegated to it by the directors shall be as effective
for all purposes as the act or authorization of the directors. Any right,
power, or authority conferred in these regulations to the "directors" or to the
"board of directors" shall also be deemed conferred upon each committee or
committees of directors to which any such right, power, or authority is
delegated (expressly, or by general delegation, or by necessary implication) by
the board of directors.
ARTICLE 3
Officers
--------
+SC3.1 NUMBER AND TITLES. The officers of the Company shall be a
chairman of the board, a president, one or more vice presidents, if needed, a
secretary, one or more assistant secretaries, if needed, a treasurer, and one
or more assistant treasurers, if needed. The board shall have the discretion
to determine from time to time the number of vice presidents, if any, the
Company shall have, whether or not assistant secretaries and assistant
treasurers are needed, and, if so, the number of assistant secretaries and
assistant treasurers the Company shall have. Furthermore, if there is more
than one vice president, the board may, in its discretion, establish
designations for the vice presidencies so as to distinguish among them as to
their functions or their order, or both. Any two or more offices may be held
by the same person, but no officer shall execute, acknowledge, or verify any
instrument in more than one capacity if such instrument is required by law,
the articles, or these regulations to be executed, acknowledged, or verified
by two or more officers.
+SC3.2 ELECTION, TERMS OF OFFICE, QUALIFICATIONS, AND COMPENSA-
TION. The officers shall be elected by the board of directors. Each shall be
elected for an indeterminate term and shall hold office during the pleasure of
the board of directors. The board of directors may hold annual elections of
officers; in that event, each such officer shall hold office until his succes-
sor is elected and qualified unless he earlier is removed by the board of
directors. The chairman of the board shall be a director, but no other
officer need be a director. The other qualifications of all officers shall be
such as the board of directors may establish. The board of directors shall
fix the compensation, if any, of each officer.
- 7 -
<PAGE> 11
+SC3.3, ADDITIONAL OFFICERS, AGENTS ETC. In addition to the
officers mentioned in +SC3.1, the Company may have such other officers, agents,
and committees as the board of directors may deem necessary and may appoint,
each of whom or each member of which shall hold office for such period, have
such authority, and perform such duties as may be provided in these regula-
tions or as may, from time to time, be determined by the board. The board of
directors may delegate to any officer or committee the power to appoint any
subordinate officer, agents, or committees. In the absence of any officer, or
for any other reason the board of directors may deem sufficient, the board of
directors may delegate, for the time being, the powers and duties, or any of
them, of such officer to any other officer, or to any director.
+SC3.4 REMOVAL. Any officer may be removed, either with or
without cause, at any time, by the board of directors at any meeting, the
notices (or waivers of notices) of which shall have specified that such
removal action was to be considered. Any officer appointed by an officer or
committee to which the board shall have delegated the power of appointment may
be removed, either with or without cause, by the committee or superior officer
(including successors) who made the appointment, or by any committee or
officer upon whom such power of removal may be conferred by the board of
directors.
+SC3.5 RESIGNATIONS. Any officer may resign at any time by
giving written notice to the board of directors, the chairman, the president,
or the secretary. Any such resignation shall taken effect at the time
specified therein. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
+SC3.6 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise, shall be filled in the
manner prescribed for regular appointments or elections to such office.
+SC3.7 POWERS, AUTHORITY, AND DUTIES OF OFFICERS. Officers of
the Company shall have the powers and authority conferred and the duties
prescribed by law, in addition to those specified or provided for in these
regulations and such other powers, authority, and duties as may be determined
by the board of directors from time to time.
ARTICLE 4
Shares and Their Transfer
-------------------------
+SC4. 1 CERTIFICATES FOR SHARES. Every owner of one or more
shares in the Company shall be entitled to a certificate or certificates,
which shall be in such form as may be approved by the board of directors,
certifying the number and class of shares in the Company owned by him. The
certificates for the respective classes of such shares shall be numbered in
the order in which they are issued and shall be signed in the name of the
Company by the chairman and the secretary; provided that, if such certificates
are countersigned by a transfer agent or registrar, the signatures of such
- 8 -
<PAGE> 12
officers upon such certificates may be fascimiles, stamped, or printed. If an
officer who has signed or whose facsimile signature has been used, stamped, or
printed on any certificates ceases to be such officer because of death,
resignation or other reason before such certificates are delivered by the
Company, such certificates shall nevertheless be conclusively deemed to be
valid if countersigned by any such transfer agent or registrar. A record
shall be kept of the name of the owner or owners of the shares represented by
each such certificate and the number of shares represented thereby, the date
thereof, and in case of cancellation, the date of cancellation. Every certif-
icate surrendered to the Company for exchange or transfer shall be cancelled
and no new certificate or certificates shall be issued in exchange for any
existing certificates until such existing certificates shall have been so
cancelled, except in cases provided for in +SC4.4.
+SC4.2 TRANSFER OF SHARES. Any certificate for shares of the
Company shall be transferable in person or by attorney upon the surrender of
the certificate to the Company or any transfer agent for the Company (for the
class of shares represented by the certificate surrendered) properly endorsed
for transfer and accompanied by such assurances as the Company or its transfer
agent may require as to the genuineness and effectiveness of each necessary
endorsement. The person in whose name any shares stand on the books of the
Company shall, to the full extent permitted by law, be conclusively deemed to
be the unqualified owner and holder of the shares and entitled to exercise all
rights of ownership, for all purposes relating to the Company. Neither the
Company nor any transfer agent of the Company shall be required to recognize
any equitable interest in, or any claim to, any such shares on the part of any
other person, whether disclosed on the certificate or any other way, nor shall
they be required to see to the performance of any trust or other obligation.
+SC4.3 REGULATIONS. The board of directors may make such rules
and regulations as it may deem expedient or advisable, not inconsistent with
these regulations, concerning the issue, transfer, and registration of certif-
icates for shares. It may appoint one or more transfer agents or one or more
registrars, or both, and may require all certificates for shares to bear the
signature of either or both.
+SC4.4 LOST, DESTROYED OR STOLEN CERTIFICATES. A new share
certificate or certificates may be issued in place of any certificate
theretofore issued by the Company which is alleged to have been lost,
destroyed, or wrongfully taken upon: (a) the execution and delivery to the
Company by the person claiming the certificate to have been lost, destroyed,
or wrongfully taken of an affidavit of that fact in form satisfactory to the
Company, specifying whether or not the certificate was endorsed at the time of
such alleged loss, destruction or taking, and (b) the receipt by the Company
of a surety bond, indemnity agreement, or any other assurances satisfactory to
the Company and to all transfer agents and registrars of the class of shares
represented by the certificate against any and all losses, damages, costs,
expenses, liabilities or claims to which they or any of them may be subjected
by reason of the issue and delivery of such new certificate or certificates or
with respect to the original certificate.
- 9 -
<PAGE> 13
ARTICLE 5
Examination of Books by Shareholders
------------------------------------
The board of directors may make reasonable rules and regulations
prescribing under what conditions the books, records, accounts, and documents
of the Company, or any of them, shall be open to the inspection of the share-
holders. No shareholder shall be denied any right which is conferred by
+SC 1701.37, Ohio Revised Code, or any other applicable law to inspect any
book, record, account, or document of the Company. An original or duplicate
stock ledger showing the names and addresses of the shareholders and the
number and class of shares issued or transferred of record to or by them from
time to time shall at all times during the usual hours for business be open to
the examination of every shareholder at the principal office or place of
business of the Company in the State of Ohio.
ARTICLE 6
Indemnification and Insurance
-----------------------------
+SC6.1 COSTS INCURRED. The Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, by reason of the fact that he is or was a
director, officer, employee, or agent of the Company, or is or was serving at
the request of the Company as a director, trustee, officer, employee, or agent
of another corporation, domestic or foreign, nonprofit or for profit, partner-
ship, joint venture, trust, or other enterprise, against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit, or proceeding
provided that: (a) he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company; (b) with
respect to any criminal action or proceeding, he had no reasonable cause to
believe his conduct was unlawful; and (c) in any action or suit by or in the
right of the Company, no indemnification shall be made with respect to any
amounts paid in settlement or with respect to any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company unless and only to the
extent that the Court of Common Pleas or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as the court of
common pleas or such other court shall deem proper. The termination of any
action, suit, or proceeding by judgment, order, settlement, or conviction, or
upon a plea of NOLO CONTENDERE or its equivalent, shall not of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
- 10 -
<PAGE> 14
+SC 6.2 INDEMNIFICATION PROCEDURE. Any indemnification under
+SC6.1 shall be made by the Company only if and as authorized in the specific
case upon a determination that indemnification of the director, trustee,
officer, employee, or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in +SC6.1. Such determination
shall be made by one of the following methods: (a) by a majority vote of a
quorum consisting of directors of the Company who were not and are not parties
to or threatened with any such action, suit, or proceeding; or (b) if such a
quorum is not obtainable or if a majority vote of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel
retained by the Company, other than an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed services for
the Company or any person to be indemnified within the past five years; or (c)
by the shareholders; or (d) by the Court of Common Pleas of Franklin County,
Ohio, or the court in which such action, suit, or proceeding was brought.
+SC6.3 ADVANCE PAYMENT OF COSTS. Expenses, including attorneys'
fees, incurred in defending any action, suit, or proceeding referred to in
+SC6.1 may be paid by the Company in advance of the final disposition of such
action, suit, or proceeding as authorized by the directors in the specific
case upon receipt of an undertaking by or on behalf of the director, trustee,
officer, employee, or agent to repay such amount unless it shall ultimately
be determined that he is entitled to be indemnified by the Company as autho-
rized in this Article.
+SC6.4 NON-EXCLUSIVE. The indemnification authorized in this
Article shall not be deemed exclusive of any other rights to which persons
seeking indemnification may be entitled under any agreement, vote of share-
holders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
+SC6.5 INSURANCE. The Company may purchase and maintain insur-
ance on behalf of any person who is or was a director, officer, employee, or
agent of the Company, or is or was serving at the request of the Company as a
director, trustee, officer, employee, or agent of another corporation, domes-
tic or foreign, nonprofit or for profit, partnership, joint venture, trust, or
other enterprise against any liability asserted against him and incurred by
him in any such capacity or arising out of his status as such, whether or not
the Company would have the power to indemnify him against such liability under
this Article or under Chapter 1701, Ohio Revised Code.
+SC6.6 SURVIVAL. The indemnification authorized in this Article
shall continue as to a person who has ceased to be a director, trustee,
officer, employee, or agent.
+SC6.7 SUCCESSORS. The indemnification authorized in this
Article shall inure to the benefit of the heirs, executors, and administrators
of any person entitled to indemnification under this Article.
- 11 -
<PAGE> 15
ARTICLE 7
Seal
----
The board of directors may adopt and alter a corporate seal and use
the same or a facsimile thereof, but failure to affix the corporate seal, if
any, shall not affect the validity of any instrument.
ARTICLE 8
Fiscal Year
-----------
The fiscal year of the Company shall be fixed and may be changed
from time to time by the board of directors.
ARTICLE 9
Control Share Acquisitions
--------------------------
Section 1701.831, Ohio Revised Code, shall not apply to control
share acquisitions of shares of the Company.
ARTICLE 10
Amendment of Regulations
------------------------
These regulations may be amended or new regulations may be adopted:
(a) at any meeting of the shareholders held for such purpose by the affirm-
ative vote of the holders of record of shares entitling them to exercise a
majority of the voting power on such proposal, except that the affirmative
vote of the holders of record of not less than 75% of the shares having voting
power with respect to any such proposal shall be required to amend, change,
adopt any provision inconsistent with, or repeal +SC+SC2.2, 2.5, or 2.7 or to
amend, change, or repeal the provisions of this Article 10 establishing the
voting requirements for amending, changing, adopting any provision incon-
sistent with, or repealing +SC+SC2.2, 2.5, or 2.7; or (b) without a meeting of
the shareholders, by the written consent of the holders of record of shares
entitling them to exercise a majority of the voting power on such proposal,
except that the written consent of the holders of record of not less than 75%
of the shares having voting power with respect to any such proposal shall be
required to amend, change, adopt any provision inconsistent with, or repeal
+SC+SC2.2, 2.5, or 2.7 or to amend, change, or repeal the provisions of this
Article 10 establishing the consent requirements for amending, changing,
adopting any provisions inconsistent with, or repealing +SC +SC2.2, 2.5, or
2.7. If any amendment or new regulations are adopted without a meeting of the
shareholders, the secretary shall mail a copy of the amendment or new regu-
lations to each shareholder who would have been entitled to vote on the
proposal but who did not participate in the adoption of the amendment or new
regulations. [As amended September 14, 1984.]
- 12 -
<PAGE> 1
Exhibit 4.02
============================================================
CARDINAL DISTRIBUTION, INC.
AND
BANK ONE, INDIANAPOLIS, NA, Trustee
Indenture
Dated as of May 1, 1993
__________
============================================================
<PAGE> 2
TABLE OF CONTENTS
__________
Page
----
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . 1
Authorization of Indenture . . . . . . . . . . . . . . . . . . . 1
Compliance with Legal Requirements . . . . . . . . . . . . . . . 1
Purpose of and Consideration for Indenture . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Certain Terms Defined . . . . . . . . . . . . . . . . . . 1
Attributable Debt . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Net Tangible Assets . . . . . . . . . . . . 3
Consolidated Subsidiary . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . 3
Exempted Debt . . . . . . . . . . . . . . . . . . . . . . 3
Funded Indebtedness . . . . . . . . . . . . . . . . . . . 3
Holder, holder of securities,
Securityholder . . . . . . . . . . . . . . . . . . . . 3
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . 4
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . 4
Person . . . . . . . . . . . . . . . . . . . . . . . . . 5
Principal . . . . . . . . . . . . . . . . . . . . . . . . 5
Responsible officer . . . . . . . . . . . . . . . . . . . 5
Security or Securities . . . . . . . . . . . . . . . . . 6
Senior Funded Indebtedness . . . . . . . . . . . . . . . 6
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 6
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 6
i
<PAGE> 3
Page
----
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . 6
vice president . . . . . . . . . . . . . . . . . . . . . 6
Yield to Maturity . . . . . . . . . . . . . . . . . . . . 6
ARTICLE TWO
SECURITIES
SECTION 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Form of Trustee's Certificate
of Authentication . . . . . . . . . . . . . . . . . . . 7
SECTION 2.3. Amount Unlimited; Issuable in Series . . . . . . . . . . . 7
SECTION 2.4. Authentication and Delivery of
Securities . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.5. Execution of Securities . . . . . . . . . . . . . . . . . 10
SECTION 2.6. Certificate of Authentication . . . . . . . . . . . . . . 10
SECTION 2.7. Denomination and Date of
Securities; Payments of Interest . . . . . . . . . . . 11
SECTION 2.8. Registration, Transfer and Exchange . . . . . . . . . . . 12
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost
and Stolen Securities . . . . . . . . . . . . . . . . . 13
SECTION 2.10. Cancellation of Securities;
Destruction Thereof . . . . . . . . . . . . . . . . . . 14
SECTION 2.11. Temporary Securities . . . . . . . . . . . . . . . . . . . 14
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.1. Payment of Principal and Interest . . . . . . . . . . . . 15
SECTION 3.2. Offices for Payments, etc . . . . . . . . . . . . . . . . 15
SECTION 3.3. Appointment to Fill a Vacancy in
Office of Trustee . . . . . . . . . . . . . . . . . . . 15
SECTION 3.4. Paying Agents . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.5. Certificate of the Issuer . . . . . . . . . . . . . . . . 17
SECTION 3.6. Securityholders' Lists . . . . . . . . . . . . . . . . . . 17
SECTION 3.7. Reports by the Issuer . . . . . . . . . . . . . . . . . . 17
SECTION 3.8. Reports by the Trustee . . . . . . . . . . . . . . . . . . 17
SECTION 3.9. Limitations on Liens . . . . . . . . . . . . . . . . . . 18
SECTION 3.10. Limitation on Sale and Lease-Back . . . . . . . . . . . . 21
ii
<PAGE> 4
Page
----
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 4.1. Event of Default Defined; Acceleration
of Maturity; Waiver of Default . . . . . . . . . . . . 21
SECTION 4.2. Collection of Indebtedness by Trustee;
Trustee May Prove Debt . . . . . . . . . . . . . . . . 24
SECTION 4.3. Application of Proceeds . . . . . . . . . . . . . . . . . 27
SECTION 4.4. Suits for Enforcement . . . . . . . . . . . . . . . . . . 28
SECTION 4.5. Restoration of Rights on Abandonment
of Proceedings . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.6. Limitations on Suits by
Securityholders . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.7. Unconditional Right of
Securityholders to Institute
Certain Suits . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.8. Powers and Remedies Cumulative;
Delay or Omission Not Waiver of
Default . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.9. Control by Securityholders . . . . . . . . . . . . . . . . 30
SECTION 4.10. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 31
SECTION 4.11. Trustee to Give Notice of Default,
But May Withhold in Certain
Circumstances . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.12. Right of Court to Require Filing
of Undertaking to Pay Costs . . . . . . . . . . . . . . 32
ARTICLE FIVE
CONCERNING THE TRUSTEE
SECTION 5.1. Duties and Responsibilities of the
Trustee; During Default; Prior to
Default . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.2. Certain Rights of the Trustee . . . . . . . . . . . . . . 34
SECTION 5.3. Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof . . . . . . . . . . . . 36
SECTION 5.4. Trustee and Agents May Hold
Securities; Collections, etc . . . . . . . . . . . . . 36
SECTION 5.5. Moneys Held by Trustee . . . . . . . . . . . . . . . . . . 36
SECTION 5.6. Compensation and Indemnification
of Trustee and Its Prior Claim . . . . . . . . . . . . 36
SECTION 5.7. Right of Trustee to Rely on
Officers' Certificate, etc . . . . . . . . . . . . . . 37
iii
<PAGE> 5
Page
----
SECTION 5.8. Persons Eligible for Appointment
as Trustee . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.9 Resignation and Removal; Appointment
of Successor Trustee . . . . . . . . . . . . . . . . . 37
SECTION 5.10. Acceptance of Appointment by
Successor Trustee . . . . . . . . . . . . . . . . . . . 39
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . . . . 40
SECTION 5.12. Indentures Not Creating Potential
Conflicting Interests for the
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
SECTION 6.1. Evidence of Action Taken by
Securityholders . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.2. Proof of Execution of Instruments and
of Holding of Securities; Record
Date . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.3. Holders to Be Treated as Owners . . . . . . . . . . . . . 42
SECTION 6.4. Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.5. Right of Revocation of Action Taken . . . . . . . . . . . 43
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.1. Supplemental Indentures Without
Consent of Securityholders . . . . . . . . . . . . . . 43
SECTION 7.2. Supplemental Indentures With Consent
of Securityholders . . . . . . . . . . . . . . . . . . 45
SECTION 7.3. Effect of Supplemental Indenture . . . . . . . . . . . . . 46
SECTION 7.4. Documents to Be Given to Trustee . . . . . . . . . . . . . 46
SECTION 7.5. Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . . . . . 47
iv
<PAGE> 6
Page
----
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1. Issuer may Consolidate, etc., on
Certain Terms . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.2. Successor Corporation Substituted . . . . . . . . . . . . 47
SECTION 8.3. Opinion of Counsel to Trustee . . . . . . . . . . . . . . 48
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 9.1. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.2. Application by Trustee of Funds
Deposited for Payment of Securities . . . . . . . . . . 50
SECTION 9.3. Repayment of Moneys Held by Paying
Agent . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 9.4. Return of Moneys Held By Trustee and
Paying Agent Unclaimed for Three
Years . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE TEN
MISCELLANEOUS PROVISIONS
SECTION 10.1. Incorporators, Stockholders, Officers
and Directors of Issuer Exempt from
Individual Liability . . . . . . . . . . . . . . . . . 51
SECTION 10.2. Provisions of Indenture for the Sole
Benefit of Parties and Security-
holders . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.3. Successors and Assigns of Issuer
Bound by Indenture . . . . . . . . . . . . . . . . . . 51
SECTION 10.4. Notices and Demands on Issuer,
Trustee and Securityholders . . . . . . . . . . . . . . 51
SECTION 10.5. Officers' Certificates and Opinions
of Counsel; Statements to Be Con-
tained Therein . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.6. Payments Due on Saturdays, Sundays
and Holidays . . . . . . . . . . . . . . . . . . . . . 53
v
<PAGE> 7
Page
----
SECTION 10.7. Conflict of Any Provision of
Indenture with Trust Indenture
Act of 1939 . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.8. Ohio Law to Govern . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.10. Effect of Headings . . . . . . . . . . . . . . . . . . . . 54
ARTICLE ELEVEN
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 11.1. Applicability of Article . . . . . . . . . . . . . . . . . 54
SECTION 11.2. Notice of Redemption; Partial
Redemptions . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.3. Payment of Securities Called for
Redemption . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.4. Exclusion of Certain Securities from
Eligibility for Selection for
Redemption . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.5. Mandatory and Optional Sinking
Funds . . . . . . . . . . . . . . . . . . . . . . . . . 57
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .61-62
vi
<PAGE> 8
THIS INDENTURE, dated as of May 1, 1993 between CARDINAL
DISTRIBUTION, INC., an Ohio corporation (the "Issuer"), and BANK ONE,
INDIANAPOLIS, NA, a national banking association duly incorporated and existing
under the laws of the United States of America (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to
time of its unsecured debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized in accordance with the terms
of this Indenture and to provide, among other things, for the authentication,
delivery and administration thereof, the Issuer has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the respective holders
from time to time of the Securities as follows:
ARTICLE ONE
DEFINITIONS
-----------
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939 or the definitions of which in the Securities Act of 1933 are referred to
in the Trust Indenture Act of 1939, including terms defined therein by
reference to the Securities Act of 1933 (except as herein otherwise expressly
provided or unless the context otherwise clearly requires), shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture. All accounting terms
used herein and not expressly defined shall have the meanings assigned to such
terms in accordance with generally
<PAGE> 9
accepted accounting principles, and the term "GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES" means such accounting principles as are generally accepted at the
time of any computation. The words "HEREIN", "HEREOF" and "HEREUNDER" and
other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision. The terms defined in
this Article have the meanings assigned to them in this Article and include
the plural as well as the singular.
"ATTRIBUTABLE DEBT" when used in connection with a sale and
lease-back transaction shall mean, as of any particular time, the lesser of (a)
the fair value of the assets subject to such arrangement or (b) the aggregate
of present values (discounted at a rate per annum equal to the weighted average
Yield to Maturity of the Securities of all series then outstanding and
compounded semi-annually) of the obligations of the Issuer or any Consolidated
Subsidiary for net rental payments during the remaining term of all leases
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended). The term "net rental payments" under any
lease of any period shall mean the sum of the rental and other payments
required to be paid in such period by the lessee thereunder, not including,
however, any amounts required to be paid by such lessee (whether or not
designated as rental or additional rental) on account of maintenance and
repairs, reconstruction, insurance, taxes, assessments, water rates or similar
charges required to be paid by such lessee thereunder or any amounts required
to be paid by such lessee thereunder contingent upon the amount of sales,
maintenance and repairs, reconstruction, insurance, taxes, assessments, water
rates or similar charges.
"BOARD OF DIRECTORS" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act hereunder.
"BUSINESS DAY" means, with respect to any Security, a day that in
the city (or in any of the cities, if more than one) in which amounts are
payable, as specified in the form of such Security, is not a day on which
banking institutions are authorized by law or regulation to close.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
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"CONSOLIDATED NET TANGIBLE ASSETS" means the aggregate amount of
assets after deducting therefrom (a) all current liabilities (excluding any
thereof constituting Funded Indebtedness by reason of being renewable or
extendible) and (b) all goodwill, tradenames, trademarks, patents, unamortized
debt discount and expense and other like intangibles, all as set forth on the
most recent balance sheet of the Issuer and its Consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary substantially all
the property of which is located, and substantially all the operations of which
are conducted, in the United States of America whose financial statements are
consolidated with those of the Issuer in accordance with generally accepted
accounting principles.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 111 Monument Circle, Suite 1611, Indianapolis,
Indiana 46204.
"EVENT OF DEFAULT" means any event or condition specified as such
in Section 4.1 which shall have continued for the period of time, if any,
therein designated.
"EXEMPTED DEBT" means the sum of the following items outstanding
as of the date Exempted Debt is to be determined: (a) Indebtedness of the
Issuer and its Consolidated Subsidiaries incurred after the date of this
Indenture and secured by liens not permitted to be created or assumed pursuant
to Section 3.9 of the Indenture, and (b) Attributable Debt of the Issuer and
its Consolidated Subsidiaries in respect of every sale and lease-back
transaction entered into after the date of this Indenture, other than those
leases expressly permitted by Section 3.10.
"FUNDED INDEBTEDNESS" means all Indebtedness having a maturity of
more than 12 months from the date as of which the amount thereof is to be
determined or having a maturity of less than 12 months but by its terms being
renewable or extendible beyond 12 months from such date at the option of the
borrower.
"HOLDER", "HOLDER OF SECURITIES", "SECURITYHOLDER" or other
similar terms mean the registered holder of any Security.
"INDEBTEDNESS" means all items classified as indebtedness on the
most recently available balance sheet of
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the Issuer and its Consolidated Subsidiaries, in accordance with generally
accepted accounting principles.
"INDENTURE" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.
"INTEREST" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"ISSUER" means (except as otherwise provided in Article Five)
Cardinal Distribution, Inc., an Ohio corporation, and, subject to Article
Eight, its successors and assigns.
"OFFICERS' CERTIFICATE" means a certificate signed by the chairman
of the Board of Directors or the president or any vice president and by the
treasurer or the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall comply with Section 314
of the Trust Indenture Act of 1939 and include the statements provided for in
Section 10.5.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer and who shall be
satisfactory to the Trustee. Each such opinion shall comply with Section 314
of the Trust Indenture Act of 1939 and include the statements provided for in
Section 10.5, if and to the extent required hereby.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 4.1.
"OUTSTANDING", when used with reference to Securities, shall,
subject to the provisions of Section 6.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than
the Issuer) or shall have been set aside, segregated and
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held in trust by the Issuer for the holders of such Securities (if the
Issuer shall act as its own paying agent), PROVIDED that if such
Securities, or portions thereof, are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as herein
provided, or provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities in substitution for which other Securities shall
have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee is presented that
such Security is held by a person in whose hands such Security is a legal,
valid and binding obligation of the Issuer).
In determining whether the holders of the requisite principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 4.1.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"PRINCIPAL" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"RESPONSIBLE OFFICER" when used with respect to the Trustee means
the chairman of the board of directors, any vice chairman of the board of
directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any
vice president, the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
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"SECURITY" or "SECURITIES" has the meaning stated in the first
recital of this Indenture, or, as the case may be, Securities that have been
authenticated and delivered under this Indenture.
"SENIOR FUNDED INDEBTEDNESS" means any Funded Indebtedness of the
Company that is not subordinated in right of payment to any other Indebtedness
of the Company.
"SUBSIDIARY" means any corporation of which at least a majority of
the outstanding stock having the voting power to elect a majority of the Board
of Directors of such corporation (irrespective of whether or not at the time
stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by the Issuer, or by one or more of
the Subsidiaries, or by the Issuer and one or more Subsidiaries.
"TRUSTEE" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Five, shall also
include any successor trustee.
"TRUST INDENTURE ACT OF 1939" (except as otherwise provided in
Sections 7.1 and 7.2) means the Trust Indenture Act of 1939 as in force at the
date as of which this Indenture was originally executed.
"VICE PRESIDENT" when used with respect to the Issuer or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title of "vice president".
"YIELD TO MATURITY" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE TWO
SECURITIES
----------
SECTION 2.1 FORMS GENERALLY. The Securities of each series shall
be substantially in such form (not inconsistent with this Indenture) as shall
be established by or pursuant to a resolution of the Board of Directors or in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have imprinted or otherwise reproduced
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thereon such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with any rules of any securities exchange or
to conform to general usage, all as may be determined by the officers executing
such Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
BANK ONE, INDIANAPOLIS, NA,
as Trustee
By______________________
Authorized Officer
SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall
be established in or pursuant to a resolution of the Board of Directors and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
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other Securities of the series pursuant to Section 2.8, 2.9, 2.11 or 11.3);
(3) the date or dates on which the principal of the Securities of
the series is payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method by which such rate shall be
determined, the date or dates from which such interest shall accrue, the
interest payment dates on which such interest shall be payable and the
record dates for the determination of Holders to whom interest is payable;
(5) the place or places where the principal of and any interest
on Securities of the series shall be payable (if other than as provided in
Section 3.2);
(6) the price or prices at which, the period or periods within
which and the terms and conditions upon which Securities of the series may
be redeemed, in whole or in part, at the option of the Issuer, pursuant to
any sinking fund or otherwise;
(7) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at
which and the period or periods within which and the terms and conditions
upon which Securities of the series shall be redeemed, purchased or repaid,
in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 4.1 or provable in bankruptcy pursuant to Section 4.2;
(10) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(11) any trustees, authenticating or paying agents, transfer
agents or registrars or any other agents with respect to the Securities of
such series.
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All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to such resolution of the Board of Directors or in any such indenture
supplemental hereto.
SECTION 2.4 AUTHENTICATION AND DELIVERY OF SECURITIES. At any
time and from time to time after the execution and delivery of this Indenture,
the Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver such Securities to or upon the written order of the Issuer, signed by
both (a) the Chairman of its Board of Directors, or any vice chairman of its
Board of Directors, or its president or any vice president and (b) by its
treasurer or any assistant treasurer, without any further action by the Issuer.
In authenticating such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities the Trustee shall be
entitled to receive, and (subject to Section 5.1) shall be fully protected in
relying upon:
(1) a certified copy of any resolution or resolutions of the
Board of Directors authorizing the action taken pursuant to the resolution
or resolutions delivered under clause (2) below;
(2) a copy of any resolution or resolutions of the Board of
Directors relating to such series, in each case certified by the Secretary
or an Assistant Secretary of the Issuer;
(3) an executed supplemental indenture, if any;
(4) an Officers' Certificate setting forth the form and terms of
the Securities as required pursuant to Sections 2.1 and 2.3, respectively
and prepared in accordance with Section 10.5;
(5) an Opinion of Counsel, prepared in accordance with Section
10.5, to the effect that
(a) the form or forms and terms of such Securities have
been established by or pursuant to a resolution of the Board of
Directors or by a supplemental indenture as permitted by Sections
2.1 and 2.3 in conformity with the provisions of this Indenture;
(b) such Securities, when authenticated and delivered by
the Trustee and issued by the Issuer in the manner and subject to
any conditions
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specified in such Opinion of Counsel, will constitute valid and
binding obligations of the Issuer;
(c) all laws and requirements in respect of the execution
and delivery by the Issuer of the Securities have been complied
with; and
(d) covering such other matters as the Trustee may
reasonably request.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee, or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee
to personal liability to existing Holders.
SECTION 2.5 EXECUTION OF SECURITIES. The Securities shall be
signed on behalf of the Issuer by both (a) the chairman of its Board of
Directors or any vice chairman of its Board of Directors or its president or
any vice president and (b) by its treasurer or any assistant treasurer or its
secretary or any assistant secretary. Such signatures may be the manual or
facsimile signatures of the present or any future such officers. Typographical
and other minor errors or defects in any such reproduction of any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall
be authenticated and delivered by the Trustee or disposed of by the Issuer,
such Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
SECTION 2.6 CERTIFICATE OF AUTHENTICATION. Only such Securities
as shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any
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purpose. Such certificate by the Trustee upon any Security executed by the
Issuer shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered hereunder and that the holder is entitled to
the benefits of this Indenture.
SECTION 2.7 DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
INTEREST. The Securities shall be issuable as registered securities without
coupons and in denominations as shall be specified as contemplated by Section
2.3. In the absence of any such specification with respect to the Securities
of any series, the Securities of such series shall be issuable in denominations
of $1,000 and any multiple thereof. The Securities shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plan as the officers of the Issuer executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
Each Security shall be dated the date of its authentication, shall
bear interest, if any, from the date and shall be payable on the dates, in each
case, which shall be specified as contemplated by Section 2.3.
The person in whose name any Security of any series is registered
at the close of business on any record date applicable to a particular series
with respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the persons in whose names Outstanding Securities for such
series are registered at the close of business on a subsequent record date
(which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established by notice given by mail by or on behalf
of the Issuer to the holders of Securities not less than 15 days preceding such
subsequent record date. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) shall
mean the date specified as such in the terms of the Securities of any
particular series, or, if no such date is so specified, if such interest
payment date is the first day of a calendar month, the fifteenth day of the
next preceding calendar month or, if such interest payment date is the
fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.
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SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE. The Issuer will
keep or cause to be kept at each office or agency to be maintained for the
purpose as provided in Section 3.2 a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will register, and will
register the transfer of, Securities as in this Article provided. Such
register shall be in written form in the English language or in any other form
capable of being converted into such form within a reasonable time. At all
reasonable times such register or registers shall be open for inspection by the
Trustee.
Upon due presentation for registration of transfer of any Security
of any series at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series in authorized denominations for a
like aggregate principal amount.
Any Security or Securities of any series may be exchanged for a
Security or Securities of the same series in other authorized denominations, in
an equal aggregate principal amount. Securities of any series to be exchanged
shall be surrendered at any office or agency to be maintained by the Issuer for
the purpose as provided in Section 3.2, and the Issuer shall execute and the
Trustee shall authenticate and deliver in exchange therefor the Security or
Securities of the same series which the Securityholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge shall be
made for any such transaction.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days next
preceding the first mailing of notice of redemption of Securities of such
series to be redeemed, or (b) any Securities selected, called or being called
for redemption except, in the case of any Security where public notice has been
given that such Security is to
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be redeemed in part, the portion thereof not so to be redeemed.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
SECURITIES. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver, a new Security of the same
series, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and
substitution for the Security so destroyed, lost or stolen. In every case the
applicant for a substitute Security shall furnish to the Issuer and to the
Trustee and any agent of the Issuer or the Trustee such security or indemnity
as may be required by them to indemnify and defend and to save each of them
harmless and, in every case of destruction, loss or theft, evidence to their
satisfaction of the destruction, loss or theft of such Security and of the
ownership thereof.
Upon the issuance of any substitute Security, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Security), if the applicant for such payment shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as any of them may require to save each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Issuer and the Trustee and any agent of the Issuer or
the Trustee evidence to their satisfaction of the destruction, loss or theft of
such Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Issuer, whether or not the destroyed, lost or stolen
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Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities of such series duly authenticated and delivered hereunder. All
Securities shall be held and owned upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, defaced or destroyed, lost or stolen
Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF.
All Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if surrendered
to the Trustee, shall be cancelled by it; and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall destroy cancelled Securities held by it and
deliver a certificate of destruction to the Issuer. If the Issuer shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are delivered to the Trustee for cancellation.
SECTION 2.11 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as registered Securities without coupons, of any authorized
denomination, and substantially in the form of the definitive Securities of
such series but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer
with the concurrence of the Trustee. Temporary Securities may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the
Issuer shall execute and shall furnish definitive Securities of such series and
thereupon temporary Securities of such series may be surrendered in
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exchange therefor without charge at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.2, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series a like aggregate principal amount of definitive Securities of the same
series of authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series.
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE TRUSTEE
---------------------------------------
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer
covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay or cause to be paid the principal of, and interest on,
each of the Securities of such series at the place or places, at the respective
times and in the manner provided in such Securities. Unless otherwise
specified in accordance with Section 2.3, each instalment of interest on the
Securities of any series may be paid by mailing checks for such interest
payable to or upon the written order of the holders of Securities entitled
thereto as they shall appear on the registry books of the Issuer.
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any of the
Securities remain outstanding, the Issuer will maintain in Indianapolis,
Indiana or in any other city where the Corporate Trust Office of any successor
Trustee may be located, the following for each series: an office or agency (a)
where the Securities may be presented for payment, (b) where the Securities may
be presented for registration of transfer and for exchange as in this Indenture
provided and (c) where notices and demands to or upon the Issuer in respect of
the Securities or of this Indenture may be served. The Issuer will give to the
Trustee written notice of the location of any such office or agency and of any
change of location thereof. Unless otherwise specified in accordance with
Section 2.3, the Issuer hereby initially designates the Corporate Trust Office
of the Trustee, as the office to be maintained by it for each such purpose. In
case the Issuer shall fail to so designate or maintain any such office or
agency or shall fail to give such notice of the location or of any change in
the location thereof, presentations and demands may be made and notices may be
served at the Corporate Trust Office.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in
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the manner provided in Section 5.9, a Trustee, so that there shall at all times
be a Trustee with respect to each series of Securities hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section,
(a) that it will hold all sums received by it as such agent for
the payment of the principal of or interest on the Securities of such
series (whether such sums have been paid to it by the Issuer or by any
other obligor on the Securities of such series) in trust for the benefit of
the holders of the Securities of such series or of the Trustee,
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities of such series) to make
any payment of the principal of or interest on the Securities of such
series when the same shall be due and payable, and
(c) pay any such sums so held in trust by it to the Trustee upon
the Trustee's written request at any time during the continuance of the
failure referred to in clause (b) above.
The Issuer will, on or prior to each due date of the principal of
or interest on the Securities of such series, deposit with the paying agent a
sum sufficient to pay such principal or interest so becoming due, and (unless
such paying agent is the Trustee) the Issuer will promptly notify the Trustee
of any failure to take such action.
If the Issuer shall act as its own paying agent with respect to
the Securities of any Series, it will, on or before each due date of the
principal of or interest on the Securities of such series, set aside, segregate
and hold in trust for the benefit of the holders of the Securities of such
series a sum sufficient to pay such principal or interest so becoming due. The
Issuer will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of Securities hereunder, or
for any other reason, pay or cause to be paid to the Trustee all sums held in
trust for any such series by the Issuer or any paying agent hereunder, as
required by this Section, such
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sums to be held by the Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 9.3 and 9.4.
SECTION 3.5 CERTIFICATE OF THE ISSUER. The Issuer will furnish
to the Trustee on or before March 31 in each year (beginning with 1994) a brief
certificate (which need not comply with Section 10.5) from the principal
executive, financial or accounting officer of the Issuer as to his or her
knowledge of the Issuer's compliance with all conditions and covenants under
this Indenture (such compliance to be determined without regard to any period
of grace or requirement of notice provided under this Indenture).
SECTION 3.6 SECURITYHOLDERS' LISTS. If and so long as the
Trustee shall not be the Security registrar for the Securities of any series,
the Issuer will furnish or cause to be furnished to the Trustee a list in such
form as the Trustee may reasonably require of the names and addresses of the
holders of the Securities of such series pursuant to Section 312 of the Trust
Indenture Act of 1939 (a) semi-annually not more than 15 days after each record
date for the payment of interest on such Securities, as hereinabove specified,
as of such record date and on dates to be determined pursuant to Section 2.3
for non-interest bearing securities in each year, and (b) at such other times
as the Trustee may request in writing, within thirty days after receipt by the
Issuer of any such request as of a date not more than 15 days prior to the time
such information is furnished.
SECTION 3.7 REPORTS BY THE ISSUER. The Issuer covenants to file
with the Trustee, within 15 days after the Issuer is required to file the same
with the Commission, copies of the annual reports and of the information,
documents, and other reports which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934.
SECTION 3.8 REPORTS BY THE TRUSTEE. Any Trustee's report
required under Section 313(a) of the Trust Indenture Act of 1939 shall be
transmitted on or before July 15 in each year following the date hereof, so
long as any Securities are outstanding hereunder, and shall be dated as of a
date convenient to the Trustee no more than 60 nor less than 45 days prior
thereto.
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SECTION 3.9 LIMITATIONS ON LIENS. The Issuer will not create or
assume, and will not permit any Consolidated Subsidiary to create or assume,
any Indebtedness for money borrowed which is secured by a mortgage, pledge,
security interest or lien ("liens") of or upon any assets, whether now owned or
hereafter acquired, of the Issuer or any such Consolidated Subsidiary without
equally and ratably securing the Securities by a lien ranking ratably with and
equal to (or at the Issuer's option prior to) such secured Indebtedness. The
foregoing restriction, however, will not apply to:
(a) liens existing on the date of this Indenture;
(b) liens on any assets of any corporation existing at the time such
corporation becomes a Consolidated Subsidiary;
(c) liens on any assets existing at the time of acquisition of such
assets by the Issuer or a Consolidated Subsidiary, or liens to secure the
payment of all or any part of the purchase price of such assets upon the
acquisition of such assets by the Issuer or a Consolidated Subsidiary or to
secure any indebtedness incurred or guaranteed by the Issuer or a
Consolidated Subsidiary prior to, at the time of, or within 360 days after
such acquisition (or in the case of real property, the completion of
construction (including any improvements on an existing asset) or
commencement of full operation of such asset, whichever is later) which
indebtedness is incurred or guaranteed for the purpose of financing all or
any part of the purchase price thereof or, in the case of real property,
construction or improvements thereon; PROVIDED, HOWEVER, that in the case
of any such acquisition, construction or improvement, the lien shall not
apply to any assets theretofore owned by the Issuer or a Consolidated
Subsidiary, other than, in the case of any such construction or
improvement, any real property on which the property so constructed, or the
improvement, is located;
(d) liens on any assets to secure indebtedness of a Consolidated
Subsidiary to the Issuer or to another wholly-owned domestic Subsidiary;
(e) liens on any assets of a corporation existing at the time such
corporation is merged into or consolidated with the Issuer or a Subsidiary
or at the time of a purchase, lease or other acquisition of the assets of a
corporation or firm
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as an entirety or substantially as an entirety by the Issuer or a
Subsidiary;
(f) liens on any assets of the Issuer or a Consolidated Subsidiary in
favor of the United States of America or any State thereof, or any
department, agency or instrumentality or political subdivision of the
United States of America or any State thereof, or in favor of any other
country, or any political subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or statute or to secure
any indebtedness incurred or guaranteed for the purpose of financing all or
any part of the purchase price (or, in the case of real property, the cost
of construction), of the assets subject to such liens (including, but not
limited to, liens incurred in connection with pollution control, industrial
revenue or similar financings);
(g) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any lien referred to in
the foregoing clauses (a) to (f), inclusive; PROVIDED, HOWEVER, that the
principal amount of indebtedness secured thereby shall not exceed the
principal amount of indebtedness so secured at the time of such extension,
renewal or replacement and that such extension, renewal or replacement
shall be limited to all or a part of the assets which secured the lien so
extended, renewed or replaced (plus improvements and construction on such
real property);
(h) liens imposed by law, such as mechanics', workmen's, repairmen's,
materialmen's, carriers', warehousemen's, vendors' or other similar liens
arising in the ordinary course of business, or governmental (federal, state
or municipal) liens arising out of contracts for the sale of products or
services by the Issuer or any Consolidated Subsidiary, or deposits or
pledges to obtain the release of any of the foregoing liens;
(i) pledges, liens or deposits under worker's compensation laws or
similar legislation and liens or judgments thereunder which are not
currently dischargeable, or in connection with bids, tenders, contracts
(other than for the payment of money) or leases to which the Issuer or any
Consolidated Subsidiary is a party, or to secure public or statutory
obligations of the Issuer or any Consolidated Subsidiary, or in connection
with
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obtaining or maintaining self-insurance or to obtain the benefits of any
law, regulation or arrangement pertaining to unemployment insurance, old
age pensions, social security or similar matters, or to secure surety,
appeal or customs bonds to which the Issuer or any Consolidated Subsidiary
is a party, or in litigation or other proceedings such as, but not limited
to, interpleader proceedings, and other similar pledges, liens or deposits
made or incurred in the ordinary course of business;
(j) liens created by or resulting from any litigation or other
proceeding which is being contested in good faith by appropriate
proceedings, including liens arising out of judgments or awards against the
Issuer or any Consolidated Subsidiary with respect to which the Issuer or
such Consolidated Subsidiary is in good faith prosecuting an appeal or
proceedings for review or for which the time to make an appeal has not yet
expired; or final unappealable judgment liens which are satisfied within 15
days of the date of judgment; or liens incurred by the Issuer or any
Consolidated Subsidiary for the purpose of obtaining a stay or discharge in
the course of any litigation or other proceeding to which the Issuer or
such Consolidated Subsidiary is a party; or
(k) liens for taxes or assessments or governmental charges or levies
not yet due or delinquent, or which can thereafter be paid without penalty,
or which are being contested in good faith by appropriate proceedings;
landlord's liens on property held under lease; and any other liens or
charges incidental to the conduct of the business of the Issuer or any
Consolidated Subsidiary or the ownership of the assets of any of them which
were not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not, in the opinion of the
Issuer, materially impair the use of such assets in the operation of the
business of the Issuer or such Consolidated Subsidiary or the value of such
assets for the purposes of such business.
Notwithstanding the restrictions set forth in the preceding
paragraph, the Issuer or any Consolidated Subsidiary will be permitted to
create or assume any Indebtedness which is secured by a lien without equally
and ratably securing the Securities, provided that at the time of such creation
or assumption, and after giving effect thereto,
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Exempted Debt does not exceed 10% of Consolidated Net Tangible Assets.
SECTION 3.10 LIMITATION ON SALE AND LEASE-BACK. The Issuer will
not, nor will it permit any Consolidated Subsidiary to, enter into any sale and
lease-back transaction with respect to any assets, other than any such
transaction involving a lease for a term of not more than three years, unless
either (a) the Issuer or such Consolidated Subsidiary would be entitled to
incur Indebtedness secured by a lien on the assets to be leased, in an amount
at least equal to the Attributable Debt with respect to such sale and
lease-back transaction, without equally and ratably securing the Securities,
pursuant to clauses (a) through (k) inclusive of Section 3.9, or (b) the
proceeds of the sale of the assets to be leased are at least equal to the fair
value of such assets (as determined by the Board of Directors of the Issuer)
and the proceeds are applied to the purchase or acquisition (or, in the case of
property, the construction) of assets or to the retirement (other than at
maturity or pursuant to a mandatory sinking fund or redemption provision) of
Senior Funded Indebtedness. This limitation, however, will not apply if at the
time the Issuer or any Consolidated Subsidiary enters into such sale and
lease-back transaction, and after giving effect thereto, Exempted Debt does not
exceed 10% of Consolidated Net Tangible Assets.
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
-------------------------------------------
SECTION 4.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. "Event of Default" with respect to Securities of any series
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any instalment of interest upon any
of the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal,
or premium, if any, on any of the Securities of such series as and when the
same shall
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become due and payable either at maturity, upon redemption, by declaration
or otherwise; or
(c) default in the payment of any sinking fund instalment as and
when the same shall become due and payable by the terms of the Securities
of such series; or
(d) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements of the Issuer in respect of the
Securities of such series (other than a covenant or warranty in respect of
the Securities of such series a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with) for a period
of 90 days after the date on which written notice specifying such failure,
stating that such notice is a "Notice of Default" hereunder and demanding
that the Issuer remedy the same, has been given by registered or certified
mail, return receipt requested, to the Issuer by the Trustee, or to the
Issuer and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of all series affected
thereby; or
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Issuer or
for any substantial part of its property or ordering the winding up or
liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary
case under any such law, or consent to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Issuer or for any substantial
part of its property, or make any general assignment for the benefit of
creditors; or
(g) any other Event of Default provided in the supplemental
indenture or resolution of the Board of Directors under which such series
of Securities is issued or in the form of Security for such series.
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If an Event of Default described in clauses (a), (b), (c), (d) or (g) above (if
the Event of Default under clause (d) or (g) is with respect to less than all
series of Securities then Outstanding) occurs and is continuing, then, and in
each and every such case, unless the principal of all of the Securities of such
series shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Securities of
such series then Outstanding hereunder (each such series voting as a separate
class) by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all
Securities of such series and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described in clause (d) or
(g) (if the Event of Default under clause (d) or (g), as the case may be, is
with respect to all series of Securities then Outstanding) or (e) or (f) occurs
and is continuing, then and in each and every such case, unless the principal
of all the Securities shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of
all the Securities then Outstanding hereunder (treated as one class), by notice
in writing to the Issuer (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if any Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Securities then outstanding and interest accrued thereon,
if any, to be due and payable immediately, and upon any such declaration the
same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition
that if, at any time after the principal (or, if the Securities are Original
Issue Discount Securities, such portion of the principal as may be specified in
the terms thereof) of the Securities of any series (or of all the Securities,
as the case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained
or entered as hereinafter provided, the Issuer shall pay or shall deposit with
the Trustee a sum sufficient to pay all matured instalments of interest upon
all the Securities of such series (or of all the Securities, as the case may
be) and the principal of any and all Securities of such series (or of all the
Securities, as the case may be) which shall have become due otherwise than by
acceleration (with interest upon such principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue instalments of
interest, at the same rate as the
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rate of interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series (or at the respective
rates of interest or Yields to Maturity of all the Securities, as the case may
be) to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of negligence or bad faith,
and if any and all Events of Default under the Indenture, other than the
non-payment of the principal of Securities which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
herein--then and in every such case the holders of a majority in aggregate
principal amount of all the Securities of such series, each series voting as a
separate class (or of all the Securities, as the case may be, voting as a
single class), then outstanding, by written notice to the Issuer and to the
Trustee, may waive all defaults with respect to such series (or with respect to
all the Securities, as the case may be) and rescind and annul such declaration
and its consequences, but no such waiver or rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been accelerated
and declared due and payable pursuant to the provisions hereof, then, from and
after such declaration, unless such declaration has been rescinded and
annulled, the principal amount of such Original Issue Discount Securities shall
be deemed, for all purposes hereunder, to be such portion of the principal
thereof as shall be due and payable as a result of such acceleration, and
payment of such portion of the principal thereof as shall be due and payable as
a result of such acceleration, together with interest, if any, thereon and all
other amounts owing thereunder, shall constitute payment in full of such
Original Issue Discount Securities.
SECTION 4.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY
PROVE DEBT. The Issuer covenants that (a) in case default shall be made in the
payment of any instalment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity
of the Securities of such series or upon any redemption or by declaration or
otherwise--then upon demand of the Trustee, the Issuer will pay to the
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Trustee for the benefit of the Holders of the Securities of such series the
whole amount that then shall have become due and payable on all Securities of
such series for principal or interest, as the case may be (with interest to the
date of such payment upon the overdue principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue instalments of
interest at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities of such
series); and in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation
to the Trustee and each predecessor Trustee, their respective agents, attorneys
and counsel, and any expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of its
negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
holders, whether or not the principal of and interest on the Securities of such
series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or other obligor
upon such Securities and collect in the manner provided by law out of the
property of the Issuer or other obligor upon such Securities, wherever
situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer
or any other obligor upon the Securities under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to
the Issuer or other obligor upon the Securities of any series, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of any Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the
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provisions of this Section, shall be entitled and empowered, by intervention in
such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid in respect of the
Securities of any series, and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Securityholders allowed in
any judicial proceedings relative to the Issuer or other obligor upon the
Securities of any series, or to the creditors or property of the Issuer or
such other obligor,
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the holders of the Securities of any series in any election of
a trustee or a standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable
or deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Securityholders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith and all other amounts
due to the Trustee or any predecessor Trustee pursuant to Section 5.6.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan
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of reorganization, arrangement, adjustment or composition affecting the
Securities of any series or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof on any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the holders of the Securities in respect of which such action was
taken.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Securities in respect to which such action was taken, and it
shall not be necessary to make any holders of such Securities parties to any
such proceedings.
SECTION 4.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee pursuant to this Article in respect of any series shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment, or issuing
Securities of such series in reduced principal amounts in exchange for the
presented Securities of like series if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such
series in respect of which monies have been collected, including reasonable
compensation to the Trustee and each predecessor Trustee and their
respective agents and attorneys and of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith, and all other
amounts due to the Trustee or any predecessor Trustee pursuant to Section
5.6;
SECOND: In case the principal of the Securities of such series
in respect of which moneys have been
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collected shall not have become and be then due and payable, to the payment
of interest on the Securities of such series in default in the order of the
maturity of the instalments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
instalments of interest at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount Securities) specified
in such Securities, such payments to be made ratably to the persons
entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for principal and interest,
with interest upon the overdue principal, and (to the extent that such
interest has been collected by the Trustee) upon overdue instalments of
interest at the same rate as the rate of interest or Yield to Maturity (in
the case of Original Issue Discount Securities) specified in the Securities
of such series; and in case such moneys shall be insufficient to pay in
full the whole amount so due and unpaid upon the Securities of such series,
then to the payment of such principal and interest or yield to maturity,
without preference or priority of principal over interest or yield to
maturity, or of interest or yield to maturity over principal, or of any
instalment of interest over any other instalment of interest, or of any
Security of such series over any other Security of such series, ratably to
the aggregate of such principal and accrued and unpaid interest or yield to
maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer or
any other person lawfully entitled thereto.
SECTION 4.4 SUITS FOR ENFORCEMENT. In case an Event of Default
has occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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SECTION 4.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the Trustee, then and in
every such case the Issuer and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceedings had been taken.
SECTION 4.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No holder
of any Security of any series shall have any right by virtue or by availing of
any provision of this Indenture to institute any action or proceeding at law or
in equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official or for any other remedy hereunder, unless such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the holders of
not less than 25% in aggregate principal amount of the Securities of such
series then outstanding shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute any such action or proceeding and
no direction inconsistent with such written request shall have been given to
the Trustee pursuant to Section 4.9; it being understood and intended, and
being expressly covenanted by the taker and Holder of every Security with every
other taker and Holder and the Trustee, that no one or more Holders of
Securities of any series shall have any right in any manner whatever by virtue
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other such Holder of Securities, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Securities of
the applicable series. For the protection and enforcement of the provisions of
this Section, each and every Securityholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
SECTION 4.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE
CERTAIN SUITS. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder of any Security to receive
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payment of the principal of and interest on such Security on or after the
respective due dates expressed in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 4.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. Except as provided in Section 4.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Securityholder to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 4.6, every power and remedy given by this
Indenture or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.
SECTION 4.9 CONTROL BY SECURITYHOLDERS. The Holders of a
majority in aggregate principal amount of the Securities of each series
affected (with each series voting as a separate class) at the time outstanding
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
this Indenture; PROVIDED that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and PROVIDED FURTHER
that (subject to the provisions of Section 5.1) the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors,
the executive committee, or a trust committee of directors or responsible
officers of the Trustee shall determine that the action or proceedings so
directed would involve the Trustee in personal liability or if the Trustee in
good faith shall so determine that the actions or forbearances specified in or
pursuant to such direction would be unduly prejudicial to the interests of
Holders of the Securities of all series so affected not
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joining in the giving of said direction, it being understood that (subject to
Section 5.1) the Trustee shall have no duty to ascertain whether or not such
actions or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 4.10 WAIVER OF PAST DEFAULTS. Prior to a declaration of
the acceleration of the maturity of the Securities of any series as provided in
Section 4.1, the Holders of a majority in aggregate principal amount of the
Securities of such series at the time Outstanding (each such series voting as a
separate class) may on behalf of the Holders of all the Securities of such
series waive any past default or Event of Default described in clause (d) or
(g) of Section 4.1 which relates to less than all series of Securities then
Outstanding, except a default in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of each Holder affected
as provided in Section 7.2. Prior to a declaration of acceleration of the
maturity of the Securities of any series as provided in Section 4.1, the
Holders of Securities of a majority in principal amount of all the Securities
then Outstanding (voting as one class) may on behalf of all Holders waive any
past default or Event of Default referred to in said clause (d) or (g) which
relates to all series of Securities then Outstanding, or described in clause
(e) or (f) of Section 4.1, except a default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Security affected as provided in Section 7.2. In the case of
any such waiver, the Issuer, the Trustee and the Holders of the Securities of
each series affected shall be restored to their former positions and rights
hereunder, respectively.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 4.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD
IN CERTAIN CIRCUMSTANCES. The Trustee shall give to the Securityholders of any
series, as the names and addresses of such Holders appear on the registry
books, notice by mail of all defaults known to the Trustee which have occurred
with respect to such series, such notice to be transmitted within 90 days after
the occurrence
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thereof, unless such defaults shall have been cured before the giving of such
notice (the term "default" or "defaults" for the purposes of this Section and
Section 5.2(h) being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
PROVIDED that, except in the case of default in the payment of the principal of
or interest on any of the Securities of such series, or in the payment of any
sinking or purchase fund instalment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee
of directors or trustees and/or responsible officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the
Securityholders of such series.
SECTION 4.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO
PAY COSTS. All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any series holding in the aggregate more than 10%
in aggregate principal amount of the Securities of such series, or, in the case
of any suit relating to or arising under clauses (d) or (g) of Section 4.1 (if
the suit relates to Securities of more than one but less than all series), 10%
in aggregate principal amount of Securities Outstanding affected thereby, or in
the case of any suit relating to or arising under clauses (d) or (g) (if the
suit relates to all the Securities then Outstanding), (e) or (f) of Section
4.1, 10% in aggregate principal amount of all Securities Outstanding, or to any
suit instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security.
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ARTICLE FIVE
CONCERNING THE TRUSTEE
----------------------
SECTION 5.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect
to the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any Series shall be determined solely
by the express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any statements, certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but
in the case of any such statements, certificates or opinions which
by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the
same to determine
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whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders pursuant to Section 4.9 relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it.
The provisions of this Section 5.1 are in furtherance of and
subject to Sections 315 and 316 of the Trust Indenture Act of 1939.
SECTION 5.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 5.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may
be evidenced to the Trustee by a copy thereof certified by the secretary or
an assistant secretary of the Issuer;
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(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order
or direction of any of the Securityholders pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within
the discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing so
to do by the holders of not less than a majority in aggregate principal
amount of the Securities of all series affected then outstanding; PROVIDED
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Issuer or, if paid by the Trustee
or any predecessor trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder; and
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(h) except for the defaults set forth in Section 4.1(a), (b) and
(c), the Trustee will not have knowledge of a default unless notified
thereof.
SECTION 5.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof.
SECTION 5.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS,
ETC. The Trustee or any agent of the Issuer or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not the Trustee or such agent and may
otherwise deal with the Issuer and receive, collect, hold and retain
collections from the Issuer with the same rights it would have if it were not
the Trustee or such agent.
SECTION 5.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
Section 9.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 5.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS
PRIOR CLAIM. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except to the extent any such expense, disbursement or advance may arise from
its negligence or bad faith. The Issuer also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against,
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any loss, liability or expense arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and the
performance of its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim of liability in the
premises, except to the extent such loss, liability or expense is due to the
negligence or bad faith of the Trustee or such predecessor Trustee. The
obligations of the Issuer under this Section to compensate and indemnify the
Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. Such additional indebtedness shall be a
senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Securities, and the Securities are hereby
subordinated to such senior claim.
SECTION 5.7 RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE,
ETC. Subject to Sections 5.1 and 5.2, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable that
a matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof.
SECTION 5.8 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The
Trustee for each series of Securities hereunder shall at all times be a
corporation having a combined capital and surplus of at least $50,000,000, and
which is eligible in accordance with the provisions of Section 310(a) of the
Trust Indenture Act of 1939. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of a
Federal, State or District of Columbia supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
SECTION 5.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE. (a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign with
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respect to one or more or all series of Securities by giving written notice of
resignation to the Issuer and by mailing notice thereof by first class mail to
Holders of the applicable series of Securities at their last addresses as they
shall appear on the Security register. Upon receiving such notice of
resignation, the Issuer shall promptly appoint a successor trustee or trustees
with respect to the applicable series by written instrument in duplicate,
executed by authority of the Board of Directors, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee or trustees. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee, or
any Securityholder who has been a bona fide Holder of a Security or Securities
of the applicable series for at least six months may, subject to the provisions
of Section 4.12, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 with respect to any
series of Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or Securities
of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 310(a) of the Trust Indenture Act of 1939 and
shall fail to resign after written request therefor by the Issuer or by any
Securityholder; or
(iii) the Trustee shall become incapable of acting with respect
to any series of Securities, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written
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instrument, in duplicate, executed by order of the Board of Directors of the
Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to Section 315(e) of
the Trust Indenture Act of 1939, any Securityholder who has been a bona fide
Holder of a Security or Securities of such series for at least six months may
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee with respect to such series. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of
the Securities of each series at the time outstanding may at any time remove
the Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 6.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 5.9 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
5.10.
SECTION 5.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 5.9 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as
if originally named as trustee for such series hereunder; but, nevertheless, on
the written request of the Issuer or of the successor trustee, upon payment of
its charges then unpaid, the trustee ceasing to act shall, subject to Section
9.4, pay over to the successor trustee all moneys at the time held by it
hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon
request of any such successor trustee, the Issuer shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights
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and powers. Any trustee ceasing to act shall, nevertheless, retain a prior
claim upon all property or funds held or collected by such trustee to secure
any amounts then due it pursuant to the provisions of Section 5.6.
If a successor trustee is appointed with respect to the Securities
of one or more (but not all) series, the Issuer, the predecessor Trustee and
each successor trustee with respect to the Securities of any applicable series
shall execute and deliver an indenture supplemental hereto which shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the predecessor Trustee with respect
to the Securities of any series as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such trustees co-trustees of the same
trust and that each such trustee shall be trustee of a trust or trusts under
separate indentures.
Upon acceptance of appointment by any successor trustee as
provided in this Section 5.10, the Issuer shall mail notice thereof by
first-class mail to the Holders of Securities of any series for which such
successor trustee is acting as trustee at their last addresses as they shall
appear in the Security register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
5.9. If the Issuer fails to mail such notice within ten days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Issuer.
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, PROVIDED that such
corporation shall be eligible under the provisions of Section 5.8, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of
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the Securities of any series shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication
of any predecessor Trustee and deliver such Securities so authenticated; and,
in case at that time any of the Securities of any series shall not have been
authenticated, any successor to the Trustee may authenticate such Securities
either in the name of any predecessor hereunder or in the name of the successor
Trustee; and in all such cases such certificate shall have the full force which
it is anywhere in the Securities of such series or in this Indenture provided
that the certificate of the Trustee shall have; PROVIDED, that the right to
adopt the certificate of authentication of any predecessor Trustee or to
authenticate Securities of any series in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 5.12. INDENTURES NOT CREATING POTENTIAL CONFLICTING
INTERESTS FOR THE TRUSTEE. The following indenture is hereby specifically
described for the purposes of Section 310(b)(1) of the Trust Indenture Act of
1939: Indenture dated as of March 1, 1992 between the Issuer and Bank One,
Indianapolis, NA, as Trustee, pursuant to which the Issuer's 8% Notes Due March
1, 1997 were issued.
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
------------------------------
SECTION 6.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Sections 5.1 and 5.2) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Article.
SECTION 6.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES; RECORD DATE. Subject to Sections 5.1 and 5.2, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be
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prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Securities shall be proved by the Security register or
by a certificate of the registrar thereof. The Issuer may set a record date
for purposes of determining the identity of holders of Securities of any series
entitled to vote or consent to any action referred to in Section 6.1, which
record date may be set at any time or from time to time by notice to the
Trustee, for any date or dates (in the case of any adjournment or
reconsideration) not more than 60 days nor less than five days prior to the
proposed date of such vote or consent, and thereafter, notwithstanding any
other provisions hereof, only holders of Securities of such series of record on
such record date shall be entitled to so vote or give such consent or revoke
such vote or consent.
SECTION 6.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Security.
SECTION 6.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING.
In determining whether the Holders of the requisite aggregate principal amount
of Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuer or
any other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which the Trustee knows are so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the
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pledgee is not the Issuer or any other obligor upon the Securities or any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance with
such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 5.1 and
5.2, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 6.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
6.1, of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by the
Holder of any Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Security and of any Securities
issued in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon any such Security. Any action taken by
the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the Holders of all the Securities affected by such action.
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 7.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:
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(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any property
or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Eight;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as its Board of Directors and the
Trustee shall consider to be for the protection of the Holders of
Securities, and to make the occurrence, or the occurrence and continuance,
of a default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of
the several remedies provided in this Indenture as herein set forth;
PROVIDED, that in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal amount
of the Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in
any supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Board of Directors may deem necessary or desirable and
which shall not adversely affect the interests of the Holders of the
Securities in any material respect;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 2.3; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or
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facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Section 5.10.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 7.2.
SECTION 7.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. With the consent (evidenced as provided in Article Six) of
the Holders of not less than 66 2/3 percent in aggregate principal amount of
the Securities at the time Outstanding of all series affected by such
supplemental indenture (voting as one class), the Issuer, when authorized by a
resolution of its Board of Directors, and the Trustee may, from time to time
and at any time, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series; PROVIDED, that no such supplemental indenture
shall (a) extend the final maturity of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof or reduce the
amount of the principal of an Original Issue Discount Security that would be
due and payable upon an acceleration of the maturity thereof pursuant to
Section 4.1 or the amount thereof provable in bankruptcy pursuant to Section
4.2, or impair or affect the right of any Securityholder to institute suit for
the payment thereof or, if the Securities provide therefor, any right of
repayment at the option of the Securityholder without the consent of the Holder
of each Security so affected, or (b) reduce the aforesaid percentage of
Securities of any series, the consent of the Holders of which is required for
any such supplemental indenture, without the consent of the Holders of each
Security so affected.
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Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the secretary or an assistant
secretary of the Issuer authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid and other documents, if any, required by Section
6.1, the Trustee shall join with the Issuer in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first class mail to the Holders of Securities of
each series affected thereby at their addresses as they shall appear on the
registry books of the Issuer, setting forth in general terms the substance of
such supplemental indenture. Any failure of the Issuer to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
SECTION 7.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Issuer and the Holders of
Securities of each series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 7.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee,
subject to the provisions of Sections 5.1 and 5.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Seven complies with
the applicable provisions of this Indenture.
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SECTION 7.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken at any such meeting. If the Issuer or the Trustee shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then outstanding.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
-----------------------------------------
SECTION 8.1 ISSUER MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. The
Issuer covenants that it will not merge or consolidate with any other
corporation or sell, lease or convey all or substantially all of its assets to
any Person, unless (i) either the Issuer shall be the continuing corporation,
or the successor corporation or the Person which acquires by sale, lease or
conveyance substantially all the assets of the Issuer (if other than the
Issuer) shall be a corporation organized under the laws of the United States of
America or any State thereof or the District of Columbia and shall expressly
assume the due and punctual payment of the principal of and interest on all the
Securities, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Issuer, by supplemental indenture satisfactory to
the Trustee, executed and delivered to the Trustee by such corporation, and
(ii) the Issuer or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 8.2 SUCCESSOR CORPORATION SUBSTITUTED. In case of any
such consolidation, merger, sale or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Issuer prior to such
succession any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Issuer
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and delivered to the Trustee; and, upon the order of such successor corporation
instead of the Issuer and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Issuer to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Securities so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Securities theretofore or thereafter issued in accordance with the terms
of this Indenture as though all of such Securities had been issued at the date
of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Issuer or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
SECTION 8.3 OPINION OF COUNSEL TO TRUSTEE. The Trustee, subject
to the provisions of Sections 5.1 and 5.2, may receive an Opinion of Counsel,
prepared in accordance with Section 10.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
-----------------
SECTION 9.1 SATISFACTION AND DISCHARGE OF INDENTURE. If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities of any series outstanding hereunder (other than
Securities of such series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9) as and when the same
shall have become due and payable, or (b) the Issuer shall have delivered to
the Trustee for cancellation all securities of any series theretofore
authenticated (other than any Securities of such
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series which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.9) or (c) (i) all the securities
of such series not theretofore delivered to the Trustee for cancellation shall
have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 9.4) sufficient to pay at maturity or upon redemption
all Securities of such series (other than any Securities of such series which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.9) not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due on or prior
to such date of maturity as the case may be, and if, in any such case, the
Issuer shall also pay or cause to be paid all other sums payable hereunder by
the Issuer with respect to Securities of such series, then this Indenture shall
cease to be of further effect with respect to Securities of such series (except
as to (i) rights of registration of transfer and exchange of securities of such
series, and the Issuer's right of optional redemption, if any, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of holders to receive payments of principal thereof and interest
thereon, and remaining rights of the holders to receive mandatory sinking fund
payments, if any, (iv) the rights, obligations and immunities of the Trustee
hereunder and (v) the rights of the Securityholders of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them), and the Trustee, on demand of the Issuer
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Issuer, shall execute proper instruments acknowledging
such satisfaction of and discharging this Indenture with respect to such
series; PROVIDED, that the rights of Holders of the Securities to receive
amounts in respect of principal of and interest on the Securities held by them
shall not be delayed longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Securities are listed. The
Issuer agrees to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Securities of such series.
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SECTION 9.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT
OF SECURITIES. Subject to Section 9.4, all moneys deposited with the Trustee
pursuant to Section 9.1 shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Issuer
acting as its own paying agent), to the Holders of the particular Securities of
such series for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such money need not be segregated from other funds
except to the extent required by law.
SECTION 9.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under the
provisions of this Indenture with respect to such series of Securities shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon
such paying agent shall be released from all further liability with respect to
such moneys.
SECTION 9.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT
UNCLAIMED FOR THREE YEARS. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest on any
Security of any series and not applied but remaining unclaimed for three years
after the date upon which such principal or interest shall have become due and
payable, shall, upon the written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the Holder of the Security of such series shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for
any payment which such Holder may be entitled to collect, and all liability of
the Trustee or any paying agent with respect to such moneys shall thereupon
cease.
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ARTICLE TEN
MISCELLANEOUS PROVISIONS
------------------------
SECTION 10.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
OF ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the
holders thereof and as part of the consideration for the issue of the
Securities.
SECTION 10.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF
PARTIES AND SECURITYHOLDERS. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and their successors and the Holders
of the Securities, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities.
SECTION 10.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 10.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND
SECURITYHOLDERS. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer
with the Trustee) to Cardinal Distribution, Inc., 655 Metro Place South, Suite
925, Dublin, Ohio 43017, Attention: Chairman. Any notice, direction, request
or demand by the Issuer or any Securityholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
made at the Corporate Trust Office.
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Where this Indenture provides for notice to Holders, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Security register. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Issuer
and Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 10.5 OFFICERS' CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent have
been complied with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
person making such certificate or opinion has read such covenant or condition,
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been
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complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate, statement or opinion of counsel may be based,
insofar as it relates to factual matters, information with respect to which is
in the possession of the Issuer, upon the certificate, statement or opinion of
or representations by an officer of officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer
or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 10.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If
the date of maturity of interest on or principal of the Securities of any
series or the date fixed for redemption or repayment of any such Security shall
not be a Business Day, then payment of interest or principal need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period after such date.
SECTION 10.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT OF 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture
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by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of
1939 (an "incorporated provision"), such incorporated provision shall control.
SECTION 10.8 OHIO LAW TO GOVERN. This Indenture and each
Security shall be deemed to be a contract under the laws of the State of Ohio,
and for all purposes shall be construed in accordance with the laws of such
State, except as may otherwise be required by mandatory provisions of law.
SECTION 10.9 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 10.10 EFFECT OF HEADINGS. The Article and Section
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES AND SINKING FUNDS
------------------------------------------
SECTION 11.1 APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
2.3 for Securities of such series.
SECTION 11.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice
of redemption to the Holders of Securities of any series to be redeemed as a
whole or in part at the option of the Issuer shall be given by mailing notice
of such redemption by first class mail, postage prepaid, at least 30 days and
not more than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear upon the
registry books. Any notice which is mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of
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payment, that payment will be made upon presentation and surrender of such
Securities, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest accrued to the date
fixed for redemption will be paid as specified in such notice and that on and
after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a series is to be redeemed in part
only the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the Issuer.
At least one Business Day prior to the redemption date specified
in the notice of redemption given as provided in this Section, the Issuer will
deposit with the Trustee or with one or more paying agents (or, if the Issuer
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 3.4) an amount of money sufficient to redeem on the
redemption date all the Securities of such series so called for redemption at
the appropriate redemption price, together with accrued interest to the date
fixed for redemption. If less than all the outstanding Securities of a series
are to be redeemed, the Issuer will deliver to the Trustee at least 70 days
prior to the date fixed for redemption an Officers' Certificate stating the
aggregate principal amount of Securities to be redeemed.
If less than all the Securities of a series are to be redeemed,
the Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part. Securities may
be redeemed in part in multiples equal to the minimum authorized denomination
for Securities of such series or any multiple thereof. The Trustee shall
promptly notify the Issuer in writing of the Securities of such series selected
for redemption and, in the case of any Securities of such series selected for
partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
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SECTION 11.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued to said
date) interest on the Securities or portions of Securities so called for
redemption shall cease to accrue and, except as provided in Sections 5.5 and
9.4, such Securities shall cease from and after the date fixed for redemption
to be entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities or the specified portions
thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption;
PROVIDED that any semiannual payment of interest becoming due on the date fixed
for redemption shall be payable to the Holders of such Securities registered as
such on the relevant record date subject to the terms and provisions of Section
2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by the Security.
Upon presentation of any Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver to or on
the order of the Holder thereof, at the expense of the Issuer, a new Security
or Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 11.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Issuer and
delivered to the Trustee at least 40 days prior to the last date on which
notice of redemption may be given as being owned of record and beneficially by,
and not pledged or hypothecated by either (a) the Issuer or (b) an entity
specifically identified in such written statement
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directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 11.5 MANDATORY AND OPTIONAL SINKING FUNDS. The minimum
amount of any sinking fund payment provided for by the terms of Securities of
any series is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.7, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or
(c) receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee a written
statement (which need not contain the statements required by Section 10.5)
signed by an authorized officer of the Issuer (a) specifying the portion of the
mandatory sinking fund payment to be satisfied by payment of cash and the
portion to be satisfied by credit of Securities of such series, (b) stating
that none of the Securities of such series has theretofore been so credited,
(c) stating that no defaults in the payment of interest or Events of Default
with respect to such series have occurred (which have not been waived or cured)
and are continuing and (d) stating whether or not the Issuer intends to
exercise its right to make an optional sinking fund payment with respect to
such series and, if so, specifying the amount of such optional sinking fund
payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Issuer to be entitled
to credit therefor as aforesaid which have not theretofore been delivered to
the
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<PAGE> 65
Trustee shall be delivered for cancellation pursuant to Section 2.10 to the
Trustee with such written statement (or reasonably promptly thereafter if
acceptable to the Trustee). Such written statement shall be irrevocable and
upon its receipt by the Trustee the Issuer shall become unconditionally
obligated to make all the cash payments or payments therein referred to, if
any, on or before the next succeeding sinking fund payment date. Failure of
the Issuer, on or before any such sixtieth day, to deliver such written
statement and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Issuer (i) that the mandatory sinking fund payment
for such series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of
such series in respect thereof and (ii) that the Issuer will make no optional
sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date plus
any unused balance of any preceding sinking fund payments made in cash shall
exceed $50,000 (or a lesser sum if the Issuer shall so request) with respect to
the Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $50,000 or less and the
Issuer makes no such request then it shall be carried over until a sum in
excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section 11.2, for redemption on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash,
as nearly as may be, and shall (if requested in writing by the Issuer) inform
the Issuer of the serial numbers of the Securities of such series (or portions
thereof) so selected. Securities of any series which are (a) owned by the
Issuer or an entity known by the Trustee to be directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer, as shown by the Security register, and not known to the Trustee to
have been pledged or hypothecated by the Issuer or any such entity or (b)
identified in an Officers' Certificate at least 60 days prior to the sinking
fund payment date as being beneficially owned by, and not pledged or
hypothecated by, the Issuer or an entity directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer shall
be excluded from Securities of such series eligible for selection for
redemption. The Trustee, in the name and at the expense of the Issuer (or the
Issuer, if it
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<PAGE> 66
shall so request the Trustee in writing) shall cause notice of redemption of
the Securities of such series to be given in substantially the manner provided
in Section 11.2 (and with the effect provided in Section 11.3) for the
redemption of Securities of such series in part at the option of the Issuer.
The amount of any sinking fund payments not so applied or allocated to the
redemption of Securities of such series shall be added to the next cash sinking
fund payment for such series and, together with such payment, shall be applied
in accordance with the provisions of this Section. Any and all sinking fund
moneys held on the stated maturity date of the Securities of any particular
series (or earlier, if such maturity is accelerated), which are not held for
the payment or redemption of particular Securities of such series shall be
applied, together with other moneys, if necessary, sufficient for the purpose,
to the payment of the principal of, and interest on, the Securities of such
series at maturity.
At least one Business Day before each sinking fund payment date,
the Issuer shall pay to the Trustee in cash or shall otherwise provide for the
payment of all interest accrued to the date fixed for redemption on Securities
to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or mail any notice of
redemption of Securities for such series by operation of the sinking fund
during the continuance of a default in payment of interest on such Securities
or of any Event of Default except that, where the mailing of notice of
redemption of any Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities, provided that it shall
have received from the Issuer a sum sufficient for such redemption. Except as
aforesaid, any moneys in the sinking fund for such series at the time when any
such default or Event of Default shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event
of Default, be deemed to have been collected under Article Four and held for
the payment of all such Securities. In case such Event of Default shall have
been waived as provided in Section 4.9 or the default cured on or before the
sixtieth day preceding the sinking fund payment date in any year, such moneys
shall thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
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<PAGE> 67
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of May 1, 1993.
CARDINAL DISTRIBUTION, INC.
By /s/ Thomas S. Summer
____________________________
Vice President and Treasurer
Attest:
By /s/ George H. Bennett, Jr.
___________________________
Assistant Secretary
BANK ONE, INDIANAPOLIS, NA
By /s/ Christopher R. Buechner
______________________________
[CORPORATE SEAL] Christopher R. Buechner
Assistant Vice President
and Trust Officer
Attest:
By /s/ John H. Pease
________________________________
John H. Pease
Vice President and Trust Officer
60
<PAGE> 1
Exhibit 10.01
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT by and among Whitmire Distribution Corporation, a
Delaware corporation (the "Company"), the undersigned executive (the
"Executive"), and Cardinal Distribution, Inc. ("Cardinal"), dated as
of the 11th day of October, 1993.
WHEREAS, the Company has entered into an Agreement and Plan of
Reorganization (the "Merger Agreement") whereby Cardinal will acquire
all of the outstanding common stock of the Company (the
"Transaction"); and
WHEREAS, it is a condition to the consummation of the
Transaction that the Company enter into employment agreements with key
executives of the Company, including the Executive; and
WHEREAS, Cardinal desires to obtain for itself, through its
future ownership of the Company, the benefit of the Executive's
services as set forth in this Agreement; and
WHEREAS, the Company and the Executive desire to set forth in a
written agreement the terms and conditions under which the Executive
will continue to be employed by the Company after the Transaction;
<PAGE> 2
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EMPLOYMENT PERIOD. The Company shall employ the Executive,
and the Executive shall serve the Company, on the terms and conditions
set forth in this Agreement, for the period commencing on the
Effective Time (as that term is defined in the Merger Agreement) and
ending on the third anniversary of the Effective Time (the "Employment
Period").
2. POSITION AND DUTIES. (a) During the Employment Period, the
Executive shall be employed by the Company with such responsibilities
of an executive nature as may be determined from time to time by the
Company's Board of Directors or its lawfully designated representative
(the "Board").
(b) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the
Executive shall devote full business attention and time to the
business and affairs of the Company, using the Executive's best
efforts to carry out faithfully and efficiently the responsibilities
assigned to the Executive under this Agreement. It shall not be
considered a violation of the foregoing for the Executive to (i)
serve on corporate boards with the approval of Cardinal, (ii) serve on
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<PAGE> 3
civic or charitable boards or committees, (iii) deliver lectures or
fulfill speaking engagements and (iv) manage personal investments, so
long as such activities do not interfere with the performance of the
Executive's responsibilities under this Agreement.
(c) The Executive's services shall be performed primarily
at the location specified on Schedule A or any other location within
30 miles thereof, except as may be otherwise provided on Schedule A.
Travel in connection with the business of the Company may be
reasonably requested from time to time by the Board.
3. COMPENSATION. (a) BASE SALARY. During the Employment Period,
the Executive shall receive an annual base salary (the "Annual Base
Salary") in an amount not less than the amount specified on Schedule
A, payable in accordance with the Company's payroll practices for
executives, as in effect from time to time. During the Employment
Period, the Annual Base Salary shall be reviewed for possible increase
at least annually. Any increase in the Annual Base Salary shall not
limit or reduce any other obligation of the Company under this
Agreement. The Annual Base Salary shall not be reduced after any such
increase, unless the annual base salaries of all executives of
Cardinal and Company are proportionately reduced, and in any event
shall not be reduced below
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<PAGE> 4
the amount specified on Schedule A. After any such increase
(or decrease), the term "Annual Base Salary" shall refer to the
Annual Base Salary as so increased (or decreased).
(b) ANNUAL BONUS. In addition to the Annual Base Salary,
the Executive shall be eligible to receive annual bonuses (each, an
"Annual Bonus") as follows. The Executive shall be eligible to
receive an Annual Bonus (including, to the extent earned, both a
"base bonus" and a "flex bonus") for the plan year ending June 30,
1994 under the Company's Management Incentive Plan (calculated as
provided in the Merger Agreement) on terms and conditions consistent
with the Executive's participation in that plan immediately before the
beginning of the Employment Period (the "Company Bonus").
Thereafter, the Executive shall participate in the annual bonus plan
in which executives of Cardinal participate from time to time (each, a
"Cardinal Bonus Plan") with an initial target bonus under such plan as
set forth on Schedule A; PROVIDED, that with respect to any plan year
under a Cardinal Bonus Plan that begins before July 1, 1994 and ends
after June 30, 1994, the Executive shall receive a pro-rata amount
based on the portion of such plan year that occurs after June 30, 1994
and with respect to any plan year under a Cardinal Bonus Plan that
begins before and ends after the end of the Employment Period,
the Executive shall receive a pro-rata amount based on the portion of
such plan year that occurs
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<PAGE> 5
before the end of the Employment Period, payable at such time
as other bonuses are paid under the Cardinal Bonus Plan (but without
regard to any requirement that the recipient be employed by Cardinal
or any of the Affiliated Companies at the time of such payment).
(c) OTHER BENEFITS. During the Employment Period: (i) Prior to
July 1, 1994, the Company shall continue, and the Executive (and/or
the Executive's family to the extent so provided under the applicable
terms of such plans) shall be eligible to participate in and to
receive benefits under those welfare benefit, incentive, deferred
compensation, savings and retirement, and vacation plans of the
Company in effect on the date of this Agreement and listed in the
Whitmire Disclosure Schedule delivered under the Merger Agreement as
applying to Company executives; and (ii) thereafter, the Executive
shall be entitled to participate in the group health, life, disability
insurance, retirement savings and other employee benefit plans
(collectively, "Group Plans") generally offered to the Company's
employees in accordance with the standard terms and conditions of such
plans as in effect from time to time, which plans shall be
substantially equivalent in the aggregate to either (A) the Company's
Group Plans as in effect on the date of this Agreement or (B) the
Group Plans maintained from time to time by Cardinal and in which the
executives of Cardinal participate. In addition,
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<PAGE> 6
the Executive shall be eligible to participate in Cardinal's
Stock Incentive Plan, although actual awards and benefits, if any, to
be granted to the Executive thereunder shall be in the sole discretion
of Cardinal's Board of Directors.
(d) EXPENSES. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all normal
and customary expenses incurred by the Executive's duties under
this Agreement, provided that the Executive complies with the policies,
practices and procedures of the Company for submission of expense
reports, receipts, or similar documentation of such expenses.
(e) FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to the fringe benefits set forth on
Schedule B to this Agreement.
(f) VACATION. (i) During the Employment Period, (A) prior
to July 1, 1994, the Executive shall be entitled to annual paid
vacations based upon completed years of service with the Company and
its predecessors as provided in the vacation policy of the Company
in effect on the date hereof and (B) thereafter the Executive shall be
entitled to annual paid vacations as provided in the Company's
vacation policy in effect from time to time; PROVIDED, however, that
the annual vacations shall not in the aggregate be less than three
weeks
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<PAGE> 7
and that all of Executive's completed years of service with the
Company and its predecessors, and with Cardinal and any Affiliated
Companies, shall be used to determine the vacation to which the
Executive is from time to time entitled.
(ii) At the Effective Time (as defined in the Merger
Agreement), the Company shall pay the Executive in full for all
vacations accrued in calendar years prior to calendar 1993 and not yet
taken as of the Effective Time.
4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY.
The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period. The Company shall be
entitled to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability"
means that (i) the Executive has failed, over a period of 180
consecutive days, to perform the Executive's duties under this
Agreement, as a result of physical or mental illness or injury, and
(ii) a physician selected by the Company or its insurers, and
reasonably acceptable to the Executive or the Executive's legal
representative, has determined that the Executive's incapacity
constitutes a disability for purposes of the Company's long-term
disability insurance coverage. A termination of the Executive's
employment by the Company for Disability shall be communicated to the
Executive by written notice, and
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<PAGE> 8
shall be effective upon receipt of such notice by the Executive (the
"Disability Effective Date").
(b) BY THE COMPANY. (i) The Company may terminate the Executive's
employment during the Employment Period for Cause or without Cause. "Cause"
shall mean (A) fraud, misappropriation, embezzlement or willful misconduct
materially injurious to the Company, Cardinal or any of the Affiliated
Companies on the part of the Executive, (B) the Executive's (x) persistent and
continued failure to substantially perform his duties for the Company when and
to the extent reasonably requested by the Board to do so and (y) failure to
correct same within twenty (20) days after notice from the Board requesting the
Executive to do so (it being understood that this standard is intended to
assure the Company of the reasonable attendance, efforts and good faith
business attention of the Executive to his duties on behalf of the Company, but
may not be relied upon by the Company to terminate the Executive based upon the
operating performance of the Company), or (C) the Executive's breach of any
material provision of this Agreement, which breach has not been cured in all
material respects within 20 days after notice of such breach is given to the
Executive by the Company. No act or failure to act on the part of the Executive
shall be considered "willful" unless it is done, or omitted to be done, by the
Executive in bad faith or without reasonable belief that
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<PAGE> 9
the Executive's action or omission was in the best interests of the Company.
Any act or failure to act that is based upon authority given pursuant to a
resolution duly adopted by the Board, the instructions of the Chief Executive
Officer or any other officer of the Company who is senior to the Executive, or
the advice of counsel for the Company, shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company. The Executive shall not be deemed to have been
terminated for Cause unless such notice is accompanied by a copy of a
resolution duly adopted by the Board to such effect.
(ii) A termination of the Executive's employment by the Company without
Cause shall be effected by giving the Executive written notice of the
termination.
(c) GOOD REASON. (i) The Executive may terminate employment for Good
Reason or without Good Reason. "Good Reason" means:
(A) the assignment to the Executive of duties inconsistent in any
material respect with paragraph (a) of Section 2 of this Agreement, other
than actions that are not taken in bad faith and are remedied by the
Company promptly after receipt of notice thereof from the Executive;
(B) any failure by the Company to comply with any provision of
Section 3 of this Agreement other than failures that are not taken in bad
faith and are remedied by the Company promptly after receipt of notice
thereof from the Executive;
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<PAGE> 10
(C) any requirement by the Company that the Executive's services
be rendered primarily at a location or locations not complying with
the provisions of paragraph (c) of Section 2 of this Agreement; or
(D) any failure by the Company to require any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company
or Cardinal expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company or Cardinal, as
the case may be, would have been required to perform if no such succession
had taken place.
(ii) A termination of employment by the Executive for Good Reason shall be
effectuated by giving the Company written notice ("Notice of Termination for
Good Reason") of the termination, setting forth in reasonable detail the
specific conduct of the Company that constitutes Good Reason and the specific
provision(s) of this Agreement on which the Executive relies. A termination of
employment by the Executive for Good Reason shall be effective on the tenth
business day following the date when the Notice of Termination for Good Reason
is given, unless the notice sets forth a later date (which date shall in no
event by later than 30 days after the notice is given); PROVIDED, that such a
termination of employment shall not become effective if the Company shall have
previously corrected to the reasonable satisfaction of the Executive the
circumstance giving rise to the Notice of Termination.
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<PAGE> 11
(iii) A termination of the Executive's employment by the Executive without
Good Reason shall be effected by giving the Company written notice of the
termination.
(d) DATE OF TERMINATION. The "Date of Termination" means the date of the
Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or by the
Executive for Good Reason is effective, the date on which the Company gives the
Executive notice of termination of employment without Cause, or the date on
which the Executive gives the Company notice of a termination of employment
without Good Reason, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH, DISABILITY,
CAUSE; WITHOUT GOOD REASON. If, during the Employment Period, the Executive's
employment is terminated because of death, disability, for Cause, or as a
result of the Executive's termination of his employment without Good Reason,
then except as provided in Section 8, the Executive shall not be entitled to
any compensation provided for under this Agreement, other than Annual Base
Salary through the effective date of any such termination or resignation,
benefits under the long-term disability insurance coverage in the case of
termination because of Disability, and (without
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<PAGE> 12
limiting the provisions of Section 6 hereof) vested benefits, if any, required
to be paid or provided by law.
(b) WITHOUT CAUSE; GOOD REASON. If, during the Employment Period, the
Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason, the Executive shall not be entitled to any
compensation provided for under this Agreement except as set forth in the
following sentence. The Company (i) shall continue to pay the Executive for and
with resepct to the unexpired portion of the Employment Period (in the same
manner as specified herein) (A) his Annual Base Salary and (B) an amount equal
to seventy-five percent (75%) of the Executive's Imputed Annual Bonuses and
(ii) shall continue during the unexpired portion of the Employment Period the
welfare benefits set forth in Section 3 (in the same manner as specified
herein); PROVIDED that (x) if any such benefits cannot be provided to
nonemployees under the terms of the applicable plans or applicable law, the
Company shall provide the Executive with substitute benefits that are
comparable and equal in value to such benefits, and (y) during any period when
the Executive is eligible to receive any such benefits under another
employer-provided plan, the benefits provided by the Company under this
paragraph may be made secondary to those provided under such other plan. As
used herein, "Imputed Annual Bonuses" shall mean the Company Bonus and the
"target"
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<PAGE> 13
bonuses or similar amounts under Cardinal Bonus Plans that the Executive would
have received had received had he remained an employee of the Company and
achieved targeted performance with respect to any personal goals under the
Company's Management Incentive Plan and the Cardinal Bonus Plan, as applicable,
taking into account the actual performance with respect to any applicable goals
relating to the performance of the Company, Cardinal, any of the Affiliated
Companies, or any of their divisions.
6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by Cardinal or any of the Affiliated Companies for
which the Executive may qualify, nor, subject to paragraph (f) of Section 10,
shall anything in this Agreement limit or otherwise affect such rights as the
Executive may have under any contract or agreement with Cardinal or any of the
Affiliated Companies. Vested benefits and other amounts that the Executive is
otherwise entitled to receive under any plan, policy, practice or program of,
or any contract or agreement with, Cardinal or any the Affiliated Companies on
or after the Date of Termination whall be payable in accordance with such plan,
policy, practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
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<PAGE> 14
7. NO MITIGATION OR REDUCTION. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement and such amounts shall not be reduced, regardless of whether
the Executive obtains other employment.
8. CONFIDENTIAL INFORMATION; NONCOMPETITION. (a) The Executive shall hold
in a fiduciary capacity for the benefit of the Company, Cardinal and the
Affiliated Companies all secret or confidential information, knowledge or data
relating to the Company, Cardinal or any of the Affiliated Companies and their
respective businesses that the Executive obtains during the Executive's
employment by the Company and that is not public knowledge (other than as a
result of the Executive's violation of this paragraph (a) of Section 8)
("Confidential Information"). The Executive shall not communicate, divulge or
disseminate Confidential Information at any time during or after the
Executive's employment with the Company, except with the prior written consent
of the Company or as otherwise required by law or legal process.
(b) During the Noncompetition Period (as defined below), except as
otherwise provided in paragraph (d) of this Section 8, the Executive shall not,
without the prior written consent of the Board, engage in or become associated
with a
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<PAGE> 15
Competitive Activity. For purposes of this paragraph (b) of Section 8: (i) the
"Noncompetition Period" means (A) the period during which the Executive is
employed by the Company, plus (B) if the Executive's employment terminates
before the end of the Employment Period, the remainder of the Employment
Period, plus (C) any Extension Periods (as defined in paragraph (e) of this
Section 8), to the extent provided in paragraph (e); (ii) a "Competitive
Activity" means any business or other endeavor that engages in the wholesale
drug distribution business or other healthcare distribution business in which
the Company, Cardinal or any of the Affiliated Companies is at the date hereof,
or at the time Executive's employment terminates, engaged in the United States
(including Puerto Rico); and (iii) except as provided on Schedule A, the
Executive shall be considered to have become "associated with a Competitive
Activity" if he becomes directly or indirectly involved as an owner, employee,
officer, director, independent contractor, agent, partner, advisor, lender, or
in any other capacity with any individual, partnership, corporation or other
organization that is engaged in a Competitive Activity. Notwithstanding the
foregoing: (i) the Executive may make and retain investments during the
Employment Period in not more than five percent of the equity of any entity
engaged in a Competitive Activity, if such equity is listed on a national
securities exchange or regularly traded in an
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<PAGE> 16
over-the-counter market; and (ii) if the Executive's employment is terminated
because of Disability, the provisions of this paragraph (b) or Section 8 shall
only apply if, following notice from Executive that his disability has ended
and that he intends to seek employment in a Competitive Activity, the Company
(A) promptly provides Executive with a lump-sum cash amount equal in value to
the compensation and benefits set forth in Section 5(b) that would have been
paid from the Disability Effective Date through the date such lump sum payment
is made if the Executive's employment had been terminated by the Company
without Cause on the Disability Effective Date, less any amounts the Executive
has received under any long-term disability plans sponsored by the Company,
Cardinal or any of the Affiliated Companies (to the extent coverage under such
plans was provided without cost to the Executive) and (B) continues such
compensation and benefits throughout the remainder of the Employment Period.
(c) The Executive agrees that he will not, for a period of one (1) year
after the expiration or termination of the Executive's employment with the
Company, Cardinal or any of the Affiliated Companies, without the prior
written consent of the Company, whether directly or indirectly, employ, whether
as an employee, officer, director, agent, consultant or independent contractor,
or solicit the employment of, any person who was or is at any time during the
previous twelve
-16-
<PAGE> 17
(12) months an employee, representative, officer or director of the Company,
Cardinal or any of the Affiliated Companies.
(d) The Executive acknowledges and agrees that the Company's remedy at
law for any breach of the Executive's obligations under this Section 8 would be
inadequate and agrees and consents that temporary and permanent injunctive
relief may be granted in any proceeding which may be brought to enforce any
provision of such Section without the necessity of proof of actual damage. With
respect to any provision of this Section 8 finally determined by a court of
competent jurisdiction to be unenforceable, the Executive and the Company
hereby agree that such court shall have jurisdiction to reform this Agreement
or any provision hereof so that it is enforceable to the maximum extent
permitted by law, and the parties agree to abide by such court's
determination.
(e) The Company shall have the right to elect to have the provisions of
paragraph (b) of this Section 8 apply for the period (the "First Extension
Period") beginning on the later of (i) the day the Executive's employment with
the Company terminates and (ii) the first day after the end of the Employment
Period and ending on the earlier of (x) the first anniversary of the first day
of the First Extension Period and (y) the death of the Executive; and if the
Company
-17-
<PAGE> 18
does so elect, it shall also have the right to elect to have the
provisions of paragraph (b) of this Section 8 apply for the period (the "Second
Extension Period") beginning on the day after the last day of the First
Extension Period and ending on the earlier of (x) the first anniversary of the
first day of the Second Extension Period and (y) the death of the Executive.
(The First Extension Period together with the Second Extension Period are
referred to as the "Extension Periods"). The election to extend for the First
Election Period shall be made by giving the Executive notice of such election
(A) in the case of a termination of the Executive's employment by reason of the
expiration of the Employment Period, no later than sixty days before the end of
the Employment Period, and (B) in the case of any other termination, within
thirty days after such termination. The election to extend for the Second
Election Period shall be made by giving the Executive notice of such election
no later than sixty days before the expiration of the First Extension Period.
(The elections described in the preceding two sentences are referred to as the
"Extension Elections.")
(f) During any Extension Period with respect to which the Company has
made an Extension Election, the Company shall provide the compensation and
benefits set forth in Section 5(b) as if (i) the Executive had been terminated
without Cause and (ii) the Employment Period had extended through the
-18-
<PAGE> 19
last day of such Extension Period; PROVIDED, that in lieu of receiving an
amount equal to seventy-five percent (75%) of the Executive's Imputed Annual
Bonus, the Executive shall receive an amount equal to fifty percent (50%) of
such Imputed Annual Bonus. Notwithstanding any other provision of this
Agreement, the Extension Periods shall end, and the Executive's obligations
under paragraph (b) of this Section 8 shall cease and be of no further effect,
if the Company fails to provide any of the compensation and benefits required
by the preceding sentence or by paragraph (a) of Section 5 and such failure
continues for ten (10) days after notice from the Executive to the Company of
such failure.
9. SUCCESSORS. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by
the Executive. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
10. MISCELLANEOUS. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement
are not
-19-
<PAGE> 20
part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
--------------------
To the address set forth on Schedule A
If to the Company:
------------------
Whitmire Distribution Corporation
81 Blue Ravine Road
Folsom, California 95630
Attention: General Counsel
(with a copy to Cardinal)
If to Cardinal:
---------------
Cardinal Distribution, Inc.
655 Metro Place South, Suite 925
Dublin, Ohio 43017
Attention: General Counsel
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of
-20-
<PAGE> 21
Section 10. Notices and communications shall be effective when actually
received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (c) of Section 4 of this
Agreement) shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement except to the extent any
other party hereto is materially prejudiced by such failure.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof.
-21-
<PAGE> 22
(g) The term "Affiliated Companies" means all companies controlled by,
controlling or under common control with Cardinal, including, without
limitation, the Company.
11. GUARANTEE. Cardinal hereby irrevocably, absolutely and unconditionally
guarantees the payment by the Company of all compensation and benefits (the
"Payments") that the Company is obligated to provide to the Executive under
Sections 3, 6 and 8 of this Agreement. This is a guarantee of payment and not
of collection, and is the primary obligation of Cardinal, and the Executive may
enforce this guarantee against Cardinal without any prior enforcement of the
obligation to make the Payments against the Company.
-22-
<PAGE> 23
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of their respective Boards of Directors,
each of the Company and Cardinal has caused this Agreement to be executed in
its name on its behalf, all as of the day and year first above written.
/s/ James Clare
------------------------
James Clare
WHITMIRE DISTRIBUTION CORPORATION
By: /s/ Gary E. Close
_____________________________
CARDINAL DISTRIBUTION, INC.
By:
_____________________________
-23-
<PAGE> 24
IN WITNESS HEREOF, the Executive has hereunto set the Executive's hand
and, pursuant tot he authorization of their respective Boards of Directors,
each of the Company and Cardinal has caused this Agreement to be executed in
its name on its befalf, all as of the day and year first above written.
--------------------------------
James Clare
WHITMIRE DISTRIBUTION CORPORATION
By:
_____________________________
CARDINAL DISTRIBUTION, INC.
By: /s/ Robert D. Walter
_____________________________
-23-
<PAGE> 25
SCHEDULE A
<TABLE>
<CAPTION>
<S> <C>
Name: James Clare
Address:
Location: Executive has agreed to move to a new location at the
request of the Company, provided that the Company
provides relocation benefits equal to those available
to executives of the Company under Cardinal's
relocation policy as in effect on the date hereof.
Annual Base Salary: $98,400, as adjusted after the date of this
Agreement in accordance with the Company's usual
compensation review policies
Initial Target $39,360
</TABLE>
-24-
<PAGE> 26
SCHEDULE B
(a) Category I automobile policy for executives (see Whitmire Disclosure
Schedule)
(b) Annual physical examinations (see Whitmire Disclosure Schedule)
(c) Estate planning (see Whitmire Disclosure Schedule)
(d) Tax planning and return preparation (see Whitmire Disclosure Schedule)
-25-
<PAGE> 1
Exhibit 10.02
The following is the form of Amended and Restated Stock Option Agreement
entered into February 7, 1994, by the Company, Whitmire Distribution
Corporation and certain officers of the Company. The only material difference
between this form and the other agreements (other than the different parties)
is the number of shares subject to each option.
<PAGE> 2
CARDINAL HEALTH, INC.
---------------------
AMENDED AND RESTATED
--------------------
NONSTATUTORY STOCK OPTION AGREEMENT
-----------------------------------
W I T N E S S E T H:
WHEREAS, Cardinal Health, Inc. (fka Cardinal Distribution, Inc.;
herein, "Cardinal") and Whitmire Distribution Corporation
("Whitmire") have effected an Agreement and plan of
Reorganization, dated as of October 11, 1993 (the "Merger
Agreement"), which Merger Agreement provides, among other things,
that at the Effective Time (as defined therein) each unexpired
and unexercised option heretofore granted to the undersigned
optionee (the "Optionee") by Whitmire (a "Whitmire Option") is to
be automatically converted into an option (a "Cardinal Exchange
Option") to purchase that number of Cardinal Class A Common
Shares (as defined in the Merger Agreement) equal to the number
of Whitmire Common Shares issuable immediately prior to the
Effective Time upon exercise of the Whitmire Option (without
regard to actual restrictions on exercisability) multiplied by
the Exchange Ratio at a per share exercise price equal to the
exercise price which existed under the corresponding Whitmire
Option divided by the Exchange Ratio; and
WHEREAS, Cardinal, Whitmire, and Optionee intend this option to
be a Cardinal Exchange Option as described in the Merger
Agreement;
NOW, THEREFORE, the Nonstatutory Stock Option Agreement
heretofore granted by Whitmire to Optionee is hereby amended and
restated (the "Amendment and Restatement") as follows:
Section 1. Exchange of Option.
- - - ---------- -------------------
On the terms and subject to the conditions stated in this
Amendment and Restatement Cardinal hereby exchanges with the
Optionee an option (the "Option") to purchase up to that number
of Cardinal Class A Common Shares specified under (A) on the
signature page hereof (the "Shares") for a purchase price per
Share as specified under (B) on the signature page hereof (as
adjusted from time to time in accordance with the terms of this
Amendment and Restatement, the "Exercise Price") in exchange for
the Whitmire Option identified under (C) on the signature page
hereof, a copy of which is appended hereto.
Section 2. No Transfer or Assignment of Option.
- - - ---------- ------------------------------------
Except as otherwise provided in this Amendment and Restatement,
the Option and the rights and privileges conferred hereby shall
not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be
-1-
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<PAGE> 3
subject to sale under execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Option, or of any right or privilege
conferred hereby, contrary to the provisions hereof, or upon any
attempted sale under any execution, attachment or similar process
upon the rights and privileges conferred hereby, the Option shall
automatically expire and the rights and privileges conferred
hereby shall immediately become null and void.
Section 3. Right to Exercise.
- - - ---------- ------------------
On the terms and subject to the conditions set forth in this
Amendment and Restatement, the Optionee shall have the right to
exercise the Option at any time or from time to time after the
date hereof and prior to the Expiration Date for a number of
Shares equal to (i) the total number of Shares minus (ii) the
aggregate number of Shares for which the Option was theretofore
exercised.
Section 4. Exercise Procedures.
- - - ---------- --------------------
(a) NOTICE OF EXERCISE. The Optionee or the Optionee's
representative may exercise this Option by giving written notice
to Cardinal pursuant to Section 9(d). The notice shall specify
the election to exercise the Option and the number of Shares for
which it is being exercised. In the event that this Option is
being exercised by the representative of the Optionee, the notice
shall be accompanied by proof (satisfactory to Cardinal) of the
representative's right to exercise this Option. The notice shall
be signed by the Optionee. The Optionee or his representative
shall deliver to Cardinal at the time of giving the notice
payment of the Purchase Price in accordance with Section 5.
(b) ISSUANCE OF SHARES. Upon the exercise of the Option,
Cardinal agrees to issue to the Optionee as soon as practicable
following payment of the Purchase Price a certificate or
certificates for the number of Shares with respect to which the
Option is exercised, registered in the name of the person
exercising this Option (or in the names of such person and his or
her spouse as community property or as joint tenants with right
of survivorship). Cardinal shall cause such certificate or
certificates to be delivered to or upon the order of the person
exercising this Option.
Section 5. Payment for Stock.
- - - ---------- ------------------
The entire Purchase Price may be paid in lawful money of the
United States of America. Alternatively, to the extent that
applicable law permits, all or part of the Purchase Price may be
paid by the surrender of Shares in good form for transfer. Such
Shares must have been owned for more than twelve (12) months by
the Optionee or the Optionee's representative and must have a
fair market value on the date of exercise of this Option which,
together with any amount paid in lawful money, is equal to the
Purchase Price.
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<PAGE> 4
Section 6. Term and Expiration.
- - - ---------- --------------------
(a) BASIC TERM. This Option shall in any event expire on the
date ten (10) years after the Date of Grant.
(b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's
service as an Employee terminates for any reason other than
death, then this Option shall expire on the earliest of the
following occasions:
(i) the expiration date determined pursuant to Subsection (a)
above;
(ii) the date forty five (45) days after the termination of the
Optionee's service as an Employee for any reason other than
Total and Permanent Disability;
(iii) the date six (6) months after the termination of the
Optionee's service as an Employee by reason of Total and
Permanent Disability.
The Optionee may exercise all or part of this Option at any time
before its expiration under the preceding sentence. In the event
that the Optionee dies after the termination of service but
before the expiration of this Option, all or part of this Option
may be exercised (prior to expiration) by the executors or
administrators of the Optionee's estate or by any person who has
acquired this Option directly from the Optionee by bequest,
beneficiary designation or inheritance.
(c) DEATH OF OPTIONEE. If the Optionee dies as an Employee, this
Option shall expire on the earlier of the following dates:
(i) the expiration date determined pursuant to Subsection (a)
above; or
(ii) the date six (6) months after the Optionee's death.
All or part of this Option may be exercised at any time before
its expiration under the preceding sentence by the executors or
administrators of the Optionee's estate or by any person who has
acquired this Option directly from the Optionee by bequest,
beneficiary designation or inheritance.
(d) LEAVES OF ABSENCE. For purposes of this Section 6, the
Employee relationship shall be deemed to continue during any
period when the Optionee is on military leave, sick leave or
other bona fide leave of absence.
Section 7. Restrictions on Transfer of Shares.
- - - ---------- -----------------------------------
(a) INVESTMENT INTENT AT GRANT. The Optionee represents and
agrees that the Shares to be acquired upon exercising the Option
will be acquired for the Optionee's own account for investment
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88WOV
<PAGE> 5
and not with a view to or for sale in connection with any
distribution thereof in violation of the Securities Act.
(b) INVESTMENT INTENT AT EXERCISE. In the event that the sale
of Shares under this Amendment and Restatement is not registered
under the Securities Act but an exemption is available which
requires an investment representation, the Optionee shall
represent and agree at the time of exercise that the Shares being
acquired upon exercising the Option are being acquired for
investment and not with a view to the sale or distribution
thereof in violation of the Securities Act.
(c) LEGEND. All certificates evidencing Shares acquired under
this Amendment and Restatement in an unregistered transaction
shall bear the following restrictive legend (and such other
restrictive legends as are required or deemed advisable under the
provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED,
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO
CARDINAL AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
(d) REMOVAL OF LEGENDS. If, in the opinion of Cardinal and its
counsel, any legend placed on a stock certificate representing
Shares sold under this Amendment and Restatement is no longer
required, the holder of such certificate shall be entitled to
exchange such certificate for a certificate representing the same
number of Shares but lacking such legend; provided, however, that
upon the effectiveness of the registration provided for in
Section 10 hereof, the legend shall be so removed.
Section 8. Shares and Adjustments.
- - - ---------- -----------------------
(a) GENERAL. In the event of a subdivision of the outstanding
Shares, a declaration of a dividend payable in Shares, a
declaration of a dividend payable in a form other than Shares in
an amount that has a material effect on the value of Shares, a
combination or consolidation of the outstanding Shares (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization or a similar occurrence, an appropriate
adjustment shall be made in one or both of (i) the number of
Shares covered by this Option or (ii) the Exercise Price.
(b) MERGER; REORGANIZATION. In the event that Cardinal is a
party to a merger or other reorganization, this Option shall be
subject to the agreement of merger or reorganization. Such
agreement may provide (i) for the assumption of this Option by
the surviving corporation or its parent, (ii) for its continu-
ation by Cardinal, if Cardinal is a surviving corporation, (iii)
for payment of a cash settlement equal to the difference between
the amount to be paid for one Share under such agreement and the
Exercise Price, or (iv) for the acceleration of its exercis-
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88WOV
<PAGE> 6
ability followed by its cancellation if not exercised, in all
cases other than clause (iii) without the Optionee's consent.
(The Optionee's consent shall be required for a cash settlement.)
Any cancellation shall not occur earlier than 30 days after such
acceleration is effective after the Optionee has been notified of
such acceleration.
(c) RESERVATION OF RIGHTS. Except as provided in this Section
8, the Optionee shall have no rights by reason of (i) any
subdivision or consolidation of shares of stock of any class,
(ii) the payment of any dividend or (iii) any other increase or
decrease in the number of shares of stock of any class. Any
issue by Cardinal of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect
to, the number or Exercise Price of the Shares subject to this
Option. Except as expressly provided herein, this Option shall
not affect in any way the right or power of Cardinal to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its
business or assets.
Section 9. Miscellaneous Provisions.
- - - ---------- -------------------------
(a) WITHHOLDING TAXES. In the event that Cardinal determines
that it is required to withhold foreign, federal, state or local
tax as a result of the exercise of this Option, the Optionee, as
a condition to the exercise of this Option, shall make
arrangements satisfactory to Cardinal to enable it to satisfy all
withholding requirements.
(b) RIGHTS AS A STOCKHOLDER. Neither the Optionee nor the
Optionee's representative shall have any rights as a stockholder
with respect to any Shares subject to this Option until such
Shares have been issued in the name of the Optionee or the
Optionee's representative.
(c) NO EMPLOYMENT RIGHTS. Nothing in this Amendment and
Restatement shall be construed as giving the Optionee the right
to be retained as an Employee. Except as may be provided in any
written employment agreement between Optionee and Whitmire or
Cardinal, Whitmire and Cardinal reserve the right to terminate
the Optionee's service at any time, with or without cause.
(d) NOTICE. Any notice required by the terms of this Amendment
and Restatement shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit with the United
States Postal Service, by registered or certified mail with
postage and fees prepaid and addressed to the party entitled to
such notice at the address shown below such party's signature on
this Agreement, or at such other address as such party may
designate by ten (10) days' advance written notice to the other
party to this Agreement.
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<PAGE> 7
(e) ENTIRE AGREEMENT. This Amendment and Restatement
constitutes the entire contract between the parties hereto with
regard to the subject matter hereof.
(f) CHOICE OF LAW. This Amendment and Restatement shall be
governed by, and construed in accordance with, the laws of the
State of California, as such laws are applied to contracts
entered into and performed in such State.
SECTION 10. REGISTRATION. Cardinal shall file with the
Securities and Exchange Commission within six (6) months of the
Closing Date (as defined in the Merger Agreement), and shall use
all reasonable efforts to have declared effective, a registration
statement on Form S-8 or other appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), to
register the Shares and shall use all reasonable efforts to cause
such registration statement to remain effective until the
exercise or expiration of this Option.
Section 11. Definitions.
- - - ----------- ------------
(a) "DATE OF GRANT" shall mean the date on which the Whitmire
Option for which this Option has been exchanged was granted, as
specified under (C) on the signature page hereof.
(b) "EMPLOYEE" shall mean any individual who is a common-law
employee of Cardinal, Whitmire or any entity controlling,
controlled by, or under the common control of either.
(c) "EXERCISE PRICE" shall mean the amount for which one Share
may be purchased upon exercise of this Option, as specified in
Section 1.
(d) "PURCHASE PRICE" shall mean the Exercise Price multiplied by
the number of Shares with respect to which this Option is being
exercised.
(e) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
(f) "SHARE" shall mean one Cardinal Class A Common Share (as
defined in the Merger Agreement), as adjusted in accordance with
Section 8 (if applicable).
(g) "TOTAL AND PERMANENT DISABILITY" shall mean that the
Optionee is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted, or can be expected to last, for a continuous period of
not less than twelve (12) months.
(h) Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to them in the Merger Agreement.
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<PAGE> 8
IN WITNESS WHEREOF, Cardinal and Whitmire have caused this
Amendment and Restatement to be executed on their behalf by their
officers duly authorized and the Optionee has personally executed
this Amendment and Restatement.
OPTIONEE Optionee's Address:
/s/ Melburn G. Whitmire
- - - ------------------------- ------------------------------------
(signature)
------------------------------------
MELBURN G. WHITMIRE
WHITMIRE DISTRIBUTION CORPORATION
By /s/ Glenn Frese
---------------------------------
Address:
81 Blue Ravine Road
Folsom, California 95630
Attn: Secretary
CARDINAL HEALTH, INC.
By /s/ George H. Bennett Jr.
---------------------------------
Address:
655 Metro Place South, Suite 925
Dublin, OH 43017
Attn: General Counsel
(A) Number of Class A
Common Shares: 8.35
(B) Exercise Price: $5.20
(C) Whitmire Option:
Date of Grant: 2/9/93
Number of Whitmire
Common Shares: 1
Exercise Price: $43.39
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<PAGE> 1
Exhibit 10.03
The following is the form of Amended and Restated Stock Option Agreement
entered into February 7, 1994, by the Company, Melco Managers, a California
corporation, and certain officers of the Company. The only material difference
between this form and the other agreements (other than the different parties)
is the number of shares subject to each option.
<PAGE> 2
CARDINAL HEALTH, INC.
---------------------
AMENDED AND RESTATED
--------------------
STOCK OPTION AGREEMENT
----------------------
W I T N E S S E T H:
WHEREAS, Melco Managers ("Melco") has granted to the undersigned
Optionee ("Optionee") an option to purchase Whitmire Common
Shares pursuant to a Nonstatutory Stock Option Agreement referred
to below; and
WHEREAS, Cardinal Health, Inc. (fka Cardinal Distribution, Inc.;
herein, "Cardinal") and Whitmire Distribution Corporation
("Whitmire") have effected an Agreement and Plan of
Reorganization, dated as of October 11, 1993 (the "Merger
Agreement"), which Merger Agreement provides, among other things,
that at the Effective Time (as defined therein) each unexpired
and unexercised option to purchase stock of Whitmire which has
been granted by Melco to a current or former officer or employee
of Whitmire (a "Whitmire Option") is to be automatically
converted into an option (a "Cardinal Exchange Option") to
purchase that number of shares of Cardinal Class A Common Shares
(as defined in the Merger Agreement) equal to the number of
Whitmire Common Shares issuable immediately prior to the
Effective Time upon exercise of the Whitmire Option (without
regard to actual restrictions upon exercisability) multiplied by
the Exchange Ratio at a per share exercise price equal to the
exercise price which existed under the corresponding Whitmire
Option divided by the Exchange Ratio;
WHEREAS, Cardinal, Melco and Optionee intend this option to be a
Cardinal Exchange Option as described in the Merger Agreement;
NOW, THEREFORE, the Nonstatutory Stock Option Agreement
identified below heretofore granted by Melco to Optionee is
hereby amended and restated (the "Amendment and Restatement") as
follows:
1. Exchange of Option.
------------------
On the terms and subject to the conditions stated in this
Amendment and Restatement, Melco hereby exchanges with the
Optionee an option (the "Option") to purchase up to that number
of Cardinal Class A Common Shares specified under (A) on the
signature page hereof (the "Shares") for a purchase price per
Share specified under (B) on the signature page hereof (as
adjusted from time to time in accordance with the terms of this
Amendment and Restatement, the "Exercise Price") in exchange for
the Whitmire Option identified under (C) on the signature page
hereof, a copy of which is appended hereto.
-1-
MELCO
<PAGE> 3
2. No Transfer or Assignment of Option.
-----------------------------------
Except as otherwise provided in this Amendment and Restatement,
the Option and the rights and privileges conferred hereby shall
not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be
subject to sale under execution, attachment or similar process.
Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Option, or of any right or privilege
conferred hereby, contrary to the provisions hereof, or upon any
attempted sale under any execution, attachment or similar process
upon the rights and privileges conferred hereby, the Option shall
automatically expire and the rights and privileges conferred
hereby shall immediately become null and void.
3. Right to Exercise.
-----------------
On the terms and subject to the conditions set forth in this
Amendment and Restatement, the Optionee shall have the right to
exercise the Option at any time or from time to time after the
date hereof and prior to the Expiration Date for a number of
Shares equal to (i) the total number of Shares minus (ii) the
aggregate number of Shares for which the Option was theretofore
exercised.
4. Exercise Procedures.
-------------------
(a) NOTICE OF EXERCISE. The Optionee or the Optionee's
representative may exercise this Option by giving written notice
to Melco pursuant to Section 9(c). The notice shall specify the
election to exercise the Option and the number of Shares for
which it is being exercised. In the event that this Option is
being exercised by the representative of the Optionee, the notice
shall be accompanied by proof (satisfactory to Melco) of the
representative's right to exercise this Option. The notice shall
be signed by the Optionee. The Optionee or his representative
shall deliver to Melco at the time of giving the notice payment
of the Purchase Price in accordance with Section 5.
(b) TRANSFER OF SHARES. Upon the exercise of the Option, Melco
agrees to transfer to the Optionee as soon as practicable
following payment of the Purchase Price a certificate or
certificates for the number of Shares with respect to which the
Option is exercised, registered in the name of the person
exercising this Option (or in the names of such person and his or
her spouse as community property or as joint tenants with right
of survivorship). Melco shall cause such certificate or
certificates to be delivered to or upon the order of the person
exercising this Option.
5. Payment for Stock.
-----------------
The entire Purchase Price shall be paid in lawful money of the
United States of America by certified or cashier's check.
-2-
MELCO
<PAGE> 4
6. Expiration.
----------
The Option shall expire at 12 o'clock midnight California time on
the 548th calendar day following the Pooling Press Release (as
defined in the Merger Agreement). All or part of this Option may
be exercised at any time before its expiration under the
preceding sentence by the executors or administrators of the
Optionee's estate or by any person who has acquired this Option
directly from the Optionee by bequest, beneficiary designation or
inheritance.
7. Restrictions on Transfer of Shares.
----------------------------------
(a) INVESTMENT INTENT AT GRANT. The Optionee represents and
agrees that the Shares to be acquired upon exercising the Option
will be acquired for the Optionee's own account for investment
and not with a view to or for sale in connection with any
distribution thereof in violation of the Securities Act.
(b) INVESTMENT INTENT AT EXERCISE. In the event that the sale
of Shares under this Amendment and Restatement is not registered
under the Securities Act but an exemption is available which
requires an investment representation, the Optionee shall
represent and agree at the time of exercise that the Shares being
acquired upon exercising the Option are being acquired for
investment and not with a view to the sale or distribution
thereof in violation of the Securities Act.
8. Shares and Adjustments.
----------------------
(a) GENERAL. In the event of any stock dividend, stock split
or share combination, a proportionate adjustment will be made in
(i) the number of Shares, and (ii) the Exercise Price, in each
case to prevent dilution or enlargement of the rights under this
Amendment and Restatement.
(b) ORGANIC CHANGE. If an Organic Change occurs, in lieu of
the Shares issuable upon exercise of the Option, the Option will
thereafter be exercisable for such shares of stock, securities or
assets (including cash) as may be issued or payable with respect
to or in exchange for the number of Shares immediately
theretofore acquirable and receivable upon exercise of the Option
had such Organic Change not taken place.
(c) RESERVATION OF RIGHTS. Except as expressly provided in
this Section 8, the Optionee shall have no rights by reason of
(i) any subdivision or consolidation of shares of stock of any
class, (ii) the payment of any dividend or (iii) any other
increase or decrease in the number of shares of stock of any
class. Any issue by Cardinal of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made
with respect to, the number or Exercise Price of the Shares
subject to the Option. Except as expressly provided herein, this
Option shall not affect in any way the right or power of Cardinal
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MELCO
<PAGE> 5
to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or
any part of its business or assets.
9. Miscellaneous Provisions.
------------------------
(a) WITHHOLDING TAXES. In the event that Melco determines that
it is required to withhold foreign, federal, state or local tax
as a result of the exercise of the Option, the Optionee, as a
condition to the exercise of the Option, shall make arrangements
reasonably satisfactory to Melco to enable Melco to satisfy all
withholding requirements.
(b) RIGHTS AS A STOCKHOLDER. The Optionee shall have no rights
as a stockholder of Cardinal with respect to any Shares subject
to the Option until such Shares have been issued in the name of
the Optionee. Nothing contained in this Subsection (b) will
impair any contract rights which the Optionee may hold.
(c) NOTICE. Any notice required by the terms of this Amendment
and Restatement shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit with the United
States Postal Service, by registered or certified mail with
postage and fees prepaid and addressed to the party entitled to
such notice at the address shown on the signature page to this
Amendment and Restatement, or at such other address as such party
may designate by 10 days' advance written notice to the other
party to this Amendment and Restatement.
(d) CHOICE OF LAW. This Amendment and Restatement shall be
governed by, and construed in accordance with, the laws of the
State of Delaware, as such laws are applied to contracts entered
into and performed in such State.
(e) NO STRICT CONSTRUCTION. The language of this Amendment and
Restatement will be deemed to be the language chosen by the
parties hereto to express their mutual intent and no rule of
strict construction will be applied against any person.
(f) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY
AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND
THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE
JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHT TO TRIAL BY JURY IN AND ACTION, SUIT OR PROCEEDING BROUGHT
TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT
OR ANY DOCUMENTS RELATED HERETO.
(g) LEGEND. All certificates evidencing Shares acquired under
this Amendment and Restatement in an unregistered transaction
shall bear the following restrictive legend (and such other
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MELCO
<PAGE> 6
restrictive legends as are required or deemed advisable under the
provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO MELCO AND ITS COUNSEL, THAT SUCH REGISTRATION
IS NOT REQUIRED."
If, in the opinion of Melco and its counsel, any legend placed on
a stock certificate representing Shares sold under this Agreement
is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate
representing the same number of Shares but lacking such legend,
provided, however, that upon the effectiveness of the
registration provided for in Section 11 hereof, the legend shall
be so removed.
(h) NO EMPLOYMENT RIGHTS. Nothing in this Amendment and
Restatement shall be construed as giving the Optionee the right
to be retained as an employee of Whitmire, Cardinal or any
affiliate of either.
(i) ADMINISTRATION. Any determination by Melco in connection
with any of the matters set forth in this Amendment and
Restatement shall be conclusive and binding on the Optionee and
all other persons.
10. Definitions.
-----------
"EXCHANGE RATIO" shall have the meaning ascribed to it in the
Merger Agreement.
"CARDINAL CLASS A COMMON SHARES" shall have the meaning ascribed
to it in the Merger Agreement.
"ORGANIC CHANGE" means any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or
substantially all of Cardinal's assets to another Person or other
transaction which is effected in such a way that holders of
Cardinal Class A Common Shares are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or
assets with respect to or in exchange for such Cardinal Class A
Common Shares.
"PERSON" shall be construed broadly and shall include, without
limitation, an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"PURCHASE PRICE" shall mean the Exercise Price multiplied by the
number of shares with respect to which this Option is being
exercised.
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MELCO
<PAGE> 7
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SHARE" shall mean one Cardinal Class A Common Share, as adjusted
in accordance with Section 8 (if applicable).
"TRANSFER" shall be construed broadly and shall include any
transfer of any Cardinal Class A Common Share, including without
limitation, by way of issuance, sale, participation, pledge,
gift, bequeath, intestate transfer, distribution, liquidation,
merger or consolidation.
Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Merger Agreement.
11. REGISTRATION. Cardinal shall cause to be filed with the
Securities and Exchange Commission within six months of the
Closing Date (as defined in the Merger Agreement), and shall use
all reasonable efforts to have declared effective, a registration
statement on Form S-8 or other appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), to
register the Shares and shall use all reasonable efforts to cause
such registration statement to remain effective until the
exercise or expiration of this Option.
12. GUARANTEE. Cardinal hereby irrevocably, absolutely and
unconditionally guarantees the performance by Melco of all
obligations of Melco to the Optionee under this Agreement.
Effective upon the earlier of any liquidation or dissolution of
Melco or the merger of Melco with and into Whitmire or Cardinal,
Cardinal's obligations hereunder shall be as principal and not as
guarantor and each reference to Melco herein shall become a
[INTENTIONALLY LEFT BLANK]
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MELCO
<PAGE> 8
reference to Cardinal for all purposes herein.
IN WITNESS WHEREOF, Melco and Cardinal have caused this
Amendment and Restatement to be executed on their behalf by
their officers duly authorized, and the Optionee has personally
executed this Amendment and Restatement.
OPTIONEE MELCO MANAGERS
/s/ Melburn G. Whitmire By /s/ Glenn Frese
- - - ------------------------- ----------------------------
(signature)
Address:
MELBURN G. WHITMIRE
81 Blue Ravine Road
Optionee's Address: Folsom, California 95630
Attn: Secretary
- - - --------------------------
CARDINAL HEALTH, INC.
- - - --------------------------
By /s/ George H. Bennett Jr.
----------------------------
Address:
655 Metro Place South, Ste. 925
Dublin, Ohio 43017
Attn: General Counsel
(A) Number of Class A
Common Shares: 250333
(B) Exercise Price: $1.73
(C) Whitmire Option:
Number of Shares: 29980
Exercise Price: $14.4375
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MELCO
<PAGE> 1
<TABLE>
Exhibit 11.01
CARDINAL HEALTH, INC.
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
(In thousands, except per share data)
<CAPTION>
3-Months Ended 9-Months Ended
------------------------- --------------------------
March 31, March 31, March 31, March 31,
1994 1993 1994 1993
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Weighted Average Number of
Common Shares Outstanding 29,089 23,791 28,036 23,722
Net Effect of Dilutive Stock Options and Warrants 2,615 3,711 3,480 3,758
Effect of Assumed Conversion of 7 1/4%
Convertible Subordinated Debentures 3,426 3,426
Weighted Average Number of Common ---------- ---------- ---------- ----------
Shares Outstanding-Fully Diluted 31,704 30,928 31,516 30,906
========== ========== ========== ==========
Net Earnings (Loss) Available for Common
Shares $ (9,096) $ 8,942 $ 17,284 $ 27,507
Add 7-1/4% Convertible Subordinated
Debenture Interest, Net of Income
Tax Effect 816 2,448
---------- ---------- ---------- ----------
Total $ (9,096) $ 9,758 $ 17,284 $ 29,955
========== ========== ========== ==========
Per Share Amount $ (.29) $ .32 $ .55 $ .97
========== ========== ========== ==========
</TABLE>
