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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM ______________TO______________
COMMISSION FILE NUMBER: 0-11355
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BINDLEY WESTERN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C>
INDIANA 84-0601662
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
10333 North Meridian Street, Suite 300, Indianapolis, Indiana 46290
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 298-9900
Securities registered pursuant to Section 12(b) of the Act:
Common Stock ($.01 par value) New York Stock Exchange
(Title of class) (Name of exchange on which registered)
Securities registered pursuant to section 12(g) of the Act:
6-1/2% Convertible Subordinated Debentures
(Title of class)
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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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
$138,637,541
Aggregate market value of the voting stock held by nonaffiliates of the
registrant based on the last sale price for such stock at March 15, 1996
(assuming solely for the purposes of this calculation that all Directors and
Officers of the Registrant are "affiliates")
11,345,847
Number of shares of Common Stock outstanding as of March 15, 1996
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents have been incorporated by reference into
this annual report on Form 10-K:
IDENTITY OF DOCUMENT PARTS ON FORM 10-K INTO WHICH
DOCUMENT IS INCORPORATED
Proxy Statement to be filed for the PART III
1996 Annual Meeting of Common Page 1 of 237
Shareholders of Registrant Index to Exhibits at Pages 39
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BINDLEY WESTERN INDUSTRIES, INC.
Indianapolis, Indiana
Annual Report to Securities and Exchange Commission
December 31, 1995
Part I
Item 1. BUSINESS.
General
Bindley Western Industries, Inc., an Indiana corporation, together
with its subsidiaries (the "Company"), is one of the country's largest
wholesale distributors of pharmaceuticals and related health care products.
Its product lines include ethical pharmaceuticals (prescription drugs),
dialysis supplies, health and beauty care products and home health care
merchandise. The Company's wholesale drug customer base includes chain drug
companies which operate their own warehouses, individual drug stores, both
chain and independent, hospitals, clinics, HMOs, state and federal government
agencies and other health care providers. The Company's drug wholesaling
operations service customers in approximately 35 states plus Puerto Rico from
its 10 distribution centers located in Austell, GA; Dallas, TX; Houston, TX;
Indianapolis, IN; Middletown, PA; Orange, CT; Orlando, FL; Portland, ME; San
Dimas, CA; and Shelby, NC. By using the Company as a primary source of
pharmaceuticals, these customers can centralize purchasing functions, exercise
better inventory control, maintain better security and reduce handling costs.
The Company has historically specialized in the distribution of
ethical pharmaceuticals to chain drug companies which maintain their own
warehouses. Currently, the Company services 5 of the top 10 chain drug
companies, based on sales and number of stores, in the United States. The
Company believes that its technological innovation and superior customer
service has enabled it to better serve these customers.
Since 1987, the Company has focused its marketing efforts on
direct store delivery customers. The Company has increased sales to these
customers from $171 million in 1987 to $1,482 million in 1995. To further this
growth, the Company purchased J.E. Goold in 1992 and Kendall Drug in 1994 to
strengthen the Company's position in the northeastern and southeastern United
States, respectively.
In 1994, the Company created Priority Healthcare Corporation as a
wholly-owned subsidiary to focus on the higher margin alternate care/alternate
site services market. These services are provided by facilities outside of the
hospital environment. Priority Healthcare's distribution divisions, located in
Altamonte Springs, FL and Santa Ana, CA, cater to doctors and clinics serving
patients in need of renal care, oncology, and infectious disease therapy while
its provider businesses, located in Altamonte Springs, FL and Indianapolis, IN,
deal directly with patients suffering from various chronic diseases. Priority
Healthcare's customers are located in 50 states, Mexico, and Central and South
America.
The Company's sales of $4.7 billion for 1995 represented the 27th
consecutive year of record sales, equating to a compound growth rate of 20%
since its inception in 1968. This
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growth is the result of market share gains in existing markets, expansion
into new markets and overall growth in the health care delivery industry.
Suppliers
During each of the last five fiscal years, more than 90% (based
on dollar volume) of the Company's purchases were ethical pharmaceutical
products. Of the thousands of ethical pharmaceutical products carried in
inventory, a comparatively small number account for a disproportionately large
share of the total dollar volume of products sold. The Company's largest
supplier accounted for 11% and the five largest suppliers accounted for
approximately 38% of its net sales during fiscal 1995, respectively. The
Company maintains many competing products in inventory and is not dependent
upon any single supplier, although the loss of a major supplier could adversely
affect the business of the Company if alternate sources of supply were
unavailable. The Company's arrangements with its suppliers typically may be
canceled by either party, without cause, on one month's
notice, although many of these arrangements are not governed by formal
agreements. The Company believes its relationships with its suppliers are
generally good. See, also, Manufacturer Pricing and Distribution Policies in
Part I, Item 1.
Customers and Markets
Direct Store Delivery Market.
The Company provides direct store delivery service to customers
from each of its 10 distribution centers. Independent drug stores,
non-warehouse chain drug stores, hospitals, clinics, HMOs, state and federal
agencies and other health care providers comprise the primary types of
customers. Purchases by these customers generally consist of less than
full-case lots which are generated on a daily basis when a customer needs a
particular item. While smaller in quantity, these sales typically generate
higher margins than sales to warehouse customers. Shipments to direct store
customers are delivered on a daily basis by the Company's vehicles or by a
for-hire carrier.
While much less concentrated than chain warehouse sales, the
direct store delivery business has experienced significant growth as the
Company has successfully expanded its business scope. Since 1987, direct
store sales have increased from $171 million to $1,482 million, demonstrating a
compound annual growth rate of 31%. During 1995, direct store delivery sales
were comprised of approximately 38% to chain drug stores, 33% to independent
pharmacies and 29% to managed care institutions. Direct store delivery sales
have increased from approximately 16% of net sales in 1987 to approximately
32% in 1995. During 1995, no single direct store delivery customer exceeded
10% of the Company's total net sales and the loss of any one of these customers
should not have a material adverse effect on the Company's
operations.
As part of the Company's goal of providing value-added solutions
to its customers' business needs, the Company implemented the "Profit Partners"
and the "1st Choice for Value" programs in 1993 and 1994. These competitive,
PC-based, marketing support and merchandising programs include a generic
pharmaceutical source program, a home health care program, a private label over
the counter program and the Rx LINX and MASTER LINX purchasing and inventory
management systems. Designed to enhance the competitiveness of
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retail, small chain and managed care pharmacies, these programs reflect the
Company's commitment to adding value to the services provided to its customers.
The Company believes that it would not be feasible for these customers to
independently develop and maintain these services on their own.
The Company believes that the opportunities for growth for this
market of the business should continue through expansion into new geographical
areas and increasing market share in existing markets. The Company is focused
on the development of new services and programs through interaction and
cooperation with both customers and suppliers. These programs are designed to
enhance profitability, provide added value to the customer, and strengthen the
Company's role in the distribution channel. These programs include
computerized ordering systems, inventory management programs, generic
pharmaceutical source programs, repack programs, innovative advertising and
marketing campaigns and merchandising programs, including private label product
lines.
Chain Warehouse Market.
Chain warehouse customers purchase in full-case lots for
redistribution to individual retail outlets. Approximately 68% of the
Company's 1995 net sales are attributable to chain drug warehouse customers.
The Company's largest chain drug customers and the approximate period of time
they have done business with the Company are: Eckerd Corporation (23 years);
Peyton (6 years); Thrifty-Payless Corporation (13 years); Revco D.S., Inc. (18
years); CVS (26 years); and Rite Aid Corporation (23 years). The following
chain drug warehouse customers each accounted for over 10% of the Company's net
sales during the years shown: Eckerd Corporation, Rite Aid Corporation, and
Revco D.S., Inc.(1995); Eckerd Corporation and Rite Aid Corporation (1994); and
Eckerd Corporation and Peyton (1993). Net sales to these customers aggregated
44%, 33% and 36% of net sales for the past three years, respectively.
By using the Company as a primary source of pharmaceuticals, the
Company believes that a chain drug customer can centralize purchasing
functions, exercise better inventory control, maintain better security and
reduce handling costs. Inventory control and security are particularly
important to these customers because of the relatively high dollar value of
pharmaceuticals in relation to their physical size. In addition, the Company
has developed systems and procedures which the Company believes facilitate
customer compliance with the recordkeeping and physical security requirements
of the Controlled Substances Act of 1970 and the Prescription Drug Marketing
Act of 1987. For example, shipments of controlled substances are billed on
separate invoices and special security procedures are followed to reduce the
possibility of theft during the distribution process. Additionally, the
Company offers these customers software to permit direct communication with the
ordering computers, thus avoiding the need to change the customers'
existing software.
The Company, from time to time, has entered into written
understandings with certain of its major chain warehouse customers setting
forth various terms and conditions of sale. The Company, however, does not
have any long- term contracts with its major customers and all relationships
with such customers are terminable at will by either party. The loss of any
one of the Company's chain warehouse customers could have a material adverse
effect on the Company's operations. Although the Company believes that the
effect could be minimized through increasing sales to existing customers,
securing additional customers within current
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distribution areas and by expanding into new markets, there can be no assurance
thereof. See, also, Note 10 - Major Customers in the Company's financial
statements, which is incorporated herein by reference.
Alternate Care/Alternate Site Market.
In 1993, the Company purchased Charise Charles, a wholesale
distributor of oncology and renal care pharmaceuticals and biotech drugs. PRN
Medical, also acquired in 1993, was a wholesale distributor of renal care
supplies and dialysis equipment. PRN's market, which included Central and
South America, complimented Charise Charles and the two companies were combined
in 1994 as part of Priority Healthcare Corporation, a wholly-owned subsidiary
created by the Company to provide a greater management focus and an enhanced
ability to meet the needs of the higher margin alternate care/alternate site
markets. 3C Medical, located in Santa Ana, CA, also joined the corporate
family in 1994. It distributes acute dialysis products to its West Coast
customers. Sales in this specialized division are aided by exclusive
distribution agreements with major vendors. Charise Charles, PRN Medical and
3C Medical are now called Priority Distribution. Priority Distribution
currently services over 2,000 customers in 50 states, Mexico and Central
and South America.
The IV One Companies, acquired by Priority Healthcare Corporation
effective January 1,1995, are comprised of IV-1, Inc., a national infusion
pharmacy and nursing service company; National Pharmacy Providers, Inc., a
nationwide clinical pharmacy; and IV-One Services, Inc., a specialty wholesale
distributor. These three companies are located in Altamonte Springs, FL in
facilities that adjoin those of Priority Distribution. IV-1, Inc., the
principal company, provides innovative, nationwide pharmacy services and
ambulatory infusion therapy. Its emphasis is on high acuity specialty pharmacy
and nursing services in addition to providing comprehensive disease state
management. In early 1995, it received Accreditation with Commendation for its
pharmacy and nursing services from the Joint Commission on Accreditation of
Healthcare Organizations. National Pharmacy Providers, Inc. is available to
patients and physicians who require pharmacy products and services but do not
require extensive clinical monitoring. Both IV-1, Inc. and National Pharmacy
Providers, Inc. have registered nurses and pharmacists available 24 hours a
day, seven days a week for patients and referring physician offices.
The IV One Companies' vision is to provide affordable,
patient-centered services to patients outside the acute care setting and to
provide high quality clinical pharmacy and nursing services. Though their
original market focused on biotech drugs that are available for self
administration via subcutaneous injection and disease management, therapies
have now expanded to include a variety of infusion services such as total
parenteral nutrition, antibiotic therapy, hydration therapy and chemotherapy.
The IV One Companies provide these services in both the home setting and in
their in-house infusion suites.
National Infusion Services, Inc. (NIS) was incorporated in January
1996 to purchase the infusion services business of one of the country's largest
infectious disease group medical practices located in Indianapolis, IN. In
conjunction with the IV One Companies, NIS intends to expand its business as a
physician managed provider of quality care to patients in a variety of
settings, including the home, extended care facilities and NIS'
state-of-the-art outpatient center in Indianapolis.
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Through its Priority Healthcare Corporation subsidiary, the
Company has strategically positioned itself as a leading national provider in
these important markets and is moving towards being a one-stop-shop for
physicians, patients and other customers for alternate care/alternate site
health care needs.
Internal Systems Development
The Company has developed and continues to improve its
specialized internal operating and management systems. Inventories and
accounts receivable are controlled through the use of Company developed data
processing and management information systems. These assets are monitored by
distribution center management using on-site data processing equipment. At
present, many operational functions, including accounting, cash management,
accounts receivable and inventory control are conducted through data processing
operations at the Altamonte Springs, Indianapolis, Brockton, Shelby, and
Portland facilities. Data is transmitted to and from on-site data processing
equipment at the distribution centers.
Expansion/Acquisitions
The Company continues to seek opportunities to expand its
operations geographically through the development of new distribution centers
or the acquisition of existing wholesale drug distributors or alternate
care/alternate site distributors or providers. Presented below is a brief
discussion of recent acquisitions by the Company. All of the acquisitions
have been accounted for under the purchase method and, accordingly, the results
of operations of the acquired companies have been included in the Company's
financial statements from the effective date of acquisition. The purchase price
has been allocated based on a determination of the fair value of the assets
acquired and liabilities assumed. The goodwill associated with these
acquisitions is being amortized on a straight line basis not exceeding 40
years. See, also, Note 11 - Statement of Cash Flows in the Company's financial
statements, which is incorporated herein by reference.
J.E. Goold.
On March 25, 1992, the Company effected a merger with J.E. Goold,
a full-line, full-service distributor of pharmaceutical, health and beauty care
and home health care products based in Portland, ME.
Charise Charles and PRN Medical.
On February 28, 1993 and October 6, 1993, the Company acquired
Charise Charles Ltd., Inc., a wholesale distributor of oncology and dialysis
products based in Altamonte Springs, FL and PRN Medical, Inc., a wholesale
distributor of renal and dialysis supplies and equipment based in Orlando, FL,
respectively.
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Kendall Drug Company.
Effective July 1, 1994, the Company acquired the net assets of
Kendall Drug Company, a wholesale distributor of pharmaceutical products and
health and beauty care products based in Shelby, NC.
3C Medical.
On October 31, 1994, the Company, through its Priority Healthcare
Corporation subsidiary, acquired in a merger all of the outstanding stock of
3C Medical, Inc., a Santa Ana, CA based distributor of hemodialysis products.
This division specializes in the acute dialysis market in Southern California
and Mexico through exclusive distribution agreements with major vendors.
IV One Companies.
Effective January 1, 1995, the Company, through its Priority
Healthcare Corporation subsidiary, acquired all of the outstanding stock of the
IV One Companies in a cash transaction. The IV One Companies are comprised of
IV-1, Inc., IV-One Services, Inc., and National Pharmacy Providers, Inc. These
companies focus on high acuity specialty pharmacy services for patients
requiring home and ambulatory infusion therapy and are operated as subsidiaries
of Priority Healthcare Corporation from Altamonte Springs, FL.
National Infusion Services, Inc.
On February 7, 1996, the Company through its Priority Healthcare
Corporation subsidiary, acquired all of the assets of the Infusion Services
Division of Infectious Disease of Indiana, P.S.C. This business will be
operated as National Infusion Services, Inc., which is a physician managed
provider of infusion services programs to patients in a variety of settings,
including the home, extended care facilities and its state-of-the-art
outpatient center in Indianapolis, IN.
Employees
As of February 29, 1996, the Company employed 912 persons, of
which approximately 4% are covered by a single collective bargaining agreement.
The Company believes that its relationship with its employees is good.
Competition
The markets in which the Company competes are highly competitive.
Not only does the Company compete with national and regional full-line,
full-service wholesale drug distributors, some of which are larger and have
substantially greater financial resources, but additional competition is
provided by direct selling manufacturers and specialty distributors. While
competition is primarily price oriented, it can also be affected by delivery
requirements, credit terms, depth of product line and other customer service
requirements. There can be no assurance that the Company will not encounter
increased competition in the future that could adversely affect the Company's
business. In recent years there has been a trend toward
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consolidation in the wholesale drug industry, as evidenced by the purchase of a
number of distributors by national wholesalers. The Company estimates that
there are currently less than 50 wholesale drug distributors in the United
States.
The alternate care/alternate site markets in which Priority
Healthcare operates are also highly competitive. Principal competitors
include: regional or national multi-market specialty distributors; national
full-line, full-service wholesale drug distributors which operate their own
specialty distribution businesses; mail order distributors which distribute
medical supplies on a regional or national basis; certain manufacturers which
sell their products both to distributors and directly to users, including
clinics and physician's offices; and local, regional or national home infusion
nursing and therapy businesses. While competition is primarily price and
service oriented, it can also be affected by depth of product line, technical
support, specific patient requirements and reputation. There can be no
assurance that Priority Healthcare will not encounter increased competition in
the future that could adversely affect its business.
Regulation
The Company, including Priority Healthcare Corporation, is subject
to regulation by federal, state and local government agencies. As a result,
the Company is required to register for permits and/or licenses with, and
comply with certain operating and security standards, of the United States Drug
Enforcement Administration, the Food and Drug Administration, and appropriate
state agencies. Each of the Company's existing distribution centers is
licensed to distribute ethical pharmaceutical products and certain controlled
substances in accordance with the requirements of the Controlled Substances Act
of 1970 and the Prescription Drug Marketing Act of 1987. Similarly, the
health care provider businesses of Priority Healthcare Corporation are licensed
by the appropriate state board of pharmacy, department of health, home health
agency or related governmental agency. In addition, Priority Healthcare
Corporation's physician customers are subject to significant federal and state
regulations, including the so called fraud and abuse laws. The fraud and abuse
laws impose criminal and civil sanctions on (a) persons who solicit, offer,
receive or pay any remuneration in return for inducing the referral of a
patient for treatment or the ordering or purchasing of items or services that
are in any way paid for by Medicare, Medicaid or similar state programs and (b)
physicians who make referrals for clinical laboratory or certain designated
health services to entities with which the physician has a financial
relationship. The fraud and abuse laws and regulations are broad in scope and
are subject to frequent modification and varied interpretation.
Failure to comply with these laws and regulations could subject
the Company to significant civil sanctions, especially under the strict
liability standards imposed by the Controlled Substances Act and the broad
scope of coverage imposed by the fraud and abuse laws. The Company believes it
complies in all material respects with applicable laws and regulations.
Because the health care industry will continue to be subject to substantial
regulations, however, the Company can give no assurance that its activities
will not be reviewed or challenged by regulatory agencies in the future.
Industry Overview
The wholesale drug industry in the United States continues to
experience significant growth. As reported by the National Wholesale
Druggists' Association, industry sales have
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grown from $30.2 billion in 1990 to approximately $55 billion in 1995, a
compound annual growth rate of 13%. Today, industry analysts estimate
approximately 85% of pharmaceutical manufacturers distribute through
wholesalers compared to less than 60% in 1980. Order processing, inventory
management and product delivery by wholesale distributors allow manufacturers
to better allocate their resources to research and development, manufacturing
and marketing their products. Customers benefit from wholesale distribution by
having access to a single supply source for a full line of pharmaceutical and
health care products from hundreds of individual manufacturers. Further,
inventory costs are lower, delivery is more timely and efficient, and
purchasing and inventory information improved. Customers additionally benefit
from the range of value added programs developed by wholesale drug distributors
that are targeted to their specific needs which, in turn, reduce their costs
and increase their operating efficiencies.
The alternate care/alternate site industry is comprised of health
care distributors and providers serving health care facilities outside the
hospital environment, including physicians' offices, clinics and patients'
homes. The shift from the hospital has occurred primarily as a result of cost
containment pressures exerted by payers and the improvement in the treatment of
various types of diseases in alternate care/alternate site facilities.
These facilities administer pharmaceutical drugs and related medical supplies
to patients who generally require dialysis therapy for treatment of kidney
failure, chemotherapy for treatment of cancer or infusion therapy for treatment
of a number of conditions, including infectious diseases such as HIV and
hepatitis. The combined market for alternate care/alternate site distributors
and providers serving dialysis, cancer and infusion therapy facilities is much
smaller than the market being served by the wholesale drug industry. These
three markets are expected to continue to grow, however, as more health care
services are shifted from the hospital to the alternate care/alternate site
facility. At the same time, the consolidation exhibited within each market the
past few years is also expected to continue. See, also, Competition in Part I,
Item 1, which is incorporated herein by reference.
Industry experts believe that the pharmaceutical industry,
including drug wholesalers and related health care distributors and providers,
will continue to grow as a result of the following trends:
Aging Population.
The number of individuals over 65 in the United States has grown
23% from approximately 26 million in 1980 to approximately 32 million in 1990
and is projected in increase an additional 9% to more than 35 million by the
year 2000. This age group suffers from a greater incidence of chronic
illnesses and disabilities than the rest of the population and is estimated to
account for approximately two-thirds of total health care expenditures by the
end of the decade.
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Introduction of New Pharmaceuticals.
Traditional research and development as well as the advent of new
research and production methods, such as biotechnology, continue to generate
new compounds that are more effective in treating diseases. These compounds
have been responsible for significant increases in pharmaceutical sales. The
Company believes that ongoing research and development expenditures by the
leading pharmaceutical manufacturers will contribute to the continued growth of
the industry. While national attention has recently been focused on the
overall increase in aggregate health care costs, drug therapy has had a
beneficial impact on such costs by reducing expensive surgeries and prolonged
hospital stays. Pharmaceuticals currently account for less than 9% of overall
health care costs, and manufacturers' emphasis on research and development is
expected to continue the introduction of cost effective drug therapies.
Analysts expect the overall sales of pharmaceuticals to continue double-digit
increases through the year 2000.
Managed Care Market.
To remain competitive, pharmaceutical manufacturers are required
to sell their products to the managed care market, wherein employers negotiate
discounts from health care providers by committing to long-term contracts
involving thousands of patients. Health care costs are linked more tightly to
the provision of managed health care services, especially with hospitals and
doctors, than under traditional medical insurance plans. Managed care
organizations generally provide full coverage for prescription drugs to lower
health care costs by improving access to medical treatment rather than delaying
treatment until more expensive services are required. The costs associated
with the prescription drug benefit are monitored by the managed care
organization primarily through the establishment of tightly controlled
formularies of approved prescription drugs, including generic substitutes, and
by drug utilization review procedures wherein physicians' prescribing practices
and patients' usage are closely scrutinized.
Increased Use of Generic Drugs.
The growth of managed care's influence on pharmacy along with the
introduction of generic equivalent products for many top selling brand name
drugs has caused the generic market to grow substantially. In the next five
years, the size of the market is expected to nearly double from $3.8 billion to
$6.5 billion.
Pharmaceutical Price Increases.
As a result of competitive market-driven cost containment
measures implemented by both the private and public sectors during the past
three years, pharmaceutical price increases are significantly less than in
prior years. Nevertheless, analysts estimate that price increases by
pharmaceutical manufacturers will continue to equal or exceed the overall
Consumer Price Index which is due in large part to relatively inelastic demand
in the face of higher prices charged for patented drugs as manufacturers have
attempted to recoup costs associated with the research and development,
clinical testing and FDA approval of new products.
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Continued Industry Consolidation.
In response to cost containment pressure from private and
governmental payers and the current focus on health care reform in the United
States, there has been significant consolidation within the industry during the
past two years at the manufacturer, wholesaler and customer levels.
Pharmaceutical manufacturers have consolidated to reduce operating expenses,
gain access to new drugs in the pipeline and enhance marketing efforts in a
managed care environment. Likewise, chain drug stores are continuing to
purchase independent drug stores and, in some cases, other drug chains.
Independent drug stores are also consolidating into regional and national
affiliations. At the same time that sales through the wholesale drug industry
have increased, the number of pharmaceutical wholesalers in the United States
has decreased from 139 in 1980 to less than 50 at the end of 1995. During
1996, it is estimated that the six national wholesalers will distribute nearly
85% of the prescription drugs in the United States.
Manufacturers' Pricing and Distribution Policies.
Some manufacturers distribute their products solely through
franchised wholesalers, while others also sell directly to retailers.
Functional price discounts to wholesalers are offered by many manufacturers. A
limited number of manufacturers have a one-price system of distribution and
sell directly to wholesalers and retailers at the same price. The Company does
not transact as much business with direct selling manufacturers that have
adopted a one-price system. In recent years, certain manufacturers have
adopted wholesaler only policies, while certain other manufacturers have
adopted one-price systems for wholesalers and retailers. Although
pharmaceutical manufacturers may adopt one-price systems in the future, or may
be required to pursuant to federal or state legislation, such developments have
not had a material adverse effect on the Company's business in the past. See,
also, Note 12 - Legal Proceedings in the Company's financial statements, which
is incorporated herein by reference.
In response to the above trends, the Company has focused its
efforts on higher margin direct store delivery sales, alternate care/alternate
site sales, managed care sales, better asset and cash flow management, and
containment of selling, general and administrative expenses through improved
technology, consolidation of distribution centers and increased sales through
market expansion and acquisitions.
Item 2. PROPERTIES.
The Company currently has 10 operating divisions, nine
wholly-owned subsidiaries, and 12 distribution centers that have warehouse
and delivery facilities. Each center has been constructed or adapted to the
Company's specifications for climate control, alarm systems and segregated
security areas for controlled substances. The Company utilizes modern
warehousing techniques and equipment designed to accommodate both the wholesale
drug and alternate care/alternate site customers. At each location, a manager
supervises warehouse, delivery and local sales functions. The Company utilizes
owned vans and trucks, contract carriers, common carriers and couriers to
deliver its products. The Company believes that its properties are adequate to
serve the Company's current and anticipated needs without making capital
expenditures materially higher than historical levels. See, also, Note 9
- -Commitments in the Company's financial statements, which is incorporated
herein by reference.
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These distribution centers are listed below:
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SQUARE OWNED OR
LOCATION FOOTAGE LEASED
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Altamonte Springs, FL 33,000 Leased
Austell, GA 56,160 Leased
Dallas, TX 44,000 Owned
Houston, TX 15,000 Leased
Indianapolis, IN 57,200 Owned
Middletown, PA 40,650 Leased
Orange, CT 185,000 Owned
Orlando, FL 94,600 Owned
Portland, ME 60,000 Owned
San Dimas, CA 65,400 Leased
Santa Ana, CA 11,941 Leased
Shelby, NC 103,500 Owned
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The Company's owned, 60,000 square foot facility in Brockton, MA
is scheduled for consolidation during the first quarter of 1996 and will be
sold or leased thereafter.
In addition, the Company purchased its corporate offices in
Indianapolis, IN from a partnership controlled by the Company's principal
shareholder at its fair market value. Prior to the purchase, the Company
leased the building under a capital lease. This building provides 32,000
square feet of office space for the accounting, contracts, credit, human
resources, information systems and purchasing departments. The Company also
leases 8,000 square feet of office space located in Indianapolis, IN. This
office currently houses certain of the Company's executive officers and related
staff. The National Infusion Services, Inc. subsidiary leases 4,810 square
feet of office and medical building space in Indianapolis, IN.
Item 3. LEGAL PROCEEDINGS.
The Company is subject to ordinary and routine litigation
incidental to its business, none of which is material to the Company's results
of operations or financial condition. See, also, Note 12 - Legal Proceedings in
the Company's financial statements, which is incorporated herein by reference.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted during the fourth quarter of 1995 to a
vote of security holders of the registrant, through the solicitation of proxies
or otherwise.
Executive Officers.
The following is a list of the Company's executive officers,
their ages and their positions held by the named individuals. These positions
may exclude other positions held with subsidiaries of the Company. These
executive officers serve at the discretion of the Board. There is no family
relationship between any of the executive officers of the Company.
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
NAME AGE POSITION
---- --- --------
William E. Bindley 55 Chairman of the Board, Chief
Executive Officer, and President
Keith W. Burks 38 Executive Vice President
Michael D. McCormick 48 Executive Vice President, General
Counsel, and Secretary
Thomas J. Salentine 56 Executive Vice President, Chief
Financial Officer
Gregory S. Beyerl 38 Vice President and Controller
Michael L. Shinn 41 Treasurer
Thomas G. Slama, M.D. 49 President and Chief Executive
Officer of National Infusion Services,
Inc.
</TABLE>
Gregory S. Beyerl, who is a certified public accountant, joined
the Company's Bindley Western Drug Company Division in 1986 as Assistant
Controller and was promoted to division Controller in 1987, division Vice
President in 1990, and corporate Vice President and Controller in 1992. He was
previously with the accounting firm of Price Waterhouse. Mr. Beyerl also holds
an MBA degree.
Michael L. Shinn joined the Company as Treasurer in May 1992. Mr.
Shinn is a certified public accountant and was previously the Director of
Corporate Taxation for the Indianapolis office of the accounting firm of Price
Waterhouse. His duties include responsibility for the Company's entire tax
function, including those of its subsidiaries and divisions.
(Pursuant to general Instruction (G)(3) of Form 10-K, the
foregoing information pertaining to executive officers who are not standing for
election as members of the Board of Directors is included as an un-numbered
Item in Part I of this Annual Report in lieu of being included in the Company's
Proxy Statement for its 1996 Annual Meeting of Shareholders.)
<PAGE> 14
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock, $.01 par value, is traded on the New
York Stock Exchange under the symbol "BDY". Prior to listing on the New York
Stock Exchange, the common stock was quoted on the NASDAQ National Market
System under the symbol "BIND". The following table reflects the range of the
reported high and low prices for the Company's common stock as reported on the
New York Stock Exchange from August 2, 1995 through December 31, 1995 and on
the NASDAQ National Market prior thereto.
<TABLE>
<S> <C> <C>
1995 HIGH LOW
January 1 - March 31 $16.13 $13.75
April 1 - June 30 $16.13 $14.50
July 1 - September 30 $19.00 $15.25
October 1 - December 31 $18.38 $14.75
1994 HIGH LOW
January 1 - March 31 $14.00 $11.88
April 1 - June 30 $13.25 $11.13
July 1 - September 30 $14.75 $11.25
October 1 - December 31 $15.63 $11.75
</TABLE>
At March 15, 1996 there were outstanding 11,345,847 shares of the
Company's common stock, which were held by approximately 800 holders of
record.
The Company has paid cash dividends on its common stock of 1-1/2
cents per share on twelve different quarterly dates for the period beginning
September 5, 1990 and ending June 30, 1993. This dividend was increased to 2
cents per share for cash dividends paid on 11 different quarterly dates for the
period beginning September 7, 1993 and ending March 25, 1996. Prior to
September 5, 1990, the Company had not declared a cash dividend on its common
stock. Future dividends will be paid in accordance with declarations by the
Board of Directors in its sole discretion. The Company's primary bank line of
credit agreement requires the Company to maintain specified levels of working
capital and net worth, which may limit the Company's ability to pay dividends
in the future.
During the third quarter of 1994, the Company established an
Automatic Dividend Reinvestment Plan for its shareholders. This voluntary plan
provides for periodic investment of shareholder dividends in shares of the
Company's common stock plus the opportunity to make voluntary cash payments up
to $5,000 per quarter to purchase additional shares without incurring any
service charges or brokerage fees.
<PAGE> 15
Item 6. Selected Financial Data
The selected financial data set forth below should be read in conjunction with
the Company's financial statements and related notes included elsewhere in this
report.
Five Year Financial Review and Selected Financial Data
BINDLEY WESTERN INDUSTRIES, INC.
<TABLE>
<CAPTION>
(in thousands, except share data)
- ---------------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $4,670,153 $4,034,107 $3,426,097 $2,911,741 $2,392,801
Other income 2,322 3,317 4,363 3,578 4,164
Cost of products sold 4,565,750 3,945,172 3,350,119 2,844,880 2,334,669
Selling, general and administrative 62,555 50,279 43,322 36,707 27,419
Other expenses 16,406 16,998 20,601 17,761 17,141
Earnings before income taxes
and cumulative effect of
change in accounting principle 27,764 24,975 16,418 15,971 17,736
Provision for income taxes 11,383 10,240 6,854 5,590 6,376
Net earnings before
Cumulative effect of change
in accounting principle 16,381 14,735 9,564 10,381 11,360
Cumulative effect of change
in accounting principle 2,510
Net Earnings 16,381 14,735 9,564 12,891 11,360
Earnings per share:
Before cumulative effect of change
in accounting principle
Primary $ 1.42 $ 1.34 $ 0.88 $ 1.02 $ 1.61
Fully diluted 1.27 1.20 0.86 1.00 1.33
Net earnings
Primary 1.42 1.34 0.88 1.27 1.61
Fully diluted 1.27 1.20 0.86 1.21 1.33
Cash dividends declared per
Common Share $ 0.08 0.08 0.07 0.06 0.06
Other financial data:
Current assets $ 772,761 $ 736,687 $ 665,412 $ 555,429 $ 431,077
Total assets 844,103 803,447 732,204 629,759 495,863
Current liabilities 568,764 547,131 489,904 395,353 341,647
Long-term debt 69,473 69,461 69,733 69,246 53,660
Total liabilities 643,343 623,196 566,486 473,072 409,693
Shareholders equity 200,760 180,251 165,718 156,687 86,170
Book value per share 17.90 16.64 15.38 14.59 12.54
</TABLE>
<PAGE> 16
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The discussion and analysis that follows should be read in conjunction
with the Consolidated Financial Statements and related notes included elsewhere
in this report.
RESULTS OF OPERATIONS.
The Company has made several acquisitions which affect the comparison
of the results of operations on a year to year basis. All acquisitions have
been accounted for under the purchase method and, accordingly, the results of
operations of the acquired entities are included in the Company's financial
statements from the respective dates of acquisition.
The Company acquired Charise Charles Ltd. (Charise Charles), a
wholesale distributor of oncology and renal care pharmaceuticals and biotech
drugs on February 28, 1993, and PRN Medical, Inc. (PRN), a wholesale
distributor of renal care supplies and dialysis equipment on October 6, 1993.
On June 23, 1994 the Company formed a new wholly owned subsidiary,
Priority Healthcare Corporation (PHC), to provide a greater management focus
and an enhanced ability to meet the needs of the higher margin alternate
care/alternate site business. The new company, based in Altamonte Springs, FL,
was initially comprised of the Charise Charles and PRN divisions of the
Company.
PHC continued to expand through the acquisitions of 3C Medical and
the IV One Companies (IV One). The acquisition of 3C Medical, a distributor of
hemodialysis products, was effective October 31, 1994. IV One is comprised of
IV-1, Inc., IV-One Services, Inc., and National Pharmacy Providers, Inc..
These companies focus on high acuity specialty pharmacy services for patients
requiring home and ambulatory infusion therapy. PHC acquired all of the
outstanding stock of IV One in a cash transaction effective January 1, 1995.
The Company also acquired Kendall Drug Company (Kendall), a wholesale
pharmaceutical distributor, effective July 1, 1994.
Net sales of $4,670 million for 1995 were an increase of 16% over
1994. These sales increases resulted from internal growth and the
aforementioned acquisitions of Kendall, 3C and IV One. The internal growth of
12% reflected increased sales to existing customers, the addition of new
customers and price increases. The 18% increase of 1994 sales over 1993 was
also primarily the result of internal growth and the acquisitions of Charise
Charles, Kendall, 3C and PRN. The commitment to the direct store delivery
portion of the business continued through 1995 and accounted for 32% and 29% of
total sales in 1995 and 1994, respectively. This represented a 25% increase of
1995 direct store sales over 1994 and a 30% increase for 1994 over 1993.
Gross margin of $104 million in 1995 increased by 17% over 1994,
primarily because of the increase in net sales. The increase in gross margin
for 1994 over 1993 was also 17%. The primary reason for this increase was also
the increase in net sales. Gross margin as a percent of net sales had a slight
increase in 1995 to 2.24% from 2.20% in 1994, which had decreased slightly
from the 2.22% of 1993. The decrease in 1994 resulted from competitive
<PAGE> 17
selling pressures and the timing of purchasing gains associated with
pharmaceutical price inflation. In 1995, the pressure on sell side margins
continued and the purchasing gains remained relatively constant. However,
there was an infusion of higher margins from the recent acquisitions of the
alternate care/alternate site businesses of PHC and the commitment to growth of
the direct store delivery portion of the business. This growth included a
greater emphasis on providing new value added information systems programs, new
marketing programs with manufacturers and increased sales of higher margin
products such as generics, home health care and private label.
Other income decreased in 1995 and 1994 as a result of reduced gains
on the sale of marketable securities and a decrease in service fee income on
certain customer receivable balances.
Selling, general and administrative (SGA) expenses increased from
$43.3 million in 1993 to $50.3 million in 1994 and to $62.6 million in 1995.
The increase from 1993 to 1994 included incremental SGA of $3.7 million related
to acquisitions. For 1995, the increase attributable to the acquired companies
was $6 million. The remainder of the increases resulted from normal
inflationary increases and costs to support the growing direct store delivery
business of Bindley Western Drug Company and the alternate care/alternate site
business of PHC. The cost increases related to the direct store delivery and
alternate care/alternate site business include, among others, delivery expense,
warehouse expense, and labor costs, which are variable with the level of sales
volume. In 1995, SGA expense also included sales and development costs
associated with the new information systems and marketing programs and
incremental costs associated with the consolidation of the Charlotte division
into the expanded facility in Shelby, NC. SGA expenses will continue to
increase as direct store delivery and alternate care/alternate site sales
increase. However, management remains focused on controlling this increase
through improved technology, better asset management and opportunities to
consolidate distribution centers.
Depreciation and amortization increased from $5.7 million in 1993 to
$5.8 million in 1994 and to $6.3 million in 1995. These increases were the
result of the inclusion of acquired entities and the depreciation and
amortization on new facilities and equipment, particularly in management
information systems.
Interest expense for 1993, 1994 and 1995 was $8.1 million, $11.2
million and $10.1 million, respectively. The average short-term borrowings
outstanding were $105 million, $142 million and $104 million at an average
short-term interest rate of 4.9%, 5.9% and 7.1% for 1993, 1994 and 1995,
respectively. In all years, funds received from customers in respect of
working capital carrying cost were treated as a reduction of interest expense.
The 1993 writedown of accounts receivable of $1.42 million represented
the Company's remaining exposure from the Reliable bankruptcy claim. Reliable
entered bankruptcy on December 9, 1992.
On February 22, 1995, Pic 'N Save, a 32-store chain based in
Jacksonville, FL, filed a petition for reorganization under the federal
Bankruptcy Code. As of the date of filing, Pic 'N Save was indebted to the
Company in an amount approximating $3.46 million. During 1995, the Company's
sales to Pic 'N Save approximated $25 million. These sales were made to Pic 'N
Save on a cash
<PAGE> 18
basis and the Company is continuing to sell to Pic 'N Save on a cash basis.
The Company believes that its reserves for doubtful accounts should be
sufficient to absorb any uncollectible amounts resulting from the Pic 'N Save
plan of reorganization.
The restructuring charge of $5.39 million in 1993 was attributable
primarily to consolidation programs for the Company's East Coast operations
which should provide increased efficiency, reduced costs and enhanced data
processing based programs for all customer categories. This charge included
lease commitments to third parties, writedowns of various assets to realizable
values and facilities consolidation costs. The charge was comprised of noncash
asset writedowns of approximately $2.7 million, product consolidation costs of
approximately $.3 million and anticipated probable cash expenditures of $2.4
million related to payments on lease commitments, data processing and inventory
conversion costs and other employee costs. The anticipated probable cash
expenditures will be funded from operating revenues. The Company believes
that, as of December 31, 1995, the consolidation of the East Coast operations
was on schedule and the Company had expended $1.8 million of the probable cash
expenditures on a basis substantially consistent with the original plan and
believes that the $5.39 million charge taken at December 31, 1993 should be
sufficient to complete the consolidation.
The provision for income taxes represented 41.0%, 41.0% and 41.7% of
earnings before taxes in 1995, 1994 and 1993, respectively. The 1993 rate
included the effect of the statutory rate increase on the Company's deferred
tax liabilities at the beginning of 1993. In accordance with the provisions of
Statement of Accounting Standards No. 109 "Accounting for Income Taxes," the
Company accounts for income taxes using the asset and liability method. The
asset and liability method requires the recognition of deferred tax assets and
liabilities for expected future tax consequences of temporary differences that
currently exist between the tax bases and financial reporting bases of the
Company's assets and liabilities.
The Company is considering a pro rata distribution to its shareholders
of all of the stock of PHC. The proposed spin-off would separate the Company's
wholesale drug business from the wholesale drug and alternate care/alternate
site business of PHC. The contemplated spin-off would be subject to, among
other business considerations, obtaining a favorable tax ruling and compliance
with applicable securities and other governmental regulations.
LIQUIDITY-CAPITAL RESOURCES.
The Company's operations provided $63 million in cash for the year
ended December 31, 1995. The source of funds was primarily a result of a
reduction in merchandise inventory and an increase in accounts payable. These
sources were partially offset by an increase in accounts receivable. The
decrease in merchandise inventories resulted from management's efforts to
control inventory levels to minimize carrying costs and maximize purchasing
opportunities while the increase in accounts payable was attributed to the
timing of payment terms. The increase in accounts receivable resulted from the
increase in the current year sales.
Capital expenditures, predominantly for the expansion and automation
of existing warehouses and the investment in additional management information
systems, were $7.9 million during 1995. Proceeds from the sale of marketable
securities during 1995 were $1.3 million. Amounts paid to acquire the stock of
the IV One Companies and to satisfy
<PAGE> 19
amounts owed pursuant to a prior year acquisition agreement totaled
approximately $4.1 million.
Net decrease in borrowings under the bank credit agreement was $62
million during 1995. At December 31, 1995, the Company had borrowed $74.5
million under the bank credit agreement and had a remaining availability of
$175.5 million.
The Company believes that its cash on hand, cash equivalents, bank
line of credit and working capital management efforts are sufficient to meet
future working capital requirements. As of December 31, 1995, the Company's
short-term bank line of credit was $250,000,000.
The Company's principal working capital needs are for inventory and
accounts receivable. The Company sells inventory to its chain drug warehouse
and other customers on various payment terms. This requires significant
working capital to finance inventory purchases and entails accounts receivable
exposure in the event any of its chain warehouse or other major customers
encounter financial difficulties. Although the Company monitors closely the
creditworthiness of its major customers and, when feasible, obtains security
interests in the inventory sold, there can be no assurance that the Company
will not incur some collection loss on chain drug or other major customer
accounts receivable in the future.
INFLATION.
The Company's financial statements are prepared on the basis of
historical costs and are not intended to reflect changes in the relative
purchasing power of the dollar. Because of its ability to take advantage of
forward purchasing opportunities, the Company believes that its gross profits
generally increase as a result of manufacturers price increases in the products
it distributes. Gross profits may decline if the rate of price increases by
manufacturers declines.
Generally, price increases are passed through to customers as they are
received by the Company and therefore reduce the negative effect of inflation.
Other non-inventory cost increases, such as payroll, supplies and services,
have been partially offset during the past three years by increased volume and
productivity.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial data required to be included under this item is
submitted in a separate section of this report and incorporated herein by
reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
<PAGE> 20
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this Item concerning the Directors and
nominees for Directors of the Company is incorporated herein by reference to
the Company's definitive Proxy Statement for its 1996 annual meeting of common
shareholders, to be filed with the Commission pursuant to Regulation 14A within
120 days after the end of the Company's last fiscal year. Information
concerning the executive officers of the Company is also included under
"Executive Officers " at the end of Part I of this Annual Report. Such
information is incorporated herein by reference, in accordance with General
Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation
S-K.
Item 11. EXECUTIVE COMPENSATION.
The information required by this Item concerning remuneration of
the Company's officers and Directors and information concerning material
transactions involving such officers and Directors is incorporated herein by
reference to the Company's definitive Proxy Statement for its annual meeting of
common shareholders to be filed with the Commission pursuant to Regulation 14A
within 120 days after the end of the Company's last fiscal year.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this Item concerning the stock
ownership of management and five percent beneficial owners is incorporated
herein by reference to the Company's definitive Proxy Statement for its annual
meeting of common shareholders to be filed with the Commission pursuant to
Regulation 14A within 120 days after the end of the Company's last fiscal year.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item concerning certain
relationships and related transactions is incorporated herein by reference to
the Company's definitive Proxy Statement for its annual meeting of common
shareholders to be filed with the Commission pursuant to Regulation 14A within
120 days after the end of the Company's last fiscal year.
<PAGE> 21
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
The documents listed below are filed as a part of this report except as
otherwise indicated:
(a) 1. FINANCIAL STATEMENTS. The following described financial
statements, required to be filed by Item 8 and incorporated therein by reference
are set forth on pages F-1 though F-16.
Report of Independent Accountants 22
Statements of Earnings for each of the three years
in the period ended December 31, 1995 23
Balance Sheets as of December 31, 1995 and 1994 24
Statements of Cash Flows for each of the three years
in the period ended December 31, 1995 25
Statements of Shareholders' Equity for each of the
three years in the period ended December 31, 1995 26
Notes to Consolidated Financial Statements 27 to 37
(a) 2. FINANCIAL STATEMENT SCHEDULES. No financial statement
schedules are included as the information required by Rule 5-04 is not
applicable, or is not material.
(a) 3. EXHIBITS. The list of exhibits filed as part of this
report is incorporated herein by reference to the Index to Exhibits at Page 39.
(b) 4. No reports on Form 8-K were filed by the Registrant during
the last quarter covered by this report.
<PAGE> 22
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Bindley Western Industries, Inc.
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a) 1 on page 21 present fairly, in all material
respects, the financial position of Bindley Western Industries, Inc. and its
subsidiaries at December 31, 1995 and 1994, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1995, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
Price Waterhouse LLP
Indianapolis, Indiana
February 28, 1996
<PAGE> 23
CONSOLIDATED STATEMENTS OF EARNINGS
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR THE YEARS ENDED DECEMBER 31, 1995 1994 1993
(In thousands, except share data)
Revenues:
Net sales $ 4,670,153 $ 4,034,107 $ 3,426,097
Other income 2,322 3,317 4,363
------------- ------------- ------------
4,672,475 4,037,424 3,430,460
Cost and expenses:
Cost of products sold 4,565,750 3,945,172 3,350,119
Selling, general and administrative 62,555 50,279 43,322
Depreciation and amortization 6,279 5,813 5,671
Interest 10,127 11,185 8,122
Write down of accounts receivable 1,420
Restructuring charge 5,388
------------- ------------- ------------
4,644,711 4,012,449 3,414,042
Earnings before income taxes 27,764 24,975 16,418
------------- ------------- ------------
Provisions for income taxes:
Current 13,944 11,800 8,193
Deferred (2,561) (1,560) (1,339)
------------- ------------- ------------
11,383 10,240 6,854
------------- ------------- ------------
Net earnings $ 16,381 $ 14,735 $ 9,564
============= ============= ============
Earnings per share:
Primary $ 1.42 $ 1.34 $ 0.88
Fully diluted 1.27 1.20 0.86
Average shares outstanding:
Primary 11,529,092 11,035,912 10,915,751
Fully diluted 15,042,597 14,539,770 14,315,902
</TABLE>
(See accompanying notes to consolidated financial statements)
<PAGE> 24
CONSOLIDATED BALANCE SHEETS
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
DECEMBER 31, 1995 1994
(In thousands, except share data)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 34,819 $ 39,840
Short-term investments 1,024
Accounts receivable, less allowance for doubtful
accounts of $3,057 for 1995 and $2,455 for 1994 397,924 318,344
Finished goods inventory 332,054 374,557
Other current assets 7,964 2,922
-------- --------
772,761 736,687
-------- --------
Other assets 1,220 1,430
-------- --------
Fixed assets, at cost 59,468 53,983
Less: accumulated depreciation (18,736) (16,250)
-------- --------
40,732 37,733
-------- --------
Intangibles 29,390 27,597
-------- --------
TOTAL ASSETS $844,103 $803,447
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 74,500 $136,500
Accounts payable 491,844 404,813
Deferred income taxes (4,605) (3,542)
Other current liabilities 7,025 9,360
-------- --------
568,764 547,131
-------- --------
Long-term debt 69,473 69,461
-------- --------
Deferred income taxes 5,106 6,604
-------- --------
Shareholders' equity:
Common stock, $.01 par value-authorized 30,000,000 shares;
issued 11,562,388 and 11,179,994 shares, respectively 3,313 3,310
Special shares, $.01 par value-authorized 1,000,000 shares
Additional paid in capital 87,707 82,652
Retained earnings 112,890 97,439
-------- --------
203,910 183,401
-------- --------
Less: 348,291 shares in treasury-at cost (3,150) (3,150)
-------- --------
Total shareholders' equity 200,760 180,251
-------- --------
Commitments and contingencies
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $844,103 $803,447
======== ========
</TABLE>
(See accompanying notes to consolidated financial statements)
<PAGE> 25
Consolidated Statements Of Cash Flows
Bindley Western Industries, Inc. And Subsidiaries
<TABLE>
<CAPTION>
FOR YEARS ENDED DECEMBER 31, 1995 1994 1993
(In thousands)
<S> <C> <C> <C>
Cash flow from operating activities:
Net income $ 16,381 $ 14,735 $ 9,564
Adjustments to reconcile net income to
net cash provided (used) by operating activities:
Depreciation and amortization 6,279 5,813 5,671
Deferred income taxes (2,561) (1,560) (1,339)
Writedown of accounts receivable 1,420
Loss (gain) on sale of marketable securities (96) (183) (1,450)
Loss (gain) on sale of fixed assets (27) (57) 3
Restructuring charge 5,388
Change in assets and liabilities,
net of acquisitions:
Accounts receivable (78,183) 6,327 (74,308)
Finished goods inventory 42,953 (46,987) (24,535)
Accounts payable 85,781 6,876 17,485
Other current assets and liabilities (7,537) 2,849 (2,838)
Net cash provided (used) by operating ----------- ----------- ---------
activities 62,990 (12,187) (64,939)
----------- ----------- ---------
Cash flow from investing activities:
Purchase of fixed assets and other assets (7,922) (3,575) (5,738)
Proceeds from sale of fixed assets 597 491 1,769
Proceeds from sale of investment securities 1,299 3,793 12,871
Acquisition of businesses (4,125) (10,361) (5,980)
----------- ----------- ---------
Net cash provided (used) by investing activities (10,151) (9,652) 2,922
----------- ----------- ---------
Cash flow from financing activities:
Proceeds from sale of stock 5,058 717 284
Addition (reduction) of long-term debt 12 (272) 487
Proceeds under line of credit agreement 1,049,000 1,184,500 984,000
Payments under line of credit agreement (1,111,000) (1,156,000) (921,000)
Dividends (930) (919) (817)
Net cash provided (used) by financing ----------- ----------- ---------
activities (57,860) 28,026 62,954
----------- ----------- ---------
Net increase (decrease) in cash (5,021) 6,187 937
Cash at beginning of year 39,840 33,653 32,716
----------- ----------- ---------
Cash at end of year $ 34,819 $ 39,840 $ 33,653
=========== =========== =========
</TABLE>
(See accompanying notes to consolidated financial statements)
<PAGE> 26
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION> Common Stock Treasury Stock
---------------------------------------------------------------
Additional
Shares Shares Paid in Retained Shareholders'
Outstanding Amount Outstanding Amount Capital Earnings Equity
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except
share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1992 11,089,834 $ 3,309 348,291 $(3,150) $81,652 $ 74,876 $ 156,687
Net earnings 9,564 9,564
Dividends (817) (817)
Shares issued upon
exercise of
stock options 31,100 284 284
---------- -------- ------- -------- ------- -------- ----------
Balances at
December 31, 1993 11,120,934 3,309 348,291 (3,150) 81,936 83,623 165,718
Net earnings 14,735 14,735
Dividends (919) (919)
Shares issued upon
exercise of
stock options 44,060 1 521 522
Shares issued upon
acquisition of
business 15,000 195 195
---------- -------- ------- --------- ------- -------- ----------
Balances at
December 31, 1994 11,179,994 3,310 348,291 (3,150) 82,652 97,439 180,251
Net earnings 16,381 16,381
Dividends (930) (930)
Shares issued upon
exercise of
Stock options 382,394 3 5,055 5,058
---------- --------- ------- --------- ------- -------- ----------
Balances at
December 31, 1995 11,562,388 $ 3,313 348,291 $(3,150) $87,707 $112,890 $ 200,760
========== ======== ======= ======== ======= ======== ==========
</TABLE>
(See accompanying notes to consolidated financial statements)
<PAGE> 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated.
MARKETABLE SECURITIES. Effective January 1, 1994, the Company adopted
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115). This statement was
adopted prospectively, and had no impact on earnings.
This statement requires the classification of certain debt and equity
securities as either held to maturity, available for sale, or trading. Held to
maturity securities are reported at amortized cost while available for sale and
trading securities are reported at fair value. The cost of marketable
securities sold is determined on the specific identification method. Prior to
adoption, marketable securities were carried at amortized cost.
INVENTORIES. Inventories are stated on the basis of lower of cost or
market using the first-in, first-out (FIFO) method.
FIXED ASSETS. Depreciation is computed on the straight-line method
for financial reporting purposes. Accelerated methods are primarily used for
income tax purposes. Assets, valued at cost, are generally being depreciated
over their estimated useful lives as follows:
Estimated useful life (years)
Buildings and furnishings 5-35
Leasehold improvements 3-20
Transportation and other equipment 3-20
DEBT ISSUE COSTS. Debt issue costs are amortized on a straight-line
basis over the life of the Convertible Subordinated Debentures (Debentures).
INTANGIBLES. Intangibles, including goodwill, generated from the
acquired companies are amortized on the straight-line method over periods of 11
to 40 years.
EARNINGS PER SHARE. Primary earnings per share are computed based on
the average number of shares of common stock and equivalents outstanding during
the year. Common stock equivalents included in the computation represent
shares issuable upon assumed exercise of stock options which would have a
dilutive effect. Fully diluted earnings per share are computed based on the
average number of shares of common stock assumed to be outstanding during the
year, as if the Debentures had been converted into common stock and after
giving effect to the elimination of interest expense, net of tax benefit,
applicable to the Debentures.
INCOME TAXES. In accordance with the provisions of Statement of
Accounting Standards No. 109 "Accounting for Income Taxes," the Company
accounts for income taxes using the asset and liability method. The asset and
liability method requires the recognition of deferred
<PAGE> 28
tax assets and liabilities for expected future tax consequences of temporary
differences that currently exist between the tax bases and financial reporting
bases of the Company's assets and liabilities.
The 1992 adoption of SFAS 109 resulted in an after-tax increase to net
earnings of $2,510,000. This amount is reflected in 1992 net income as the
effect of a change in accounting principle.
USE OF ESTIMATES. The preparation of financial statements in
accordance with generally accepted accounting principles requires the use of
estimates made by management. Actual results could differ from those
estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying values of
cash, accounts receivable, short-term borrowings, accounts payable and other
current liabilities approximate their fair market values due to the short-term
maturity of these instruments. The fair market values of marketable securities
and long term debt were determined based on market quoted rates and are
disclosed in Notes 3 and 6, respectively.
NOTE 2 - SHORT-TERM BORROWINGS
The Company's short-term bank line of credit was $250,000,000 as of
December 31,1995. The line was available, as necessary, for general corporate
purposes at rates based upon prevailing money market rates. $74,500,000 was
borrowed under the short-term bank line of credit at a rate of 6.9% at December
31, 1995. $136,500,000 was borrowed under the short-term bank line of credit
at a rate of 6.9% at December 31, 1994. $108,000,000 was borrowed under the
short-term bank line of credit at a rate of 4.9% at December 31, 1993.
No compensating balance is required on the line. Certain conditions
relating to the maintenance of working capital, net worth and corporate
existence have been imposed by the lenders.
A summary of 1995, 1994 and 1993 borrowings follows:
<TABLE>
<S> <C> <C> <C>
Maximum short-term Average Average
Year borrowings borrowings interest rate
- -------------------------------------------------------------------------------------------------------------------
(in thousands)
1995 $189,500 $104,465 7.1%
1994 $240,000 $142,275 5.9%
1993 $149,500 $104,842 4.9%
</TABLE>
NOTE 3 - MARKETABLE SECURITIES AND INVESTMENT INCOME
At December 31, 1995, the Company had liquidated substantially all of
its investments in debt and equity securities. The proceeds from the 1995
sales of securities classified as available for sale approximated their
amortized cost.
<PAGE> 29
At December 31, 1994, all securities owned by the Company were
categorized as either available for sale or trading. Securities classified as
available for sale were debt securities with a maturity of five to ten years
and a fair market value of $1,047,000, which approximated amortized cost.
During 1994 the proceeds on sales of securities classified as available for
sale were $2,524,000, which approximated the amortized cost of securities sold.
The components of other income were as follows:
<TABLE>
DECEMBER 31, 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Interest income $ 2,194 $ 3,076 $ 2,832
Dividends 32 1 54
Realized gains
and losses, net 96 240 1,477
----------------------------------------------------------------------------------
$ 2,322 $ 3,317 $ 4,363
==================================================================================
</TABLE>
NOTE 4 - FIXED ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, 1995 1994
- -------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Land $ 2,919 $ 2,833
Buildings and furnishings 22,864 18,361
Capitalized lease 1,390
Leasehold improvements 2,556 3,071
Transportation and
other equipment 31,129 28,328
----------------------------------------------------------------------------------
59,468 53,983
Less: Accumulated
depreciation (18,736) (16,250)
----------------------------------------------------------------------------------
$ 40,732 $ 37,733
==================================================================================
</TABLE>
NOTE 5 - INCOME TAXES
The provision for income taxes includes state income taxes of
$1,925,000, $1,850,000 and $1,225,000 in 1995, 1994 and 1993, respectively.
The following table indicates the significant elements contributing to
the difference between the U.S. federal statutory tax rate and the effective tax
rate:
<TABLE>
YEAR ENDED DECEMBER 31, 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Percentage of earnings before taxes:
U.S. federal statutory rate 35.0% 35.0% 35.0%
State and local taxes on income, net of
federal income tax benefit 4.5% 4.8% 4.8%
Other 1.5% 1.2% 1.9%
------------------------------------------------------------------------------------------
Effective rate 41.0% 41.0% 41.7%
==========================================================================================
</TABLE>
<PAGE> 30
Presented below are the significant elements of the net deferred tax
balance sheet accounts at December 31, 1995 and 1994:
<TABLE>
<S> <C> <C>
Deferred tax assets: 1995 1994
---- ----
Current:
Accounts receivable $ 4,893 $ 3,846
Inventories 677 888
Restructuring costs 255 473
Other, net 1,176 731
---------------------------------
Subtotal 7,001 5,938
Long-term:
Acquired net operating loss benefits 539 596
Customer lists 278 403
Other, net 1,022 669
---------------------------------
Subtotal 1,839 1,668
---------------------------------
Total deferred tax assets $ 8,840 $ 7,606
=================================
Deferred tax liabilities:
Current:
Change in tax method for inventories $ 2,396 $ 2,396
---------------------------------
Subtotal 2,396 2,396
Long-term:
Fixed assets 3,486 3,001
Change in tax method for inventories 2,396 4,793
Other, net 1,063 478
----------------------------------
Subtotal 6,945 8,272
----------------------------------
Total deferred tax liabilities $ 9,341 $ 10,668
==================================
</TABLE>
During 1992, the Company adopted the FIFO method of valuing
inventories for tax purposes. Prior to 1992, the Company used the LIFO method
of valuing inventories for tax purposes. The transition rules allow for the
Company to implement this change in accounting for tax purposes on a pro-rata
basis over the years 1992 through 1997.
In connection with the acquisition of Goold, the Company acquired
federal net operating loss carryforwards of $2,318,468. Due to certain tax law
limitations, annual utilization of the carryforward is limited to $162,945.
The remaining tax loss carryforward at December 31, 1995 is $1,704,188. The
carryover period expires in 2006.
<PAGE> 31
NOTE 6 - LONG-TERM DEBT
The primary component of long-term debt at December 31, 1995 is
$67,350,000 of Debentures. The remaining $2,123,000 is comprised of non-voting
(mandatorily redeemable) preferred stock, mortgage obligations, and certain
other debt related to the purchase of the IV One Companies.
On September 24, 1992 and October 20, 1992, the Company concluded a
public offering of $65,000,000 and $2,350,000, respectively, of Convertible
Subordinated Debentures, Due 2002, for approximately $65,565,000, net of
underwriting and other costs. The 6.50% Debentures are convertible at any time
prior to maturity into the Company's common stock at $19.825 per share. The
Company may redeem the Debentures at a decreasing premium after October 1,
1996.
The market value of the 6.50% Debentures, based upon the publicly
quoted rate, was $70,212,375 and $64,487,625 as of December 31, 1995 and
December 31, 1994, respectively.
In 1995, the Company purchased its corporate offices from a
partnership controlled by the Company's principal shareholder at its fair
market value of $1,450,000. Prior to the purchase, the Company leased the
building under a capitalized lease with a minimum annual rental of $111,000 at
an implicit rate of 10.5%.
NOTE 7 - PROFIT SHARING PLAN
The Company and its subsidiaries maintain a qualified Profit Sharing
Plan ("Profit Sharing Plan") for eligible employees. All employees are
generally eligible to participate in the Profit Sharing Plan as of the first
January 1, April 1, July 1 or October 1 after having completed at least one
year of service (as defined in the Profit Sharing Plan) and having reached
age 21 ("Participant"). The annual contribution of the Company and its
subsidiaries to the Profit Sharing Plan is at the discretion of the Board and
is generally 8% of the Participant's compensation for the year. The employer
contribution for a year is allocated among the Participants employed on the
last day of the year in proportion to their relative compensation for the year.
The Company's contributions to the plan for the years ended December 31, 1995,
1994 and 1993 were $1,165,550, $933,600 and $961,798, respectively.
Subject to limitations imposed by the Internal Revenue Code, a
Participant may have a whole percentage (ranging from 1% to 13%) of his or her
compensation withheld from pay and contributed to the Profit Sharing Plan and
make "rollover" contributions to the Profit Sharing Plan of qualifying
distributions from other employers' qualified plans.
A Participant's interest in amounts withheld from his or her pay and
contributed to the Profit Sharing Plan or in rollover contributions and in the
earnings on those amounts are fully vested at all times. A Participant's
interest in employer contributions made on his or her behalf and the earnings
on those contributions become 20% vested after three years of service and an
additional 20% vested during each of the next four years. A Participant's
interest in employer contributions made on his or her behalf and the earnings
on those contributions will also become fully vested when the employee retires
at age 65 or older, dies or becomes totally disabled.
<PAGE> 32
All contributions to the Profit Sharing Plan are paid in cash to an
Indianapolis bank, as trustee, and are invested by the trustee until
distributed to Participants or their beneficiaries. Participants are permitted
to direct the trustee as to the investment of their accounts by choosing among
several investment funds that are offered under the Profit Sharing Plan,
including one fund consisting of common stock of the Company. Participants may
elect to invest in one fund or a combination of the available funds according
to their investment goals. If a Participant does not make an investment
election, his or her Profit Sharing Plan accounts will be invested in a fund
designated by the Company.
Except in certain cases of financial hardship, a Participant (or his
or her beneficiary) receives distributions from the Profit Sharing Plan only at
death, retirement or termination of employment. At that time, the value of a
Participant's interest in the Profit Sharing Plan is distributed to him or her.
Effective January 1, 1994, the Company adopted the PRISM Prototype
Retirement Plan and Trust, which differs from the prior plan document in the
following respects: (a) the Company's contribution is discretionary instead of
mandatory; (b) Participants' forfeitures are used to reduce the Company's
contribution instead of being allocated prorata among the remaining
Participants; (c) the type and number of investment alternatives available for
Participants; and (d) the entry dates for new Participants now include April 1
and October 1. Generally, the new plan is considered an improvement in terms
of administration, cost and Participant access.
NOTE 8 - CAPITAL STOCK
The Company's capitalization presently consists of 30,000,000
authorized shares of Common Stock and 1,000,000 authorized shares of Special
Stock. Both the Common Stock and Special Stock have a $.01 par value per
share.
Prior to May 20, 1993, the Company had a 1983 Incentive Stock Option
Plan, a 1983 Nonqualified Option Plan, and a 1987 Stock Option and Incentive
Plan. The number of shares available for issuance pursuant to such plans
aggregated 2,500,000 shares. Incentive stock options, granted at a minimum of
100% of fair market value, and nonqualified stock options, granted at a minimum
of 85% of fair market value, both exercisable for up to 10 years from the date
of grant, were authorized under such plans.
On May 20, 1993, the Company's shareholders approved the 1993 Stock
Option and Incentive Plan authorizing 1,000,000 shares of the Company's common
stock for sale or award to officers and key employees (including any such
officer or employee who holds at least 10% of the Company's common stock) as
stock options or restricted stock. No further awards will be made from the
shares of common stock that remained available for grants under prior stock
option plans.
On May 19, 1994, the Company's shareholders approved amendments to the
Company's 1983 Incentive Stock Option Plan, the 1983 Nonqualified Stock Option
Plan, the 1987 Stock Option and Incentive Plan and the 1993 Stock Option and
Incentive Plan to permit the Company's Compensation and Stock Option Committee
of the Board of Directors ("Committee") to allow participants under these
plans, including the holders of outstanding
<PAGE> 33
options, to exercise an option during its term following cessation of
employment by reason of death, disability or retirement. Such amendments also
permitted the Committee, in its sole discretion, to change the exercise and
termination terms of options granted if such changes are otherwise consistent
with applicable federal and state laws. In addition, the 1993 plan was amended
to (i) increase from 1,000,000 to 1,500,000 the number of shares authorized for
issuance pursuant to awards made under the 1993 plan; (ii) limit to 100,000
shares the number of shares that any one participant may receive under the 1993
plan during any calendar year; and (iii) provide that the Board of Directors
may amend the 1993 plan in any respect without shareholder approval, unless
such approval is required to comply with Rule 16b-3 under the Securities
Exchange Act of 1934 or Section 422 of the Internal Revenue Code of 1986. At
its December 6, 1995 meeting, the Company's Board proposed to amend the 1993
Stock Option and Incentive Plan to increase by 1,500,000 the number of shares
authorized for issuance pursuant to awards made under the 1993 plan subject to
shareholder approval at the Company's May 16, 1996 annual meeting.
Changes in stock options under all plans are shown below:
<TABLE>
<CAPTION>
NUMBER OF SHARES OPTION PRICE PER SHARE
<S> <C> <C> <C>
Options outstanding
at December 31, 1992 1,407,354 $5.42 to $17.00
Forfeited during 1993 (27,050) $12.88 to $17.00
Granted during 1993 667,000 $11.00 to $12.65
Exercised during 1993 (31,100) $5.84 to $11.63
--------
Options outstanding
at December 31, 1993 2,016,204 $5.42 to $17.00
Forfeited during 1994 (51,200) $6.38 to $17.00
Granted during 1994 708,417 $11.50 to $14.58
Exercised during 1994 (43,950) $6.38 to $13.38
---------
Options outstanding
at December 31, 1994 2,629,471 $5.42 to $17.00
Forfeited during 1995 (102,598) $11.50 to $17.00
Granted during 1995 647,300 $14.50 to $19.39
Exercised during 1995 (382,394) $5.42 to $17.00
--------
Options outstanding
at December 31, 1995 2,791,779 $5.42 to $19.39
=========
Exercisable
at December 31, 1995 1,688,044
=========
Available for grant
at December 31, 1995 1,138,331
=========
</TABLE>
In certain cases, the exercise of stock options results in state and
federal income tax deductions to the Company on the difference between the
market price at the date of exercise
<PAGE> 34
and the option price. The tax benefits obtained from these deductions are
included in additional paid in capital.
The Company will continue to apply Accounting Principles Board Opinion
No. 25 in accounting for its stock based plans and will implement the
disclosure requirements of SFAS 123 "Accounting for Stock Based Compensation"
in 1996.
NOTE 9 - COMMITMENTS
The Company leases warehouse and office space under noncancelable
operating leases expiring at various dates through 2000, with options to renew
for various periods. Minimum commitments under leases aggregate $4,959,607
through 2000.
The consolidated rent expense for the years ended December 31, 1995,
1994 and 1993 was $1,708,691, $1,500,082 and $1,477,000, respectively, of which
approximately $76,875 in 1995, $45,000 in 1994 and $38,000 in 1993 pertained to
leases with terms of one year or less.
NOTE 10 - MAJOR CUSTOMERS
The Company services customers in 50 states, Puerto Rico, Mexico
and Central and South America from its 12 distribution centers located in nine
states. Its principal customers are chain drug companies that operate their
own warehouses. Other customers include independent drug stores, chain drug
stores, hospitals, clinics, HMOs, state and federal government agencies, and
other health care providers. Sales were made to three customers in 1995 and
two customers in 1994 and 1993 in amounts exceeding 10% of net sales. Sales
to these customers aggregated 44%, 33% and 36% of net sales in 1995, 1994 and
1993, respectively. The Company sells inventory to its chain drug warehouse
and other customers on various payment terms. This entails accounts receivable
exposure, especially if any of its chain warehouse customers encounter
financial difficulties. Although the Company monitors closely the
creditworthiness of its major customers and, when feasible, obtains security
interests in the inventory sold, there can be no assurance that the Company
will not incur the write-off or writedown of chain drug accounts receivable in
the future. In 1993, the Company recorded a writedown of $1.42 million
for Reliable Drug Stores, Inc. which represented the Company's remaining
exposure from the Reliable bankruptcy claim.
On February 22, 1995, Pic 'N Save, a 32 store chain based in
Jacksonville, FL, filed a petition for reorganization under the federal
Bankruptcy Code. As of the date of filing, Pic 'N Save was indebted to the
Company in an amount approximating $3.46 million. During 1995, the Company's
sales to Pic 'N Save approximated $25 million. These sales were made to Pic 'N
Save on a cash basis and the Company is continuing to sell to Pic 'N Save on a
cash basis. The Company believes that its reserves for doubtful accounts
should be sufficient to absorb any uncollectible amounts resulting from the Pic
'N Save plan of reorganization.
<PAGE> 35
NOTE 11 - STATEMENT OF CASH FLOWS
Cash paid for interest expense and income taxes was as follows:
DECEMBER 31, 1995 1994 1993
(in thousands)
Interest $13,395 $13,679 $10,074
Income Taxes $16,469 $ 8,003 $12,677
Presented below is a brief discussion of recent acquisitions by the
Company. The purchase price has been allocated based on a determination of the
fair value of the assets acquired and liabilities assumed. The goodwill
associated with these acquisitions is being amortized on a straight line basis
not exceeding 40 years. All acquisitions were treated as purchases and the
financial statements include the results of operations from the respective
effective date of acquisition. Results of operations of the acquired companies
from January 1 of the year of acquisition to the effective dates of the
transactions are not material to the consolidated results of operations of the
Company for the respective years.
On February 28, 1993 and October 6, 1993, the Company acquired
Charise Charles Ltd., Inc., a wholesale oncology and dialysis products
distributor based in Altamonte Springs, FL and PRN Medical, Inc., a wholesale
distributor of renal and dialysis supplies and equipment based in Orlando, FL,
respectively. The consideration exchanged by the Company for Charise Charles
and PRN of approximately $10 million (of which approximately $1.2 million was
paid in 1995) exceeded the fair market value of the net assets acquired and
resulted in approximately $5.6 million of intangible assets.
Effective July 1, 1994 and October 31, 1994, the Company purchased
Kendall Drug Co. (Kendall), a wholesale pharmaceutical distributor based in
Shelby, NC and 3C Medical, Inc. (3C), a distributor of hemodialysis products
based in Santa Ana, CA, respectively. The Company expended approximately $8.1
million for the acquisition of Kendall which approximated the fair value of the
net assets acquired. The Company exchanged 15,000 shares of its common stock
(market value $195,000) and approximately $1.2 million in cash for 3C which
exceeded the fair value of the net assets acquired and resulted in
approximately $1.1 million of intangible assets.
Effective January 1, 1995, the Company purchased the IV One Companies
(IV One). IV One is comprised of IV-1, Inc., IV-One Services, Inc., and
National Pharmacy Providers, Inc.. These companies focus on high acuity
specialty pharmacy services for patients requiring home and ambulatory infusion
therapy. The consideration exchanged for IV One was approximately $2.9
million which exceeded the fair value of net assets acquired and resulted in
approximately $2.1 million of intangible assets.
NOTE 12 - LEGAL PROCEEDINGS
The Company is a defendant in a consolidated class action complaint
filed in the United States District Court for the Northern District of Illinois
which names Bindley Western, five other pharmaceutical wholesalers and 26
pharmaceutical manufacturers as defendants. Plaintiffs allege that chargeback
agreements between pharmaceutical manufacturers and wholesalers
<PAGE> 36
are the result of price-fixing agreements in violation of the federal antitrust
laws. The plaintiffs seek injunctive relief, unspecified treble damages,
costs, interest and attorneys fees. On November 15, 1994, plaintiffs' motion
for class certification was granted, and the certified class consists of all
persons or entities who purchased from the manufacturer or wholesaler
defendants from October 15, 1989 to the present, with the exception of other
manufacturers, other wholesalers, governmental entities, mail order pharmacies,
HMOs, hospitals, clinics and nursing homes. Discovery has been concluded and
the Court is considering disposition motions. A majority of the manufacturer
defendants and the class plaintiffs have reached a settlement agreement, which
is subject to court approval after a hearing to consider its proposal. No
specific trial date has been set. On October 21, 1994, the Company entered
into an agreement in these cases with five other wholesalers and 26
pharmaceutical manufacturers. Among other things, the agreement provides that:
(a) if a judgment is entered into against both the manufacturer and wholesaler
defendants, the total exposure for joint and several liability of the Company
is limited to $1,000,000; (b) if a settlement is entered into by, between and
among the manufacturer and wholesaler defendants, the Company has no monetary
exposure for such settlement amount; (c) the six wholesaler defendants will be
reimbursed by the 26 manufacturer defendants for related legal fees and
expenses up to $9,000,000 total (the Company's initial portion of this amount
is $1,000,000); and (d) the Company is to release certain claims which it might
have had against the manufacturer defendants for the claims presented by the
plaintiffs in these cases. The agreement covers the federal court litigation
as well as cases which have been filed in various state courts.
The Company is contesting the consolidated action vigorously and, at
the present time, is unable to form a conclusion regarding the likelihood of a
favorable or unfavorable outcome. The Company believes, however, that the
allegations of liability set forth in the action are without merit as to the
wholesaler defendants and that the attendant liability of the Company, if any,
would not have a material adverse effect on the Company's financial condition.
On January 13, 1995, Publix Supermarkets filed a complaint in the
United States District Court for the Northern District of Illinois against the
manufacturer and wholesaler defendants in the consolidated action, including
the Company. The wholesalers, including the Company, have been dismissed from
this complaint.
On March 17, 1995, the Company was served a complaint that was filed
in the United States District Court for the Eastern District of Arkansas by 148
independent pharmacies. The complaint names the manufacturer and wholesaler
defendants in the consolidated action plus a number of regional wholesalers
which sell pharmaceutical drugs in Arkansas. No responsive pleadings have been
filed at this time. The Company has been informed by plaintiffs' counsel that
the Company will be dismissed as a defendant in their complaint.
NOTE 13 - RESTRUCTURING
In 1993, the Company provided for a restructuring charge of $5.39
million associated with the consolidation of distribution, accounting and data
processing functions for its East Coast operations. This charge included lease
commitments to third parties, writedowns of various assets to realizable values
and facilities consolidation costs. The charge was comprised of noncash asset
writedowns of approximately $2.7 million, product consolidation costs of
approximately $.3 million and anticipated probable cash expenditures of $2.4
million
<PAGE> 37
related to payments on lease commitments, data processing and inventory
conversion costs and other employee costs. The anticipated probable cash
expenditures are funded from operating revenues. The Company believes that, as
of December 31, 1995, the consolidation of the East Coast operations was on
schedule and the Company had expended $1.8 million of the probable cash
expenditures on a basis substantially consistent with the original plan and
believes that the $5.39 million charge taken at December 31, 1993 should be
sufficient to complete the consolidation.
NOTE 14 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following table presents the quarterly financial data for 1995 and 1994.
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
- ----------------------------------------------------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
1995
Net sales $1,113,717 $1,126,260 $1,121,533 $1,308,643
Gross margin 27,008 26,020 24,041 27,335
Net earnings 4,196 4,201 3,547 4,436
Earnings per share:
Primary $ .37 $ .37 $ .31 $ .38
Fully Diluted .33 .33 .28 .34
1994
Net sales $ 916,839 $ 986,965 $1,012,641 $1,117,662
Gross margin 20,819 20,835 22,649 24,631
Net earnings 3,620 3,736 3,348 4,030
Earnings per share:
Primary $ .33 $ .34 $ .30 $ .36
Fully Diluted .30 .31 .28 .32
</TABLE>
<PAGE> 38
SIGNATURES
Pursuant to the requirements of Section 13 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.
BINDLEY WESTERN INDUSTRIES, INC.
By /s/ William E. Bindley
-----------------------
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ William E. Bindley Chairman of the Board and President March 21, 1996
- --------------------------------------- (Principal Executive Officer);
William E. Bindley Director
/s/ William F. Bindley, II Director March 21, 1996
- ----------------------------------------
William F. Bindley, II
/s/ Keith W. Burks Executive Vice President; Director March 21, 1996
- ----------------------------------------
Keith W. Burks
/s/ Seth B. Harris Director March 21, 1996
- -----------------------------------------
Seth B. Harris
/s/ Robert L. Koch, II Director March 21, 1996
- -----------------------------------------
Robert L. Koch, II
/s/ Michael D. McCormick Executive Vice President, General Counsel March 21, 1996
- ----------------------------------------- and Secretary; Director
Michael D. McCormick
/s/ J. Timothy McGinley Director March 21, 1996
- -----------------------------------------
J. Timothy McGinley
/s/ James K. Risk, III Director March 21, 1996
- -----------------------------------------
James H. Risk, III
/s/ Thomas J. Salentine Executive Vice President and Chief March 21, 1996
---------------------------------------- Financial Officer (Principal Accounting
and Financial Officer); Director
Thomas J. Salentine
/s/ Thomas G. Slama Chief Executive Officer, National Infusion March 21, 1996
- ------------------------------------------ Services, Inc. Subsidiary; Director
Thomas G. Slama
/s/ K. Clay Smith Director March 21, 1996
- ------------------------------------------
K. Clay Smith
</TABLE>
<PAGE> 39
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page No.
Exhibit This
No. Description Filing
---------- ------------------------------------------- ----------
<S> <C> <C>
3-A 1 (i) Amended and Restated Articles of Incorporation of
Registrant......................................................
2 (ii)Amendment to Restated Articles of Incorporation increasing
number of authorized shares.....................................
3 (iii)Amendment to Restated Articles of Incorporation
establishing terms of Class A Preferred Stock...................
47
3-B Restated By-Laws of Registrant, as Amended to date.............. ----------------
4-A 5 Trust Indenture dated as of September 15, 1992 between
Registrant and Bank One, Indianapolis,
NA..............................................................
4-B 6 (i)Amended and Restated Credit Agreement dated as of December
31, 1991 among Registrant and Bank One, Indianapolis, NA, NCNB
Texas National Bank, The Chicago-Tokyo Bank, Mellon Bank, N.A.,
Ameritrust National Bank, Central Indiana, Bank One, Milwaukee,
NA, The Boatmen's National Bank of St. Louis, and Bank One,
Indianapolis, NA, as agent......................................
7 (ii)First Amendment to Amended and Restated Credit Agreement
dated as of March 25, 1991 among Registrant and Bank One,
Indianapolis, NA, NCNB Texas National Bank, The Chicago-Tokyo
Bank, Mellon Bank N.A., Ameritrust National Bank, Central
Indiana, Bank One, Milwaukee, NA, The Boatmen's National Bank of
St. Louis, and Bank One, Indianapolis, NA, as
agent...........................................................
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
Page No.
Exhibit This
No. Description Filing
---------- ------------------------------------------- ----------
<S> <C> <C>
8 (iii)Second Amendment to Amended and Restated Credit Agreement
dated as of June 30, 1992 among Registrant and Bank One,
Indianapolis, NA, Nationsbank, The Chicago-Tokyo Bank, Mellon
Bank, N.A., Ameritrust National Bank, Central Indiana, Bank One,
Milwaukee, NA, The Boatmen's National Bank of St. Louis, and
Bank One, Indianapolis, NA, as
agent...........................................................
9 (iv)Third Amendment to Amended and Restated Credit Agreement
dated as of December 31, 1992 among Registrant and Bank One,
Indianapolis, NA, Nationsbank, The Chicago-Tokyo Bank, Mellon
Bank, N.A., Society National Bank of Indiana, Central Indiana,
Bank One, Milwaukee, NA, The Boatmen's National Bank of St.
Louis, and Bank One, Indianapolis, NA, as
agent............................................................
15 (v)Fourth Amendment to Amended and Restated Credit Agreement
dated as of September 27, 1993 among Registrant and Bank One,
Indianapolis, NA, Nationsbank, The Chicago-Tokyo Bank, Mellon
Bank, N.A., Society National Bank of Indiana, Central Indiana,
Bank One, Milwaukee, NA, The Boatmen's National Bank of St.
Louis, and Bank One, Indianapolis, NA, as agent (this exhibit has
not been included with this filing but will be provided upon
written request to the Registrant's Chief Financial
Officer).........................................................
15 (vi)Fifth Amendment to Amended and Restated Credit Agreement
dated as of December 31, 1993 among Registrant and Bank One,
Indianapolis NA, Nationsbank, The Chicago-Tokyo Bank, Mellon
Bank, N.A., Society National Bank of Indiana, Central Indiana,
Bank One, Milwaukee, NA, The Boatmen's National Bank of St.
Louis, and Bank One, Indianapolis, NA, as agent (this exhibit has
not been included with this filing but will be provided upon
written request to the Registrant's Chief Financial
Officer).........................................................
</TABLE>
<PAGE> 41
<TABLE>
<CAPTION>
Page No.
Exhibit This
No. Description Filing
---------- ------------------------------------------- ----------
<S> <C> <C>
15 (vii)Sixth Amendment to Amended and Restated Credit Agreement
dated as of February 28, 1994 among Registrant and Bank One,
Indianapolis, NA, Nationsbank of Texas, N.A., The Chicago-Tokyo
Bank, Mellon Bank, N.A., Society National Bank of Indiana, Bank
One, Milwaukee, NA, The Boatmen's National Bank of St. Louis, The
First National Bank of Chicago, Sun Bank, N.A., and Bank One,
Indianapolis, NA, as agent (this exhibit has not been included
with this filing but will be provided upon written request to the
Registrant's Chief Financial
Officer).........................................................
15 (viii) Credit Agreement dated as of October 24, 1994 by and among
Registrant and Bank One, Indianapolis, NA, Bank One, Milwaukee,
NA, and Bank One, Indianapolis, NA, as agent (this exhibit has
not been included with this filing but will be provided upon
written request to the Registrant's Chief Financial
Officer).........................................................
15 (ix) Seventh Amendment to Amended and Restated Credit Agreement
dated as of February 28, 1995 among Registrant and Bank One,
Indianapolis, NA, Nationsbank of Texas, N.A., The Chicago-Tokyo
Bank, Society National Bank of Indiana, Bank One, Milwaukee, NA,
The Boatmen's National Bank of St. Louis, The First National Bank
of Chicago, Sun Bank, N.A., The Industrial Bank of Japan,
Limited, and Bank One, Indianapolis, NA, as agent (this exhibit
has not been included in this filing but will be provided upon
written request to the Registrant's Chief Financial
Officer).........................................................
10-A* 14 (I)1993 Restatement of the Profit Sharing Plan and related Trust
of Registrant, as amended to date................................
10 (iii)Employee Benefit Trust Agreement of Registrant dated
November 30, 1990................................................
10 (iv)Deferred Compensation Agreement dated December 31, 1990
between Registrant and William E. Bindley........................
9 (v)Split Dollar Insurance Agreement dated December 11, 1992
between Registrant and William F. Bindley, II and K. Clay Smith
as trustees of the William E. Bindley Irrevocable
Trust............................................................
</TABLE>
<PAGE> 42
<TABLE>
<CAPTION>
Page No.
Exhibit This
No. Description Filing
---------- ------------------------------------------- ----------
<S> <C> <C>
9 (vi)The William E. Bindley Trust Agreement dated December 11,
1992 between William E. Bindley, grantor, and William F. Bindley,
II and K. Clay Smith, trustees...................................
15 (vii)Amendment to Deferred Compensation Agreement between
Registrant and William E. Bindley...............................
10-B* 11 (i)Nonqualified Stock Option Plan of Registrant..................
14 (ii)Amendment to the Nonqualified Stock Option Plan of
Registrant.......................................................
10-C* 11 (i)Incentive Stock Option Plan of Registrant.....................
14 (ii)Amendment to the Incentive Stock Option Plan of
Registrant.......................................................
10-D* 12 (i)1987 Stock Option and Incentive Plan of Registrant............
13 (ii)Amendment to 1987 Stock Option and Incentive
Plan.............................................................
13 (iii)Outside Directors Stock Option Plan of Registrant...........
14 (iv)Amendment to the 1987 Stock Option and Incentive Plan of
Registrant.......................................................
10-E* 9 (i)1993 Stock Option and Incentive Plan of Registrant............
14 (ii)Amendment to the 1993 Stock Option and Incentive Plan of
Registrant.......................................................
10-F 11 (i)Lease Agreement dated June 30, 1978 among Western Properties,
Registrant, and Bindley Western Drug Company,
Inc..............................................................
11 (ii)Addendum to Lease Agreement dated September 30, 1982 between
Western Properties and Bindley Western Drug Company,
Inc..............................................................
(iii)Termination of Lease dated September 30, 1995 between
Western Properties and Bindley Western Industries, 61
Inc.............................................................. -----------------
</TABLE>
<PAGE> 43
<TABLE>
<CAPTION>
Page No.
Exhibit This
No. Description Filing
---------- ------------------------------------------- ----------
<S> <C> <C>
10-J* 9 (i)Form of Termination Benefits Agreement, dated as of December
31, 1992, between Registrant and each of William E. Bindley,
Michael D. McCormick, Thomas J. Salentine, George E. Maloof and
Keith W. Burks.................................................
(ii)Termination Benefits Agreement, dated as of February 8, 1996,
between Registrant and Thomas G. 63
Slama........................................................... -----------------
10-U 14 Assistance Agreement dated August 11, 1993 between the State of
Connecticut and Registrant......................................
10-X* 14 (i)Consulting Agreement, dated January 20, 1994, between George
E. Maloof and Registrant........................................
(ii)Severance Agreement and Release, dated August 31, 1995, 78
between Registrant and Michael R. Visnich....................... -----------------
(iii)Employment Agreement, dated February 8, 1996, between 86
Registrant and Thomas G. Slama.................................. -----------------
(iv)Noncompetition Agreement, dated February 7, 1996, between 106
Registrant and Thomas G. Slama.................................. -----------------
10-Y Collective Bargaining Agreement dated October 21, 1994 between
J.E. Goold & Co. and Truck Drivers, Warehousemen and Helpers 115
Union Local No. 340............................................. -----------------
10-Z* 14 (i)401(k) Profit Sharing Plan (Nonstandardized) Adoption
Agreement of Registrant, effective January
1,1994..........................................................
15 (ii)Amendment to page 4 of the 401(k) Profit Sharing Plan
(Nonstandardized) Adoption Agreement of Registrant, effective
January 1, 1994.................................................
(iii)401(k) Profit Sharing Plan (Nonstandardized) Adoption
Agreement of Registrant, effective January 1, 175
1996............................................................ -----------------
</TABLE>
<PAGE> 44
<TABLE>
<CAPTION>
Page No.
Exhibit This
No. Description Filing
---------- ------------------------------------------- ----------
<S> <C> <C>
(iv)Amendment to page 6 of the 401(k) Profit Sharing Plan
(Nonstandardized) Adoption Agreement of Registrant, effective 205
January 1, 1996................................................. -----------------
10-AA* 15 (i)Form of Profit Sharing Excess Plan and related Trust between
Registrant and each of William E. Bindley, Keith W. Burks,
Michael D. McCormick, and Thomas J. Salentine...................
15 (ii)Form of 401(k) Excess Plan and Related Trust between
Registrant and each of William E. Bindley, Keith W. Burks,
Michael D. McCormick, and Thomas J. Salentine...................
206
(iii)First Amendment to 401(k) Excess Plan...................... -----------------
10-BB Lease Agreement dated February 7, 1996 between North Meridian 209
Medical Realty Company and Registrant........................... -----------------
235
21 List of subsidiaries of Registrant............................. -----------------
236
23 Written Consent of Price Waterhouse LLP......................... -----------------
237
27 Financial Data Schedule......................................... -----------------
</TABLE>
_______________
*The indicated exhibit is a management contract, compensating plan, or
arrangement required to be filed by Item 601 of Regulation S-K.
<PAGE> 45
1 The copy of this exhibit filed as the same exhibit number
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1987 is incorporated by reference.
2 The copy of this exhibit filed as Exhibit 4(a)(ii) to the
Company's Registration Statement on Form S-3
(Registration No. 33-45965) is incorporated by reference.
3 The copy of this exhibit filed as exhibit number 1 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1992 is incorporated by reference.
4 There is no footnote 4 to this Index To Exhibits.
5 The copy of this exhibit filed as Exhibit 4-D to the
Company's Registration Statement on Form S-3
(Registration No. 33-50982) is incorporated by reference.
6 The copy of this exhibit filed as Exhibit 4-C to the
Company's Registration Statement on Form S-3
(Registration No. 33-45965) is incorporated by reference.
7 The copy of this exhibit filed as Exhibit 4-C(ii) to the
Company's Registration Statement on Form S-3
(Registration No. 33-50982) is incorporated by reference.
8 The copy of this exhibit filed as exhibit number 2 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1992 is incorporated by reference.
9 The copy of this exhibit filed as the same exhibit number
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 is incorporated by reference.
10 The copy of this exhibit filed as the same exhibit
number to the Company's Annual Report on Form 10-K
for the year ended December 31, 1990 is incorporated by
reference.
11 The copy of this exhibit filed as the same exhibit
number to the Company's Registration Statement on
Form S-1 (Registration No. 2-84862) is incorporated by
reference.
12 The copy of this exhibit filed as the same exhibit
number to the Company's Annual Report on Form 10-K
for the year ended December 31, 1986 is incorporated by
reference.
13 The copy of this exhibit filed as the same exhibit
number to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991 is incorporated by
reference.
14 The copy of this exhibit filed as the same exhibit
number to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993 is incorporated by
reference.
<PAGE> 46
15 The copy of this exhibit filed as the same exhibit
number to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 is incorporated by
reference.
<PAGE> 1
EXHIBIT 3-B
BY-LAWS
OF
BINDLEY WESTERN INDUSTRIES, INC.
(As last amended effective February 8, 1996)
ARTICLE I
---------
Meetings of Shareholders
------------------------
Section 1.1. Annual Meetings. Annual meetings of the
shareholders of the Corporation shall be held on the third Thursday of May of
each year, at such hour and at such place within or without the State of
Indiana as shall be designated by the Board of Directors. In the absence of
designation, the meeting shall be held at the principal office of the
Corporation at 10:00 a.m. (local time). The Board of Directors may, by
resolution, change the date or time of such annual meeting. If the day fixed
for any annual meeting of shareholders shall fall on a legal holiday, then such
annual meeting shall be held on the first following day that is not a legal
holiday.
Section 1.2. Special Meetings. Special meetings of the
shareholders of the Corporation may be called at any time by the Board of
Directors or the Chairman of the Board and shall be called by the Board of
Directors if the Secretary received written, dated and signed demands for a
special meeting, describing in reasonable detail the purpose or purposes for
which it is to be held, from the holders of shares representing at least
twenty-five percent (25%) of all votes entitled to be cast on any issue
proposed to be considered at the proposed special meeting. If the Secretary
received one (1) or more proper written demands for a special meeting of
shareholders, the Board of Directors may set a record date for determining
shareholders entitled to make such demand. The Board of Directors or the
Chairman of the Board, as the case may be, calling a special meeting of
shareholders shall set the date, time and place of such meeting, which may be
held within or without the State of Indiana.
Section 1.3. Notices. A written notice, stating the date,
time and place of any meeting of the shareholders, and in the case of a special
meeting the purpose or purposes for which such meeting is called, shall be
delivered or mailed by the Secretary of the Corporation, to each shareholder of
record of the Corporation entitled to notice of or to vote at such meeting no
fewer than ten (10) nor more than sixty (60) days before the date of the
meeting. In the event of a special meeting of shareholders required to be
called as the result of a demand therefor made by shareholders, such notice
shall be given no later than the sixtieth (60th) day after the Corporation's
receipt of the demand requiring the meeting to be called. Notice of
shareholders' meetings, if mailed, shall be mailed, postage
<PAGE> 2
prepaid, to each shareholder at his address shown in the Corporation's current
record of shareholders.
Notice of a meeting of shareholders shall be given to
shareholders not entitled to vote, but only if a purpose for the meeting is to
vote on any amendment to the Corporation's Restated Articles of Incorporation,
merger or share exchange to which the Corporation would be a party, sale of the
Corporation's assets, dissolution of the Corporation, or consideration of
voting rights to be accorded to shares acquired or to be acquired in a "control
share acquisition" (as such term is defined in the Indiana Business Corporation
Law). Except as required by the foregoing sentence or as otherwise required by
the Indiana Business Corporation Law or the Corporation's Restated Articles of
Incorporation, notice of a meeting of shareholders is required to be given only
to shareholders entitled to vote at the meeting.
A shareholder or his proxy may at any time waive notice of a meeting if
the waiver is in writing and is delivered to the corporation for inclusion in
the minutes or filing with the Corporation's records. A shareholder's
attendance at a meeting, whether in person or by proxy, (a) waives objection to
lack of notice or defective notice of the meeting, unless the shareholder or
his proxy at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting, and (b) waives objection to consideration
of a particular matter at the meeting that is not within the purpose or
purposes described in the meeting notice, unless the shareholder or his proxy
objects to considering the matter when it is presented. Each shareholder who
has in the manner above provided waived notice or objection to notice of a
shareholders' meeting shall be conclusively presumed to have been given due
notice of such meeting, including the purpose or purposes thereof.
If an annual or special shareholders' meeting is adjourned to
a different date, time or place, notice need not be given of the new date, time
or place if the new date, time or place is announced at the meeting before
adjournment, unless a new record date is or must be established for the
adjourned meeting.
Section 1.4. Voting. Except as otherwise provided by the
Indiana Business Corporation Law or the Corporation's Restated Articles of
Incorporation, each share of the capital stock of any class of the Corporation
that is outstanding at the record date established for any annual or special
meeting of shareholders and is outstanding at the time of and represented in
person or by proxy at the annual or special meeting, shall entitle the record
holder thereof, or his proxy, to one (1) vote on each matter voted on at the
meeting.
-2-
<PAGE> 3
Section 1.5. Quorum. Unless the Corporation's Restated
Articles of Incorporation or the Indiana Business Corporation Law provide
otherwise, at all meetings of shareholders a majority of the votes entitled to
be cast on a matter, represented in person or by proxy, constitutes a quorum
for action on the matter. Action may be taken at a shareholders' meeting only
on matters with respect to which a quorum exists; provided, however, that any
meeting of shareholders, including annual and special meetings and any
adjournments thereof, may be adjourned to a later date although less than a
quorum is present. Once a share is represented for any purpose at a meeting,
it is deemed present for quorum purposes for the remainder of the meeting and
for any adjournment of that meeting unless a new record date is or must be set
for that adjourned meeting.
Section 1.6. Vote Required to Take Action. If a quorum exists
as to a matter to be considered at a meeting of shareholders, action on such
matter (other than the election of Directors) is approved if the votes properly
cast favoring the action exceed the votes properly cast opposing the action,
except as the Corporation's Restated Articles of Incorporation or the Indiana
Business Corporation Law require a greater number of affirmative votes.
Directors shall be elected by a plurality of the votes properly cast.
Section 1.7. Record Date. Only such persons shall be
entitled to notice of or to vote, in person or by proxy, at any shareholders'
meeting as shall appear as shareholders upon the books of the Corporation as of
such record date as the Board of Directors shall determine, which date may not
be earlier than the date seventy (70) days immediately preceding the meeting.
In the absence of such determination, the record date shall be the fiftieth
(50th) day immediately preceding the date of such meeting. Unless otherwise
provided by the Board of Directors, shareholders shall be determined as of the
close of business on the record date.
Section 1.8. Proxies. A shareholder may vote his shares
either in person or by proxy. A shareholder may appoint a proxy to vote
or otherwise act for the shareholder (including authorizing the proxy to
receive, or to waive, notice of any shareholders' meetings within the effective
Period of such proxy) by signing an appointment form, either personally or by
the shareholder's attorney-in-fact. An appointment of a proxy is effective
when received by the Secretary or other officer or agent authorized to tabulate
votes and is effective for eleven (11) months unless a shorter or longer period
is expressly provided in the appointment form. The proxy's authority may be
limited to a particular meeting or may be general and authorize the proxy to
represent the shareholder at any meeting of shareholders held within the time
provided in the appointment
-3-
<PAGE> 4
form. Subject to the Indiana Business Corporation Law and to any
express limitation on the proxy's authority appearing on the face of the
appointment form, the Corporation is entitled to accept the proxy's vote or
other action as that of the shareholder making the appointment.
Section 1.9 Removal of Directors. Any or all of the members
of the Board of Directors may be removed, with or without cause, only at a
meeting of the shareholders called expressly for that purpose, by a vote of the
holders of shares representing a majority of the votes then entitled to be cast
at an election of Directors.
Section 1.10. Participation by Conference Telephone. The
Chairman of the Board or the Board of Directors may permit any or all
shareholders to participate in an annual or special meeting of shareholders by,
or through the use of, any means of communication, such as conference
telephone, by which all shareholders participating may simultaneously hear each
other during the meeting. A shareholder participating in a meeting by such
means shall be deemed to be present in person at the meeting.
ARTICLE II
----------
Directors
---------
Section 2.1. Number and Terms. The business and affairs of
the Corporation shall be managed under the direction of a Board of Directors
consisting of eleven (11) Directors. Each Director shall be elected for a term
of office to expire at the annual meeting of shareholders next following his
election.
Despite the expiration of a Director's term, the Director
shall continue to serve until his successor is elected and qualified, or until
the earlier of his death, resignation, disqualification or removal, or until
there is a decrease in the number of Directors. Any vacancy occurring in the
Board of Directors, from whatever cause arising, shall be filled by selection
of a successor by a majority vote of the remaining members of the Board of
Directors (although less than a quorum); provided, however, that if such
vacancy or vacancies leave the Board of Directors with no members or if the
remaining members of the Board are unable to agree upon a successor or
determine not to select a successor, such vacancy may be filled by a vote of
the shareholders at a special meeting called for that purpose or at the next
annual meeting of shareholders. The term of a Director elected or selected to
fill a vacancy shall expire at the end of the term for which such Director's
predecessor was elected.
-4-
<PAGE> 5
The Directors and each of them shall have no authority to bind
the Corporation except when acting as a Board.
Section 2.2. Quorum and Vote Required to Take Action. A
majority of the whole Board of Directors shall be necessary to constitute a
quorum for the transaction of any business, except the filling of vacancies.
If a quorum is present when a vote is taken, the affirmative vote of a majority
of the Directors present shall be the act of the Board of Directors, unless the
act of a greater number is required by the Indiana Business Corporation Law,
the Corporation's Restated Articles of Incorporation or these By-Laws.
Section 2.3. Annual and Regular Meetings. The Board of
Directors shall meet annually, without notice, immediately following the annual
meeting of the shareholders, for the purpose of transacting such business as
properly may come before the meeting. Other regular meetings of the Board of
Directors, in addition to said annual meeting, shall be held on such dates, at
such times and at such places as shall be fixed by resolution adopted by the
Board of Directors and specified in a notice of each such regular meeting, or
otherwise communicated to the Directors. The Board of Directors may at any
time alter the date for the next regular meeting of the Board of Directors.
Section 2.4. Special Meetings. Special meetings of the Board
of Directors may be called by any member of the Board of Directors upon not
less than twenty-four (24) hours' notice given to each Director of the date,
time and place of the meeting, which notice need not specify the purpose or
purposes of the special meeting. Such notice may be communicated in person
(either in writing or orally), by telephone, telegraph, teletype or other form
of wire or wireless communication, or by mail, and shall be effective at the
earlier of the time of its receipt or, if mailed, five (5) days after its
mailing. Notice of any meeting of the Board may be waived in writing at any
time if the waiver is signed by the Director entitled to the notice and is
filed with the minutes or corporate records. A Director's attendance at or
participation in a meeting waives any required notice to the Director of the
meeting, unless the Director at the beginning of the meeting (or promptly upon
the Director's arrival) objects to holding the meeting or transacting business
at the meeting and does not thereafter vote for or assent to action taken at
the meeting.
Section 2.5. Written Consents. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if the action is taken by all members of the Board. The
action must be evidenced by one (1) or more written consents describing the
action taken, signed by each Director, and included in the minutes or filed
with the corporate
-5-
<PAGE> 6
records reflecting the action taken. Action taken under this Section 2.5 is
effective when the last Director signs the consent, unless the consent
specifies a different prior or subsequent effective date, in which cases the
action is effective on or as of the specified date. A consent signed under
this Section 2.5 shall have the same effect as a unanimous vote of all members
of the Board and may be described as such in any document.
Section 2.6. Participation by Conference Telephone. The
Board of Directors may permit any or all Directors to participate in a regular
or special meeting by, or through the use of, any means of communication, such
as conference telephone, by which all Directors participating may
simultaneously hear each other during the meeting. A Director participating in
a meeting by such means shall be deemed to be present in person at the meeting.
Section 2.7. Committees.
(a) The Board of Directors may create one (1) or more
committees and appoint members of the Board of Directors to serve on
them, by resolution of the Board of Directors adopted by a majority of
all the Directors in office when the resolution is adopted. Each
committee may have one (1) or more members, and all the members of a
committee shall serve at the pleasure of the Board of Directors.
(b) To the extent specified by the Board of Directors in
the resolution creating a committee, each committee may exercise all
of the authority of the Board of Directors; provided, however, that a
committee may not:
(1) authorize dividends or other distributions,
except a committee (or an executive officer of the
Corporation designated by the Board of Directors) may
authorize or approve a reacquisition of shares or other
distribution if done according to a formula or method, or
within a range, prescribed by the Board of Directors;
(2) approve or propose to shareholders action that
is required to be approved by shareholders;
(3) fill vacancies on the Board of Directors or on
any of its committees;
-6-
<PAGE> 7
(4) amend the Corporation's Restated Articles of
Incorporation under IC 23-1-38-2;
(5) adopt, amend, repeal, or waive provisions of
these By-Laws;
(6) approve a plan of merger not requiring
shareholder approval; or
(7) authorize or approve the issuance or sale or a
contract for sale of shares, or determine the designation
and relative rights, preferences and limitations of a class
or series of shares, except the Board of Directors may
authorize a committee (or an executive officer of the
Corporation designated by the Board of Directors) to take
action described in this subdivision within limits
prescribed by the Board of Directors.
(c) Except to the extent inconsistent with the resolutions
creating a committee, Sections 2.1 through 2.6 of these By-Laws, which
govern meetings, action without meetings, notice and waiver of notice,
quorum and voting requirements and telephone participation in meetings
of the Board of Directors, apply to each committee and its members as
well.
ARTICLE III
-----------
Officers
--------
Section 3.1. Designation, Selection and Terms. The officers
of the Corporation shall consist of the Chairman of the Board, the President,
the Senior Vice President, the Treasurer, the Secretary and the Controller.
The Board of Directors may also elect other Vice Presidents, Assistant
Secretaries, Assistant Treasurers, Assistant Controllers, and such other
officers or assistant officers as it may from time to time determine by
resolution creating the office and defining the duties thereof. In addition,
the Chairman of the Board or the President may, by a certificate of appointment
creating the office and defining the duties thereof delivered to the Secretary
for inclusion with the corporate records, from time to time create and appoint
such assistant officers as they deem desirable. The officers of the
Corporation shall be elected by the Board of Directors (or appointed by the
Chairman of the Board or the President as provided above) and need not be
selected from among the members of the Board of Directors, except for the
Chairman of the Board and the President who shall be members of
-7-
<PAGE> 8
the Board of Directors. Any two (2) or more offices may be held by the same
person. All officers shall serve at the pleasure of the Board of Directors
and, with respect to officers appointed by the Chairman of the Board or the
President, also at the pleasure of such officers. The election or appointment
of an officer does not itself create contract rights.
Section 3.2. Removal. The Board of Directors may remove any
officer at any time with or without cause. An officer appointed by the
Chairman of the Board or the President may also be removed at any time, with or
without cause, by either of such officers. Vacancies in such offices, however
occurring, may be filled by the Board of Directors at any meeting of the Board
of Directors (or by appointment by the Chairman of the Board or the President,
to the extent provided in Section 3.1 of these By-Laws).
Section 3.3. Chairman of the Board. The Chairman of the
Board shall be the chief executive and principal policy-making officer of the
Corporation. Subject to the authority of the Board of Directors, he shall
formulate the major policies to be pursued in the administration of the
Corporation's affairs. He shall study and make reports and recommendations to
the Board of Directors with respect to major problems and activities of the
Corporation and shall see that the established policies are placed into effect
and carried out under the direction of the President. The Chairman of the
Board shall, if present, preside at all meetings of the shareholders and of the
Board of Directors.
Section 3.4. President. Subject to the provisions of Section
3.3, the President shall be the chief operating officer of the Corporation,
shall exercise the powers and perform the duties which ordinarily appertain to
that office and shall manage and operate the business and affairs of the
Corporation in conformity with the policies established by the Board of
Directors and by the Chairman of the Board, or as may be provided for in these
By-Laws. In connection with the performance of his duties, he shall keep the
Chairman of the Board fully informed as to all phases of the Corporation's
activities. In the absence of the Chairman of the Board, the President shall
preside at meetings of the shareholders and of the Board of Directors.
Section 3.5. Senior Vice President - Treasurer. The Senior
Vice President - Treasurer shall be the chief treasury officer of the
Corporation and shall be responsible for the handling of the Corporation's
cash; property, plant and equipment; short and long-term debt, banking
relations; capital expenditures; and investment and portfolio management,
subject to the supervision and direction of the Chairman of the Board or the
President, and shall have and perform such further powers and
-8-
<PAGE> 9
duties as the Board of Directors may, from time to time, prescribe and as the
Chairman of the Board or the President may, from time to time, delegate to him.
Section 3.6. Vice Presidents. Each Vice President shall have
such powers and perform such duties as the Board of Directors may, from time to
time, prescribe and as the Chairman of the Board or the President may, from
time to time, delegate to him.
Section 3.7. Assistant Treasurer. In the absence or
inability of the Treasurer, the Assistant Treasurer, if any, shall perform only
such duties as are specifically assigned to him, in writing, by the Board of
Directors, the Chairman of the Board, the President, the Senior Vice President
or the Treasurer.
Section 3.8. Secretary. The Secretary shall be the custodian
of the books, papers and records of the Corporation and of its corporate seal,
if any, and shall be responsible for seeing that the Corporation maintains the
records required by IC 23-1-52-1 (other than accounting records) and that the
Corporation files with the Indiana Secretary of State the annual report
required by IC 23-1-53-3. The Secretary shall be responsible for preparing
minutes of the meetings of the shareholders and of the Board of Directors and
for authenticating records of the Corporation, and he shall perform all of the
other duties usual in the office of secretary of a corporation.
Section 3.9. Assistant Secretary. In the absence or
inability of the Secretary, the Assistant Secretary, if any, shall perform only
such duties as are provided herein or specifically assigned to him, in writing,
by the Board of Directors, the Chairman of the Board, the President or the
Secretary.
Section 3.10. Vice President - Finance. The Vice President -
Finance shall be the chief accounting officer of the Corporation and shall be
responsible for maintaining the Corporation's accounting books and records,
preparing its financial statements, and for causing the Corporation to furnish
financial statements to its shareholders pursuant to IC 23-1-53-1, subject to
the supervision and direction of the Chairman of the Board or the President of
the Corporation.
Section 3.11. Controller. The Controller shall be the
assistant chief accounting officer and shall assist the Vice President -
Finance in maintaining the Corporation's accounting books and records and
preparing its financial statements, subject to the direction of the Vice
President - Finance and Chief Accounting Officer.
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<PAGE> 10
Section 3.12. Salary. The Board of Directors may, at its
discretion, from time to time, fix the salary of any officer by resolution
included in the minute book of the Corporation.
ARTICLE IV
----------
Checks
------
All checks, drafts or other orders for payment of money shall
be signed in the name of the Corporation by such officers or persons as shall
be designated from time to time by resolution adopted by the Board of Directors
and included in the minute book of the Corporation; and in the absence of such
designation, such checks, drafts or other orders for payment shall be signed by
either the President or the Treasurer.
ARTICLE V
----------
Loans
-----
Such of the officers of the Corporation as shall be designated
from time to time by resolution adopted by the Board of Directors and included
in the minute book of the Corporation shall have the power, with such
limitations thereon as may be fixed by the Board of Directors, to borrow money
in the Corporation's behalf, to establish credit, to discount bills and papers,
to pledge collateral and to execute such notes, bonds, debentures or other
evidences of indebtedness, and such mortgages, trust indentures and other
instruments in connection therewith, as may be authorized from time to time by
such Board of Directors.
ARTICLE VI
----------
Execution of Documents
----------------------
The Chairman of the Board or the President may, in the
Corporation's name, sign all deeds, leases, contracts or similar documents that
may be authorized by the Board of Directors unless otherwise directed by the
Board of Directors or otherwise provided herein or in the Corporation's
Restated Articles of Incorporation, or as otherwise required by law.
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<PAGE> 11
ARTICLE VII
-----------
Stock
-----
Section 7.1. Execution. Certificates for shares of the
capital stock of the Corporation shall be signed by the Chairman of the Board
or the President and by the Secretary and the seal of the Corporation (or a
facsimile thereof), if any, may be thereto affixed. Where any such certificate
is also signed by a transfer agent or a registrar, or both, the signatures of
the officers of the Corporation may be facsimiles. The Corporation may issue
and deliver any such certificate notwithstanding that any such officer who
shall have signed, or whose facsimile signature shall have been imprinted on,
such certificate shall have ceased to be such officer.
Section 7.2. Contents. Each certificate shall state on its
face the name of the Corporation and that it is organized under the laws of the
State of Indiana, the name of the person to whom it is issued, and the number
and class of shares and the designation of the series, if any, the certificate
represents, and shall state conspicuously on its front or back that the
Corporation will furnish the shareholder, upon his written request and without
charge, a summary of the designations, relative rights, preferences and
limitations applicable to each class and the variations in rights, preferences
and limitations determined for each series (and the authority of the Board of
Directors to determine variations for future series).
Section 7.3. Transfers. Except as otherwise provided by law
or by resolution of the Board of Directors, transfers of shares of the capital
stock of the Corporation shall be made only on the books of the Corporation by
the holder thereof in person or by duly authorized attorney, on payment of all
taxes thereon and surrender for cancellation of the certificate or certificates
for such shares (except as hereinafter provided in the case of loss,
destruction or mutilation of certificates) properly endorsed by the holder
thereof or accompanied by the proper evidence of succession, assignment or
authority to transfer, and delivered to the Secretary or an Assistant
Secretary.
Section 7.4. Stock Transfer Records. There shall be entered
upon the stock records of the Corporation the number of each certificate
issued, the name and address of the registered holder of such certificate, the
number, kind and class of shares represented by such certificate, the date of
issue, whether the shares are originally issued or transferred, the registered
holder from whom transferred and such other information as is commonly required
to be shown by such records. The stock records of the Corporation shall be
kept at its principal office, unless the Corporation appoints a transfer agent
or registrar, in which
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<PAGE> 12
case the Corporation shall keep at its principal office a complete and accurate
shareholders' list giving the names and addresses of all shareholders and the
number and class of shares held by each. If a transfer agent is appointed by
the Corporation, shareholders shall give written notice of any changes in their
addresses from time to time to the transfer agent.
Section 7.5. Transfer Agents and Registrars. The Board of
Directors may appoint one or more transfer agents and one or more registrars
and may require each stock certificate to bear the signature of either or both.
Section 7.6. Loss, Destruction, or Mutilation of
Certificates. The holder of any of the capital stock of the Corporation shall
immediately notify the Corporation of any loss, destruction, or mutilation of
the certificate therefor, and the Board of Directors may, in its discretion,
cause to be issued to him a new certificate or certificates of stock, upon the
surrender of the mutilated certificate, or, in the case of loss or destruction,
upon satisfactory proof of such loss or destruction. The Board of Directors
may, in its discretion, require the holder of the lost or destroyed certificate
or his legal representative to give the Corporation a bond in such sum and in
such form, and with such surety or sureties as it may direct, to indemnify the
Corporation, its transfer agents, and registrars, if any, against any claim
that may be made against them or any of them with respect to the capital stock
represented by the certificate or certificates alleged to have been lost or
destroyed, but the Board of Directors may, in its discretion, refuse to issue a
new certificate or certificates, save upon the order of a court having
jurisdiction in such matters.
Section 7.7. Form of Certificates. The form of the
certificates for shares of the capital stock of the Corporation shall conform
to the requirements of Section 7.2 of these By-Laws and be in such printed form
as shall from time to time be approved by resolution of the Board of Directors.
ARTICLE VIII
------------
Seal
----
The corporate seal of the Corporation shall, if the
Corporation elects to have one, be in the form of a disc, with the name of the
Corporation and "INDIANA" on the periphery thereof and the word "SEAL" in the
center.
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<PAGE> 13
ARTICLE IX
----------
Miscellaneous
-------------
Section 9.1. Indiana Business Corporation Law. The
provisions of the Indiana Business Corporation law, as amended, applicable to
all matters relevant to, but not specifically covered by, these By-Laws are
hereby, by reference, incorporated in and made a part of these By-Laws.
Section 9.2. Fiscal Year. The fiscal year of the Corporation
shall end on the 31st of December of each year.
Section 9.3. Election to be Governed by Indiana Code 23-1-43.
Effective October 23, 1992, the Corporation shall be governed by the provisions
of IC 23-1-43 regarding business combinations.
Section 9.4. Control Share Acquisition Statute. Effective
October 23, 1992, the provisions of IC 23-1-42 shall apply to the acquisition
of shares of the Corporation.
Section 9.5. Redemption of Shares Acquired in Control Share
Acquisitions. If and whenever the provisions of IC 23-1-42 apply to the
Corporation, any or all control shares acquired in a control share acquisition
shall be subject to redemption by the Corporation, if either:
(a) no acquiring person statement has been filed with the
Corporation with respect to such control share acquisition in
accordance with IC 23-1-42-6, or
(b) the control shares are not accorded full voting rights
by the Corporation's shareholders as provided in IC 23-1-42-9.
A redemption pursuant to Section 9.5(a) may be made at any
time during the period ending sixty (60) days after the last acquisition of
control shares by the acquiring person. A redemption pursuant to Section
9.5(b) may be made at any time during the period ending two (2) years after the
shareholder vote with respect to the granting of voting rights to such control
shares. Any redemption pursuant to this Section 9.5 shall be made at the fair
value of the control shares and pursuant to such procedures for such redemption
as may be set forth in these By-Laws or adopted by resolution of the Board of
Directors.
As used in this Section 9.5, the terms "control shares",
"control share acquisition", "acquiring person statement" and "acquiring
person" shall have the meanings ascribed to such terms in IC 23-1-42.
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<PAGE> 14
Section 9.6. Amendments. These By-Laws may be rescinded,
changed or amended, and provisions hereof may be waived, at any meeting of the
Board of Directors by the affirmative vote of a majority of the entire number
of Directors at the time, except as otherwise required by the Corporation's
Restated Articles of Incorporation or by the Indiana Business Corporation Law.
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<PAGE> 1
EXHIBIT 10-F(iii)
TERMINATION OF LEASE
This Termination of Lease is made as of this 30th day of September,
1995 between Western Properties ("Landlord") and Bindley Western Industries,
Inc. ("Tenant").
WHEREAS, Landlord is the owner of certain real estate located in Marion
County, Indiana, more particularly described on the attached Exhibit A;
WHEREAS, Landlord has leased the real estate described in the attached
Exhibit A to Tenant pursuant to a lease dated June 3, 1978, as amended
September 30, 1982 (the "Lease"); and
WHEREAS, Landlord and Tenant desire to terminate the Lease.
NOW, THEREFORE, in consideration of the payment of Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Landlord and Tenant hereby terminate the Lease.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year indicated above.
WESTERN PROPERTIES
By: /s/ William E. Bindley
-----------------------------------
William E. Bindley, General Partner
BINDLEY WESTERN INDUSTRIES, INC.
By: /s/ Michael D. McCormick
-----------------------------------
Printed: Michael D. McCormick
------------------------------
Title: Executive V.P. & General Counsel
--------------------------------
<PAGE> 2
A part of the Southwest Quarter of Section 30, Township 17 North, Range 3 East,
Pike Township, Marion County, Indiana, described as follows:
COMMENCING at the Southeast corner of the Southwest Quarter of Section 30,
Township 17 North, Range 3 East, Pike Township, Marion County, Indiana; thence
South 90 degrees 00 minutes 00 seconds West (assumed bearing) on the South line
of said Southwest Quarter a distance of 150.00 feet to the Southwest corner of
that tract of land described in a Warranty Deed recorded as Instrument No.
87-46781 in the Office of the Recorder, Marion County, Indiana, being the POINT
OF BEGINNING of this description; thence continuing South 90 degrees 00 minutes
00 seconds West 381.54 feet on the South line of said Southwest Quarter to the
Southwest corner of that tract of land described in a Quitclaim Deed recorded
as Instrument No. 71-67427 in the Office of the Recorder, Marion County,
Indiana; thence North 00 degrees 03 minutes 17 seconds East 249.87 feet on the
West line of the real estate described in said Instrument No. 71-67427 to the
intersection with the Westerly prolongation of the South line of an existing
Warehouse; thence South 89 degrees 56 minutes 30 seconds East 380.89 feet on
said Westerly prolongation, the South line of said existing warehouse and the
Easterly prolongation thereof to the West line of the real estate described in
said Instrument No. 87-46781; thence South 00 degrees 05 minutes 43 seconds
East 249.48 feet on the West line of the real estate described in said
Instrument No. 87-46781 to the POINT OF BEGINNING, containing 2.19 acres, more
or less.
EXHIBIT A
<PAGE> 1
EXHIBIT 10-J (ii)
TERMINATION BENEFITS AGREEMENT
This Termination Benefits Agreement ("Agreement") is made and
entered into as of February 8, 1996 by and between National Infusion Services,
Inc., an Indiana corporation (hereinafter referred to as the "Corporation") and
Thomas G. Slama, M.D., a resident of the State of Indiana (hereinafter referred
to as "Employee").
W I T N E S S E T H
WHEREAS, Employee is now serving as President and Chief
Executive Officer of the Corporation; and
WHEREAS, the Corporation believes that Employee has made
valuable contributions to the productivity and profitability of the
Corporation; and
WHEREAS, the Corporation desires to encourage Employee to
continue to make such contributions and not to seek or accept employment
elsewhere; and
WHEREAS, the Corporation, therefore, desires to assure
Employee of certain benefits in case of any termination or significant
redefinition of the terms of his employment with the Corporation subsequent to
any Change in Control of the Corporation;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants herein contained and the mutual benefits herein provided,
the Corporation and Employee hereby agree as follows:
1. The term of this Agreement shall be from the date
hereof through December 31, 1998; provided, however, that such term shall be
automatically extended for an additional year on December 31, 1996 and on
December 31 of each year thereafter unless either party hereto gives written
notice to the other party not to so extend prior to November 30 of the year for
which notice is given, in which case no further automatic extension shall occur
and the term of this Agreement shall end on December 31 three (3) years
subsequent to the date of the latest preceding automatic extension.
Notwithstanding the foregoing, if a Change in Control of the Corporation (as
defined in Section 2 below) shall occur prior to the expiration of the original
term or any extensions of the term of this Agreement, then the term of this
Agreement shall automatically become a term of three (3) years commencing on
the date of any such Change in Control.
2. As used in this Agreement, "Change in Control" of the
Corporation means:
<PAGE> 2
(A) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act as in effect from time to time) of twenty-five
percent (25%) or more of either (i) the then outstanding shares of
common stock of the Corporation or (ii) the combined voting power of
the then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors; provided, however, that
the following acquisitions shall not constitute an acquisition of
control: (i) any acquisition directly from the Corporation (excluding
an acquisition by virtue of the exercise of a conversion privilege),
(ii) any acquisition by the Corporation, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Corporation or any corporation controlled by the Corporation, (iv)
any acquisition by any corporation pursuant to a reorganization,
merger or consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and (iii)
of subsection (C) of this Section 2 are satisfied and (v) any
acquisition by underwriters in a firm commitment underwritten public
offering of voting securities of the Corporation;
(B) Individuals who, as of the date hereof, constitute
the Board of Directors of the Corporation (the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board of
Directors of the Corporation (the "Board"); provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(C) Approval by the shareholders of the Corporation of a
reorganization, merger or
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<PAGE> 3
consolidation, in each case, unless, following such reorganization,
merger or consolidation, (i) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding Corporation common stock and outstanding Corporation
voting securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the outstanding Corporation stock and outstanding
Corporation voting securities, as the case may be, (ii) no Person
(excluding the Corporation, any employee benefit plan or related trust
of the Corporation or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, twenty-five percent (25%) or
more of the outstanding Corporation common stock or outstanding voting
securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively, the
then outstanding shares of common stock of the corporation resulting
from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors
and (iii) at least a majority of the members of the board of directors
of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization,
merger or consolidation; or
(D) Approval by the shareholders of the Corporation of
(i) a complete liquidation or dissolution of the Corporation or (ii)
the sale or other disposition of all or substantially all of the
assets of the Corporation, other than to a corporation with respect to
which following such sale or other disposition (a) more than sixty
percent (60%) of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then
outstanding voting securities of such
-3-
<PAGE> 4
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding Corporation common
stock and outstanding Corporation voting securities immediately prior
to such sale or other disposition in substantially the same proportion
as their ownership, immediately prior to such sale or other
disposition, of the outstanding Corporation common stock and
outstanding Corporation voting securities, as the case may be, (b) no
Person (excluding the Corporation and any employee benefit plan or
related trust of the Corporation or such corporation and any Person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, twenty-five percent (25%) or more
of the outstanding Corporation common stock or outstanding Corporation
voting securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors and (c) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at
the time of the execution of the initial agreement or action of the
Board providing for such sale or other disposition of assets of the
Corporation.
3. The Corporation shall provide Employee with the
benefits set forth in Section 6 of this Agreement upon any termination of
Employee's employment by the Corporation following a Change in Control for any
reason except the following:
(A) Termination by reason of Employee's death.
(B) Termination by reason of Employee's "disability".
For purposes hereof, "disability" shall be defined as Employee's
inability by reason of illness or other physical or mental disability
to perform the duties required by his employment for any consecutive
One Hundred Eighty (180) day period, provided that notice of any
termination by the Corporation because of Employee's "disability"
shall have been given to Employee prior to the resumption by him of
the performance of such duties.
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<PAGE> 5
(C) Termination upon Employee reaching his normal
retirement date, which for purposes of this Agreement shall be
deemed to be the end of the month during which employee
reaches sixty-five (65) years of age.
(D) Termination for "cause". As used in this Agreement,
the term "cause" means fraud, dishonesty, theft of corporate assets,
or other gross misconduct by Employee. Notwithstanding the foregoing,
Employee shall not be deemed to have been terminated for cause unless
and until there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Corporation's Board at a
meeting called and held for the purpose (after reasonable notice to
him and an opportunity for him, together with his counsel, to be heard
before such Board), finding that, in the good faith opinion of such
Board, Employee was guilty of conduct constituting "cause" and
specifying the particulars thereof in detail.
4. The Corporation shall also provide Employee with the
benefits set forth in Section 6 of this Agreement upon any termination of
Employee's employment with the Corporation at Employee's option after a Change
in Control followed by the happening of any one of the following events:
(A) Without Employee's express written consent, the
assignment of Employee to any duties which, in Employee's reasonable
judgment, are materially inconsistent with his positions, duties,
responsibilities or status with the Corporation immediately prior to
the Change in Control or a substantial reduction of his duties or
responsibilities which, in Employee's reasonable opinion, does not
represent a promotion from his position, duties or responsibilities
immediately prior to the Change in Control.
(B) A reduction by the Corporation in Employee's salary
from the level of such salary immediately prior to the Change in
Control or the Corporation's failure to increase (within twelve (12)
months of Employee's last increase in base salary) Employee's base
salary after a Change in Control in an amount which at least equals,
on a percentage basis, the average percentage increase in base salary
for all executive and senior officers of the Corporation effected in
the preceding twelve (12) months.
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<PAGE> 6
(C) The failure by the Corporation to continue in
effect any incentive, bonus or other compensation plan in
which Employee participates, including but not limited to the
Corporation's stock option plans, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan), with which Employee has consented, has been made with
respect to such plan in connection with the Change in Control,
or the failure by the Corporation to continue Employee's
participation therein, or any action by the Corporation which
would directly or indirectly materially reduce Employee's
participation therein.
(D) The failure by the Corporation to continue to provide
Employee with benefits substantially similar to those enjoyed by
Employee or to which Employee was entitled under any of the
Corporation's principal pension, profit sharing, life insurance,
medical, dental, health and accident, or disability plans in which
Employee was participating at the time of a Change in Control, the
taking of any action by the Corporation which would directly or
indirectly materially reduce any of such benefits or deprive Employee
of any material fringe benefit enjoyed by Employee or to which
Employee was entitled at the time of the Change in Control, or the
failure by the Corporation to provide Employee with the number of paid
vacation and sick leave days to which Employee is entitled on the
basis of years of service or position with the Corporation in
accordance with the Corporation's normal vacation policy in effect on
the date hereof.
(E) The Corporation's requiring Employee to be based
anywhere other than the metropolitan area where the Corporation office
at which he was based immediately prior to the Change in Control was
located, except for required travel on the Corporation's business in
accordance with the Corporation's past management practices.
(F) Any failure of the Corporation to obtain the
assumption of the obligation to perform this Agreement by any
successor as contemplated in Section 10 hereof.
(G) Any failure by the Corporation or its shareholders,
as the case may be, to reappoint or reelect Employee to a corporate
office held by him immediately prior to the Change in Control or his
removal from any such office including any seat held at such time on
the Corporation's Board of Directors.
-6-
<PAGE> 7
(H) The effectiveness of a resignation, tendered at any
time, either before or after a Change in Control and regardless of
whether formally characterized as voluntary or otherwise, by Employee
of any corporate office held by him immediately prior to the Change in
Control or of any seat held at such time on the Corporation's Board of
Directors, at the request of the Corporation or at the request of the
person obtaining control of the Corporation in such Change in Control.
(I) Any purported termination of the Employee's
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 5 hereof (and, if applicable,
Section 3(D) hereof); and for purposes of this Agreement, no such
purported termination shall be effective.
(J) Any request by the Corporation that Employee
participate in an unlawful act or take any action constituting a
breach of Employee's professional standard of conduct.
(K) Any breach by the Corporation of any of the
provisions of this Agreement or any failure by the Corporation to
carry out any of its obligations hereunder.
Notwithstanding anything in this Section 4 to the contrary, Employee's right to
terminate Employee's employment pursuant to this Section 4 shall not be
affected by Employee's incapacity due to physical or mental illness.
5. Any termination of Employee's employment with the
Corporation as contemplated by Section 3 hereof (except subsection 3(A)) or by
Employee as contemplated by Section 4 hereof shall be communicated by written
"Notice of Termination" to the other party hereto. Any "Notice of Termination"
given by Employee pursuant to Section 4 or given by the Corporation in
connection with a termination as to which the Corporation believes it is not
obligated to provide Employee with benefits set forth in Section 6 hereof shall
indicate the specific provisions of this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for such termination.
6. Subject to the conditions and exceptions set forth in
Section 3 and Section 4 hereof, the following benefits, less any amounts
required to be withheld therefrom under any applicable federal, state or local
income tax, other tax, or social security laws or similar statutes, shall be
paid to
-7-
<PAGE> 8
Employee upon any termination of his employment with the Corporation
subsequent to a Change in Control:
(A) Within thirty (30) days following such a termination,
Employee shall be paid, at his then-effective salary, for services
performed through the date of his termination. In addition, any
earned but unpaid amount of any bonus or incentive payment shall be
paid to Employee within thirty (30) days following the termination of
his employment.
(B) Within thirty (30) days following such a termination,
Employee shall be paid a lump sum payment of an amount equal to two
and nine-tenths (2.9) times Employee's "Base Amount." For purposes
hereof, Base Amount is defined as Employee's average includable
compensation paid by the Corporation for the five (5) most recent
taxable years ending before the date on which the Change in Control
occurs. The Base Amount shall be determined by adding the Employee's
total includable compensation paid by the Corporation for the five (5)
most recent taxable years and dividing such total by five (5).
Notwithstanding the foregoing, should a Change in Control occur prior
to December 31, 1996, the Employee's Base Amount shall be one-fifth
(1/5) of the Employee's includable compensation paid by the
Corporation during the applicable portion of calendar year 1996. The
definition, interpretation and calculation of the dollar amount of
Base Amount shall be in a manner consistent with and as required by
the provisions of Section 280G of the Internal Revenue Code of 1986,
as amended ("Code"), and the regulations and rulings of the Internal
Revenue Service promulgated thereunder, without regard, however, to
the definition therein of "base period".
(C) (i) In the event that any payment or benefit
(within the meaning of Section 280G(b)(2) of the Code) paid or payable
to the Employee or for his benefit pursuant to the terms of this
Agreement or otherwise in connection with, or arising out of, his
employment with the Corporation or a change in ownership or effective
control of the Corporation or of a substantial portion of its assets
(a "Payment" or "Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest, penalties,
additional tax or similar items are incurred by the Employee with
respect to such excise tax (such excise tax, together with any such
interest, penalties, additional tax or similar items are hereinafter
collectively referred to as the "Excise Tax"), then the Employee will
be entitled to
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<PAGE> 9
receive an additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Employee of all taxes (including any
interest, penalties, additional tax or similar items imposed with
respect thereto and the Excise Tax) including any Excise Tax imposed
upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(ii) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount of such
Gross-Up Payment shall be made at the Corporation's expense by an
accounting firm selected by the Corporation and reasonably acceptable
to the Employee which is designated as one of the five largest
accounting firms in the United States (the "Accounting Firm"). The
Accounting Firm shall provide its determination (the "Determination"),
together with detailed supporting calculations and documentation to
the Corporation and the Employee within ten days of the Termination
Date if applicable, or such other time as requested by the Corporation
or by the Employee and if the Accounting Firm determines that no
Excise Tax is payable by the Employee with respect to a Payment or
Payments, it shall furnish the Employee with an opinion reasonably
acceptable to the Employee that no Excise Tax will be imposed with
respect to any such Payment or Payments. Within ten days of the
delivery of the Determination to the Employee, the Employee shall have
the right to dispute the Determination (the "Dispute"). The Gross-Up
Payment, if any, as determined pursuant to this subsection 6(c)(ii)
shall be paid by the Corporation to the Employee within five days of
the receipt of the Accounting Firm's Determination. The existence of
the Dispute shall not in any way affect the Employee's right to
receive the Gross-Up Payment in accordance with the Determination. If
there is no Dispute, the Determination shall be binding, final and
conclusive upon the Corporation and the Employee subject to the
application of subsection 6(c)(iii) below.
(iii) As a result of the uncertainty in the application
of Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Excess Payment") or a Gross-Up Payment (or a portion
thereof) which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred (a)
upon notice (formal or informal) to the Employee from any
-9-
<PAGE> 10
governmental taxing authority that the Employee's tax liability
(whether in respect of the Employee's current taxable year or in
respect of any prior taxable year) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments with respect to
which the Corporation has failed to make a sufficient Gross-Up
Payment, (b) upon a determination by a court, (c) by reason of
determination by the Corporation (which shall include the position
taken by the Corporation, together with its consolidated group, on its
federal income tax return) or (d) upon the resolution of the Dispute
to the Employee's satisfaction. If an Underpayment occurs, the
Employee shall promptly notify the Corporation and the Corporation
shall promptly, but in any event, at least five days prior to the date
on which the applicable government taxing authority has requested
payment, pay to the Employee an additional Gross-Up Payment equal to
the amount of the Underpayment plus any interest, penalties,
additional taxes or similar items imposed on the Underpayment. An
Excess Payment shall be deemed to have occurred upon a "Final
Determination" (as hereinafter defined) that the Excise Tax shall not
be imposed upon a Payment or Payments (or portion thereof) with
respect to which the Employee had previously received a Gross-Up
Payment. A "Final Determination" shall be deemed to have occurred
when the Employee has received from the applicable government taxing
authority a refund of taxes or other reduction in the Employee's tax
liability by reason of the Excise Payment and upon either (x) the date
a determination is made by, or an agreement is entered into with, the
applicable governmental taxing authority which finally and
conclusively binds the Employee and such taxing authority, or in the
event that a claim is brought before a court of competent
jurisdiction, the date upon which a final determination has been made
by such court and either all appeals have been taken and finally
resolved or the time for all appeals has expired or (y) the statute of
limitations with respect to the Employee's applicable tax return has
expired. If an Excess Payment is determined to have been made, the
amount of the Excess Payment shall be treated as a loan by the
Corporation to the Employee and the Employee shall pay to the
Corporation on demand (but not less than 10 days after the Final
Determination of such Excess Payment and written notice has been
delivered to the Employee) the amount of the Excess Payment plus
interest at an annual rate equal to the Applicable Federal Rate
provided for in Section 1274(d) of the Code from the date the Gross-Up
Payment (to which the
-10-
<PAGE> 11
Excess Payment relates) was paid to the Employee until the date
of repayment to the Corporation.
(iv) Notwithstanding anything contained in this
Agreement to the contrary, in the event that, according to the
Determination, an Excise Tax will be imposed on any Payment or
Payments, the Corporation shall pay to the applicable government
taxing authorities as Excise Tax withholding, the amount of the Excise
Tax that the Corporation has actually withheld from the Payment or
Payments.
(D) Employee acknowledges and agrees that payment in
accordance with subsections 6(A), 6(B) and 6(C) shall be deemed to
constitute a full settlement and discharge of any and all obligations
of the Corporation to Employee under this Agreement. Nothing in this
Agreement shall be construed as affecting the Employee's rights to
compensation or benefits (including without limitation severance
compensation or benefits) under any other agreements between the
Corporation and the Employee or under any insurance, pension,
supplemental pension, thrift, employee stock ownership, or stock
option plans sponsored or made available by the Corporation.
7. The Corporation is aware that upon the occurrence of
a Change in Control the Board of Directors or a shareholder of the Corporation
may then cause or attempt to cause the Corporation to refuse to comply with its
obligations under this Agreement, or may cause or attempt to cause the
Corporation to institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take or attempt to take other action
to deny Employee the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is the
intent of the Corporation that Employee not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by
litigation or other legal action, nor be bound to negotiate any settlement of
his rights hereunder, because the cost and expense of such legal action or
settlement would substantially detract from the benefits intended to be
extended to Employee hereunder. Accordingly, if following a Change in Control
it should appear to Employee that the Corporation has failed to comply with any
of its obligations under this Agreement or in the event that the Corporation or
any other person takes any action to declare this Agreement void or
unenforceable, or institutes any litigation or other legal action designed to
deny, diminish or to recover from Employee the benefits entitled to be provided
to the Employee hereunder, and that Employee has complied with all of his
obligations under this Agreement, the Corporation irrevocably
-11-
<PAGE> 12
authorizes Employee from time to time to retain counsel of his choice,
at the expense of the Corporation as provided in this Section 7, to
represent Employee in connection with the initiation or defense of any
litigation or other legal action, whether such action is by or against
the Corporation or any director, officer, shareholder, or other person
affiliated with the Corporation, in any jurisdiction. Notwithstanding
any existing or prior attorney-client relationship between the
Corporation and such counsel, the Corporation irrevocably consents to
Employee entering into an attorney-client relationship with such
counsel, and in that connection the Corporation and Employee agree
that a confidential relationship shall exist between Employee and such
counsel. The reasonable fees and expenses of counsel selected from
time to time by Employee as hereinabove provided shall be paid or
reimbursed to Employee by the Corporation on a regular, periodic basis
upon presentation by Employee of a statement or statements prepared by
such counsel in accordance with its customary practices, up to a
maximum aggregate amount of One Hundred Thousand Dollars ($100,000).
Any legal expenses incurred by the Corporation by reason of any
dispute between the parties as to enforceability of or the terms
contained in this Agreement as provided by this Section 7,
notwithstanding the outcome of any such dispute, shall be the sole
responsibility of the Corporation, and the Corporation shall not take
any action to seek reimbursement from Employee for such expenses.
Notwithstanding any limitation contained in this Section 7 to the
contrary, Employee shall be entitled to payment or reimbursement of
legal expenses in excess of One Hundred Thousand Dollars ($100,000) if
the expenses were incurred as a result of a dispute under this
Agreement in which Employee obtains a final judgment in his favor from
a court of competent jurisdiction or his claim is settled by the
Corporation prior to the rendering of a judgment by such a court.
8. Employee is not required to mitigate the amount of
benefit payments to be made by the Corporation pursuant to this Agreement by
seeking other employment or otherwise, nor shall the amount of any benefit
payments provided for in this Agreement be reduced by any compensation earned
by Employee as a result of employment by another employer or which might have
been earned by Employee had Employee sought such employment, after the date of
termination of his employment with the Corporation or otherwise.
9. In order to induce the Corporation to enter into this
Agreement, Employee hereby agrees as follows:
(A) He will keep confidential and not improperly divulge
for the benefit of any other party any of the Corporation's
confidential information and business secrets including, but not
limited to, confidential information and business secrets relating to
such
-12-
<PAGE> 13
matters as the Corporation's finances, operations and customer lists.
All of the Corporation's confidential information and business secrets
shall be the sole and exclusive property of the Corporation.
(B) For a period of two years after Employee's employment
with the Corporation ceases, Employee shall not either on his own
account or for any other person, firm or company solicit or endeavor
to cause any employee of the Corporation to leave his employment or to
induce or attempt to induce any such employee to breach any employment
agreement with the Corporation.
In the event of a breach or threatened breach by Employee of the provisions of
this Section 9, the Corporation shall be entitled to an injunction restraining
Employee from committing or continuing such breach. Nothing herein contained
shall be construed as prohibiting the Corporation from pursuing any other
remedies available to it for such breach or threatened breach including the
recovery of damages from Employee. The covenants of this Section 9 shall run
not only in favor of the Corporation and its successors and assigns, but also
in favor of its subsidiaries and their respective successors and assigns and
shall survive the termination of this Agreement.
10. The Corporation shall 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 Corporation, by
agreement in form and substance satisfactory to Employee, to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Corporation would be required to perform it if no such succession had
taken place. Failure of the Corporation to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Corporation in the same amount
and on the same terms as Employee would be entitled hereunder if he were to
terminate his employment pursuant to Section 4 hereof, except that for purposes
of implementing the foregoing, the date on which succession becomes effective
shall be deemed the date of termination of Employee's employment with the
Corporation. As used in this Agreement, "Corporation" shall mean corporation
as hereinbefore defined and any successor to the business or assets of it as
aforesaid which executes and delivers the agreement provided for in this
Section 10 or which otherwise becomes bound by all of the terms and provisions
of this Agreement by operation of law.
11. Should Employee die while any amounts are payable to
him hereunder, this Agreement shall inure to the benefit of and be enforceable
by Employee's executors, administrators,
-13-
<PAGE> 14
heirs, distributees, devisees and legatees and all amounts payable hereunder
shall be paid in accordance with the terms of this Agreement to Employee's
devisee, legatee or other designee or if there be no such designee, to his
estate.
12. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Employee:
Thomas G. Slama
3065 South 975 East
Zionsville, IN 46077
If to the Corporation:
National Infusion Services, Inc.
10333 North Meridian, Suite 300
Indianapolis, Indiana 46290
Attention: Corporate Secretary
or to such other address as any party may have furnished to the other party in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Indiana. The parties
agree that all legal disputes regarding this Agreement will be resolved in
Indianapolis, Indiana, and irrevocably consent to service of process in such
City for such purpose.
14. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Employee and the Corporation. No waiver by any party
hereto at any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time. No agreements or
representation, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not set forth
expressly in this Agreement.
15. The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or
-14-
<PAGE> 15
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
16. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same Agreement.
17. This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder, except as provided in
Section 10 and Section 11 above. Without limiting the foregoing, Employee's
right to receive payments hereunder shall not be assignable or transferable,
whether by pledge, creation of a security interest or otherwise, other than a
transfer by his Will or by the laws of descent and distribution as set forth in
Section 11 hereof, and in the event of any attempted assignment or transfer
contrary to this Section 17, the Corporation shall have no liability to pay any
amount so attempted to be assigned or transferred.
Any benefits payable under this Agreement shall be paid solely
from the general assets of the Corporation. Neither Employee nor Employee's
beneficiary shall have interest in any specific assets of the Corporation under
the terms of this Agreement. This Agreement shall not be considered to create
an escrow account, trust fund or other funding arrangement of any kind or a
fiduciary relationship between Employee and the Corporation.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered as of the day and year first above set forth.
NATIONAL INFUSION SERVICES, INC.
("Corporation")
By:/s/ Michael D. McCormick
------------------------
Michael D. McCormick
Executive Vice President
/s/ Thomas G. Slama, M.D.
----------------------------------
Thomas G. Slama, M.D. ("Employee")
-15-
<PAGE> 1
EXHIBIT 10-X (ii)
SEVERANCE AGREEMENT
AND GENERAL RELEASE
Michael R. Visnich ("Visnich") and Priority Healthcare Corporation, a
subsidiary of BINDLEY WESTERN INDUSTRIES, INC. (all affiliated organizations
are referred to herein as "Bindley Western") hereby execute this Severance
Agreement And General Release ("Agreement") and pursuant thereto agree as
follows:
1. Visnich has been employed by Bindley Western and various of its
affiliated organizations since 1993. For reasons discussed, Visnich
desires to resign his employment with Bindley Western effective August
7, 1995.
2. Both Visnich and Bindley Western desire to resolve any and all claims
and disputes or issues which have arisen or could arise concerning
Visnich's employment with or service for Bindley Western and the
severance of that employment and service. To accomplish such a
resolution, they have entered into this Agreement.
3. On or before August 25, 1995, Bindley Western will pay Visnich any and
all salary payments and earned but unused vacation benefits to which
he is entitled as an employee of Bindley Western, including August 25,
1995.
4. Upon execution of this Agreement, Visnich agrees that he has received
any and all salary payments and earned but unused vacation benefits to
which he is entitled as an employee of Bindley Western, including
August 25, 1995.
5. In addition to such payments and benefits, and as consideration for
Visnich's service to Bindley Western and execution of and compliance
with the terms of this Agreement, Bindley Western agrees to provide to
Visnich, and Visnich agrees to accept, the following supplemental
severance payments and benefits:
a. Bindley Western will pay Visnich a sum each month during the
period August 7, 1995 through January 1, 1996 equivalent to
Visnich's normal monthly salary
<PAGE> 2
($11,000) less normal withholding for federal, state and local
taxes. The first such payment shall be made on October 1,
1995, the second on November 1, 1995, the third on December 1,
1995, and the final on January 1, 1996.
b. Should Visnich elect to continue his health insurance coverage
under the provisions of the Comprehensive Omnibus Budget
Reconciliation Act of 1986, Bindley Western will reimburse
Visnich a sum equivalent to Visnich's premium each month
Visnich so continues the coverage, up to but not beyond
December 31, 1995. This monthly amount totals $474.98 for
family medical coverage and $34.56 for family dental coverage.
c. On or before November 7, 1995, Visnich shall purchase the
Bindley Western vehicle (1992 Ford Explorer) that he currently
drives for $12,000. If Visnich has not paid the $12,000 to
Bindley Western by November 7, 1995, Bindley Western shall
have the right to set off $12,000 from Visnich's November and
December severance payments. If such purchase election is not
made by Visnich upon signing this Agreement, he shall return
to Bindley Western such vehicle in its current condition by
September 1, 1995.
d. Pursuant to the July 31, 1995 approval of Bindley Western's
Compensation And Stock Option Committee, Visnich shall be
permitted to exercise the vested Incentive Stock Options and
Nonqualified Stock Options granted on December 10, 1993 and
December 9, 1994 on or before March 9, 1996. Such extension
shall be irrevocable unless Visnich in any way breaches the
Agreement and, in such event, Visnich would then forfeit all
of his non vested options. All other vested options
previously awarded to Visnich per Schedule A attached must be
exercised on or before November 7, 1995.
6. Visnich recognizes his continuing responsibilities to Bindley Western
with respect to confidential and
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<PAGE> 3
proprietary information and material. Visnich therefore warrants,
covenants and agrees:
a. That, during his employment and service with Bindley Western,
he has not disclosed outside the ordinary course of business
to others not employed by Bindley Western any trade secrets or
other confidential or proprietary information of Bindley
Western, in any form whatsoever, including but not limited to
any and all proprietary or confidential information or trade
secrets pertaining to (1) the operations; (2) employee,
vendor, or customer relationships; (3) the company's research,
development and other investigational interests and
activities; (4) customer lists; or (5) any other confidential
information of a financial or business nature of either
Bindley Western or any of its affiliated organizations,
including Priority Healthcare Corporation, Charise Charles,
PRN Medical, 3C Medical, IV-1, Inc., IV-One Services, Inc. or
National Pharmacy Providers, Inc.
b. That, subsequent to his employment and service with Bindley
Western, he will not, without Bindley Western's prior written
consent, disclose to anyone any of such trade secrets or other
confidential or proprietary information of Bindley Western or
any of its affiliated organizations in any form whatsoever.
c. That he has returned, or will return prior to September 1,
1995, to Bindley Western all originals and all copies of all
materials of any kind whatsoever of a trade secret,
confidential or proprietary nature to Bindley Western or any
of its affiliated organizations which were in his possession
or custody or under his control during his employment or
service and up to and including the date of this Agreement;
that he has not knowingly given any such materials, either
directly or indirectly, to others not in the employ of Bindley
Western without Bindley Western's prior written consent; and
that in the future he will not obtain or give any such
materials, either directly
-3-
<PAGE> 4
or indirectly, to others not in the employ of Bindley Western
without Bindley Western's prior written consent.
d. In exchange for the additional consideration set forth in
Paragraph 5a.-d. above, Visnich agrees not to engage, prior to
January 1, 1996, in any businesses involving the selling or
distributing of pharmaceutical drugs, medical and surgical
supplies, and related products and services in the United
States as an employee of a drug or device distributor without
first obtaining the prior written consent of William E.
Bindley to do so.
7. Visnich covenants that he has returned, or will return prior to
September 1, 1995, all other property of Bindley Western, including
but not limited to keys, credit cards, files, personal computers,
documents and any other such property in his possession or custody at
his office, personal residence, or elsewhere.
8. If it is necessary for Bindley Western to call upon him to provide
evidence in judicial, administrative or other proceedings occurring
subsequent to his resignation, Visnich agrees to cooperate in making
himself available for such proceedings, and Bindley Western agrees to
reimburse his reasonable expenses and fees for his time spent in such
matters.
9. Visnich agrees and covenants that he will not sue Bindley Western
Industries, Inc., any of its affiliated organizations or any of
Bindley Western's or its affiliated organizations' officers,
directors, employees, agents or representatives or commence any
proceeding or action in any forum, administrative or judicial, arising
out of, connected with or in any way related to his employment with or
service for, or his severance from employment with Bindley Western.
10. Visnich hereby releases and forever discharges Bindley Western
Industries, Inc., its affiliated organizations, and
-4-
<PAGE> 5
its and their officers, directors, employees, agents or
representatives from any and all claims, liabilities, demands, actions
and causes of action of every nature, kind and character, known and
unknown, which have or may have arisen or accrued to Visnich by reason
of his employment by and service for Bindley Western, including,
without limitation, any and all claims that the severance from his
employment and service resulted from a violation or breach of any
federal, state, or local statute, regulations, ordinance, or common
law, or any contract, and including, without limitation, any charges
or claims regarding possible discrimination (based on age, race,
ethnic background, sex, disability, religion), wrongful termination,
or express or implied contract, any and all claims for salary,
vacation pay, fringe benefits, severance pay, profit sharing benefits,
costs and attorneys' fees and any and all other compensation,
benefits, damages or fees, whether or not such claims have been or
could have been asserted by Visnich at any time up to and including
the date of this Agreement, excepting only claims which may arise as a
result of the failure of Bindley Western to perform under this
Agreement and any other amounts to which Visnich is entitled under
Bindley Western's group benefits programs.
11. Bindley Western Industries, Inc., on behalf of itself and its
affiliated organizations and its and their officers, directors,
employees, agents or representatives agrees and covenants not to sue
Visnich or commence any proceeding or action in any forum,
administrative or judicial, arising out of, connected with or in any
way related to his employment with or service for, or his severance
from employment with Bindley Western.
12. Bindley Western Industries, Inc., on behalf of itself and its
affiliated organizations and its and their officers, directors,
employees, agents or representatives hereby releases and forever
discharges Visnich from any and all claims, liabilities, demands,
actions and causes of action of every nature, kind and character,
known and unknown, which have or may have arisen or accrued to Visnich
by
-5-
<PAGE> 6
reason of his employment by and service for Bindley Western and its
affiliated organizations, including, without limitation, any and all
claims resulting from an alleged violation or breach of any federal,
state, or local statute, regulations, ordinance, or common law, or any
contract, whether or not such claims have been or could have been
asserted at any time up to and including the date of this Agreement,
excepting only claims which may arise as a result of the failure of
Visnich to perform under this Agreement. In the event Visnich in any
way breaches the Agreement, Bindley Western shall immediately cease
paying the additional consideration set forth in Paragraph 5a.-b.
above and Bindley Western's future obligations to pay such
consideration shall terminate.
13. The parties agree to keep the contents of this Agreement confidential,
except any disclosures that may be compelled by a court of competent
jurisdiction pursuant to a civil or criminal proceeding.
14. Should any provision of this Agreement be declared or determined by
any court of competent jurisdiction to be illegal, invalid or
unenforceable, the legality, validity and enforceability of the
remaining parts, terms, or provisions shall not be affected thereby
and said illegal, unenforceable or invalid part, term or provision
shall be deemed not to be a part of this Agreement.
15. Visnich represents and acknowledges that in executing this Agreement
he does not rely and has not relied upon any representation or
statement with regard to the subject matter, basis or effect of this
Agreement, other than those specifically stated in this Agreement.
16. This Agreement sets forth the entire agreement between the parties
hereto, and fully supersedes any and all prior agreements or
understandings, written or oral, between the parties hereto pertaining
to the subject matter hereof. It may be modified only by the
agreement of the parties hereto memorialized in writing and executed
by each of them.
-6-
<PAGE> 7
17. This Agreement shall be binding upon each of the parties hereto and
upon their legal representatives, heirs, successors, and assigns.
18. This Agreement shall be interpreted under and according to the laws of
the State of Florida. In the event suit is brought for breach or
default of any of the terms or conditions of this Agreement, the party
prevailing in any such action, in law or in equity, shall be entitled
to reasonable attorneys' fees and court costs.
I, MICHAEL R. VISNICH, AGREE THAT I HAVE READ AND UNDERSTAND THIS
AGREEMENT; THAT I HAVE BEEN GIVEN UP TO 21 DAYS TO THINK ABOUT THE AGREEMENT;
THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO CONSULT WITH SUCH SOURCES OF COUNSEL
AS I DESIRE REGARDING THE TERMS OF THIS AGREEMENT; AND THAT I HAVE EXECUTED IT
VOLUNTARILY AND OF MY OWN FREE WILL.
Date: August 30, 1995
---------------
/s/ Belinda Goodmark /s/ Michael R. Visnich
- --------------------------- ---------------------------------
Witness Michael R. Visnich
Date: August 31, 1995 BINDLEY WESTERN INDUSTRIES, INC.
---------------
By: /s/ Michael D. McCormick,
----------------------------------
Michael D. McCormick
Ex V.P. & General Counsel
-7-
<PAGE> 8
Options Statement as of 03/25/1995
BINDLEY WESTERN INDUSTRIES
Michael Visnich
P.O. Box 160672
Altamonte Springs, FL 32716
<TABLE>
<CAPTION>
Options Options Option Date of Options
Grant Date Type Granted Outstanding Price Expiration Vested
- ----------- ------------- -------- ----------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
05/20/1993 Non Qualified 10,000 10,000 $11.5000 05/20/2003 5,000 (current)
2,500 on 05/20/1996
2,500 on 05/20/1997
12/10/1993 Incentive Stock 8,000 8,000 $11.5000 12/10/2003 8,000 (current)
12/10/1993 Non Qualified 12,000 12,000 $11.5000 12/10/2003 3,000 (current)
3,000 on 12/10/1995
3,000 on 12/10/1996
3,000 on 12/10/1997
12/09/1994 Incentive Stock 7,500 7,500 $13.2500 12/09/2004 0 (current)
7,500 on 12/09/1995
0 (current)
12/09/1994 Non Qualified 12,500 12,500 $13.2500 12/09/2004 3,125 on 12/09/1995
3,125 on 12/09/1996
3,125 on 12/09/1997
3,125 on 12/09/1998
======== ====== =========
TOTALS 50,000 50,000 16,000
By 11/7/95
7,500 ) By 3/9/96
3,125 )
---------
26,625
3,000 By 3/9/95
---------
29,625
</TABLE>
Schedule A
<PAGE> 1
EXHIBIT 10-X (iii)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the
8th day of February, 1996, by and among Thomas G. Slama, M.D. (the "Employee"),
National Infusion Services, Inc., an Indiana corporation (the "Corporation"),
and for certain purposes only, Bindley Western Industries, Inc., an Indiana
corporation that is the indirect parent of the Corporation ("BWI").
W I T N E S S E T H:
WHEREAS, the Corporation desires to obtain the services of the
Employee as President and Chief Executive Officer, and the Employee is willing
to render such services to the Corporation upon the terms and conditions herein
set forth:
WHEREAS, the role of the Corporation is to (a) own and operate
the business previously owned and operated by the Infusion Services Division of
Infectious Disease of Indiana, P.S.C. ("ISD"), (b) own and operate any infusion
centers developed by Employee or the Corporation, (c) provide infusion therapy
services, and (d) supervise the operation of any infusion centers now owned or
operated, directly or indirectly, by BWI or any subsidiary, division or
affiliate of BWI (the "Corporation Group").
WHEREAS, in connection with the transactions contemplated in
this Agreement, the parties have reviewed and considered the laws set forth at
42 U.S.C. Sections 1320a-7b(b) and 1877 (the "Fraud and Abuse Laws"), and
believe that the terms and conditions of this Agreement are in compliance with
these laws.
NOW, THEREFORE, in consideration of the mutual promises set
forth herein and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. COMPENSATION; DUTIES; OTHER TERMS
1.1. Compensation
1.1.1. Signing Bonus
On the date hereof, Employee shall be
entitled to receive sixty (60) shares of common stock of the Corporation,
without par value (the "Common Stock"), such that, if, on the date hereof, all
of the options, warrants, conversion privileges or other similar rights to
acquire Common Stock held by any person on the date hereof were exercised, the
Employee would own six percent (6%) of the then issued and outstanding Common
Stock. The Corporation represents to the Employee that
<PAGE> 2
Common Stock is the only class of capital stock of the Corporation currently
authorized.
1.1.2. Salary and Benefits
(a) The Corporation agrees to employ the Employee and the
Employee agrees to accept employment by the Corporation on a full-time
basis as President and Chief Executive Officer of the Corporation, at
a minimum annual salary of $300,000 payable during the Term of
Employment (as defined in Section 2 hereof). Such salary shall be
payable monthly in advance in equal installments and shall be subject
to deduction for withholding and other applicable taxes.
(b) The Employee shall be entitled to participate in all
fringe benefit programs to which executive officers of BWI are
generally entitled, including any termination benefit agreement,
retirement, pension, profit-sharing or thrift plan, deferred
compensation plan, hospitalization, vacation and sick leave, medical
or insurance plan, and also including any other benefit policy, plan
or other practice that under applicable law constitutes a benefit of
employment to which executive officers of BWI are generally entitled.
The Employee shall be further entitled to receive all perquisites to
which executive officers of BWI are generally entitled. The
Corporation and BWI retain the right to abolish or alter the terms of
any fringe benefit programs that either of them may establish.
1.1.3. Bonus
The Employee shall be entitled to an annual bonus, with
respect to each fiscal year of the Corporation, based upon the financial
performance of the Corporation and IV-I, Inc., the parent corporation of the
Corporation, ("IV-I") and National Pharmacy Providers, Inc., a wholly owned
subsidiary of IV-I ("NPP") (collectively the Corporation, IV-I and NPP are
referred to herein as the "Infusion Businesses"). The Employee's annual bonus
shall be equal to the sum of (a) four percent (4%) of the annual net income of
the Corporation before income taxes, amortization of goodwill, interest on the
$9,000,000 loan from Priority Healthcare Corporation to finance the acquisition
of the Infusion Services Division of ISD and the calculation of Employee's
bonus hereunder, plus (b) one percent (1%) of the unconsolidated separate net
income before income taxes of each of IV-I and of NPP (in each case as
determined in accordance with generally accepted accounting principles);
provided, however, that Employee shall be entitled to receive at least $150,000
as a bonus for the partial fiscal year ending December 31, 1996, at
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<PAGE> 3
least $200,000 as a bonus for the fiscal year ending December 31,1997, and at
least $150,000 as a bonus for each of the fiscal years ending December 31,
1997, 1998 and 1999. Minimum bonus amounts will be paid prior to year-end and
the balance, if any, shall be paid within ninety (90) days after year-end. BWI
agrees not to allocate any overhead or other expenses to the Corporation, IV-I
and/or National Pharmacy Providers, Inc. in a manner inconsistent with its
prior practices. BWI or its wholly owned subsidiary, Priority Healthcare
Corporation, will provide sufficient funds to meet such capital requirements of
the Corporation as are set forth in a business plan to be adopted by the
Corporation and approved by BWI within one hundred twenty (120) days after the
date of this Agreement.
1.1.4. Stock Options
(a) On the date hereof (the "Transfer Date"), BWI shall
grant to the Employee pursuant to BWI's 1993 Stock Option and
Incentive Plan (the "Plan") an option to purchase 25,000 shares of
common stock, par value of $.01 per share, of BWI (the "BWI Common
Stock"). On each of the first, second, and third anniversaries of the
date hereof, BWI shall grant to Employee under the Plan (or any
successor plan) an option to purchase 25,000 shares of BWI Common
Stock (the total options to which Employee is entitled under this
Section 1.1.4 shall be referred to as the "Options"). The exercise
price for the Options shall be the fair market value of BWI Common
Stock on the respective grant dates and each of the Options shall vest
25% on each of the first four (4) anniversaries of the respective
grant dates. To the maximum extent permissible, the Options shall be
incentive stock options. The other terms of the Options shall be as
set forth in the grant letters attached hereto as Exhibit A-1 and
Exhibit A-2. BWI agrees to continue to register the BWI Common Stock
issuable upon the exercise of Options granted under the Plan on Form
S-8 (or any successor form).
(b) In the event that changes in the BWI Common Stock of
the type described by Section 10 of the Plan occur prior to any of the
anniversaries of the date hereof, the number and kind of securities as
to which BWI shall thereafter be obligated to grant an option or
options to the Employee pursuant to this Section 1.1.4 shall be
adjusted as appropriate as contemplated by Section 10 of the Plan as
if such options had already been granted to the Employee prior to the
date of such change in the BWI Common Stock.
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<PAGE> 4
(c) BWI's obligations to issue options under this Section
1.1.4 are an integral part of this Agreement and BWI agrees never to
assert that the general disclaimer of Section 14 of the Plan to the
effect that BWI shall not bind itself to award shares under the Plan
invalidates or limits in any way BWI's obligations to Employee under
this Section 1.1.4.
1.2. Duties
The Employee shall perform the following duties:
(a) Such duties for the Corporation as are typically
performed by a chief executive officer and in addition shall provide
supervisory services to the infusion related businesses of IV-I and
NPP;
(b) serve in such additional capacities appropriate to
his responsibilities and skills as shall be designated by the
Corporation and agreed to by the Employee;
(c) carry out the other terms and conditions of this
Agreement diligently and in good faith.
Notwithstanding anything expressed or implied in this
Agreement to the contrary, the Employee shall not be required to perform any
services, duties or obligations that would violate any statute, law, ordinance,
rule or regulation or breach Employee's professional standard of conduct.
1.3. Extent of Service
The Employee shall carry out his duties under the general
supervision of the Board of Directors of the Corporation. The Employee shall
devote his full time, attention, knowledge, and skills solely to the business
and interest of the Corporation and the Infusion Businesses during normal
business hours, shall perform no acts contrary to the best interests of the
Corporation and the Corporation shall be entitled to all of the benefits,
profits or other results arising from or incident to all work, services, and
advice of the Employee; provided, however, that (a) the Employee, for his own
account and solely in his own personal interest, may engage in the practice of
medicine during two half-days (or any other time equivalent thereof) per week
and (b) consistent with the Employee's past practice, the Employee may spend up
to 20 percent of his time devoted to activities of the National Foundation for
Infectious Diseases and the Infectious Disease Society of America. Any
provision of this Agreement to the contrary notwithstanding, in no event shall
the Employee make any patient referrals, or recommend that physicians
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<PAGE> 5
with whom the Employee is involved in a group practice make patient referrals,
in violation of the Fraud and Abuse Laws.
1.4. Expenses and Auto Allowance
The Corporation shall reimburse the Employee for all ordinary
and necessary business expenses incurred by him while carrying out his
employment responsibilities under this Agreement. The Corporation retains the
right to establish limits on the types or amounts of business expenses that the
Employee may incur. The Employee shall receive a monthly auto allowance of
$400, shall be reimbursed by the Corporation for such auto's gasoline and oil
charges and the Corporation will pay up to $900 annually for auto insurance on
such auto.
2. TERM OF EMPLOYMENT
2.1. Term of Employment
The "Term of Employment" as used herein during which, in
accordance with the terms of this Agreement, the Corporation will employ or
continue to employ the Employee in its business, and the Employee will work or
continue to work for the Corporation, shall be a period beginning the date
hereof, and ending 5 years after the date hereof (or any earlier date of
termination of the Employee's employment pursuant to the terms hereof or by
mutual agreement).
2.2. Termination
2.2.1. Employee's employment pursuant to this Agreement may
be terminated during the term of this Agreement only as follows:
(a) at any time by Employee without cause by giving
thirty (30) days advance written notice of his voluntary resignation
to the Board of Directors of the Corporation;
(b) at any time by Employee with cause (as defined below)
for such termination by giving written notice thereof to the
Corporation specifying therein the effective date of such termination
(which shall not be earlier than ten (10) days after the date the
Employee mails or otherwise gives such notice to the Corporation) and
a description of the circumstances or occurrences that the Employee
believes to constitute cause for terminating the Employee's
employment;
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<PAGE> 6
(c) at any time by the Corporation without cause, by
giving thirty (30) days advance written notice to Employee;
(d) at any time by the Corporation with cause (as defined
below) for such termination by giving written notice thereof
to the Employee, specifying therein the effective date of
such termination (which shall not be earlier than ten (10)
days after the date the Corporation mails or otherwise gives
such notice to the Employee) and a description of the
circumstances or occurrences that the Corporation believes
to constitute cause for terminating the Employee's
employment; or
(e) upon Employee's death.
2.2.2. "Cause" for termination by the Corporation shall be
deemed to mean the following:
(a) the continuing failure of the Employee to
substantially perform any of the Employee's significant duties or
responsibilities hereunder (other than any such failure resulting from
the Employee's incapacity due to physical or mental illness) if such
failure is not corrected or cured within 15 days after demand for
substantial performance is made in writing upon the Employee by the
Corporation specifically identifying the manner in which the
Corporation believes the Employee has failed to substantially perform
one or more of the Employee's significant duties or responsibilities;
or
(b) any act that constitutes on the part of the Employee
common law fraud or theft, but only if such action resulted in, or was
intended to result in, a benefit to the Employee at the expense of the
Corporation; or
(c) the indictment of the Employee for, or conviction of
the Employee of, or the plea by the Employee of nolo contendere to, a
felony; or
(d) any continuing violation by the Employee in any
material respect of any of the Corporation's policies or of any term
or provision of this Agreement which, in either case, is not corrected
or abated by the Employee within fifteen (15) days after written
notice of such violation, describing same in reasonable detail, is
given by the Corporation to the Employee; or
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<PAGE> 7
(e) Employee is unable, due to mental or physical
disability, to substantially perform the essential functions of the
Employee's duties and services specified in this Agreement for a
period of not less than three (3) consecutive months during any twelve
(12) month period.
2.2.3. "Cause" for termination by the Employee shall be
deemed to mean the following:
(a) the Corporation violates in any material respect any
of the terms or provisions of this Agreement and such violation is not
corrected or abated by the Corporation within fifteen (15) days after
written notice of such violation, describing same in reasonable
detail, is given by the Employee to the Corporation; or
(b) the Employee's duties and responsibilities to the
Corporation shall be substantially and materially diminished from the
Employee's duties and responsibilities to the Corporation as of the
date of this Agreement; or
(c) the Employee's title shall be changed from President
and Chief Executive Officer; or
(d) the Employee's office shall be relocated to a
location other than Marion County, Indiana or the counties contiguous
to Marion County, Indiana.
2.3. Compensation Upon Termination.
2.3.1. In the event that Employee's employment hereunder is
terminated by the Employee without cause (as provided in Section 2.2.1(a)), by
the Corporation with cause (as provided in Section 2.2.1(d)), or Employee's
death (as provided in Section 2.2.1(e)), Employee shall be entitled to receive
his base salary under Section 1.1.2 prorated to the date of termination plus a
prorata bonus under Section 1.1.3 based on the financial performance of the
Infusion Businesses or the pro rata minimum bonus under Section 1.1.3,
whichever is applicable, in either case for that portion of the fiscal year to
the date of termination (but otherwise calculated in accordance with Section
1.1.3). Such salary and bonus shall be paid to Employee (or, in the event of
Employee's death, to his estate), but no compensation (or other payments,
including payments under Section 3.1) in excess of such unpaid salary and bonus
amounts shall then be paid or payable to Employee (or to his estate) under this
Agreement.
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<PAGE> 8
2.3.2. In the event that Employee's employment hereunder is
terminated by Employee with cause (as provided in Section 2.2.1(b)) or
by the Corporation without cause (as provided in Section 2.2.1(c)),
Employee shall have no further obligations hereunder, and Employee
shall continue to be paid the base salary and the bonus amounts
described in Sections 1.1.2 and 1.1.3, to the same extent as if the
Term of Employment had not ended on a date that is prior to five (5)
years after the date hereof.
2.3.3. In the event of Employee's death at any time following
termination of the Term of Employment, all termination amounts payable
under this Section 2.3 shall be paid to the Employee's estate to the
same extent and in the same manner as if the Employee had not died.
2.3.4. The obligations of the Corporation under this Section
2.3 shall survive the termination or expiration of the Term of
Employment.
2.3.5. Any options held by Employee at the time of
termination shall be governed by the terms thereof.
3. COVENANTS
3.1. Covenant Not to Compete; Covenant Not to Enter into Competing
Business
3.1.1.
(a) During the Term of Employment and for five years
thereafter, the Employee shall not solicit, hire or contract with any
healthcare-related employees of the Corporation Group or any past
healthcare-related employees of the Corporation Group who were
employed by the Corporation Group within twelve (12) months prior to
Employee's departure.
(b) During the Term of Employment and for a period of
five years thereafter, Employee shall not, directly or indirectly,
reveal or disclose to third parties any Trade Secrets (as hereinafter
defined) of the Corporation Group, which are not, at the time in
question, in the public domain without having become so in violation
of this Agreement, except as authorized by the Corporation. For
purposes of this Agreement, the term "Trade Secret" includes not only
that confidential or proprietorial information defined as a "Trade
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<PAGE> 9
Secret" under the Indiana Trade Secrets Act, I.C. Section
24-2-3-1 et seq. (the "Act"), but also that information which
possesses independent economic benefit to the Corporation Group from
not being generally known by other persons who can obtain economic
benefit from its disclosure or use. The Employee covenants that he
will, at all times, conform his conduct to the requirements of the Act
and will not misappropriate (e.g., use or disclose to any third party)
any Trade Secret of the Corporation Group. The Employee recognizes
that the penalties for a Trade Secret violation may include
disgorgement of profits, payment of royalties, compensatory damages,
punitive damages, and attorneys' fees.
(c) Notwithstanding any provision of this Section 3.1 to
the contrary, during the Term of Employment and for a period of five
years thereafter, the Employee shall not, without the written consent
of the Corporation (which consent the Corporation may give or withhold
in its sole discretion), directly or indirectly (i) own any interest
in (except the ownership of less than five percent of the capital
interest in a publicly traded entity or indirect ownership of less
than five percent as a participant in an employee benefit plan) or
manage (whether as an owner, employee, consultant or other agent of
any type whatsoever) a business identical or substantially similar to
the healthcare related business of the Corporation Group or any parts
thereof in the State of Indiana or in any city or county in which the
Corporation Group provides infusion therapy services, or (ii) except
where the failure to do so without first obtaining the Corporation's
written consent would constitute a health risk to the potential
recipient, attempt to sell, offer, or provide to any person or entity
which is a past or present supplier, client, patient or customer of
the Corporation Group a product or service substantially similar to
products or services offered by the Corporation Group; provided,
however, that the foregoing is not intended to prohibit or restrict,
and shall not be construed as prohibiting or restricting, the Employee
from engaging in the practice of medicine substantially in the manner
in which the Employee engaged in the practice of medicine immediately
prior to the commencement of the Term of Employment or in any other
manner that does not contravene the foregoing restrictive covenants.
By way of explanation and amplification of the foregoing, the Employee
is a physician who, in the course of his medical practice, refers
patients to, and manages the
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<PAGE> 10
care of patients who are receiving services from, various
sources that provide infusion services and other services identical or
similar to those provided by the Corporation Group. Nothing in this
Agreement is intended to prohibit the Employee, in his capacity as a
physician, from continuing to refer new patients to and manage the
care of patients who are receiving services from other infusion
centers or other businesses that compete with the Corporation Group.
It is understood that the Employee may, in his capacity as a
physician, be required to become involved as a physician and health
care provider in or otherwise establish working relationships of
various types with managed care plans or other health care provider
groups or networks that are or may become providers of infusion
services or other services similar to those provided by the
Corporation Group, and that if he is required to be an employee
(solely in the capacity as a physician) of any such plan or group he
may become a participant in one or more employer-sponsored benefit
plans that may own employer securities (which would be a circumstance
that the Employee could not control). The establishment and
maintenance of such relationships in the course of the conduct of the
medical practice of the Employee is not intended to be prohibited by
the foregoing restrictive covenants. Rather, such restrictive
covenants are intended to prohibit the Employee from becoming
financially interested as an owner (or the economic equivalent) in, or
from becoming involved in a management position (as opposed to a
position in which the Employee is merely rendering medical care and
advice) with, a business identical or substantially similar to the
health care related business of the Corporation Group and from
soliciting past or present suppliers, clients, patients or customers
of the Corporation Group for a competitor.
(d) The covenants contained in this Section 3.1 shall be
construed as a series of separate and severable covenants which are
identical in terms except for geographic coverage. The Employee, BWI,
and the Corporation agree that if in any proceeding, the tribunal
shall refuse to enforce fully any covenants contained herein because
such covenants cover too extensive a geographic area or too long a
period of time or for any other reason whatsoever, any such covenant
shall be deemed amended to the extent (but only to the extent)
required by law. Each party acknowledges and agrees that the services
to be rendered by Employee to the Corporation hereunder are of a
special and unique character. Each party shall
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<PAGE> 11
have the right to injunctive relief, in addition to all of its other
rights and remedies at law or in equity, to enforce the provisions of
this Agreement and the prevailing party shall be entitled to be
reimbursed by the losing party for all of the prevailing party's
attorneys' fees and other expenses incurred in connection with
enforcing its rights under this Agreement or in resisting an
unsuccessful enforcement attempt by the other party.
(e) Except for the infusion centers and infusion therapy
services of IV-I and NPP existing on the date of this Agreement, BWI
shall not, nor shall BWI cause, permit or otherwise enable or
encourage any subsidiary, division or affiliate of BWI other than the
Corporation to, directly or indirectly, own, operate or develop any
infusion center or provide any infusion therapy services.
(f) In consideration for the noncompetition obligations
of Employee hereunder, the Corporation shall pay to Employee $600,000
during the first year of this Agreement, $500,000 during the second
year of this Agreement, $300,000 during the third year of this
Agreement, $200,000 during the fourth year of this Agreement, and
$100,000 during the fifth year of this Agreement. Each of the
foregoing annual amounts shall be paid in equal monthly installments
payable on or before the eighth day of each month commencing February
8, 1996. Notwithstanding any other provision of this Agreement, any
payments thereafter owed to Employee under this Section 3.1.1(f) shall
cease if Employee's employment under this Agreement is terminated by
the Employee pursuant to Section 2.2.1(a) or by the Corporation
pursuant to Section 2.2.1(d).
3.2. Survival
The obligations of Employee, the Corporation, and BWI under
this Section 3 shall survive the termination or expiration of the Term of
Employment.
4. BOARDS OF DIRECTORS
For a period of five years beginning on the date hereof, (a)
BWI and the Corporation shall each use its best efforts to cause Employee to be
elected to the Board of Directors of the Corporation and (b) BWI shall use its
best efforts to cause Employee to be elected to its Board of Directors.
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<PAGE> 12
5. REPRESENTATIONS AND WARRANTIES
The Employee represents and warrants to the Corporation that
neither the execution and delivery of this Agreement nor the carrying out of
any of the transactions contemplated hereby will in any respect result in any
violation of or be in conflict with any term or provision of any agreement,
document or instrument to which the Employee is a party or by which he is
bound. The Employee agrees not to divulge to the Corporation any information
that would violate any such agreement, document or instrument nor to divulge to
the Corporation any trade secrets of prior employers.
6. INDEMNIFICATION
The Corporation agrees to indemnify the Employee to the
maximum extent permitted under applicable law for any liability incurred by
Employee in his capacity as an officer or director of the Corporation. The
Corporation shall use its commercially reasonable best efforts to obtain
director's and officer's liability insurance with coverage relating to all acts
and omissions alleged to have occurred during the Term of Employment. BWI
agrees to indemnify the Employee to the maximum extent permitted under
applicable law for any liability incurred by Employee in his capacity as a
director of BWI. BWI shall use its commercially reasonably best efforts to
obtain or continue in effect directors' and officers' liability insurance with
coverage relating to all acts and omissions alleged to have occurred during the
time the Employee is a director of BWI. The obligations of the Corporation and
BWI under this Section 6 shall survive the termination or expiration of the
Term of Employment.
7. MISCELLANEOUS
7.1. Additional Actions and Documents
Each of the parties hereto hereby agrees to take or cause to
be taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents, and will obtain such
consents, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Agreement.
7.2. Assignment
The parties shall not assign their respective rights and
obligations under this Agreement, in whole or in part, whether by operation of
law or otherwise, without the prior written consent of the other party, and any
such assignment
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<PAGE> 13
contrary to the terms hereof shall be null and void and of no force
and effect.
7.3. Entire Agreement; Amendment
This Agreement (together with various documents and agreements
being executed concurrently herewith) constitutes the entire agreement among
the parties hereto with respect to the transactions contemplated herein, and it
and they supersede all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein and therein. No
amendment, modification or discharge of this Agreement shall be valid or
binding unless set forth in writing and duly executed and delivered by the
party against whom enforcement of the amendment, modification, or discharge is
sought.
7.4. Waiver
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any
other documents furnished in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
7.5. Governing Law
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of Indiana (excluding the
choice of law rules thereof).
7.6. Notices
All notices, demands, requests, or other communications that
may be or are required to be given, or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand delivered,
sent by overnight courier or mailed by first-class, registered or certified
mail, return receipt requested, postage prepaid, or transmitted by telegram,
telecopy or telex, addressed as follows:
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(i) If to the Corporation:
c/o Bindley Western Industries, Inc.
Michael D. McCormick
Executive Vice President and General Counsel
10333 North Meridian Street
Suite 300
Indianapolis, Indiana 46290
Telecopier: (317) 580-9753
(ii) If to the Employee:
Thomas G. Slama, M.D.
3065 South 975 East
Zionsville, IN 46077
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication that shall be hand
delivered, sent, mailed, telecopied or telexed in the manner described above, or
that shall be delivered to a telegraph corporation, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at
such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or (with respect to a telecopy or telex) the answerback being
deemed conclusive, but not exclusive, evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
7.7. Headings
Article and Section headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning construction or scope of any of the provisions hereof.
7.8. Execution in Counterparts
To facilitate execution, this Agreement may be executed in as
many counterparts as may be required. It shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
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7.9. Limitation on Benefits
The covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
7.10. Binding Effect
Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, heirs, executors, administrators, legal
representatives and assigns.
7.11. No Mitigation
The Employee shall not be required to mitigate damages by
seeking employment elsewhere.
7.12. BWI Guaranty
Until such time as the Corporation is no longer a direct or
indirect subsidiary of BWI, BWI shall guarantee all payments due to Employee
under this Agreement.
IN WITNESS WHEREOF, BWI and the Corporation have caused this
Agreement to be executed by their respective duly authorized officers, and the
Employee has set his hand as of the date first above written.
NATIONAL INFUSION SERVICES, INC.
By:/s/ Michael D. McCormick
----------------------------
Name: Michael D. McCormick
--------------------------
Title: Exec. V. P. & Sec.
-------------------------
/s/ Thomas G. Slama M.D.
------------------------------
Thomas G. Slama, M.D.
For the purposes of Sections 1.1.2(b),
1.1.3, 1.1.4, 3.1.1(d) and
(e), 3.2, 4, 6 and 7.12 only
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BINDLEY WESTERN INDUSTRIES, INC.
By: /s/ Michael D. McCormick
------------------------
Name: Michael D. McCormick
------------------------
Title: Exec. V. P. & General Counsel
-------------------------------
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STOCK OPTION AGREEMENT
FOR INCENTIVE OPTIONS GRANTED UNDER
BINDLEY WESTERN INDUSTRIES, INC.
1993 STOCK OPTION AND INCENTIVE PLAN
------------------------------------
THIS STOCK OPTION AGREEMENT has been entered into as of
the 8th day of February, 1996 between BINDLEY WESTERN INDUSTRIES,
INC., an Indiana corporation ("Company"), Thomas G. Slama, an
employee of the Company or one of its affiliates ("Optionee"),
pursuant to the Company's 1993 stock Option and Incentive Plan
("Plan") and evidences and sets forth certain terms of an
Incentive Stock Option for _______ shares of the Company's Common
Stock granted to the Optionee as of the date of this Agreement
("Option").
Section 1. Receipt of Plan; General Terms of Plan and
Option. The Optionee acknowledges receipt of a copy of the Plan.
This Agreement and the Option are subject to the terms and
conditions of the Plan, all of which are incorporated herein by
reference.
Section 2. Option Price. The Option is exercisable at a price of
$__________ for each share subject to it, which may be paid in cash, by
delivery to the Company of certificates representing shares of the Company's
common stock having a fair market value equal to the exercise price, or by
delivery of such shares and cash.
Section 3. Option Period. The Option is exercisable
in whole or in part at any time commencing one (1) year from the
date hereof and expiring ten (10) years from the date hereof. In
no instance may the Option or any portion thereof be exercised
later than ten (10) years from the date hereof.
Section 4. Transferability. The Option may not be
transferred by the Optionee except as expressly permitted by the
terms of the Plan.
Section 5. Termination of Option. In the event that
the Optionee is dismissed by the Company for cause, or the
Optionee voluntarily terminates employment for any reason other
than death, disability, or retirement at the normal retirement
age, all rights under the Option and this Agreement shall expire
immediately. In the event of Optionee's death, the Optionee's
estate or heirs may exercise the Option in accordance with its
terms. In the event that the Optionee's employment with the
Company is terminated for any other reason, the Optionee may,
subject to and as provided by the Plan, exercise the Option to
the extent the Optionee was entitled to exercise the Option on
the date of termination.
EXHIBIT A-1
<PAGE> 18
IN WITNESS WHEREOF, this Stock Option Agreement has
been executed by the undersigned, thereunto duly authorized, as
of the date first above written.
BINDLEY WESTERN INDUSTRIES, INC.
By___________________________________
X___________________________________
OPTIONEE
Please sign by the "X" and return to Pat Bane in Indianapolis.
-2-
<PAGE> 19
STOCK OPTION AGREEMENT
FOR INCENTIVE OPTIONS GRANTED UNDER
BINDLEY WESTERN INDUSTRIES, INC.
1993 STOCK OPTION AND INCENTIVE PLAN
------------------------------------
THIS STOCK OPTION AGREEMENT has been entered into as of the 8th day of
February, 1996 between BINDLEY WESTERN INDUSTRIES, INC., an Indiana corporation
("Company"), Thomas G. Slama, an employee of the Company or one of its
affiliates ("Optionee"), pursuant to the Company's 1993 Stock Option and
Incentive Plan ("Plan") and evidences and sets forth certain terms of
Nonqualified Stock Option for _____ Shares of the Company's Common Stock
granted to the Optionee as of the date of this Agreement ("Option").
Section 1. Receipt of Plan; General Terms of Plan and
Option. The Optionee acknowledges receipt of a copy of the Plan.
This Agreement and the Option are subject to the terms and
conditions of the Plan, all of which are incorporated herein by
reference.
Section 2. Option Price. The Option is exercisable at
a price of $________ for each Share subject to it, which may be
representing shares of the Company's common stock having a fair
market value equal to the exercise price, or by delivery of such
shares and cash.
Section 3. Option Period. The Option is exercisable
in installments as follows: to the extent of 25% of the number
of shares originally covered thereby (adjusted as appropriate
pursuant to Section 10 of the Plan in the event of any changes in
capitalization or otherwise requiring an adjustment under
Section 10 of the Plan), at any time beginning on the first
anniversary hereof and ending ten years from the date hereof and
to the extent of an additional 25% of the number of shares
originally covered by the Option (adjusted as appropriate
pursuant to Section 10 of the Plan in the event of any changes in
capitalization or otherwise requiring an adjustment under
Section 10 of the Plan) on each subsequent anniversary hereof
until the Option is exercisable in full and ending in each case
ten (10) years from the date hereof. In addition, the Option may
become exercisable prior to the period set forth above in the
event of a change in control or certain other events involving
the Company, as provided in the Plan. In no instance may the
Option or any portion thereof be exercised later than ten years
from the date hereof.
Section 4. Transferability. The Option may not be
transferred by the Optionee except as expressly permitted by the
terms of the Plan.
EXHIBIT A-2
<PAGE> 20
Section 5. Termination of Option. In the event that
the Optionee is dismissed by the Company for cause, or the
Optionee voluntarily terminates employment for any reason other
than death, disability, or retirement at the normal retirement
age, all rights under the Option and this Agreement shall expire
immediately. In the event of Optionee's death, the Optionee's
estate or heirs may exercise the Option in accordance with its
terms. In the event that the Optionee's employment with the
Company is terminated for any other reason, the Optionee may,
subject to and as provided by the Plan, exercise the Option to
the extent the Optionee was entitled to exercise the Option on
the date of termination.
IN WITNESS WHEREOF, this Stock Option Agreement has
been executed by the undersigned, thereunto duly authorized, as
of the date first above written.
BINDLEY WESTERN INDUSTRIES, INC.
By _______________________________
X________________________________
OPTIONEE
Please sign by the "X" and return to Pat Bane in Indianapolis.
-2-
<PAGE> 1
EXHIBIT 10-X (iv)
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of
this 7th day of February, 1996 by and between Bindley Western Industries, Inc.,
an Indiana corporation ("BWI"), and Thomas G. Slama, M.D., a shareholder of
Infectious Disease of Indiana, P.S.C. (the "Shareholder").
WHEREAS, BWI, through its subsidiary, National Infusion Services,
Inc., is purchasing on the date hereof the Infusion Services Division of
Infectious Disease of Indiana, P.S.C. (the "Business") in exchange, in part,
for execution and delivery of this Agreement by the Shareholder;
WHEREAS, in connection with such purchase and the entering of this
Agreement, the Shareholder and BWI have reviewed and considered the laws set
forth at 42 U.S.C. Sections 1320a-7b(b) and 1877, and believe that the terms
and conditions of this Agreement are in compliance with these laws.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. COVENANT NOT TO COMPETE; NONDISCLOSURE.
(a) Except on behalf of one or more of the companies in
the BWI Group (as hereinafter defined), for a period beginning on the
day after the date hereof and ending five years thereafter (the
"Noncompetition Period"), the Shareholder hereby covenants and agrees
that he shall not, directly or indirectly solicit, hire or contract
with any healthcare-related employees of BWI or of any subsidiary,
division or affiliate of BWI (collectively, the "BWI Group"), or any
past healthcare-related employees of the BWI Group who were employed
by the BWI Group within twelve (12) months prior to the date of this
Agreement.
(b) Except on behalf of one or more of the companies in
the BWI Group, during the Noncompetition Period, the Shareholder shall
not, directly or indirectly, reveal or disclose to third parties any
Trade Secrets (as hereinafter defined) of the BWI Group or the
Business, which are not, at the time in question, in the public domain
without having become so in violation of this Agreement, except as
authorized by BWI. For purposes of this Agreement, the term "Trade
Secret" includes not only that confidential or proprietorial
information defined as a "Trade Secret" under the Indiana Trade
Secrets Act, I.C. Section 24-2-3-1 et seq. (the "Act"), but also that
information which possesses independent economic benefit to the BWI
Group or the Business from not being generally known by other persons
who can obtain economic benefit from its disclosure or use. The
Shareholder covenants that he will, at all times, conform his conduct
to the requirements of the Act and will not misappropriate (e.g., use
or disclose to any third party) any Trade Secret of the BWI Group or
the Business. The Shareholder recognizes that the damages
<PAGE> 2
for a Trade Secret violation may include disgorgement of profits,
payment of royalties, compensatory damages, punitive damages and
attorneys' fees.
(c) Except on behalf of one or more of the companies in
the BWI Group, during the Noncompetition Period the Shareholder shall
not, without the written consent of BWI (which consent BWI may give or
withhold in its sole discretion), directly or indirectly (i) own any
interest in (except the ownership of less than five percent of the
capital interest in a publicly traded entity or indirect ownership of
less than five percent as a participant in an employee benefit plan)
or manage (whether as an owner, employee, consultant or other agent of
any type whatsoever) a business identical or substantially similar to
the Business in the State of Indiana, or (ii) except where the failure
to do so without first obtaining BWI's written consent would
constitute a health risk to the potential recipient, sell, offer or
provide to any person or entity which is a past or present supplier,
client, patient or customer of the Business a product or service
substantially similar to products or services offered by the Business;
provided, however, that the foregoing is not intended to prohibit or
restrict, and shall not be construed as prohibiting or restricting,
the Shareholder from engaging in the practice of medicine
substantially in the manner in which the Shareholder engaged in the
practice of medicine immediately prior to the commencement of the
Noncompetition Period or in any other manner that does not contravene
the foregoing restrictive covenants. By way of explanation and
amplification of the foregoing, the Shareholder is a physician who, in
the course of his medical practice, refers patients to, and manages
the care of patients who are receiving services from, various sources
that provide infusion services and other services identical or similar
to those provided by the Business. Nothing in this Noncompetition
Agreement is intended to prohibit the Shareholder, in his capacity as
a physician, from continuing to refer patients to and manage the care
of patients who are receiving services from other infusion centers or
other businesses that compete with the Business. It is understood
that the Shareholder may, in his capacity as a physician, be required
to become involved as a physician and health care provider in or
otherwise establish working relationships of various types with
managed care plans or other health care provider groups or networks
that are or may become providers of infusion services or other
services similar to those provided by the Business, and that if he is
required to be an employee (solely in the capacity as a physician) of
any such plan or group he may become a participant in one or more
employer-sponsored benefit plans that may own employer securities
(which would be a circumstance that the Shareholder could not
control). The establishment and maintenance of such relationships in
the course of the conduct of the medical practice of the Shareholder
is not intended to be prohibited by the foregoing restrictive
covenants. Rather, such restrictive covenants are intended to
prohibit the Shareholder from becoming financially interested as an
owner (or the economic equivalent) in, or from becoming involved in a
management position (as opposed to a position in which the Shareholder
is merely rendering medical care and advice) with, a business
identical or substantially similar to the Business in the State of
Indiana and from soliciting past or present suppliers, clients,
patients or customers of the Business for any competitor of the
Business.
2
<PAGE> 3
(d) The covenants contained in this Section 1 shall be
construed as a series of separate and severable covenants which are
identical in terms except for geographic coverage. The Shareholder
and BWI agree that if in any proceeding, the tribunal shall refuse to
enforce fully any covenants contained herein because such covenants
cover too extensive a geographic area or too long a period of time or
for any other reason whatsoever, any such covenant shall be deemed
amended to the extent (but only to the extent) required by law. Each
party shall have the right to injunctive relief, in addition to all of
its other rights and remedies at law or in equity, to enforce the
provisions of this Agreement.
(e) BWI acknowledges that all of the other shareholders
(other than the Shareholder and Robert L. Baker, M.D.) of Infectious
Disease of Indiana, P.S.C. ("IDI") (each an "Other Shareholder" and
collectively the "Other Shareholders") are entering into agreements
with BWI substantially identical to this Agreement (the "Other
Shareholder Agreements") on or about the date hereof, and acknowledges
that the Shareholder and some or all of the Other Shareholders may
continue to be shareholders, officers and employees of IDI or may from
time to time otherwise be associated with one another in one or more
entities or business relationships for the purpose of conducting a
medical practice or practices. Notwithstanding anything herein to the
contrary, no acts or actions committed or taken by any of the Other
Shareholders, including any such acts or actions that may constitute a
breach or violation by any such Other Shareholder of any of the Other
Shareholder Agreements, shall constitute a direct or indirect breach
or violation (including a "Continuing Violation" under Section 3) by
the Shareholder of any of the Shareholder's covenants hereunder unless
the Shareholder either (i) has authorized the acts or actions being
committed or taken by such Other Shareholders, or (ii) is sharing in
or otherwise receiving a direct economic benefit from the acts or
actions of the Other Shareholders.
2. CONSIDERATION.
In consideration for the noncompetition obligations of the
Shareholder, BWI shall pay to the Shareholder on the date hereof, by certified
or bank cashiers check, the sum of $258,256.88.
3. LIQUIDATED DAMAGES
(a) This Section 3 sets forth certain non-exclusive
remedies available to BWI (in addition to other legal and equitable
remedies available to BWI) with respect to violations (or alleged
violations) by the Shareholder of one or more of the Shareholder's
covenants under Section 1 of this Agreement (each such covenant being
referred to herein as a "Section 1 Covenant" and said covenants being
collectively referred to herein as the "Section 1 Covenants").
3
<PAGE> 4
(b) For purposes of this Section 3:
(i) "Liquidated Damages" means the damage
recovery that BWI may be entitled to seek for violation of a
Section 1 Covenant under the provisions of this Section 3.
(ii) "Liquidated Damages Notice" means a written
notification given by BWI to the Shareholder, and signed by an
executive officer of BWI, asserting that the Shareholder has
violated and/or is violating a Section 1 Covenant, stating
with reasonable specificity the particular Section 1 Covenant
being violated and the factual basis supporting BWI's
assertion.
(c) The Shareholder and BWI acknowledge that it would be
impracticable and difficult to ascertain the actual damages that BWI
would suffer if the Shareholder commits a Continuing Violation
(defined below) of any of his Section 1 Covenants. The Shareholder
and BWI have considered carefully the damages, general and special,
which the Shareholder and BWI realize and recognize that BWI would
sustain but which BWI cannot at this time calculate with absolute
certainty in the event of such a Continuing Violation. Based on all
those considerations, the Shareholder and BWI have agreed that for
purposes of this Section 3 the damages to BWI on account of a
Continuing Violation should be fixed and liquidated by the mutual
agreement of the parties as follows:
<TABLE>
<CAPTION>
Earliest Period of Time During Which Maximum Amount of
Continuing Violation Occurs Liquidated Damages Recoverable
<S> <C>
On or prior to February 7, 1997 $522,970.18
February 8, 1997 through February 7, 1998 $319,592.89
February 8, 1998 through February 7, 1999 $116,215.60
February 8, 1999 through February 7, 2000 $58,107.80
February 8, 2000 through February 7, 2001 $29,053.90
</TABLE>
(d) BWI shall be entitled to recover Liquidated Damages
from the Shareholder, in the amount determined under Section 3(c)
above, only on account of a Continuing Violation of a Section 1
Covenant. For purposes of this Agreement, a "Continuing Violation"
means that:
(i) a violation of a Section 1 Covenant by the
Shareholder in fact occurred; and
4
<PAGE> 5
(ii) after receipt of a Liquidated Damages Notice, the Shareholder
either:
(A) repeats a solicitation of
prospective employment or contracting with respect to
a person in violation of Section 1(a) after receiving
a Liquidated Damages Notice from BWI asserting a
violation of the Shareholder's covenants under
Section 1(a) for soliciting such person, or fails to
terminate an employment or contract relationship with
a person in violation of Section 1(a) within thirty
(30) days following the date on which the Shareholder
receives a Liquidated Damages Notice from BWI
asserting that such employment or contract
relationship with such person is a violation of the
Shareholder's covenants under Section 1(a); or
(B) continues the improper use of, or
makes any further prohibited disclosure of, a Trade
Secret in violation of Section 1(b) after receiving a
Liquidated Damages Notice from BWI asserting a
violation of the Shareholder's covenants under
Section 1(b) for using or disclosing such Trade
Secret; or
(C) sells, offers or provides a particular
product or service in violation of his covenant not
to do so under Section 1(c)(ii) after receiving a
Liquidated Damages Notice from BWI asserting a
violation of the Shareholder's covenants under
Section 1(c)(ii) for selling, offering or providing
that same product or service; or
(D) continues to own a prohibited ownership
interest in a specifically identified business
identical or substantially similar to the Business in
the State of Indiana in violation of his covenant
under Section 1(c)(i) for more than thirty (30) days
following the date on which the Shareholder receives
a Liquidated Damages Notice from BWI asserting that
such ownership in that specifically identified
business is a violation of the Shareholder's
covenants under Section 1(c)(i); provided, however,
that if the nature of the Shareholder's prohibited
ownership interest is such that it can be terminated
by the Shareholder but cannot be reasonably
terminated within the 30 day period provided above,
and if the Shareholder commences efforts to terminate
such ownership interest within such 30 day period and
thereafter diligently proceeds to take such actions
as may be reasonably required to effect such
termination, the 30 day "cure" period provided above
shall be extended for a period ending the earlier of
(1) 90 days after the expiration of such 30 day cure
period provided above, or (2) the date as of which
the Shareholder shall cease the diligent pursuit of
such actions as may be reasonably required to
terminate such ownership interest; or
5
<PAGE> 6
(E) continues to hold a prohibited
management position in a specifically identified
business identical or substantially similar to the
Business in the State of Indiana in violation of his
covenant under Section 1(c)(i) for more than twenty
(20) days following the date on which the Shareholder
receives a Liquidated Damages Notice from BWI
asserting that occupying such position in that
specifically identified business is a violation of
the Shareholder's covenants under Section 1(c)(i).
(e) Under no circumstances shall BWI be entitled to
recover Liquidated Damages more than once or for more than one
violation of the Section 1 Covenants or for violations occurring in or
for more than one period of time as reflected in Section 3(c),
regardless of the number of violations that may have occurred or the
number of separate periods of time in which violations occurred. The
amounts reflected as potentially recoverable Liquidated Damages in
Section 3(c) are not recoverable amounts on a "per violation" or on a
"per period" basis, but represent the maximum recovery of Liquidated
Damages that BWI can potentially obtain from the Shareholder for all
violations by the Shareholder of Section 1 Covenants in all relevant
periods of time (in other words, the recovery of such amount reflected
for a particular period of time precludes recovery of the amounts
reflected for subsequent periods of time).
(f) A recovery of Liquidated Damages by BWI hereunder
shall automatically result in the cancellation of this Agreement
effective immediately upon (but not until) payment in full of such
recovery of Liquidated Damages to BWI. Upon such cancellation all
obligations of the parties to one another hereunder shall be void, of
no force and effect and held for naught and any pending litigation,
arbitration or other proceedings involving claims asserted by the
parties hereto and arising hereunder shall be dismissed or withdrawn,
all injunctions or other orders for legal and/or equitable relief with
respect to claims arising hereunder shall be dissolved, dismissed or
otherwise cancelled by mutual agreement, and all liability of the
parties hereto arising hereunder, and all claims, causes of action and
rights of BWI and the Shareholder arising hereunder, with respect to
matters arising or occurring prior to such cancellation shall be fully
and completely released and discharged.
(g) BWI recognizes that the Shareholder may wish to
obtain a determination as promptly as is reasonably practicable with
respect to an alleged violation of a Section 1 Covenant that is
disputed by the Shareholder. Accordingly, BWI agrees that it will, if
so elected by the Shareholder, submit such matter to binding
arbitration under the rules and procedures of the American Arbitration
Association. The parties further agree that in any arbitration,
litigation or other proceeding wherein a determination is being sought
as to whether an alleged violation of a Section 1 Covenant is, in
fact, a violation thereof, they will not, and will instruct their
respective counsel that such counsel should not on their behalf, take
any actions that are primarily intended to delay such determination
other than delays that in good faith are reasonably necessary for
preparation by counsel.
6
<PAGE> 7
1. MISCELLANEOUS.
(a) Additional Actions and Documents. Each of the
parties hereto hereby agrees to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed,
delivered and filed such further documents, and will obtain such
consents, as may be necessary or as may be reasonably requested in
order to fully effectuate the purposes, terms and conditions of this
Agreement.
(b) Assignment. The parties shall not assign their
respective rights and obligations under this Agreement, in whole or in
part, whether by operation of law or otherwise, without the prior
written consent of the other party, and any such assignment contrary
to the terms hereof shall be null and void and of no force and effect.
Notwithstanding the foregoing, all of the rights of BWI under this
Agreement may be assigned to any member of the BWI Group without the
consent of the Shareholder.
(c) Entire Agreement; Amendment. This Agreement
constitutes the entire agreement among the parties hereto with respect
to the transactions contemplated herein, and it supersedes all prior
oral or written agreements, commitments or understandings with respect
to the matters provided for herein. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth
in writing and duly executed and delivered by the party against whom
enforcement of the amendment, modification, or discharge is sought.
(d) Waiver. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this
Agreement or under any other documents furnished in connection with or
pursuant to this Agreement shall impair any such right, power or
privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power
or privilege. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom
enforcement of such waiver is sought and then only to the extent
expressly specified therein.
(e) Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating
thereto, shall be governed by and construed in accordance with the
laws of the State of Indiana (excluding the choice of law rules
thereof).
(f) Notices. All notices, demands, requests, or other
communications that may be or are required to be given, served, or
sent by any party to any other party pursuant to this Agreement shall
be in writing and shall be hand delivered, sent by overnight courier
or mailed by first-class, registered or certified mail, return receipt
7
<PAGE> 8
requested, postage prepaid, or transmitted by telegram, telecopy or
telex, addressed as follows:
(i) If to BWI:
Michael D. McCormick
Executive Vice President and
General Counsel
Bindley Western Industries, Inc.
10333 North Meridian Street, Suite 300
Indianapolis, Indiana 46290
Telecopier: (317) 580-9753
(ii) If to the Shareholder:
Thomas G. Slama, M.D.
3065 South 975 East
Zionsville, Indiana 46077
Each party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be so
given, served or sent. Each notice, demand, request, or communication
that shall be hand delivered, sent, mailed, telecopied or telexed in
the manner described above, or that shall be delivered to a telegraph
corporation, shall be deemed sufficiently given, served, sent,
received or delivered for all purposes at such time as it is delivered
to the addressee (with the return receipt, the delivery receipt, or
(with respect to a telecopy or telex) the answerback being deemed
conclusive, but not exclusive, evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
(g) Headings. Article and Section headings contained in
this Agreement are inserted for convenience of reference only, shall
not be deemed to be a part of this Agreement for any purpose, and
shall not in any way define or affect the meaning, construction or
scope of any of the provisions hereof.
(h) Execution in Counterparts. To facilitate execution,
this Agreement may be executed in as many counterparts as may be
required. It shall not be necessary that the signatures of, or on
behalf of, each party, or that the signatures of all persons required
to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that
the signatures of the persons required to bind any party, appear on
one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making
proof of this Agreement to produce or account for more than a number
of counterparts containing the respective signatures of, or on behalf
of, all of the parties hereto.
8
<PAGE> 9
(i) Limitation on Benefits. The covenants, undertakings
and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto and
their respective successors, heirs, executors, administrators, legal
representatives and permitted assigns.
(j) Binding Effect. Subject to any provisions hereof
restricting assignment, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors, heirs, executors, administrators, legal representatives
and assigns.
(k) Attorneys' Fees, Etc. The prevailing party shall be
entitled to be reimbursed by the losing party for all of the
prevailing party's attorneys' fees and other expenses incurred in
connection with any proceedings to interpret or enforce its rights
under this Agreement or in resisting an unsuccessful interpretation or
enforcement attempt by the other party.
IN WITNESS WHEREOF, each of the parties hereto has executed this
NONCOMPETITION AGREEMENT, or has caused this NONCOMPETITION AGREEMENT to be
duly executed and delivered in its name on its behalf, all as of the day and
year first above written.
BINDLEY WESTERN INDUSTRIES, INC.
By /s/ Michael D. McCormick
------------------------------------
Michael D. McCormick, Executive Vice
President and General Counsel
SHAREHOLDER
/s/ Thomas G. Slama, M.D.
--------------------------------------
Thomas G. Slama, M.D.
9
<PAGE> 1
EXHIBIT 10-Y
COLLECTIVE BARGAINING AGREEMENT
BETWEEN J.E. GOOLD & CO., PORTLAND, MAINE
(A DIVISION OF BINDLEY WESTERN INDUSTRIES, INC.
OF INDIANAPOLIS, INDIANA)
AND
TRUCK DRIVERS, WAREHOUSEMEN AND HELPERS UNION LOCAL NO. 340
OCTOBER 21, 1994
thru
OCTOBER 21, 1999
<PAGE> 2
INDEX
-----
1. Access to Payroll Records Page 34
2. Bulletin Boards Page 34
3. Checkoff of Dues Page 13
4. Cooperation Page 16
5. Credit Union - DRIVE Page 13
6. Discharge or Suspension Page 7
7. Equipment Page 29
8. Funeral Pay Page 25
9. Grievance Procedure Page 10
10. Health and Welfare Page 30
11. Holidays Page 18
12. Hours of Work Page 14
13. Individual Retirement Account Page 34
14. Job Stewards Page 5
15. Jury Duty Page 24
16. Lie Detector Test Page 10
17. Management Rights Page 3
18. Military Service Page 25
19. New Employees Page 26
20. Non-Discrimination Clause Page 9
21. No Strikes or Lockouts Page 5
<PAGE> 3
22. Part-time Employees Page 35
23. Recognition Page 1
24. Seniority Page 26
25. Sick Days Page 23
26. Termination Page 35
27. Union Security Page 2
28. Vacations Page 21
29. Wages Page 17
<PAGE> 4
AGREEMENT
AGREEMENT, entered into effective the 21st day of October, 1994 by and
between J.E. GOOLD & CO., Portland, Maine, (a division of Bindley Western
Industries Inc. of Indianapolis, Indiana) hereinafter called the "Company," and
TRUCK DRIVERS, WAREHOUSEMEN AND HELPERS UNION LOCAL NO. 340, affiliated with
the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers
of America, hereinafter called the "Local or Union."
The term of this Agreement shall be from October 21, 1994 through and
including October 21, 1999.
ARTICLE I
RECOGNITION
The Company recognizes and acknowledges the Union as the exclusive
representative for the purpose of collective bargaining in respect to rates of
pay, wages, hours of employment and other conditions of employment of all
regular full-time and part-time warehouse employees and drivers at the
Employer's Portland, Maine location, but excluding telephone sales persons,
electronic data processing employees, keypunch operators, office clericals,
management employees, the Expediter and supervisors as defined in the Act.
<PAGE> 5
This Agreement shall be binding upon a successor, assignee, purchaser,
lessee, or other transferee of the company (hereinafter "the successor") only
if the successor assumes this agreement in writing within 30 days of the
transfer of the business, provided that if the successor elects not to assume
this agreement, it shall negotiate with the Union with regard to the wages,
hours and working conditions of its regular full-time and part-time warehouse
employees and drivers at the Company's Portland, Maine location.
The foregoing provisions do not relate to the Company's rights to
subcontract bargaining unit work.
-2-
<PAGE> 6
ARTICLE II
UNION SECURITY
All employees of the Company presently covered by the Agreement shall
remain members of the Union in good standing as to the payment of initiation
fees and periodic dues. All new employees shall become and remain members of
the Union in standing as to payment of initiation fees and periodic dues on the
ninety-first (91st) working day immediately following their employment. The
Company agrees to discharge, upon written request from the Union, any employee
who does not tender to the Union the uniform initiation fees and/or periodic
dues.
In the event of any change in the law during the term of this
Agreement, the Company agrees that the Union will be entitled to receive the
maximum Union Security which may be lawfully possible.
-3-
<PAGE> 7
No provision of this Article shall apply in any State to the extent
that may be prohibited by State Law. If under applicable State Law, additional
requirements must be met before any such provision may become effective, such
additional requirements must be met.
ARTICLE III
MANAGEMENT RIGHTS
-4-
<PAGE> 8
Section 1. Except to the extent expressly abridged by a specific
provision of this Agreement, the Company reserves and retains solely and
exclusively, all of its Common Law rights to manage the business. The sole and
exclusive rights of management which are not abridged by this Agreement, shall
include but are not limited to its rights to determine the existence or
non-existence of facts which are the basis of management decision, to determine
prices of products, volume of production and methods of financing, to drop a
product line, to sell, transfer or lease the business or any part thereof free
of the liabilities of this Agreement, to establish or continue policies,
practices, procedures for the conduct of the business and, from time to time,
to change or abolish such practices, policies, or procedures; the right to
determine and from time to time to redetermine the number, location,
relocations, and types of its operations, and the methods, processes and
materials to be employed, to discontinue processes or operations or to
discontinue their performance by employees of the Company; to determine and
schedule the number of hours per day or per week operations shall be carried
on; to select and to determine the number and types of employees required; to
assign work to and to
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cross-train employees in accordance with the requirements determined by
management, to promote, or demote employees, or to lay off, terminate, or
otherwise relieve employees from duty for lack of work or other legitimate
reasons, to determine the facts of lack of work, to make and enforce reasonable
rules for the maintenance of discipline, to suspend, discharge, or otherwise
discipline employees for just cause and otherwise to take such measures as
management may determine to be necessary for the orderly, efficient and
profitable operation of the business ... all to the best regard of its
employees.
The Company and the Union for the life of this Agreement, each
voluntarily and unqualifiedly waives the right, and each agrees that the other
shall not be obligated to bargain collectively with respect to any subject
matter not specifically referred to or covered in this Agreement.
Section 2. The Company agrees not to subcontract delivery work
provided that the costs of performing such work does not exceed by twenty (20%)
percent, on a per stop basis, a viable bid from a subcontractor.
Section 3. The Company shall have the right to establish and enforce
standards of efficiency in connection with employee
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performance. Such standards shall be in accordance with widely accepted
standards within the industry. The Union reserves the right to challenge any
such standard the Company establishes and enforces. In the first instance of
discipline resulting from enforcement of a standard, the parties agree to allow
the Union a reasonable time, from the date of a grievance being filed, to
conduct their own study using experts hired by the Union, to determine if the
standard is legitimate. During this interval, further discipline to any
employee shall not exceed warnings, and all such warnings shall be contingent
on the parties' agreement as to the legitimacy of the standard. If the parties
cannot agree, all discipline subsequent to the initial grievance shall be
contingent on the outcome of the arbitration of the initial grievance. In
pursuing their rights to study and challenge a standard, it shall be the
Union's burden to prove that such activities were engaged in with reasonable
diligence, and that any delays in such activities were unavoidable.
Section 4.
The parties agree that if any term or condition of this Agreement is
or becomes, as a matter of statutory or common law, unenforceable or unlawful,
then said term or condition shall be
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excised from the Agreement, with the balance of the contract provisions
remaining fully intact and binding on the parties.
ARTICLE IV
NO STRIKES OR LOCKOUTS
It is agreed that during the term of this Agreement, neither the
Union, nor any of its members will engage or participate in, any strike, work
stoppage or slowdown or cessation of work of any kind or nature whatsoever.
The Company agrees there shall be no lockouts.
ARTICLE V
JOB STEWARDS
The Union may designate a job steward and alternate for each shift.
No person shall hold the office of job steward unless he or she is a regular
employee of the Company.
No person shall have or exercise any of the authorities, powers of
duties of the job steward or alternate in dealing with the Company unless and
until written notice of his appointment, signed by the Union, revoking a prior
appointment, if any, shall have been sent to the Company.
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Job stewards may collect dues during lunch period or breaks. The job
steward may transmit messages and information which shall originate with and
are authorized by the Local Union or its officers provided such messages and
information: (a) have been reduced to writing or (b) if not reduced to writing
are of a routine nature and do not involve work stoppages, slowdowns, refusal
to handle goods or any other interference with the Employer's business.
Shop stewards or their alternate shall be permitted to adjust
grievances or complaints during working hours without loss of pay, provided
however, that no job steward shall leave his regular work for the purpose of
adjusting grievances or complaints without first reporting to and obtaining
permission of the Operations Manager. Such permission will be granted unless
it interferes with any important operation in progress at that time.
Job stewards have no authority to take strike action or any other
action interrupting the Employer's business in violation of this Agreement, or
any action in violation of the law, except as authorized by official action of
the Union. The Employer recognizes these limitations and shall have authority
to render
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proper discipline, including discharge without recourse to such job steward or
alternate if he or she be an employee, in the event the steward or alternate
has taken unauthorized action as defined above. The Company shall not hold the
Union liable for any unauthorized acts. However, upon notification to the
Union, if the unauthorized acts are not stopped, then the Union shall be held
liable.
ARTICLE VI
DISCHARGE OR SUSPENSION
Section 1. The Employer shall not discharge nor suspend any employee
without just cause. In all cases involving the discharge or suspension of an
employee, the Company must immediately notify the employee in writing of his
discharge or suspension and the reason therefor. Such written notice shall
also be given to the shop steward, and a copy mailed to the Local Union office,
within five (5) working days from the time of the discharge or suspension.
Section 2. The Employer will be allowed to discharge an employee
immediately without written warning for serious offenses such as the following:
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(1) falsification or alteration of timecards, forging or punching
fellow employee's timecard;
(2) operating company owned vehicle while under driver's license
suspension;
(3) use of company property for personal use without permission
from management;
(4) use or possession of intoxicating beverages or drugs or
reporting for work under the influence of intoxicating
beverages or drugs;
(5) theft of company or employee property;
(6) the carrying of unauthorized passengers in company vehicles;
and
(7) the possession of firearms or dangerous weapons of any kind
anywhere on company premises.
The seven enumerated discharge offenses listed above are for purposes of
illustration only, and are not intended to limit the Company's discretion to
discharge employees for other serious offenses.
The Company agrees that it will not force an employee to cross a
picket line or make him subject to discharge or suspension if he refuses to
cross a picket line.
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Section 3. Any employee discharged or resigning after giving ten (10)
working days notice must be paid in full for all wages owed him by the
employer, including earned vacation pay, on the next regular pay day or within
seven (7) days from the date of discharge or resignation, whichever is sooner.
Once the ten (10) working day resignation notice has been submitted, the
employee shall not be entitled to use any accrued paid leaves without prior
written permission from the Company. An employee may, with written approval of
the Company, withdraw his/her resignation during this ten (10) working day
notice period.
Section 4. A discharged or suspended employee must advise his Local
union in writing, within five (5) working days after receiving notification of
such action against him, of his desire to appeal the discharge or suspension.
Notice of appeal from discharge or suspension must be made to the Employer in
writing within ten (10) days from the date of discharge or suspension.
Section 5. Should the Company agree that an injustice has been done a
discharged or suspended employee, he shall be fully reinstated in his position
and compensated at his usual rate of pay for lost work opportunity. If the
Union and the Employer are unable to agree as to the settlement of the case,
then it may be
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referred to the grievance machinery as set forth in ARTICLE IX, within fifteen
(15) days after the above notice of appeal is given to the Employer.
ARTICLE VII
NON-DISCRIMINATION CLAUSE
Section 1. The Employer and the Union agree not to discriminate
against any individual with respect to hiring, compensation, terms or
conditions of employment because of such individual's race, color, religion,
sex, national origin, age, or disability, nor will they limit, segregate or
classify employees in any way to deprive any individual employee of employment
opportunities because of race, color, religion, sex, national origin, age, or
disability.
Section 2. The Company and the Union agree that there will be no
discrimination by the Company or the Union against any employee because of his
or her membership in the Union or because of any employee's activity and/or
support of the Union.
Section 3. The Company and the Union agree that, to the extent the
terms or application of the terms of the parties' Agreement conflict with the
provisions of the Americans with
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Disabilities Act of 1990 (hereafter "ADA") as the parties understand said law,
the parties shall seek to apply and adhere to the provisions of the Agreement
to the fullest extent allowed by law.
ARTICLE VIII
LIE DETECTOR TEST
The Company shall not require, request or suggest that an employee
take a polygraph or any other form of lie detector test. However, this shall
not restrict the right of local, state or federal law enforcement officials or
Drug Enforcement Administration (DEA) officials to conduct such tests in
conjunction with violations of local, state or federal laws.
ARTICLE IX
GRIEVANCE PROCEDURE
Section 1. Any disputes arising out of the application or
interpretation of any of the provisions of this Agreement shall be presented to
the Company within five (5) working days of the occurrence and handled in the
following manner.
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STEP 1 - The aggrieved employee or employees will first present the
grievance to the job steward. The job steward will take up the
grievance with the Operations Manager. Three (3) working days will be
allowed to reach a satisfactory settlement.
STEP 2 - If a settlement has not been effected, the Union Business
Representative will take up the matter with a representative of the
Company's top management with authority to act upon such grievance
within five (5) working days. A decision must be rendered within five
(5) working days.
STEP 3 - If no satisfactory settlement can be agreed upon, either
party may request that the dispute be submitted to arbitration, which
request must be initiated within ten (10) working days subsequent to
the conclusion of the Step 2 process. The party requesting
arbitration shall give notice of its intent to arbitrate by sending
the other party written notification, which notification shall also
indicate if the requesting party desires to use the applicable
arbitrator from a mutually agreed upon panel. Those arbitrators on
the panel shall be assigned cases on a
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rotating basis. The requesting party may elect to forego the panel
and file for arbitration with the American Arbitration Association
(hereafter "AAA"). If the party who requests arbitration chooses to
use the arbitrator from the agreed upon panel, the other party shall
have ten (10) days from the date of receipt of notification to elect
to forego the panel and file the matter with the AAA. The party
filing with AAA shall be responsible for paying the entire AAA filing
fee.
All arbitrations shall be conducted in accordance with the rules of
the AAA. The decision of the arbitration shall be final and binding
on all parties concerned.
Section 2. The arbitrator appointed under the above procedure shall
interpret the provisions of this Agreement. He shall have no power to enlarge
upon or reduce the obligations of parties under this Agreement. The
arbitrator's fee shall be borne equally by the Company and the Union.
Section 3. A dispute or grievance not presented within the time
limits specified shall not be subject to arbitration. A grievance proposed by
the Company shall be handled under STEPS 2 and 3 outlined above.
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Section 4. At the request of a grievant, the shop steward or business
agent may be present at any discussion of a grievance between the grievant and
management provided that this Article shall not otherwise affect or impair the
right of management to speak or meet with individual employees or groups of
employees on any matter.
Section 5. With respect to any statutory claim or right which could
also be asserted by an employee pursuant to this Agreement, the parties agree
that every attempt will be made to resolve such disputes using the grievance
and arbitration mechanism provided for in Article IX, which the parties agree
is the preferred dispute resolution process for all such employment related
statutory claims and disputes. Without limiting the foregoing, it is
understood that an employee may have certain statutory employment protections
or claims which are not covered by this Agreement, and this provision is not
intended in any way to limit such claims and protections.
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ARTICLE X
CHECKOFF OF DUES
The Employer agrees to deduct from the pay of all employees covered by
this Agreement, the dues and initiation fees of the Local Union having
jurisdiction over such employees and agrees to remit to said Local Union of all
such deductions prior to the end of the month for which the deduction is made.
Where laws require written authorization by the employee, the same is to be
furnished in the form required. No deduction shall be made which is prohibited
by applicable law.
The Union shall indemnify and save the Company harmless against all
claims and suits which may arise by reason of making any such deduction and
remitting the same to apparently authorized officials of the Union.
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ARTICLE XI
CREDIT UNION - DRIVE
The Employer agrees to deduct an amount each week from the wages of
those employees who shall have given the Employer written notice to make such
deductions for the credit union and for DRIVE (Democrats, Republicans,
Independents Voter Education). The amount so deducted for the DRIVE shall be
to the Local Union once each month. The Employer shall not make deductions and
shall not be responsible for remittance to the credit union or DRIVE for any
deductions for those weeks during which the employee's earnings shall be less
than the amount authorized for deductions. Employees shall arrange for the
Company to be notified in writing by the Union of the amount to be so deducted.
Such amounts may be changed for the succeeding quarter if the Union provides
the Company with written notice of the change on or before the 15th day of
March, June, September and December, respectively.
The Union shall indemnify and save the Company harmless against all
claims and suits which may arise by reason of making
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any such deduction and remitting the same to apparently authorized officials of
the Union.
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ARTICLE XII
HOURS OF WORK
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Section 1. The work week shall consist of five (5) consecutive days,
Monday through Friday, except for employees filling the existing position which
has a work week consisting of four week days and Saturday, which position may
be continued at the option of the Company and except for employees on the night
shift whose work week shall begin on Sunday evening. After the date of this
Agreement, the Company may establish similar positions with a work week of four
days and Saturday provided that the employee is given notice that the position
involves such a work week at the time the job is posted or that he is hired and
further provided that employees of the Company on October 21, 1981 shall not be
assigned such a split work week unless they bid on such a position and are
awarded the bid. The Company may establish a work week consisting of four (4)
ten-hour days for any of its drivers provided that any such work week shall
include at least two consecutive days off and shall not include Sunday.
Drivers will be permitted to bid on four (4) ten-hour day weeks by seniority,
provided that if there are insufficient bids, jobs will be assigned by reverse
seniority within driver classification. Warehouse employees hired after
10/20/87 may be assigned to a four (4) ten-hour day week. Warehouse employees
as
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of 10/20/87 may be assigned to a four (4) ten-hour day week on a voluntary
basis. Forty (40) hours shall constitute a normal week's work.
Section 2. All work in excess of forty hours (40) in a work week
shall be paid for at the rate of time and one-half.
Section 3. Exclusive of lunch periods, eight (8) hours will
constitute a day's work for all employees. Work performed in excess of eight
(8) hours shall be paid for at the rate of time and one-half provided that if
an employee is assigned a four (4) day ten-hour work week by the Company, work
performed in excess of ten (10) hours per day shall be paid at the rate of time
and one-half. The Company shall not pay overtime on overtime or the pyramiding
of such overtime.
Section 4. All employees will be granted an unpaid lunch period of
not less than one-half (1/2) hour nor more than one hour per day as the Company
shall determine. All employees will be allowed to take their lunch break no
later than the fifth (5th) hour.
Section 5. All employees will be allowed two paid fifteen minute
breaks, one in the morning and one in the afternoon.
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Section 6. When overtime is required, each employee will be expected
to work overtime hours unless he has an acceptable excuse and is excused by
management. The Company reserves the right to require employees to work
overtime if necessary to complete work, provided they are notified no later
than one hour prior to their scheduled quitting time and further provided that
such employees shall be permitted to use the Company telephone to make
necessary arrangements after reporting to and obtaining permission of the
Operations Manager. Such permission will be granted unless it interferes with
any important operation in progress at the time.
ARTICLE XIII
COOPERATION
Section 1. To further promote the goals and objectives of this
Article, the Company and the steward(s) shall meet periodically to discuss
matters and concerns relating to the cost-efficient operation of the warehouse
and delivery part of the Company's business, as well as the fair and reasonable
administration of the Company's rules and policies.
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Section 2. If any employee for whom work is available in his or her
own job is temporarily transferred to work in another job classification for
the convenience of the Employer, such employee shall receive either the rate of
the job classification to which he or she is temporarily transferred to or his
or her own classification job rate, whichever is higher.
Section 3. Supervisory employees are employed primarily for
supervisory purposes; however, supervisors may instruct employees and under
emergency situations may perform bargaining unit work. The Company agrees to
keep such work to a minimum, taking into consideration the need and desire of
both the Company and the Union for the Company's operations to be profitable
and its customer relations good. "Emergency" is defined as an unforeseen
combination of circumstances which calls for immediate action to prevent delay
in the processing of orders scheduled to be shipped during the current day's
cycle or any other circumstances that involves severe delays in the handling of
incoming merchandise or return merchandise.
Section 4. Physical inventories as determined by the Company may be
conducted by all Company personnel. The Company
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may assign employees to work overtime in connection with taking physical
inventory without regard to seniority.
ARTICLE XIV
WAGES
Section 1. Commencing on the effective date of this contract, October
21, 1994 and lasting for the entire contract term, wages for all full-time
employees shall be paid in accordance with the Appendix A, B, C, D and E wage
schedules.
New employees shall receive seventy (70%) percent of the lowest rate
in the employee's classification during their first three months, eighty (80%)
percent the next three months, and ninety (90%) percent for the balance of the
new employee's first year. After one year, the rate of pay shall be increased
to the lowest rate in the employee's classification.
All part-time employees shall be paid $8.00 per hour. Part-time
employees will be paid part-time employee rates after the ninety (90) working
day probationary period, except that seasonal/fill-in part-time employees
defined as seasonal employees who stay on during the year working irregular
shifts,
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hired after October 20, 1989 shall be paid at the rate of $6.60 per hour.
If the regular starting time assigned is 8:00 p.m. or after employees
shall be paid .40c. differential per hour.
Section 2. The Company shall be allowed to calculate "hours' worked"
in accordance with any time-keeping system permissible under federal and state
wage and hour laws. Employees shall be given reasonable advance notice of any
changes in the Company's time-keeping system, and an explanatory posting shall
accompany such change.
ARTICLE XV
HOLIDAYS
Section 1. The following days shall be observed as holidays with full
pay: i.e., eight hours pay at basic straight time rates.
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- New Year's Day - Veteran's Day
- Washington's Birthday - Thanksgiving Day
- Memorial Day - Christmas Eve - 1/2 day
- Independence Day - Christmas Day
- Labor Day - Employee's Birthday
- Martin Luther King's
In lieu of celebrating Washington's Birthday, Martin Luther King Day,
and Veteran's Day, employees shall be given three (3) floating holidays to
accommodate the needs of the business. Floating holidays will be scheduled in
advance by the employee seeking the holiday. Employees shall make requests to
take a floating holiday at least seven (7) days in advance of the holiday being
requested. The Company shall notify the employee within forty-eight hours
after receiving a request if the day can be granted. Failure to notify the
employee shall be assumed to mean the request has been granted. Permission to
take floating holidays shall not be unreasonably withheld. Floating holidays
will be granted on the basis of seniority should employee requests conflict;
however, within seven (7) days of an employee's approved selection of a
holiday, a junior employee's selection cannot be superseded by a senior
employee. Floating
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holidays may be granted with shorter notice for compelling reasons, such as an
emergency. Additionally, subject to the approval of the Company, employees may
be permitted to exchange floating holidays.
Section 2. To qualify for a holiday an employee must:
a. Have worked for the Company for ninety (90) working days prior
to the date of the holiday.
b. Be a full-time employee.
c. Must have worked both the last scheduled work day before and
after the holiday. Must have a doctor's paper if absent due
to sickness. If an employee is hurt on the job within one
week, (7) days, of the scheduled holiday, the Company will pay
the employee his holiday pay.
d. Must not be on a leave, layoff, or a similar inactive status.
Section 3. The employee's birthday holiday shall be scheduled by
mutual consent on a day during the month when his birthday occurs.
Section 4. All work performed on a paid holiday, noting Section 3
above, shall be compensated as follows; that is, eight
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hours basic straight time holiday (Section 1) pay plus time and one-half for
all hours of work performed on such holiday, except that the night shift shall
take off each holiday on the regular shift which commences the evening before
the holiday begins and shall work the regular shift which begins on the night
of the holiday without any holiday premium.
Section 5. If the holiday falls on Sunday, the holiday will usually
be celebrated the following Monday. If a wholesale drug warehouse competitor
serving the same area which this Company serves shall remain open on Monday
following a Sunday holiday, the Company shall have the option to open or close
such Monday. If warehouse is open on Monday holiday, the employee shall be
paid in accordance with Section 4 above.
ARTICLE XVI
VACATIONS
Section 1. Employees shall receive annual vacations with pay provided
that they have been employed in accordance with the following schedule:
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PERIOD OF EMPLOYMENT VACATION
-------------------- --------
1 year through 7 years 2 weeks
8 years through 14 years 3 weeks
15 years and above 4 weeks
Section 2. The vacation allowance will be paid to full-time employees
only.
Section 3. The vacation allowance shall be on the basis of a forty
(40) hour week at basic straight time pay.
Section 4. Holidays occurring during the employee's vacation period
shall be counted as part of the employee's vacation time but he shall receive
the holiday pay under Article XV, in addition to his vacation pay.
Section 5. Any employee who has completed the required service shall
be granted a vacation within the subsequent twelve (12) month period of their
anniversary date.
The Company has the right to establish a number of employees in the
bargaining unit and/or in each classification or department who can be on
vacation during any week of the vacation period, provided that all employees
shall have the opportunity to take their vacation during the subsequent twelve
(12) months of their anniversary date.
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Unless mutually agreed, the vacation schedule must be posted by the
Employer not later than March 1st to allow employees in the order of their
seniority to make their vacation selection. The schedule shall remain posted
for thirty (30) days, after which time it shall be taken down. Employees in
the first 50% from the top of the seniority list must make their selection
within the first fifteen (15) days after posting. The balance of the employees
shall make their selection in the remaining fifteen (15) days. Any employee
failing to make his selection during such periods shall be assigned to whatever
vacation period may be open.
An employee entitled to two or three weeks of vacation may not,
without the Employer's consent, take such weeks consecutively and no employee
shall be allowed to select more than one week of vacation during the months of
June, July and August without the Employer's consent. An employee's annual
vacation cannot contain more than one Monday holiday.
Section 6. Vacations as herein provided are not cumulative from year
to year and shall be taken during the subsequent twelve (12) month period
following the employee's anniversary date.
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Section 7. Employees who are eligible for vacations who have been
absent during the eligibility year for reasons of sickness or injury off the
job, or a layoff shall receive their vacations on a pro-rated basis in
accordance with the following formula:
Period worked
during the year Percentage
--------------- ----------
[S] [C]
3 months 25%
6 months 50%
9 months 75%
12 months 100%
ARTICLE XVII
SICK DAYS
Based on the employee's date of hire and subsequent annual anniversary
date, each employee shall be entitled to sick leave under the following
schedule:
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Period of Employment Days of Sick Leave
-------------------- ------------------
6 months to 1 year 3 days
1 year to 5 years 6 days
5 years and beyond 7 days
Section 2. Sick leave pay is intended to compensate an employee who
suffers a temporary illness. The Company may request the employee to submit a
medical certificate certifying to the illness or to be examined by a physician
selected by the Company. If the Company makes the request it will pay for the
physician's fee. The employee shall be paid two (2) hours pay if the visit to
a physician selected by the Company is not scheduled during the shift to which
his sick leave applies or is not otherwise scheduled during company time.
Employees may use their paid sick leave in four (4) hour increments, at a
minimum.
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Section 3. Unused sick leave for the prior year only shall be paid in
cash to each employee during the second week of December unless the employee
requests that his unused sick leave accumulate for the following year which
shall be permitted up to a maximum of 30 days. Employees shall be entitled to
payment for accumulated sick leave from prior calendar years on termination of
employment.
Section 4. Workers' Compensation Payback
Any employee who is paid and is subsequently determined to be eligible
for workers' compensation benefits and subsequently receives workers'
compensation benefits shall reimburse the Company for all days which workers'
compensation was paid in which the injured employee received paid leave
benefits. The employee can either reimburse the Company in accordance with the
reimbursement procedure as established by the Company or the employee can
notify the Company to adjust the workers' compensation benefit to reflect the
payment already received by the employee by the use of a paid leave benefit.
In no case shall the employee be entitled to a double payment of compensation
for a day's absence.
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ARTICLE XVIII
JURY DUTY
Employees who are called for Jury Duty and who actually serve shall
receive the difference between their regular straight time pay and the payment
they receive while on Jury Duty, provided that they submit to the Company
receipts for Jury Duty payment.
ARTICLE XIX
MILITARY SERVICE
The applicable provisions of the military service act with respect to
re-employment shall be complied with in connection with the return to work of
present employees and former employees in the military service on the effective
date of this Agreement.
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ARTICLE XX
FUNERAL PAY
An employee who is absent from work because of death in his immediate
family shall receive, provided he attends the funeral, up to, but not more
than, three (3) days pay for time lost because of such reason from regularly
scheduled work from the date of such death to the date of the day after the
funeral, both dates inclusive. The term immediate family shall include spouse,
child, mother, father, guardian, mother-in-law, father-in-law, brother, sister,
stepmother, stepfather, stepchildren and grandparents. An employee who is
absent from work to attend the funeral of the employee's sister-in-law or
bother-in-law shall receive one (1) days pay for actual time lost from
regularly scheduled work. The employee shall furnish the Employer with
satisfactory proof of death. The provision also applies to part-time non-
probationary employees.
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ARTICLE XXI
NEW EMPLOYEES
New employees shall not be entitled to seniority rights until such
employee has completed his probationary period of ninety (90) working days.
The probationary period may be extended beyond ninety (90) working days by
mutual agreement. The Company may discharge the employee without recourse
within the ninety (90) working day period or any extension thereof without
cause.
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ARTICLE XXII
SENIORITY
Section 1. Plantwide seniority will be in effect for layoffs and
recalls and for bidding on posted jobs. Separate seniority lists shall be kept
(1) for regular part-time employees defined as part-time employees assigned to
a regular shift on a year round basis; and (2) for seasonal/fill-in employees
defined as part-time employees who are not assigned to a regular shift on a
year round basis. Regular part-time employees shall have bidding rights on
full-time positions after full-time employees but ahead of seasonal/fill-in
employees. Seasonal/fill-in employees have bidding rights on regular part-time
positions and full-time positions after regular part-time employees but ahead
of new hires. Bidding rights shall be subject to management determination of
qualification.
Section 2. The Company will be divided into the following departments
and classifications:
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Department: Warehouse
----------
Classifications: 1. Picker
---------------
2. Class II Receivers, Shippers
and Special Projects
3. General Warehouse Class III
Helpers and Packers
Department: Trucking
----------
Classification: Truck Drivers
--------------
Overtime will be offered to the most senior qualified employee within the
classification. If overtime is refused by all members of the classification,
the junior person or persons in the classification must perform the work.
Management has the right to assign work to employees within their
classification and has the right to change such work assignments with the
classification at its discretion without posting for bids. When an opening
occurs within a classification, it shall be open for bid only to employees
outside of that classification. When management assigns an employee with a
rate of pay above the lowest rate within his classification to different work
within his classification, he shall continue to receive his prior rate of pay
in his new assignment.
-40-
<PAGE> 44
Section 3. All permanent job openings will be posted for five (5)
working days on the main bulletin board. The employee will sign a bid form
which will be available from the Operations Manager. At the end of the period,
the opening will be awarded on a thirty (30) working day trial period. The
determination of qualifications shall be deemed one of the management rights as
outlined in Article III. The Union will be advised as to the selection made.
If management decides that an employee may return to his/her former job, and
any other employee who has changed jobs as a direct or indirect result of the
initial award of the job in question shall be simultaneously returned to his
previous job. Part-time openings due to seasonal work will not be put up for
bids. Seasonal covers June, July and August. With respect to the first shift
job classification which requires an employee to be able to drive a delivery
truck and also to perform the job responsibilities of warehouse worker III, the
Company shall have the sole authority to determine an appropriate number of
driver/warehouse worker III positions to be filled. Any subsequent posting for
the first shift work assignment shall be posted as a warehouse worker III
position only.
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<PAGE> 45
Section 4. Loss of time due to sickness, accident or temporary layoff
shall not be construed so as to interfere with an employee's length of service.
Section 5. An employee desiring a leave of absence from the Company
shall secure written permission from the Company with notification to the
Union. Failure to comply with this provision shall result in discharge of the
employee. If the employee is granted a leave of absence and secures employment
with another company, he will be subject to discharge.
Section 6. All rights of an employee accrued under this Article shall
be lost in the event of a break in continuous service for the Company caused by
any one of the following:
A. Discharge for just cause.
B. Voluntary resignation.
C. Layoff for lack of work for more than twelve (12) consecutive
months.
D. Failure to report to work within three (3) working days, (or
five (5) working days if employed) of receipt of recall notice.
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<PAGE> 46
E. Absence from work for a period of more than two (2) days
without notice to the Company (unless substantial justification prevents the
giving of timely notice.)
F. Medical leave of absence for a period of twelve (12)
consecutive months or more, regardless of cause or reason.
Employees who become absent or who are currently absent for any reason
shall be required to pay for the full amount of health insurance consistent
with COBRA requirements at such time as the employee's absence is in excess of
six (6) months (regardless of when such absence commenced, or will in the
future commence).
ARTICLE XXIII
EQUIPMENT
Defective equipment will be reported to the Operations Manager by
responsible employees. The intent of the Company is to maintain vehicles in
serviceable condition with working heaters and defrosters and in compliance
with state and federal safety regulations.
-43-
<PAGE> 47
ARTICLE XXIV
HEALTH AND WELFARE
Section 1. All insurance coverages shall apply to full-time employees
only. Coverage will begin upon successful completion of the employee's ninety
(90) day working day probationary period.
Section 2. The Company will provide life insurance benefits, free of
charge to the employee at the rate of one and one-half (1-1/2) times his basic
annual earnings, rounded to the next $1,000.00, not to exceed $35,000.00.
Basic annual earnings are computed by multiplying the employee's basic hourly
rate times two thousand and eighty (2,080) hours.
Section 3. The Company will provide, free of charge, Accidental Death
and Dismemberment Insurance to the employee at the rate of one and one-half
(1-1/2) times his basic annual earnings as calculated above, not to exceed
$35,000.00
Section 4. Upon attainment of age 70 by an active employee, the
amount of Life Insurance is reduced by 50% to a maximum of $5,000.00 and the
AD&D is discounted.
-44-
<PAGE> 48
Section 5. At no cost to employees except as otherwise provided for
in Article XXIV, Section 12, health insurance will be provided according to the
schedule below:
A. Hospital Expense Benefits - Insurance coverage for
hospitalization expenses, including outpatient department charge incurred as a
result of minor surgery, emergency treatment of an accident within 48 hours and
pre and post admission testing are eligible for the Hospital benefit, shall be
in accordance with the provisions of Paragraph D below.
Reasonable and customary charges for Intensive Care are covered.
B. Surgical Expense Benefit - 80% of reasonable and customary
surgery.
C. Major Medical Benefit - Maximum of $1,000,000 per lifetime.
D. Co-insurance - 80% of the first $5,000.00, 100% thereafter for
the calendar year not to exceed major medical maximum. The maximum
out-of-pocket expense for the employee including deductible as required by
section E shall be $1,200.00 for one person coverage and $3,600.00 per family
(based on three persons).
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<PAGE> 49
E. Calendar Year Deductible - $200.00 per individual, and $600.00
per family.
F. Daily Room and Board Maximum - Semi-Private.
G. Intensive Care Allowance - Reasonable and Customary.
H. Convalescent Hospital Allowance - 50% of Semi-Private charges.
I. Home Health Care - Is considered a covered expense.
J. Mental Health Benefit -
Inpatient - same as any other hospital expense subject to a
maximum of 31 days in any consecutive 12-month period, not to
exceed $25,000.00 per lifetime.
Outpatient - 50% of usual and customary charges - up to
a maximum of $1,000.00 per 12-month period; subject to a
lifetime maximum of $25,000.00.
K. Maternity - treated as any other disability.
L. Utilization Review - the requirement of obtaining
pre-approvals and secondary opinions as currently exists shall remain intact.
Section 6. The Company will provide non-occupation sickness and
accident insurance coverage of $225.00 per week during the 1994-1999 contract
period for a maximum of thirteen (13) weeks
-46-
<PAGE> 50
for full-time employees only. There is an 8-day waiting period until benefits
are paid. Maternity is included.
Section 7. The Company will provide long-term disability coverage
(LTD) at no cost to the employee similar to that described in the plan
described in the booklet entitled J.E. Goold & Co. Group Benefits dated July,
1989.
Section 8. Should any Federal or State Social Security Law be enacted
and put into effect during the period of this Agreement, providing benefits
paralleling any of those contained herein and imposing the cost thereof upon
the Employer, then and to that extent only shall such paralleling benefit
provided herein become inoperative and cancelled in the policy of insurance and
the Employer shall be relieved of the cost thereof in order to avoid
duplication of insurance costs.
Section 9. The Company will provide to the employee and his or her
dependent children, a paid prescription plan which provides that employees will
be issued a prescription card which enables them to purchase covered
prescription generic drugs at no cost and covered prescription brand named
drugs at a price of $5.00 per prescription during the duration of the contract
-47-
<PAGE> 51
period. Each prescription filled and subsequently re-filled shall be limited
to a thirty (30) day supply.
Section 10. The Company will provide to the employee and his or her
dependent children a basic dental plan similar to that described in the J.E.
Goold & Co. Employee Benefit Plan Summary Plan Description dated January 1,
1994.
Section 11. The Company will provide a vision care benefit to the
employee and his or her dependent children up to a maximum family limit of
$200.00 per year similar to that described in the J.E. Goold & Co. Employee
Benefit Plan Summary Plan Description dated January 1, 1994.
Section 12. Employee Insurance Contributions
A. Current employees who elect group health and group dental
insurance coverage shall be required to contribute, through weekly payroll
deductions, the amount of eight ($8.00) dollars per week from November 30, 1995
to October 22, 1996; twelve ($12.00) dollars per week from October 23, 1996
through October 17, 1997; sixteen ($16.00) dollars per week from October 18,
1997 through October 23, 1998; and twenty-four ($24.00) dollars per week for
all subsequent time periods.
-48-
<PAGE> 52
B. New employees shall be required to contribute, through weekly
payroll deductions, twenty-four ($24.00) dollars per week for group health and
dental insurance coverage as soon as they are eligible for and elect to receive
such insurance coverage.
ARTICLE XXV
INDIVIDUAL RETIREMENT ACCOUNT
Each year, for all full-time and part-time employees who have
successfully completed the ninety (90) working day probationary period as of
the end of the second pay period in December, the Company will pay the
following percentages of straight time, post-probationary earnings during that
year, which the employee may at his or her option use to fund a voluntary IRA
(Individual Retirement Account):
1994 Three (3%) percent
1995 Three (3%) percent
1996 Three and one-half (3 1/2%) percent
1997 Four (4%) percent
1998 Four (4%) percent
-49-
<PAGE> 53
ARTICLE XXVI
ACCESS TO PAYROLL RECORDS
Authorized representatives of the Union will be allowed by the Company
access to payroll records and work logs for the purpose of adjusting
grievances.
ARTICLE XXVII
BULLETIN BOARDS
The Company agrees to provide space on its bulletin boards for the
posting of official notices relating to Union meetings and other Union affairs.
ARTICLE XXVIII
PART-TIME EMPLOYEES
Any part-time non-probationary employee shall receive only the IRA
option and funeral leave as contained in this Agreement.
-50-
<PAGE> 54
ARTICLE XXIX
TERMINATION
The terms and conditions of this Agreement shall, except as herein
otherwise expressly provided, become effective the 21st day of October, 1994
and shall continue in full force and effect up to and including the 21st day of
October, 1999, and thereafter from year to year unless and until either party
shall give to the other notice by registered or certified mail at least sixty
(60) days prior to the expiration date in 1999, or to the expiration date in
any year thereafter of any intention to terminate, cancel or modify the
Agreement.
-51-
<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be signed the day and year first above written.
J.E. GOOLD & CO.; TRUCK DRIVERS, WAREHOUSEMEN
DIVISION OF BINDLEY-WESTERN AND HELPERS UNION LOCAL 340
INDUSTRIES, INC.
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
By:___________________________
Its:__________________________
By:___________________________
Its:__________________________
-52-
<PAGE> 56
APPENDIX A
J.E. GOOLD & COMPANY
BASE PAY SCALE AS OF NOVEMBER 30, 1995
<TABLE>
<CAPTION>
(80%) (90%)
(70%) THREE SIX FULL-TIME
STARTING MONTH MONTH PERSONNEL
PAY RAISE RAISE AFTER 1 YEAR
<S> <C> <C> <C> <C>
CLASS III WAREHOUSE HELP $ 6.65 $ 7.60 $ 8.55 $ 9.50
CLASS II WAREHOUSE $ 6.72 $ 7.68 $ 8.64 $ 9.60
REGULAR TRUCK DRIVER $ 6.72 $ 7.68 $ 8.64 $ 9.60
DRIVER CLASS II $ 7.07 $ 8.08 $ 9.09 $10.10
DRIVER CLASS I $ 7.77 $ 8.88 $ 9.99 $11.10
</TABLE>
-53-
<PAGE> 57
APPENDIX B
J.E. GOOLD & COMPANY
BASE PAY SCALE AS OF MARCH 1, 1996
<TABLE>
<CAPTION>
(70%) (80%) (90%) FULL-TIME
STARTING AFTER AFTER PERSONNEL
PAY 3 MONTHS 6 MONTHS AFTER 1 YEAR
<S> <C> <C> <C> <C>
CLASS III WAREHOUSE $ 7.18 $ 8.20 $ 9.23 $10.00
CLASS II WAREHOUSE $ 7.07 $ 8.08 $ 9.09 $10.10
REGULAR TRUCK DRIVER $ 7.07 $ 8.08 $ 9.09 $10.10
DRIVER - CLASS II $ 7.42 $ 8.48 $ 9.54 $10.60
DRIVER - CLASS I $ 8.12 $ 9.28 $10.44 $11.60
</TABLE>
-54-
<PAGE> 58
APPENDIX C
J.E. GOOLD & COMPANY
BASE PAY SCALE AS OF MARCH 1, 1997
<TABLE>
<CAPTION>
(70%) (80%) (90%) FULL-TIME
STARTING AFTER AFTER PERSONNEL
PAY 3 MONTHS 6 MONTHS AFTER 1 YEAR
<S> <C> <C> <C> <C>
CLASS III WAREHOUSE $ 7.53 $ 8.60 $ 9.68 $10.50
CLASS II WAREHOUSE $ 7.42 $ 8.48 $ 9.54 $10.60
REGULAR TRUCK DRIVER $ 7.42 $ 8.48 $ 9.54 $10.60
DRIVER - CLASS II $ 7.77 $ 8.88 $ 9.99 $11.10
DRIVER - CLASS I $ 8.47 $ 9.68 $10.89 $12.10
</TABLE>
-55-
<PAGE> 59
APPENDIX D
J.E. GOOLD & COMPANY
BASE PAY SCALE AS OF JANUARY 1, 1998
<TABLE>
<CAPTION>
(70%) (80%) (90%) FULL-TIME
STARTING AFTER AFTER PERSONNEL
PAY 3 MONTHS 6 MONTHS AFTER 1 YEAR
<S> <C> <C> <C> <C>
CLASS III WAREHOUSE $ 7.53 $ 8.60 $ 9.68 $11.00
CLASS II WAREHOUSE $ 7.77 $ 8.88 $ 9.99 $11.10
REGULAR TRUCK DRIVER $ 7.77 $ 8.88 $ 9.99 $11.10
DRIVER - CLASS II $ 8.12 $ 9.28 $10.44 $11.60
DRIVER - CLASS I $ 8.82 $10.08 $11.34 $12.60
</TABLE>
-56-
<PAGE> 60
APPENDIX E
J.E. GOOLD & COMPANY
BASE PAY SCALE AS OF OCTOBER 21, 1998
<TABLE>
<CAPTION>
(70%) (80%) (90%) FULL-TIME
STARTING AFTER AFTER PERSONNEL
PAY 3 MONTHS 6 MONTHS AFTER 1 YEAR
<S> <C> <C> <C> <C>
CLASS III WAREHOUSE $ 7.53 $ 8.60 $ 9.68 $11.50
CLASS II WAREHOUSE $ 8.12 $ 9.28 $10.44 $11.60
REGULAR TRUCK DRIVER $ 8.12 $ 9.28 $10.44 $11.60
DRIVER - CLASS II $ 8.47 $ 9.68 $10.89 $12.10
DRIVER - CLASS I $ 9.17 $10.48 $11.79 $13.10
</TABLE>
-57-
<PAGE> 1
EXHIBIT 10-Z (iii)
PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST
Section 401(K) PROFIT SHARING PLAN
(NONSTANDARDIZED)
ADOPTION AGREEMENT(1)
The Employer(2), designated below, hereby establishes a profit-sharing plan
(optionally including a cash or deferred arrangement (as defined in Section
401(k) of the Internal Revenue Code)) for all Eligible Employees as defined in
this Adoption Agreement pursuant to the terms of the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST BASIC PLAN DOCUMENT # 05.
A. EMPLOYER INFORMATION:
1. [ ] NAME: Bindley Western Industries, Inc.
2. ADDRESS: 10333 N. Meridian Street, Suite 300
3. ADDRESS: Indianapolis, IN 46290
4. ATTENTION: Michael D. McCormick TELEPHONE: 317-298-9890
5. EMPLOYER TAXPAYER IDENTIFICATION NUMBER(3): 84-0601662
B. BASIC PLAN PROVISIONS:
1. PLAN NAME (SELECT ONE):
a. [ ] This plan is established effective _____,
19__, (the "Effective Date") as a profit
sharing plan and trust (optionally with a
"cash or deferred arrangement" as defined in
Code Section 401(k)) to be known as _____
Plan and Trust (the "Plan") in the form of
the PRISM(R) PROTOTYPE RETIREMENT PLAN &
TRUST.
__________________________________
(1) Footnotes in this Adoption Agreement are not to be construed as part of the
Plan provisions but are explanatory only. To the extent a footnote is
inconsistent with the provisions of the Basic Plan Document or applicable
law, the provisions of the Plan shall be construed in conformity with the
Basic Plan Document or law.
(2) Terms that are capitalized are defined in the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST BASIC PLAN DOCUMENT.
(3) The Plan will have an individual TIN, distinct from the Employer TIN.
<PAGE> 2
b. [X] This plan is an amendment and restatement in
the form of the PRISM(R) PROTOTYPE RETIREMENT
PLAN & TRUST, effective January 1, 1996, (the
"Effective Date") of the Profit Sharing Plan
of Bindley Western Industries, Inc. &
Subsidiaries Plan and Trust (the "Plan"),
originally effective as of January 1, 1979
(the "Original Effective Date").
2. EMPLOYER'S THREE DIGIT PLAN NUMBER: 001
3. COMMITTEE MEMBERS (4):
Michael D. McCormick, Kathy Messick, and Mike Shinn
4. DEFINITIONS:
a. COMPENSATION for allocation purposes:
i Will be determined over the following
applicable period (select only one):
(a) [X] the Plan Year
(b) [ ] the period of Plan participation
during the Plan Year
(c) [ ] a consecutive 12 month period
commencing on _____ and ending
with, or within, the Plan Year.
ii [ ] If selected, Compensation will include
Employer contributions made pursuant to
a Salary Reduction Agreement, or other
arrangement, which are not includible in
the gross income of the Employee under
Sections 125, 402(e)(3), 402(h)(1)(B) or
403(b) of the Internal Revenue Code.
iii Shall NOT include (select as many as desired):
(a) [ ] Bonuses
(b) [ ] Commissions
(c) [ ] Taxable fringe benefits identified
below:
-----
(d) [X] Other items of remuneration
identified below:
1) Income derived from exercise of
stock options. 2) Any benefit not
included in the employee's taxable
income for the year.
iv Shall be limited to $ _____, which shall be the
maximum amount of compensation considered for
plan allocation purposes (but not for
__________________________________
(4) Committee members direct the day to day operation of the Plan.
Committee members serve at the pleasure of the Employer. See Section 11.4
for changes in Committee membership. If no Committee members are specified,
the Employer shall assume responsibility for the operations of the Plan.
Page 2
<PAGE> 3
testing purposes), and may not be an amount in
excess of the Internal Revenue Code Section
401(a)(17) limit in effect for the Plan Year(5).
If no amount is specified, Compensation shall be
limited to the Internal Revenue Code Section
401(a)(17) amount, as adjusted by the Secretary
of the Treasury from time to time.
b. EARLY RETIREMENT DATE:
i [X] is not applicable to this Plan
ii [ ] is the latter of the date on which
the Participant attains age _____
(not less than 55) and the date on
which the Participant completes _
Years of Service.
C. HOUR OF SERVICE shall be determined on the basis of
the method selected below. Only one method may be
selected. The method shall be applied to all
Employees covered under the Plan as follows (select
only one):
i [X] On the basis of actual hours for
which an Employee is paid, or
entitled to be paid.
ii [ ] On the basis of days worked. An
Employee shall be credited with ten
(10) Hours of Service if under
Section 1.1(U) of the Plan such
Employee would be credited with at
least one (1) Hour of Service during
the day.
iii [ ] On the basis of weeks worked. An
Employee shall be credited with
forty-five (45) Hours of Service if
under Section 1.1(U) of the Plan
such Employee would be credited with
at least one (1) Hour of Service
during the week.
iv [ ] On the basis of semi-monthly payroll
periods. An Employee shall be
credited with ninety-five (95) Hours
of Service if under Section 1.1(U)
of the Plan such Employee would be
credited with at least one (1) Hour
of Service during the semi-monthly
payroll period.
v [ ] On the basis of months worked. An
Employee shall be credited with one
hundred ninety (190) Hours of
Service if under Section 1.1(U) of
the Plan such Employee would be
credited with at least one (1) Hour
of Service during the month.
d. LIMITATION YEAR shall mean the 12 month period
commencing on January 1 and ending on December 31.
__________________________________
(5) If no amount is specified, the maximum amount of Compensation
allowed under Code Section # 401(a)(17) (the "$150,000 limit" ( "$200,000
limit" prior to the Plan Year beginning before January 1, 1994)), as
adjusted from time to time, shall be used.
PAGE 3
<PAGE> 4
e. NORMAL RETIREMENT DATE for each Participant shall
mean (select one):
i [X] the date the Participant attains
age: 65 (not to exceed 65)
ii [ ] the latter of the date the
Participant attains age _____ (not
to exceed 65) or the ___ (not to
exceed 5th) anniversary of the
participation commencement date. if
for the Plan Years beginning before
January 1, 1988, Normal Retirement
Date was determined with reference
to the anniversary of the
participation commencement date
(more than 5 but not to exceed 10
years), the anniversary date for
Participants who first commenced
participation under the Plan before
the first Plan Year beginning on or
after January 1, 1988 shall be the
earlier of (A) the tenth anniversary
of the date the Participant
commenced participation in the Plan
(or such anniversary as had been
elected by the employer, if less
than 10) or (B) the fifth
anniversary of the first day of the
first Plan Year beginning on or
after January 1, 1988.
Notwithstanding any other provisions
of the Plan, the participant
commencement date is the first day
of the first Plan Year in which the
Participant commenced participation
in the Plan.
f. PERMITTED DISPARITY LEVEL, for purposes of allocating
Employer Contributions, shall mean (select only one):
i [X] Not applicable - the Plan does not
use permitted disparity.
ii [ ] The Taxable Wage Base, which is the
contribution and benefit base under
section 230 of the Social Security
Act at the beginning of the year.
iii [ ] _____ % (not greater than 100%) of
the Taxable Wage Base as defined in
B(4)(f)(ii) above.
iV [ ] $ _____, provided that the amount
does not exceed the Taxable Wage
Base as defined in B(4)(f)(ii)
above.
g. PLAN YEAR shall mean (select and complete only one of
the following):
i [X] the 12-consecutive month period
which coincides with the Limitation
Year. The first Plan Year shall be
the period commencing on the
Effective Date and ending on the
last day of the Limitation Year.
ii [ ] the 12-consecutive month period
commencing on_____, 19__, and each
annual anniversary thereof.
iii [ ] the calendar year (January 1 through
December 31).
PAGE 4
<PAGE> 5
h. QUALIFIED DISTRIBUTION DATE, for purposes of
making distributions under the provisions of a
Qualified Domestic Relations Order (as defined in
Internal Revenue Code Section 414(p)), [X] SHALL
[ ] SHALL NOT be the date the order is
determined to be qualified. If SHALL is selected,
the Alternate Payee will be entitled to an immediate
distribution of benefits as directed by the Qualified
Domestic Relations Order. If SHALL NOT is selected,
the Alternate Payee may only take a distribution on
the earliest date that the Participant is entitled to
a distribution.
i. SPOUSE:
[ ] If selected, Spouse shall mean only that
person who has actually been the
Participant's spouse for at least one
year.
j. YEAR OF SERVICE shall mean:
i For ELIGIBILITY purposes (select one of the
following):
(a) [X] the 12 consecutive months during
which an Employee is credited
with 1000 (not more than 1000)
Hours of Service.
(b) [ ] a Period of Service (using the
elapsed time method of counting
Service, as described in Section
1.1(N)(3) of the Plan).
ii For ALLOCATION accrual purposes (select one of
the following):
(a) [X] the 12 consecutive months during
which an Employee is credited
with 1000 (not more than 1000)
Hours of Service.
(b) [ ] a Period of Service (using the
elapsed time method of counting
Service, as described in Section
1.1(N)(3) of the Plan).
iii For VESTING service purposes (select one of the
following):
(a) [X] the 12 consecutive months during
which an Employee is credited
with 1000 (not more than 1000)
Hours of Service.
(b) [ ] a Period of Service (using the
elapsed time method of counting
Service, as described in Section
1.1(N)(3) of the Plan).
iv For purpose of computing Years of Service in
plans where Year of Service is defined in terms
of Hours of Service), the consecutive 12 month
period shall be:
PAGE 5
<PAGE> 6
(a) For ELIGIBILITY purposes, the first Year of
Service shall be computed using the 12 month
period commencing on the Employee's date of
hire and ending on the first annual
anniversary of the Employee's date of hire
(the "Initial Computation Period"). In the
event an employee does not complete an
eligibility Year of Service during this
initial computation period, the computation
period shall be (select only one):
(1) [ ] the period commencing on
each annual anniversary of
the Employee's date of hire
and ending on the next annual
anniversary of the Employee's
date of hire.
(2) [X] the Plan Year, commencing
with the Plan Year in which
the Initial Computation
Period ends.
(b) For VESTING purposes, Years of Service shall
be computed on the basis of:
(1) [ ] the period commencing on
each annual anniversary of
the Employee's date of hire
and ending on the next annual
anniversary of the Employee's
date of hire.
(2) [X] the Plan Year, commencing
with the first Plan Year an
Employee completes an Hour of
Service.
(c) For ALLOCATION accrual purposes, Year of
Service shall be computed on the basis of the
Plan Year.
v [X] For ELIGIBILITY purposes, Years
of Service with the following
Predecessor Employers shall count in
fulfilling the eligibility
requirements for this Plan:
Kendall Drug Company; 3-C
Medical, Inc.; IV-I, Inc; IV-One
Services, Inc.; National Pharmacy
Providers, Inc.; National Infusion
Services, Inc.
vi [ ] For VESTING purposes, Years of
Service with the following
Predecessor Employers shall count
for purposes of determining the
nonforfeitable amount of a
Participant's account: _____
5. COVERAGE:
This Plan is extended by the Employer to the following
Employees who have met the eligibility requirements (select as
many as appropriate):
i [ ] All Employees
PAGE 6
<PAGE> 7
ii [ ] Salaried Employees
iii [ ] Sales Employees
iv [ ] Hourly Employees
v [ ] Leased Employees
vi [X] All Employees except (select as applicable):
(a) [X] those who are members of a
unit of Employees covered by
a collective bargaining
agreement between the
Employer and Employee
representatives, if
retirement benefits were the
subject of good faith
bargaining and if two percent
or less of the Employees who
are covered pursuant to that
agreement are professionals
as defined in Section
1.410(b)-9 of the
Regulations. For this
purpose, the term "Employee
representative" does not
include any organization more
than half of whose members
are Employees who are owners,
officers, or executives of
the Employer.
(b) [ ] those who are nonresident
aliens (within the meaning of
Internal Revenue Code Section
7701(b)(1)(B)) and who
receive no earned income
(within the meaning of
Internal Revenue Code Section
911(d)(2)) from the Employer
which constitutes income from
sources within the United
States (within the meaning of
Internal Revenue Code Section
861(a)(3)).
vii [ ] Union Employees (who are members of
the following unions or union
affiliates:
-----
viii [ ] Other Employees, described as
follows:
-----
6. ELIGIBILITY:
An Employee covered by the Plan may become a Participant upon
completion of the following eligibility requirements:
a. SERVICE(6):
i [ ] There shall be no minimum service
requirement for an Employee to
become a Participant.
__________________________________
(6) If a fractional year is elected, the elapsed time method of computing
service shall be used for the fractional year. Eligibility provisions for
optional cash or deferred arrangements are contained in Item C of this
Adoption Agreement.
PAGE 7
<PAGE> 8
ii [X] The Employee must complete 1 Year
of Service (not more than 2 years)
to be a Participant for purposes of
receiving allocations of Employer
Profit Sharing Contributions.
b. AGE:
i [ ] There shall be no minimum age
requirement for an Employee to become a
Participant.
ii [X] The Employee must attain age 21 (not more than
21) to be a Participant in the Plan.
c. WAIVER OF AGE AND SERVICE REQUIREMENTS:
i [ ] Notwithstanding the provisions of Items B(6)(a)
and (b), Employees who have not satisfied the age
and service requirements, but would otherwise be
eligible to participate in the plan, shall be
eligible to participate on the Effective Date.
ii [ ] For new Plans, notwithstanding the provisions of
Items B(6)(a) and (b), Employees who have not
satisfied the age and service requirements, but
would otherwise be eligible to participate in the
plan, shall be eligible to participate on the
Effective Date.
d. ENTRY DATES:
Upon completion of the eligibility requirements, an
Employee shall commence participation in the Plan
(select only one):
i [ ] As soon as practicable under the payroll
practices utilized by the Employer, and
consistently applied to all Employees, or if
earlier, the first day of the Plan Year (7).
ii [ ] As of the first day of the month following the
completion of the eligibility requirements.
iii [X] As of the earliest of the first day of the Plan
Year, fourth, seventh or tenth month of the Plan
Year next following completion of the eligibility
requirements.
iv [ ] As of the earliest of the first day of the Plan
Year or seventh month of the Plan Year next
following completion of the eligibility
requirements.
v [ ] As of the first day of the Plan Year next
following completion of the eligibility
requirements (may only be
__________________________________
(7) Notwithstanding the foregoing, an Employee who has met the eligibility
requirements may not enter the Plan later than six months following the
date on which the Employee first completes the eligibility requirements.
PAGE 8
<PAGE> 9
selected if the eligibility year of service
requirement is 6 months or less).
7. VESTING:
a. The percentage of a Participant's Employer
Contribution Account (attributable to Employer Profit
Sharing Contributions) to be vested in him or her
upon termination of employment prior to attainment of
the Plan's Normal Retirement Date shall be (8):
COMPLETED YEARS OF SERVICE
1 2 3 4 5 6 7
-------------------------------------------------------
i [ ] 100%
------ ------
ii [ ] 100%
------ ------ ------
iii [ ] 20% 40% 60% 80% 100%
------ ------ ------ ------ ------ ------
iv [X] 0% 0% 20% 40% 60% 80% 100%
------ ------ ------ ------ ------ ------ ------
v [ ] 10% 20% 30% 40% 60% 80% 100%
------ ------ ------ ------ ------ ------ ------
vi [ ] 100%
------ ------ ------ ------ ------
vii [ ] 100%
------ ------ ------ ------ ------ ------ ------
vii [ ] Full and immediate vesting upon entry into the Plan (9)
Notwithstanding anything to the contrary in the Plan, the amount
inserted in the blanks above shall not exceed the limits specified
in Code Section 411(a)(2).
b. For purposes of computing a Participant's vested
account balance, Years of Service for vesting
purposes [X] SHALL [ ] SHALL NOT include Years of
Service before the Employer maintained this Plan or
any predecessor plan, and [X] SHALL [ ] SHALL NOT
include Years of Service before the Employee attained
age 18.
c. Notwithstanding the provisions of this Item B(7)(c)
of the Adoption Agreement, a Participant shall become
fully vested in his Participant's Employer
Contribution if: (10)
i [ ] the Participant's job is eliminated
without the Participant being
offered a comparable position
elsewhere with the Employer.
ii [ ] for such reason as is described
below:
------
__________________________________
(8) Notwithstanding the selection made in this Item B(7)(a), a Participant
shall be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
(9) If more than one Year of Service is an eligibility requirement, Item viii
must be selected.
(10)The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
PAGE 9
<PAGE> 10
8. EMPLOYER PROFIT SHARING CONTRIBUTIONS:
a. CONTRIBUTIONS:
i [X] In its discretion, the Employer may contribute
Employer Profit Sharing Contributions to the
Plan.
ii [ ] The Employer shall contribute Employer Profit
Sharing Contributions to the Plan in the amount
of _____ % of the Compensation of all Eligible
Participants under the Plan.
iii[ ] If selected, the Employer may make Employer
Profit Sharing Contributions without regard to
current or accumulated Net Profits of the
Employer for the taxable year ending with, or
within the Plan Year.
iv [ ] If selected, the Employer may designate all or
any part of the Employer Profit Sharing
Contributions as Qualified Nonelective
Contributions, provided, however, that
contributions so designated will be subject to
the same vesting, distribution, and withdrawal
restrictions as Before Tax Contributions (11).
b. ALLOCATIONS:
Employer Profit Sharing Contributions shall be
allocated to the accounts of eligible Participants
according to the following selected allocation
formula:
i [X] The Employer Profit Sharing
Contributions shall be allocated to each
eligible Participant's account in the ratio
which the Participant's Compensation bears to
the Compensation of all eligible Participants.
Employer Profit Sharing Plan Contributions,
shall be allocated to the accounts of
Participants who have completed a Year of
Service (12) (select one):
(a) [ ] as of the last day of
the month preceding the month
in which the contribution was
made.
(b) [ ] as of the last day of
the Plan quarter preceding
the quarter in which the
contribution was made.
__________________________________
(11)Amounts designated as Qualified Nonelective Contributions will be allocated
pursuant to Section 3.1(A)(14) of the Basic Plan Document.
(12)In the event contributions are allocated on a basis other than a full plan
year, the Year of Service shall be based on the elapsed time method of
calculation, and a Participant shall be deemed to have completed an
appropriate Period of Service for allocation purposes if the Participant
has completed a pro-rata Period of Service corresponding to the interval on
which contributions are allocated.
PAGE 10
<PAGE> 11
(c) [X] as of the last day of the
Plan Year.
ii The Employer Profit Sharing
Contributions shall be allocated in
accordance with the following
formula:
(a) If the Plan is Top-Heavy, the
contribution shall be first
credited to each eligible
Participant's Account in the
ratio which the Participant's
Compensation bears to the total
Compensation of all eligible
Participants, up to 3% of each
Participant's Compensation.
(b) If the Plan is Top-Heavy, any
Employer Profit Sharing
Contribution remaining after the
allocation in (a) above shall be
credited to each eligible
Participant's account in the
ratio which the Participant's
Excess Compensation (13) bears to
the total Excess Compensation of
all eligible Participants, up to
3% of each eligible
Participant's Excess
Compensation.
(c) Any contributions remaining after
the allocation in (b) above
shall be credited to each
eligible Participant's account
in the ratio which the sum of
the Participant's total
Compensation and Excess
Compensation bears to the sum of
the total Compensation and
Excess Compensation of all
eligible Participants, up to an
amount equal to the maximum
Excess Percentage times the sum
of the Participant's
Compensation and Excess
Compensation. If the Plan is
Top-Heavy, the maximum Excess
Percentage is N/A% (insert
percentage). If the Plan is not
Top-Heavy, the maximum Excess
Percentage is N/A% (insert
percentage, which shall not
exceed the prior Excess
Percentage limitation specified
by more than 3).
NOTE: If the Permitted Disparity Level
defined at Item B(4)(f) is the
Taxable Wage Base (which is the
contribution and benefit base
under section 230 of the Social
Security Act at the beginning of
the year), then the maximum
Excess Percentage should be 2.7%
if the Plan is Top-Heavy and
5.7% if the Plan is not
Top-Heavy.
If the Permitted Disparity Level
defined at Item B(4)(f) is
greater than 80% but less than
100% of the Taxable Wage Base,
then the maximum Excess
__________________________________
(13)Excess Compensation means a Participant's Compensation in excess of the
Permitted Disparity Level specified in the Definitions section of this
Adoption Agreement.
PAGE 11
<PAGE> 12
Percentage should be 2.4% if the
Plan is Top-Heavy and 5.4% if
the Plan is not Top-Heavy.
If the Permitted Disparity Level
defined at Item B(4)(f) is
greater than the greater of
$10,000 or 20% of the Taxable
Wage Base, but not more than
80%, then the maximum Excess
Percentage should be 1.3% if
the Plan is Top-Heavy and 4.3%
if the Plan is not Top-Heavy.
(d) Any remaining Employer Profit
Sharing Contribution shall be
allocated among eligible
Participants' accounts in the
ratio which the Participant's
Compensation bears to the total
Compensation of all
Participants.
iii [X] If selected, and the Employer has
elected to allocate Employer Profit
Sharing Plan Contributions as of the
last day of the Plan Year, a
Participant must be employed by the
Employer on the last day of the Plan
Year in order to receive an
allocation (14).
iv [ ] A Participant who terminates before
the end of the period for which
contributions are allocated shall
share in the allocation of Employer
Profit Sharing Contributions if
termination of employment was the
result of (select all that apply):
(a) [ ] retirement
(b) [ ] disability
(c) [ ] death
(d) [ ] other, as specified below:
------
9. ROLLOVER & TRANSFER CONTRIBUTIONS (SELECT ONE):
a. [X] Subject to policies, applied in a consistent
and nondiscriminatory manner, adopted by the
Committee, each Employee, who would otherwise
be eligible to participate in the Plan except
that such Employee has not yet met the
eligibility requirements, and each
Participant may make a Rollover Contribution
as described in Internal Revenue Code
Sections 402(a)(5), 403(a)(4) or 408(d)(3).
b. [ ] Subject to policies, applied in a consistent
and nondiscriminatory manner, adopted by the
Committee, each Participant may make a
__________________________________
14 This option shall only be effective if Item 8(b)(i)(c) has been
selected. Even if this Item is selected, the provisions of Section 4.8 of
the Basic Plan Document may supersede this requirement if necessary to
satisfy Code Sections 401(a)(26) and 410(b).
PAGE 12
<PAGE> 13
Rollover Contribution as described in
Internal Revenue Code Sections 402(a)(5),
403(a)(4) or 408(d)(3).
c. [ ] No Employee shall make Rollover Contributions
to the Plan.
10. DISTRIBUTIONS:
a. DISTRIBUTIONS UPON SEPARATION FROM SERVICE:
The Normal Form of Benefit under the Plan shall be a
single lump sum distribution, made [X] (if selected)
as soon as administratively practical after receipt
of a distribution request from a Participant entitled
to a distribution or [ ] (if selected) upon the
Participant's attainment of the Plan's Early
Retirement Date or the Plan's Normal Retirement Date,
whichever is earlier.
In addition to the Normal Form of Benefit, the
Participant shall be entitled to select from among
the following optional forms of benefit specified by
the employer (select as many as apply):
i [ ] Installment payments
ii [ ] Such other forms as may be specified
below:
b. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE
APPROPRIATE)
i [X] There shall be no in-service
distribution of Participant account
balances derived from Employer
Profit Sharing Contributions.
ii [ ] Participants may request an
in-service distribution of their
account balance attributable to
Employer Profit Sharing
Contributions, for the following
reasons:
(a) [ ] For purposes of
satisfying a financial
hardship, as determined in
accordance with the uniform
nondiscriminatory policy of
the Committee;
(b) [ ] Attainment of age 59 1/2 by
the Participant; or
(c) [ ] Attainment of the
Plan's Normal Retirement Date
by the Participant.
11. FORFEITURES:
a. Forfeitures of amounts attributable to Employer
Profit Sharing Contributions shall be reallocated as
of:
PAGE 13
<PAGE> 14
i [X] the last day of the Plan Year in
which the Forfeiture occurred.
ii [ ] the last day of the Plan Year
following the Plan Year in which the
Forfeiture occurred.
iii [ ] the last day of the Plan Year in
which the Participant suffering the
Forfeiture has incurred five
consecutive One Year Breaks in
Service.
b. Forfeitures of Employer Profit Sharing Contributions
shall be reallocated as follows:
i [ ] Not applicable as Employer Profit
Sharing Contributions are always
100% vested and nonforfeitable.
ii [ ] Used first to pay the expenses of
administering the Plan, and then
allocated pursuant to one of the
following two options (15):
iii [ ] Forfeitures shall be allocated to
Participant's accounts in the same
manner as Employer Profit Sharing
Contributions, Employer Matching
Contributions, Qualified Nonelective
Contributions or Qualified Matching
Contributions, in the discretion of
the Employer, for the year in which
the Forfeiture arose.
iv [X] Forfeitures shall be applied to
reduce the Employer Profit Sharing
Contributions, Employer Matching
Contributions, Qualified Nonelective
Contributions or Qualified Matching
Contributions, in the discretion of
the Employer, for the Plan Year
following the Plan Year in which the
Forfeiture arose.
12. LIMITATIONS ON ALLOCATIONS:
If the Employer maintains or ever maintained another qualified
retirement plan in which any Participant in this Plan is (or
was) a participant, or could possibly become a participant,
the Employer must complete the following:
a. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer
other than a Master or Prototype Plan:
i [ ] The provisions of this Plan shall
apply as if the other plan were a
Master or Prototype plan; or,
ii [ ] The following provisions will be
effective to limit the total Annual
Additions to the Maximum Permissible
Amount, and will properly reduce any
Excess Amounts, in a manner that
precludes Employer discretion:
__________________________________
15 If this option is selected, iii or iv must be selected to reallocate
Forfeitures of Employer Profit Sharing Contributions remaining after
expenses of administering the Plan have been paid.
PAGE 14
<PAGE> 15
-----
b. If the Participant is or ever has been a participant
in a qualified defined benefit plan maintained by the
Employer, the following provisions will be effective
to satisfy the 1.0 limitation of Internal Revenue
Code Section 415(e), in a manner that precludes
Employer discretion:
-----
13. INTERNAL REVENUE CODE Section 411(D)(6) PROTECTED BENEFITS:
[X] If selected, the Plan has Internal Revenue Code
Section 411(d)(6) Protected Benefits from a prior
plan that this Plan amends, that must be protected.
14. TOP-HEAVY PLAN PROVISIONS:
For each Plan Year in which the Plan is a Top-Heavy Plan the
following provisions will apply:
a. The percentage of a Participant's Employer
Contribution Account to be vested in him upon
termination of employment prior to retirement shall
be:
i [X] a percentage determined in
accordance with the following schedule:
YEARS OF SERVICE PERCENTAGE
---------------- ----------
Less than two 0
Two but less than three 20
Three but less than four 40
Four but less than five 60
Five but less than six 80
Six or more 100;
ii [ ] 100% vesting after _____ (not to
exceed 3) Years of Service;
provided, however, that Years of
Service may not exceed two (2) if
the service requirement for
eligibility exceeds 1 year; or
iii [ ] computed in accordance with the
vesting schedule selected by the
Employer in Items B(7)(a) or
C(4)(d), as long as the benefits
under the vesting schedule in Items
B(7)(a) or C(4)(d) vest at least as
rapidly as the two options specified
in this Item B(14)(a), above.
If the vesting schedule under the Plan shifts in or
out of the schedules above for any Plan Year because
of the Plan's Top-Heavy status, such shift is an
amendment to the vesting schedule and the election in
Section 2.2 of the Basic Plan Document applies.
PAGE 15
<PAGE> 16
b. For purposes of minimum Top-Heavy allocations,
contributions and forfeitures equal to 3% (not
less than 3%) of each Non-key Employee's Compensation
will be allocated to each Participant's Contribution
Account when the Plan is a Top-Heavy Plan, except as
otherwise provided in the Basic Plan Document. This
Item 14 will not apply to any Participant to the
extent the Participant is covered under any other
plan or plans of the Employer and the Employer
completes the following: (Insert the name of the
plan or plans which will meet the minimum
allocation or benefit requirement applicable to
Top-Heavy plans.)
------
c. The Valuation Date as of which account balances or
accrued benefits are valued for purposes of computing
the Top-Heavy Ratio shall be the last day of each
Plan Year.
d. If the Employer maintains or has ever maintained one
or more defined benefit plans which have covered or
could cover a Participant in this Plan, complete the
following:
Present Value: For purposes of establishing Present
Value to compute the Top-Heavy Ratio, any benefit
shall be discounted only for mortality and interest
based on the following:
Interest rate _____ % Mortality table ______
15. INVESTMENTS:
a. Investments made pursuant to the investment direction
provisions of the Basic Plan Document shall be made
into any appropriate Investment Fund as selected by
the Employer. In addition, investment of Plan assets
is expressly authorized, as required by Revenue
Ruling 81-100, in each of the following common or
collective funds sponsored by the Trustee, or an
affiliate of the Trustee (16):
SOCIETY NATIONAL BANK EB MANAGED GUARANTEED
INCOME CONTRACT FUND, THE SOCIETY NATIONAL BANK
MULTIPLE INVESTMENT TRUST FOR EMPLOYEE BENEFIT
TRUSTS, AND OTHER COLLECTIVE TRUSTS EXEMPT FROM
TAX UNDER IRC Section 501 AND AS DESCRIBED IN
REV. RUL. 81-100.
b. [X] If selected, an Employer Stock Fund shall be
available as an Investment Fund pursuant to
the terms of the Basic Plan Document.
[ ] If selected, and an Employer Stock Fund
is available as an Investment Fund,
Participants will have the right,
notwithstanding any other provisions
of the Plan, to direct
__________________________________
(16)This Item is for use in identifying collective trust funds, which, pursuant
to Revenue Ruling 81-100 must be specifically referenced in the Plan.
Actual Investment Funds are referenced on the Investment Fund Designation
form attached to this Adoption Agreement.
PAGE 16
<PAGE> 17
that a portion of the Plan
assets held for their benefit and
invested in the Employer Stock Fund
be diversified pursuant to the
provisions of Section 10.7(F) of the
Basic Plan Document.
c. Participants may make changes of existing account
balances and future contributions from among the
Investment Funds offered:
i [X] Once during each business day that the
Trustee and the New York Stock Exchange are
open.
ii [ ] Once during each calendar month.
iii [ ] Once during each quarter of the Plan Year.
iv [ ] Once during each rolling ___ day period.
d. [ ] If selected, the Participant
shall be restricted in making changes of
existing account balances from any Investment
Fund, as specified in the terms or conditions
of such Investment Fund, and the Employer
shall attach an addendum specifying such
restriction.
e. The Participant will designate into which Investment
Funds all contributions to their accounts are made,
EXCEPT the following:
i [ ] Employer Profit Sharing Contributions
ii [ ] Employer Mandatory Matching Contributions
iii [ ] Employer Discretionary Matching
Contributions
iv [ ] Qualified Matching Contributions
v [ ] Qualified Nonelective Contributions
f. [ ] If selected, and to the
extent a selection is made above, the
Employer shall attach an Investment Direction
Addendum specifying how the contributions so
specified shall be invested among the
Investment Fund.
g. [ ] If selected, the Participant
shall be restricted in the use of the
Employer Stock Fund as an Investment Fund for
designating the investment of contributions
in the Participant's account, as follows:
i [ ] The Participant may not
direct the investment of Plan
assets held in their account
into the Employer Stock Fund.
ii [ ] The Participant may direct
____ % of the following
contributions into the
Employer Stock Fund:
PAGE 17
<PAGE> 18
(a) [ ] Employer Profit Sharing Contributions
(b) [ ] Employer Mandatory Matching Contributions
(c) [ ] Employer Discretionary Matching Contributions
(d) [ ] Qualified Matching Contributions
(e) [ ] Qualified Nonelective Contributions
iii [ ] ___ % of the following contributions will be
invested into the Employer Stock Fund, with the
balance invested among:
(a) [ ] the other Investment Funds,
including the Employer Stock
Fund
(b) [ ] the other Investment Funds, NOT
including the Employer Stock
Fund
16. LOANS (SELECT ONE):
a. [X] Loans may be made from the Plan in accordance with the
Basic Plan Document and such policies and procedures as
the Committee may adopt and apply on a consistent and
nondiscriminatory basis (17).
b. [ ] No loans shall be made from the Plan.
17. TRUSTEE:
The Trustee of this Plan shall be Key Trust Company of
Indiana, N.A. (a bank or trust company affiliated with KeyCorp
within the meaning of Internal Revenue Code Section 1504).
18. EFFECTIVE DATE ADDENDUM:
[ ] If selected, the following provisions shall have the
specified effective dates (which are different from
the date specified in Item B(1)):
______
__________________________________
(17) If this option is selected, the Employer must establish appropriate
procedures for implementation of the Plan's loan program.
PAGE 18
<PAGE> 19
c. Section 401(K) PLAN PROVISIONS:
1. SERVICE:
An Eligible Employee shall be required to fulfill the
following eligibility service requirements in order to
participate in the Plan through a salary reduction agreement
and for purposes of receiving an allocation of Employer
Matching Contributions:
a. [ ] The Employee must complete ____ Month of
Service (not more than 1 year) to be a
Participant for purposes of receiving
allocations of Employer Matching
Contributions.
b. [X] The Employee must complete 1 Year of
Service (not more than 1 year) to be a
Participant for purposes of entering
into a Salary Reduction Agreement and having
Employee Before Tax Contributions or Employee
After Tax Contributions contributed to the
Plan on the Employee's behalf.
2. EMPLOYEE SALARY DEFERRALS:
a. [X] Participants shall be entitled to enter into
a Salary Reduction Agreement providing for
Before Tax Contributions to be made to the
Plan.
i The minimum Before Tax Contribution shall
be 1% of the Participant's Compensation.
ii The maximum Before Tax Contribution shall
be 13% of the Participant's Compensation.
b. [ ] Participants shall be entitled to enter into
a Salary Reduction Agreement providing for
After Tax Contributions to be made to the
Plan.
i The minimum After Tax Contribution shall
be % of the Participant's Compensation.
ii The maximum After Tax Contribution shall
be % of the Participant's Compensation.
iii [ ] If selected, notwithstanding the
above, a Participant shall not be
able to enter into a Salary Reduction
Agreement providing for After Tax
Contributions to be made to the Plan
unless the Participant has entered
into a Salary Reduction Agreement
that provides for Before Tax
Contributions to be made to the Plan
in an amount
PAGE 19
<PAGE> 20
of at least ____ % of the
Participant's Compensation.
c. [ ] If selected, a Participant shall be entitled
to enter into a Salary Reduction Agreement
providing that any extraordinary item of
compensation, not yet payable (including
bonuses), be withheld from the Participant's
Compensation and contributed to the Plan as
either a Before Tax Contribution, or After
Tax Contribution (provided such contributions
are authorized above, and to the extent that
such contribution, when aggregated with
either the Participants other Before Tax
Contributions or After Tax Contributions do
not exceed the limitations specified above,
on an annual basis).
3. CONTRIBUTION CHANGES:
a. Participants may increase or decrease the amount of
contributions made to the Plan pursuant to a Salary
Reduction Agreement once each:
i [ ] Plan Year
ii [ ] Semi-annual period, based on the Plan Year
iii [X] Quarter, based on the Plan Year
iv [ ] Month
v [ ] Other, as specified below (provided that it
is at least once per year):
____
b. Claims for returns of Excess Before Tax Contributions
for the Participant's preceding taxable year must be
made in writing, and submitted to the Committee by
March 1 (specify a date between March 1 and
April 15). (18)
4. EMPLOYER MATCHING CONTRIBUTIONS (19):
a. MANDATORY MATCHING CONTRIBUTIONS:
The Employer shall make contributions to the Plan, in
an amount as specified below:
i [ ] An amount, equal to _____ % of each
Participant's Before Tax Contributions,
however, no match shall be made on
__________________________________
18 The date specified is for the refund of amount deferred in excess of
the Code Section 402(g) limit (the $7,000 limit) for the Participant's
taxable year.
19 The Employer shall have the right to designate all, or any portion of
Employer Matching Contributions as Qualified Matching Contributions, which
shall then be subject to the same vesting, distribution, and withdrawal
restrictions as Before Tax Contributions.
PAGE 20
<PAGE> 21
Participant's Before Tax Contributions in excess
of ____ % (or $____) of the Participant's
Compensation.
ii [ ] An amount, equal to ____ % of each Participant's
After Tax Contributions, but not to exceed ___ %
of the Participant's Compensation, or $ ____.
iii [ ] An amount, equal to ____ % of each Participant's
contributions made pursuant to a Salary Reduction
Agreement (including both Before Tax
Contributions and After Tax Contributions), but
only if the Participant has entered into a Salary
Reduction Agreement providing for Before Tax
Contributions of at least ____ % of the
Participant's Compensation, but not to exceed
_____ % of the Participant's Compensation,
or $ ____.
iv [ ] An amount equal to the sum of the following:
(a) ____ % of the first ___ % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement; plus,
(b) ____ % of the next ____ % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement; plus,
(c) ____ % of the next ____ % of the Participant's
Compensation deferred pursuant to a Salary
Reduction Agreement, but not to exceed
____ % of the Participant's Compensation,
or $ ____.
v [ ] An amount equal to $ ____, for each
Participant who enters into a Salary Reduction
Agreement providing for [ ] Before Tax
Contributions, [ ] After Tax Contributions, or
[ ] either Before Tax Contributions or After Tax
Contributions (or a combination of both) equal to
or exceeding ____ % of the Participant's
Compensation. Such contributions shall be made
and allocated:
(a) [ ] only during the first Plan Year the
Plan is in effect, or if a restatement,
for the first Plan Year beginning with,
or containing the restatement Effective
Date.
(b) [ ] each Plan Year that a Participant has
in force a Salary Reduction Agreement
meeting the criteria specified above.
(c) [ ] during the first Plan Year that the
Participant participates through a
Salary Reduction Agreement meeting the
criteria specified above.
PAGE 21
<PAGE> 22
b. DISCRETIONARY MATCHING CONTRIBUTIONS:
[ ] The Employer shall make contributions to the
Plan, in an amount determined by resolution of
the Board of Directors on an annual basis. The
Board resolution shall provide for the percentage
and/or amount of Before Tax Contributions and/or
After Tax Contributions to be matched and the
maximum percentage and/or amount of Before Tax
Contributions and/or After Tax Contributions
eligible for matching.
c. ALLOCATION OF MATCHING CONTRIBUTIONS:
Employer Matching Contributions shall be allocated
pursuant to the terms of the Basic Plan Document,
notwithstanding the foregoing:
i [ ] A Participant who terminates before the
end of the period for which contributions
are allocated shall share in the allocation
of Employer Matching Contributions if
termination of employment was the result of
(select all that apply):
(a) [ ] retirement
(b) [ ] disability
(c) [ ] death
(d) [ ] other, as specified below:
____
ii [ ] Employer Matching Contributions shall
be allocated to the accounts of Participants
(select one):
(a) [ ] as of each pay period for which
a contribution was made pursuant to
a Salary Reduction Agreement.
(b) [ ] semi-monthly.
(c) [ ] as of the last day of the month
preceding the month in which the
contribution was made.
(d) [ ] as of the last day of the Plan
quarter preceding the quarter in
which the contribution was made.
(e) [ ] as of the last day of the Plan year.
PAGE 22
<PAGE> 23
iii [ ] If selected, the Employer may make
Employer Matching Contributions without
regard to current or accumulated Net Profits
of the Employer for the taxable year ending
with, or within the Plan Year (20).
d. The percentage of a Participant's Employer Matching
Contribution Account (21) (attributable to Employer
Matching Contributions) to be vested in him or her
upon termination of employment prior to attainment of
the Plan's Normal Retirement Date shall be (22):
COMPLETED YEARS OF SERVICE
1 2 3 4 5 6 7
-------------------------------------------------------
i [ ] 100%
------ ------
ii [ ] 100%
------ ------ ------
iii [ ] 20% 40% 60% 80% 100%
------ ------ ------ ------ ------ ------
iv [ ] 20% 40% 60% 80% 100%
------ ------ ------ ------ ------ ------ ------
v [ ] 10% 20% 30% 40% 60% 80% 100%
------ ------ ------ ------ ------ ------ ------
vi [ ] 100%
------ ------ ------ ------ ------
vii [ ] 100%
------ ------ ------ ------ ------ ------ ------
vii [ ] Full and immediate vesting upon entry into the Plan
Notwithstanding anything to the contrary in the Plan, the amount
inserted in the blanks above shall not exceed the limits specified in Code
Section 411(a)(2).
e. Notwithstanding the provisions of this Item C(4)(e)
of the Adoption Agreement, a Participant shall become
fully vested in his Participant's Employer Matching
Contribution Account if (23):
i [ ] the Participant's job is eliminated
without the Participant being offered a
comparable position elsewhere with the
Employer.
ii [ ] for such reason as is described below:
____
__________________________________
20 Net Profits will never be required for the contribution of Before Tax
Contributions, After Tax Contributions, Qualified Nonelective Contributions
or Qualified Matching Contributions.
21 Notwithstanding anything in the Adoption Agreement to the contrary, amounts
in a Participant's account attributable to Before Tax Contributions,
Qualified Nonelective Contributions, and Qualified Matching Contributions
shall be 100% vested and nonforfeitable at all time.
22 Notwithstanding the selection made in this Item B(7)(b), a Participant
shall be fully vested in his or her Employer Contribution Accounts if the
Participant dies or becomes Disabled while in the employ of the Employer.
23 The provisions of this section will be administered by the Employer on a
consistent and nondiscriminatory basis.
PAGE 23
<PAGE> 24
f. CORRECTIVE CONTRIBUTIONS:
i [ ] If selected, the Employer shall be
authorized to make Qualified Matching
Contributions, subject to the terms of the
Basic Plan Document, in an amount determined
by resolution of the Board of Directors on
an annual basis.
ii [X] If selected, the Employer shall be
authorized to make Qualified Nonelective
Contributions, subject to the terms of the
Basic Plan Document, in an amount determined
by resolution of the Board of Directors on
an annual basis.
5. GAP EARNINGS:
[ ] If selected, Gap Earnings, as defined in
Section 3.2(G)(1) of the Basic Plan Document, will be
calculated for Excess Elective Deferrals, Excess
Contributions and Excess Aggregate Contributions, and
refunded to the Participant as provided for in
Article III of the Basic Plan Document.
6. FORFEITURES:
a. Forfeitures of amounts attributable to Employer
Matching Contributions shall be reallocated as of:
i [ ] the last day of the Plan Year in which
the Forfeiture occurred.
ii [ ] the last day of the Plan Year following
the Plan Year in which the Forfeiture
occurred.
iii [ ] the last day of the Plan Year in which
the Participant suffering the Forfeiture has
incurred the fifth consecutive One Year
Break in Service.
b. Forfeitures of Employer Matching Contributions shall be
reallocated as follows:
i [ ] Not applicable as Employer Matching
Contributions are always 100% vested and
nonforfeitable.
ii [ ] Used first to pay the expenses of
administering the Plan, and then allocated
pursuant to one of the following two
options:
iii [ ] Forfeitures shall be allocated to
Participant's accounts in the same manner as
Employer Profit Sharing Contributions,
Employer Matching Contributions, Qualified
Nonelective Contributions or Qualified
Matching Contributions, in the discretion of
the Employer, for the year in which the
Forfeiture arose.
PAGE 24
<PAGE> 25
iv [ ] Forfeitures shall be applied to reduce
the Employer Profit Sharing Contributions,
Employer Matching Contributions, Qualified
Nonelective Contributions or Qualified
Matching Contributions, in the discretion of
the Employer, for the Plan Year following
the Plan Year in which the Forfeiture arose.
c. Forfeitures of Excess Aggregate Contributions shall be:
i [ ] Applied to reduce Employer contributions for
the Plan Year in which the excess arose, but
allocated as below, to the extent the excess
exceeds Employer contributions for the Plan
Year, or the Employer has already
contributed for such Plan Year.
ii [ ] Allocated after all other forfeitures
under the Plan:
(a) [ ] to the Matching
Contribution account of each
Non-highly Compensated
Participant who made Before
Tax Contributions or After
Tax Contributions in the
ratio which each such
Participant's Compensation
for the Plan Year bears to
the total Compensation of all
such Participants for the
Plan Year; or,
(b) [ ] to the Matching
Contribution account of each
Non-highly Compensated
Eligible Participant in the
ratio which each Eligible
Participant's Compensation
for the Plan Year bears to
the total Compensation of all
Eligible Participants for the
Plan Year.
7. IN-SERVICE DISTRIBUTIONS (SELECT AS MAY BE APPROPRIATE):
a. [ ] There shall be no in-service
distribution of Participant account balances
derived from Before Tax Contributions
(including Qualified Nonelective
Contributions and Qualified Matching
Contributions treated as Before Tax
Contributions under the terms of the Basic
Plan Document), or Employer Matching
Contributions.
b. [ ] Participants may request an in-service
distribution of their account balance
attributable to Employer Matching
Contributions, for the following reasons:
PAGE 25
<PAGE> 26
i [ ] For purposes of satisfying a
financial hardship, as determined
in accordance with the uniform
nondiscriminatory policy of the
Committee;
ii [ ] Attainment of age 59 1/2 by the
Participant; or
iii [ ] Attainment of the Plan's Normal
Retirement Date by the
Participant.
c. [ ] Participants may request an in-service
distribution of their account balance
attributable to Employee Before Tax
Contributions, for the following reasons:
i [ ] For purposes of satisfying a
financial hardship, as determined
by the facts and circumstances of
an Employee's situation, in
accordance with the provisions of
Section 3.9 of the Basic Plan
Document;
ii [ ] For purposes of satisfying a
financial hardship, using the
"safe harbor" provisions of
Section 3.9 of the Basic Plan
Document.
iii [ ] Attainment of age 59 1/2 by the
Participant; or
iv [ ] Attainment of the Plan's Normal
Retirement Date by the
Participant.
PAGE 26
<PAGE> 27
NOTICE: The adopting Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that the Plan is
qualified under the provisions of Section 401 of the Internal Revenue Code. In
order to obtain reliance with respect to the Plan's qualification, the Employer
must apply to the Key District Office of the Internal Revenue Service for a
determination letter.
This Adoption Agreement may only be used in conjunction with Basic Plan
Document # 05.
This Plan document may only be used under the express authority of KeyCorp, its
subsidiaries and affiliates, and is not effective as completed until executed
by a duly authorized officer of KeyCorp, one of its subsidiaries or affiliates,
and approved by KeyCorp's counsel.
KeyCorp, as sponsor, may amend or discontinue this prototype plan document upon
proper notification to all adopting Employers pursuant to Revenue Ruling 89-13.
Failure to properly fill out an Adoption Agreement may result in
disqualification of the Plan, and adverse tax consequences to the Employer and
Plan Participants.
This Plan is sponsored by:
KeyCorp, on behalf of its operating subsidiaries, banking and
trust company affiliates
127 Public Square
Cleveland, Ohio 44114
(800) 982-3811
PAGE 27
<PAGE> 28
IN WITNESS WHEREOF, the Employer and the Trustee, by their respective duly
authorized officers, have caused this Adoption Agreement to be executed on this
30th day of Nov., 1995.
- ---- ----- --
EMPLOYER:
----
By: /s/ Michael D. McCormick
--------------------------------------------
Title: Exec. V.P. & General Counsel
-------------------------------------------------
TRUSTEE:
----
By: /s/ April M. Czenkusch
--------------------------------------------
Title: Vice President
-------------------------------------------------
and
By: /s/ Thomas M. Getty
--------------------------------------------
Title: Trust Officer
-------------------------------------------------
APPROVED ON BEHALF OF TRUSTEE:
Initials: Date:
-------- ----------
PAGE 28
<PAGE> 29
INVESTMENT FUND DESIGNATION
Michael D. McCormick (the "Named Fiduciary"), as an
independent fiduciary with respect to the Profit Sharing Plan
of Bindley Wester Industries, Inc. & Subsidiaries (the "Plan"), an employee
pension benefit plan covered by the applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and its employees
who participate therein (the "Participants"), hereby designates the following
investment funds from among the investment fund options available for adopting
employers of the PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST (as defined in
Section 10.7 of the Plan), available for selection by Participants for the
investment of Plan assets held for their benefit:
(a) Victory U.S. Government Obligations Fund
(b) Victory Investment Quality Bond Fund
(c) Victory Balanced Fund
(d) American Washington Mutual Investors Fund
(e) Victory Special Value Fund
(f) American EuroPacific Growth Fund
(g) -----
(h) -----
[X] In addition, if selected, an Employer Stock Fund will also
be available.
In making the selection of Investment Funds, the Named Fiduciary hereby
confirms and acknowledges that:
- The Named Fiduciary has had made available to it copies of the
prospectuses (to the extent required under applicable federal
securities law and regulation) for each investment fund available
for selection by adopting employers of the PRISM(R) PROTOTYPE
RETIREMENT PLAN & TRUST, and has received copies of each such
prospectus for the Investment Funds selected;
- The Named Fiduciary acknowledges that the Trustee of the Plan
may receive certain fees for services provide to, or on behalf of
an Investment Fund, or the sponsors or distributors thereof,
pursuant to plans of distribution adopted by the fund under the
provisions of Rule 12b-1 of the Investment Company Act of 1940,
and further acknowledges that (i) such fee, if paid, is
appropriate for services rendered to the fund, and when
aggregated with other fees for service payable to the Trustee
constitutes reasonable compensation for the Trustee's services to
the Plan; and (ii) the Plan will be able to redeem its interest
in any such Investment Fund on reasonably short notice without
penalty;
- The Named Fiduciary further acknowledges that it has selected
the Investment Funds on its determination, after due inquiry,
that the Investment Funds are appropriate vehicles for the
investment of Plan assets pursuant to the terms of the Plan,
considering all relevant facts and circumstances, including but
not limited to (i) the investment policy and philosophy of the
Named Fiduciary developed pursuant to ERISA Section 404; (ii)
the ability of Participants, using an appropriate mix of
Investment Funds, to diversify the
PAGE 29
<PAGE> 30
investment of Plan assets held for their benefit; and, (iii)
the ability of Participants to, utilizing an appropriate mix of
Investment Funds, to structure an investment portfolio within
their account in the Plan with risk and return characteristics
within the normal range of risk and return characteristics for
individuals with similar investment backgrounds, experience and
expectations; and,
- The Named Fiduciary acknowledges that it has not relied on any
representations or recommendations from the Trustee or any of its
employees in selecting the Investment Funds.
The Trustee agrees to follow the Named Fiduciary's direction with respect to
offering the Investment Funds available for selection by the Participants in
the Plan for the investment of Plan assets held for their benefit:
IN WITNESS WHEREOF, the Employer, by its duly authorized representative,
has executed this document in connection with adoption of the Plan utilizing
the PRISM(R) PROTOTYPE RETIREMENT PLAN & TRUST documents, as provided by the
Trustee.
NAMED FIDUCIARY:
-----
By: /s/ Michael D. McCormick
---------------------------------
Title: Exec. V.P. & General Counsel
------------------------------
Seen and accepted by the Trustee, who shall provide the Investment Funds
selected by the Employer pursuant to the terms of this document, and pursuant
to the Plan.
TRUSTEE:
-----
By: /s/ April M. Czenkusch
---------------------------
Title: Vice President
------------------------
PAGE 30
<PAGE> 1
EXHIBIT 10-Z (iv)
(a) For ELIGIBILITY purposes, the first Year of Service shall
be computed using the 12 month period commencing on the
Employee's date of hire and ending on the first annual
anniversary of the Employee's date of hire (the "Initial
Computation Period"). In the event an employee does not complete
an eligibility Year of Service during this initial computation
period, the computation period shall be (select only one):
(1) [ ] the period commencing on each annual anniversary of the
Employee's date of hire and ending on the next annual
anniversary of the Employee's date of hire.
(2) [X] the Plan Year, commencing with the Plan Year in
which the Initial Computation Period ends.
(b) For VESTING purposes, Years of Service shall be computed on the
basis of:
(1) [ ] the period commencing on each annual
anniversary of the Employee's date of hire and ending
on the next annual anniversary of the Employee's date
of hire.
(2) [ ] the Plan Year, commencing with the first Plan
Year an Employee completes an Hour of Service.
(c) For ALLOCATION accrual purposes, Year of Service shall be
computed on the basis of the Plan Year.
v [X] For ELIGIBILITY purposes, Years of Service with the
following Predecessor Employers shall count in fulfilling the
eligibility requirements for this Plan:
Kendall Drug Company; 3-C Medical, Inc,; IV-I, Inc;
IV-One Services, Inc,; National Pharmacy Providers, Inc,;
National Infusion Services, Inc.
vi [ ] For VESTING purposes, Years of Service with the
following Predecessor Employers shall count for purposes of
determining the nonforfeitable amount of a Participant's
account:
-----
5. COVERAGE:
This Plan is extended by the Employer to the following Employees who
have met the eligibility requirements (select as many as appropriate):
Page 6
<PAGE> 1
EXHIBIT 10-AA (iii)
FIRST AMENDMENT TO
BINDLEY WESTERN INDUSTRIES, INC.
401(k) EXCESS PLAN
This First Amendment to Bindley Western Industries, Inc. 401(k) Excess
Plan is adopted by Bindley Western Industries, Inc. ("Company").
Background
A. Effective December 9, 1994, the Company established the Bindley
Western Industries, Inc. 401(k) Excess Plan ("Plan").
B. The Company now wishes to amend the Plan.
Amendment
Therefore, the following amendment is adopted effective January 1,
1996:
1. Subsection 2.01(g) is amended to read as follows:
(g) "Compensation" means, with respect to a Participant for a
Plan Year, the Participant's salary and bonus for the Plan Year,
reduced by any salary reductions made by the Participant under a Code
Section 125 cafeteria plan for the Plan Year.
2. Subsection 3.2(a) is amended to read as follows:
(a) Election Procedure. Within a reasonable time before the
beginning of each Plan Year, the Committee shall provide each Eligible
Employee with a Deferral Agreement. An Eligible Employee may become a
Participant in the Plan by delivering a completed Deferral Agreement
to the Committee prior to the first day of the Plan Year. On the
Deferral Agreement, the Eligible Employee shall indicate the amount or
percentage of his Compensation to be deferred to the Plan for the Plan
Year, subject to the provisions of Subsections (b) and (c). On Deferral
Agreements for Plan Years beginning after December 31, 1995, the
Eligible Employee also shall indicate whether to contribute to the
Profit Sharing Plan that portion of his Compensation deferred pursuant
to the preceding sentence that he can contribute to the Profit Sharing
Plan for the Plan Year without exceeding the limitations of Code
Subsection 402(g) and Paragraph 401(k)(3) for the Plan Year. Subject
to Subsection (d), an election made under this Section shall be
effective as of the first day of the Plan Year, and subject to
Subsection (e), the election for any Plan Year shall be irrevocable.
3. Section 4.1 is amended to read as follows:
Section 4.1. Establishment of Accounts. The Committee shall
create and maintain adequate records to disclose the interest in the
Plan of
<PAGE> 2
each Participant and Beneficiary. Records shall be in the form of individual
bookkeeping accounts, which shall be credited with deferrals pursuant to
Section 3.2 and earnings and losses pursuant to Section 4.2, and debited
with any contributions to the Profit Sharing Plan pursuant to Section 4.4 and
any payments pursuant to Article V. Each Participant shall have a separate
Deferral Account. The Participant's interest in his Deferral Account shall be
fully vested at all times.
4. Section 4.5 is amended to read as follows:
Section 4.5. Valuation of Deferral Accounts. The Value
of a Participant's Deferral Account as of any date shall equal the
dollar amount of any deferrals credited to the Deferral Account pursuant to
Section 3.2, increased or decreased by the earnings and losses deemed to be
credited to the Deferral Account in accordance with Section 4.2, and decreased
by the amount of any contributions made or to be made from the Deferral Account
to the Profit Sharing Plan pursuant to Section 4.4 and any payments made from
the Deferral Account to the Participant or his Beneficiary pursuant to Article
V. In the event that a Participant dies before his Deferral Account has been
distributed, the value of the Participant's Deferral Account shall be adjusted
in accordance with Section 5.7.
5. A new Section 4.7 is added to read as follows:
Section 4.7. Determination and Treatment of Amounts
Contributable to Profit Sharing Plan. As soon as possible for each Plan Year,
the Committee shall determine the amount that each Eligible Employee electing
deferrals pursuant to Section 3.2 can contribute to the Profit Sharing Plan
for the same Plan Year without exceeding the limitaions of Code Subsection
402(g) and Paragraph 401(k)(3) for the Plan Year. If an Eligible Employee
elected to contribute to the Profit Sharing Plan that portion of his deferrals
that did not exceed the determined amount, that portion shall be transferred
directly to the Profit Sharing Plan no later than March 15 of the following
Plan Year. Alternatively, if the Eligible Employee elected to receive a lump
sum distribution of that portion of his deferrals that did not exceed the
determined amount, that portion shall be distributed to him no later than March
15 of the following Plan Year. The earnings and losses credited to the
transferred or distributed portion pursuant to Section 4.3 shall remain in the
Eligible Employee's Deferral Account until distributed pursuant to Article V.
6. Section 5.6 is amended to read as follows:
Section 5.6. Distribution Upon Financial Emergency. A
Participant or Beneficiary, upon written petition to the Committee, may
withdraw some or all of the balance of the Participant's Deferral Account if
the
-2-
<PAGE> 3
Committee, in its sole discretion, determines that the requested
withdrawal is on account of an Unforeseeable Emergency and that the
amount to be withdrawn does not exceed the amount necessary to satisfy
the Unforeseeable Emergency. The balance of the Participant's
Deferral Account shall not include any amount that the Participant
elected to contribute to the Profit Sharing Plan pursuant to Section
3.2 but that has not yet been transferred to the Profit Sharing Plan
pursuant to Section 4.4. Withdrawals under this Section shall not be
permitted to the extent that the Unforeseeable Emergency may reasonably
be relieved through (a) reimbursement or compensation by insurance or
otherwise, (b) liquidation of the Participant's or Beneficiary's assets
(to the extent liquidation would not itself cause a financial
hardship), or (c) suspension or cessation of elective deferrals under
this Plan or the Profit Sharing Plan.
Bindley Western Industries, Inc. has caused this First Amendment to
Bindley Western Industries, Inc. 401(k) Excess Plan to be executed by its
authorized officer this 29 day of February, 1996.
BINDLEY WESTERN INDUSTRIES, INC.
ATTEST: By /s/ Michael D. McCormick
----------------------------------
(Signature)
/s/ Keith W. Burks Michael D. McCormick
- ----------------------------- ------------------------------------
(Signature) (Printed)
Executive Vice President
Keith W. Burks & General Counsel
- ----------------------------- ------------------------------------
(Printed) (Office)
Executive Vice President
- -----------------------------
(Office)
-3-
<PAGE> 1
EXHIBIT 10-BB
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is executed this 7th day of February,
1996, by and between NORTH MERIDIAN MEDICAL REALTY COMPANY, an Indiana
corporation ("Landlord"), with its principal office at 10610 N. Pennsylvania
Street, Carmel, Indiana 46032, and BINDLEY WESTERN INDUSTRIES, INC., an Indiana
corporation ("Tenant"), who, in consideration of the premises and the mutual
promises and covenants herein contained, agree as follows:
I. THE BUILDING AND THE REAL ESTATE.
The term "Building" whenever used herein shall mean the North Meridian
Medical Complex Building that is situated on certain land in Hamilton County,
State of Indiana, commonly known as 10610 N. Pennsylvania Street, Carmel,
Indiana 46032, said land being more particularly described as follows:
SEE LEGAL DESCRIPTION ATTACHED HERETO AS EXHIBIT A
(the Building and the land above described, together with all other facilities
and improvements now or hereafter on said land, hereinafter shall be known as
the "Real Estate").
II. LEASED PREMISES.
Landlord hereby lets and demises to Tenant, subject to and upon the
terms and provisions of this Lease, and Tenant hereby accepts and leases from
Landlord, (i) the premises outlined in red and designated with Tenant's name on
the site plan of the Building that is attached hereto, made a part hereof and
marked as Exhibit B said premises having a gross area of 4,810 square feet and
being hereinafter referred to as the "Premises", and (ii) Tenant's Pro Rata
Share of the Common Areas located within the Building (on a nonexclusive basis)
which, for purposes of this Lease, is the equivalent of an additional gross
area of 708 square feet (the "Additional Area"). Landlord retains, and Tenant
grants to Landlord, an irrevocable license for Landlord's and Landlord's other
tenants' employees, agents, customers and invitees to enter upon and pass
through the Premises in a mutually agreeable location or locations in order to
have access to and from the portion of the Building in the northeast quadrant
of the second floor designated as area number 7 on Exhibit B hereto (the
current tenant in such space is Infectious Disease of Indiana, P.S.C.).
III. COMMON AREAS.
Landlord grants unto Tenant, its invitees, customers, employees and
agents the non-exclusive right to use all areas, equipment and facilities
within the Building that are not designated for the exclusive use of any
tenant, together with the sidewalks, parking areas, landscaped areas and
private driveways within or on the Real Estate and all other areas and
improvements within or on the Real Estate that are provided by Landlord for the
general use in common of tenants and their invitees, customers, employees and
agents (all of which shall hereinafter be referred to as the "Common Areas.")
The Common Areas shall at all times be
<PAGE> 2
subject to the exclusive control and management of Landlord, and Tenant's use
of the Common Areas shall be subject to such reasonable rules and regulations
as Landlord may from time to time impose. Tenant agrees to abide by such rules
and regulations and use Tenant's best efforts to cause its employees, agents,
customers and invitees to conform thereto.
IV. TERM.
(A) Term. Unless sooner terminated under the terms and
provisions of Section XVII of this Lease, the term of this Lease shall
be five (5) years commencing on the 8th day of February, 1996 and
ending on the 7th day of February, 2001 (the "Term").
(B) Surrender and Holdover. Upon the expiration or sooner
termination of this Lease, Tenant shall surrender to Landlord the
Premises, together with all other property affixed to the Premises
(excepting trade fixtures), "broom clean" and in the same order and
condition in which Tenant received said Premises, ordinary wear and
tear excepted. Unless an event of default as hereinafter defined has
occurred and remains uncured, Tenant, prior to the expiration of the
Term shall remove all of Tenant's trade fixtures and personal property
from the Premises. Any damage to the Premises caused by such removal
shall be repaired by Tenant prior to the expiration of the Term. At
Landlord's option, if Tenant fails to remove such trade fixtures and
personal property, then the same shall be deemed Landlord's property.
If Tenant remains in possession of all or any part of the Premises
after the expiration of the Term, with the consent of the Landlord,
then Tenant shall be deemed to be occupying the Premises as a tenant
from month to month at the rent hereinafter specified (pro rated on a
monthly basis), subject to all conditions, provisions and obligations
of this Lease insofar as the same are applicable to month-to-month
tenancy. Landlord's acceptance of rent after the expiration of the
term shall not constitute a renewal or extension of this Lease, and
this provision shall not be deemed to waive Landlord's right of
re-entry or any other right or remedy hereunder or provided by law.
V. RENT.
(A) Minimum Rental. Tenant shall pay to Landlord without
prior demand therefor a minimum rental for the Premises and Additional
Area (hereinafter referred to as "Minimum Rental") of Four Hundred
Thirteen Thousand Eight Hundred Fifty Dollars ($413,850) during the
Term, payable in equal monthly installments of Six Thousand Eight
Hundred Ninety-Seven and 50/100 Dollars ($6897.50) each, in advance on
the first day of each calendar month of the Term.
(B) Additional Rental. In addition to the Minimum Rental,
Tenant shall pay to Landlord, with respect to each calendar year or
fractional calendar year during the Term, Tenant's Pro Rata Share of
Landlord's Real Property Taxes and Operating Expenses (as hereinafter
defined) as additional rental. The term "Real Property Taxes"
includes all ad valorem real property taxes and currently due
installments of assessments levied upon
2
<PAGE> 3
or with respect to the Real Estate and all taxes, levies and charges
which may be levied or imposed by any governmental authority in
replacement of, in lieu of, or in addition to ad valorem real property
taxes, in whole or in part, including, but not limited to, a state or
local option tax designed for property tax relief purposes, or a
license or franchise fee measured by rents received from the Building,
or otherwise measured or based upon Landlord's interest in the
Building. (The term "Real Property Taxes" does not include any income
tax.) The term "Operating Expenses" means all costs and expenses of
every kind and nature paid or incurred by Landlord (including
appropriate reserves) for the owning, operating, managing, equipping,
lighting, heating, cooling, repairing, replacing, cleaning, painting,
maintaining and insuring the Building and the Common Areas in
accordance with standards customary for first class office buildings
located in Indianapolis, Indiana, excluding only depreciation of the
cost of initial construction of the Building. As used in this Lease
the Tenant's "Pro Rata Share" means twenty-nine and 38/100 percent
(29.38%). Tenant's Pro Rata Share of Real Property Taxes and
Operating Expenses (hereinafter "Additional Rental") for each calendar
year or fractional calendar year during the Term shall be paid
promptly, without demand therefor, in estimated monthly installments
in advance on the first day of each calendar month of the Term, which
estimated monthly installments during the initial year of the Term
shall be Two Thousand Five Hundred Twenty-Nine and 08/100 Dollars
($2529.08) each. On or before the 7th day of February, 1997, and on
or before the 7th day of February of each subsequent year during the
Term, Landlord shall deliver to Tenant a written statement of the
estimated monthly installments of Additional Rental that Tenant shall
pay Landlord during the twelve month period beginning each February 8
during the Term. Not later than August 8, 1996 and February 8, 1997,
and each August and February thereafter during the Term, Landlord
shall furnish Tenant a statement in reasonable detail of the actual
Real Property Taxes and Operating Expenses paid or incurred by
Landlord in the preceding six (6) month period ending June 30 and
December 31 prepared in accordance with sound accounting principles
and practices. Should the Tenant's Pro Rata Share of the actual Real
Property Taxes and Operating Expenses paid or incurred by Landlord
during such six (6) month period exceed the Additional Rental that
Tenant is required to pay in monthly installments during such six (6)
month period, then Tenant shall pay the excess amount to Landlord
within thirty (30) days after Tenant receives such statement to the
end that Landlord shall receive the entire amount of Tenant's Pro Rata
Share of such Real Property Taxes and Operating Expenses. Should the
Additional Rental that Tenant has paid during such six (6) month
period exceed Tenant's Pro Rata Share of the actual Real Property
Taxes and Operating Expenses paid or incurred by Landlord during such
six (6) month period, then Landlord shall remit the excess amount to
Tenant within thirty (30) days after Tenant receives such statement.
(The dates of such statements and six (6) month periods may, at the
option of Landlord, be subject to change.)
3
<PAGE> 4
VI. USE AND OCCUPANCY.
The Premises may be used and occupied by Tenant for the purposes of
administrative offices of Tenant and/or its subsidiaries and for the operation
of a clinic providing infusion services, and for no other purpose or purposes
without Landlord's consent. Tenant shall not do or permit anything to be done
in or about the Premises, or bring or keep anything therein, which will in any
way increase the rate of fire insurance upon the Premises or the Building
wherein the Premises are situated. Tenant shall comply with all laws,
ordinances, orders and regulations affecting the Premises and the cleanliness,
safety, occupation and use thereof.
Tenant shall not cause or permit injury or waste to the Premises or
the Building or cause or permit a nuisance to exist, and shall keep the
Premises clean and free from rubbish and dirt at all times, and shall store all
trash and garbage within the Premises and arrange for the regular pickup of
such trash and garbage at Tenant's expense. Tenant shall not burn any trash or
garbage of any kind in or about the Premises or Building.
VII. ADDITIONAL SPACE.
Portions of the Building are currently leased to Roche Biomedical
Laboratories, Inc. ("Roche Biomedical") (831 square feet as its occupied space
plus 122 square feet as its pro rata share of the Common Areas), Roche
Professional Service Centers, Inc. ("Roche Professional") (2,756 square feet as
its occupied space plus 406 square feet as its pro rata share of the Common
Areas) and Northwest Radiologist, P.C. ("Northwest") (1,614 square feet as its
occupied space plus 238 square feet as its pro rata share of Common Areas)
(Roche Biomedical, Roche Professional and Northwest collectively being the
"Other Tenants"). The locations of the space currently occupied by each of the
Other Tenants in the Building is depicted on Exhibit C attached hereto.
Because Tenant needs additional space for its business purposes, Tenant hereby
agrees to lease the space occupied by Roche Professional (plus its pro rata
share of the Common Areas), and to take a first right of refusal on and lease,
if Tenant so elects, the space occuped by Roche Biomedical, (plus Roche
Biomedical's pro rata share of the Common Areas) and the space occupied by
Northwest (plus Northwest's pro rata share of the Common Areas) if such space
becomes vacant and available for rent to Tenant (which shall be determined in
Landlord's sole discretion) during the Term (i) for the remainder of the Term,
(ii) at the same per square foot rent as the Minimum Rent is for the Premises
and the Additional Area (which is $15 per square foot per year), and (iii) on
the other terms and conditions (including, without limitation, the payment of
Additional Rental with respect thereto) in this Lease. If Tenant receives
written notice from Landlord that Roche Biomedical's space or Northwest's space
is vacant and available to rent, Tenant shall have five (5) days after its
receipt of such notice to notify Landlord that Tenant has decided to lease the
Roche Biomedical space or the Northwest space, as the case may be. In the
event that Tenant does not notify Landlord as herein provided after receipt of
written notice from Landlord, Tenant shall have no further interest or rights
to the Roche Biomedical space or the Northwest space, as the case may be, and
Landlord shall have no further obligations to Tenant with respect to the Roche
Biomedical space or the Northwest space, as the case may be. Tenant's
agreement as stated in this Section VII shall be a standing offer that is
acceptable
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by Landlord in writing at any time prior to three (3) months before the end of
the Term with respect to the space in the Building currently occupied by either
of the Other Tenants. Upon the leasing of any such additional space by Tenant,
an appropriate and mutually acceptable amendment to this Lease (and an amended
or additional Memorandum of Lease for recording purposes) shall be prepared by
Landlord and executed by Landlord and Tenant to evidence the leasing of such
additional space by Tenant.
VIII. RIGHTS OF LANDLORD TO MORTGAGE LEASED PREMISES.
This Lease, and the rights of Tenant hereunder, shall be, and hereby
are, subject and subordinate to the lien or liens of any mortgage or mortgages,
now or at any time hereafter in force against the title of Landlord, or any
successor to Landlord, in and to the Real Estate, and to all advances made or
hereafter to be made upon the security thereof, including, but not limited to,
the mortgage of the Real Estate in favor of The American National Bank of
Vincennes dated February 28, 1994, and recorded in the Office of the Recorder,
Hamilton County, Indiana on March 9, 1994 as Instrument No. 9411353. Tenant
shall execute and deliver whatever instruments may be required to subordinate
this Lease to the lien or liens of any such mortgage or mortgages, and in the
event Tenant fails to do so within ten (10) days after demand in writing,
Tenant does hereby make, constitute and irrevocably appoint Landlord as its
attorney-in- fact, and in its name and stead, to execute such instruments.
If by reason of any default on the part of Landlord as mortgagor under
any mortgage or mortgages to which this Lease is subordinate, any such mortgage
is foreclosed by legal proceedings or extinguished by conveyance in lieu of
foreclosure or otherwise, Tenant, upon the election of the holder of any such
mortgage, but not otherwise, will attorn to and recognize such mortgage holder
and its successors and assigns, including any purchaser in foreclosure or a
grantee of a deed in lieu thereof, as Landlord under this Lease. Tenant shall
execute and deliver at any time, upon request of Landlord or any holder of a
mortgage to which this Lease is subordinate, an instrument to evidence such
attornment and containing the agreement of Tenant that no action taken to
enforce any such mortgage by reason of any default thereunder shall terminate
this Lease or invalidate or constitute a breach of any of the terms thereof.
This obligation on the part of Tenant to attorn is entirely independent of and
not contingent upon the foregoing subordination provisions of this Section
VIII.
The terms and provisions of this Lease may require approval by a
mortgagee. If any such mortgagee should require as a condition to Landlord's
financing, as may be determined necessary or desirable by Landlord, any
modification of the terms and provisions of this Lease, other than provisions
relating to rent or term, and the right to use and occupy the Premises for the
purposes described in Section VII, and if Tenant should refuse to approve and
execute any modifications so required, then Landlord shall have the right by
notice given to Tenant thirty (30) days in advance to cancel this Lease
without liability on the part of Landlord.
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IX. REPAIRS AND ALTERATIONS.
(A) Landlord's Responsibility. Landlord shall keep in good
order, condition and repair the Common Areas, exterior foundations,
exterior walls (except the interior faces thereof), downspouts,
gutters and roof of the Premises, and the plumbing and sewage system
outside of the Building of which the Premises form a part (but
excluding the exterior and interior of all windows, doors, plate
glass, show cases and store fronts), excluding any damage thereto
caused by Tenant, its agents or invitees. Tenant shall pay to
Landlord in the manner provided in Section V(B) of this Lease Tenant's
Pro Rata Share of costs incurred by Landlord under this Section X(A).
(B) Tenant's Responsibility. Tenant shall keep and maintain
the Premises and every part thereof, and the exterior and interior
portions of all doors, windows, plate glass, show cases and the store
front surrounding the Premises in good order, condition and repair,
including, without limitation, all plumbing, heating, air conditioning
and sewage facilities within the Premises, fixtures, interior walls,
floors, ceilings, signs and all interior building appliances and
similar equipment, except for reasonable use and ordinary wear and
tear.
(C) Alterations. Tenant shall have the right, with the
written consent of Landlord, to make alterations to the interior of
the Premises so long as the cost thereof is paid by Tenant and all
such work is done in a workmanlike manner and without damage to the
structural elements of the Premises and in conformance with the
regulations of fire insurance underwriters carrying insurance on the
Premises. Tenant agrees that upon expiration or termination of this
Lease it will, at its own expense, if Landlord shall so request,
restore the Premises to their former condition, ordinary wear and tear
and damage by the elements excepted.
(D) Signs and Awnings. Tenant shall not affix to or upon the
exterior of the Premises signs or awnings except with the prior
written consent of Landlord.
(E) Personal Property on Premises - Risk of Damage.
Notwithstanding anything expressed or implied to the contrary in this
Lease, Tenant agrees that all personal property of every kind or
description which may at any time be in the Premises shall be at
Tenant's sole risk, or at the risk of those claiming through or under
the Tenant, and Landlord shall not be liable for and shall be held
harmless by Tenant against claims for any damage to said property or
loss suffered by the business or property of the Tenant arising from
bursting, overflowing or leaking of water, sewer or steam pipes or
from the heating or plumbing fixtures, or from the electric wiring or
from gas or odors or caused in any manner.
(F) Trade Fixtures. All improvements to the Premises and all
fixtures shall be and become the property of the Landlord, except that
all machinery and equipment installed by the Tenant and all trade
fixtures, including cabinets, installed or used by the
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Tenant shall remain the personal property of the Tenant. Any damage
to the Premises caused by the installation or removal of trade
fixtures or personal property shall promptly be repaired by Tenant at
its expense.
(G) Liens. Tenant shall not cause or permit the creation of
any lien against the Premises or the Building on account of any labor
or materials furnished in connection with maintenance, repairs or
alterations undertaken by Tenant. In the event any such lien shall be
filed against the Premises or the Building, Tenant shall cause such
lien to be released within ten (10) days after actual notice of the
filing thereof or shall furnish to Landlord a bond, satisfactory to
Landlord, conditioned to indemnify Landlord against the foreclosure of
such lien.
(H) Inspection and Repair by Landlord. Landlord shall have
the right to enter at reasonable times upon the Premises for the
purpose of inspection or to make such improvements, repairs or
alterations as it may consider expedient, but Landlord assumes no
obligation to make any improvements, repairs or alterations except as
expressly provided in this Lease.
X. INDEMNITY AND INSURANCE.
Each party to this Lease agrees to indemnify and save harmless the
other against and from any and all claims by or on behalf of any person, firm
or corporation arising from any breach or default in the performance of any
covenant or agreement on its part to be performed under this Lease.
Tenant shall indemnify, protect, defend and hold Landlord harmless
from all injury, damages, actions, suits, proceedings, losses, claims and
liabilities that may occur or be claimed by or with respect to any persons,
corporations, entities, property or chattels on or about the Premises resulting
from any act done or omission by the Tenant, its servants, invitees or agents,
or caused by, or resulting from or relating to Tenant's use, non-use or
possession thereof, or Tenant's conduct of its business therein or thereon.
Tenant hereby agrees to pay, discharge and defend Landlord against any and all
such claims, litigation, suits, proceedings, and demands. The indemnification
provided by this paragraph shall include Landlord's legal costs and attorneys'
fees in connection with any such claim, action or proceeding.
Landlord covenants at all times to save Tenant harmless from all loss,
cost or damages which may occur or be claimed with respect to any persons,
corporations, entities, property or chattels on or about the Premises, or to
the property itself, resulting from the gross negligence of Landlord or its
servants or agents.
Tenant, in order to insure against the liabilities specified in this
Lease, agrees to place and maintain, at Tenant's own expense, with insurance
companies qualified to do business in the State of Indiana and acceptable to
Landlord, comprehensive general liability and property damage insurance with
respect to Tenant's use and occupancy of the Premises with a single
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combined liability limit of Three Million Dollars ($3,000,000). Such insurance
shall include premises operation, bodily injury, personal injury, death, broad
form contractual liability, completed operations, broad form property damage
coverage and products liability. Such insurance shall be for the benefit of
the Landlord and shall name the Landlord as an insured. Tenant agrees to
furnish certificates of such insurance to Landlord. Such insurance policies
shall contain an endorsement requiring thirty (30) days' advance notice from
the insurance company to Landlord before cancellation or change in the
coverage, scope, or amount of any policy.
Tenant shall furnish at its own cost and expense replacement insurance
for any cracked or broken glass, including plate glass and interior and
exterior windows and doors in the Premises, provided, however, that Landlord
will replace any glass that is cracked or broken by any casualty covered by
fire and extended coverage or other insurance of the Landlord or caused by a
structural defect or settling of the Building in which the Premises are
located.
Landlord shall keep the Real Estate insured against loss or damage by
fire and such other risks as are usually and customarily included within the
term "extended coverage," as deemed advisable by Landlord, but such insurance
shall not cover Tenant's trade fixtures, furnishings, equipment or any items of
personal property on the Premises. Tenant shall pay Tenant's Pro Rata Share of
any expenses incurred by Landlord in obtaining and maintaining such insurance,
and Tenant's pro rata share of such expenses shall be calculated and paid in
the manner specified in Section V(B) of this Lease with respect to the payment
of Operating Expenses.
Tenant shall carry such insurance against loss of its property in the
Premises by fire or other hazards as Tenant deems necessary. Landlord shall
not be liable for any damage to Tenant's property in the Premises, and Tenant
expressly releases Landlord of and from all liability for any such damage.
Tenant agrees that its insurance policy or policies shall include a waiver of
subrogation recognizing this release from liability.
XI. CASUALTY PROVISIONS.
If either the Building or the Premises should be substantially
destroyed or damaged (which, as used herein, means destruction or material
damage to at least fifty percent (50%) of the Building or the Premises) by fire
or other casualty, or if Landlord's uninsured and/or underinsured portion of
the loss resulting from any fire or other casualty affecting the Building or
the Premises exceeds $100,000 in the aggregate, then in either such case
Landlord may terminate this Lease by giving written notice of such termination
to Tenant within sixty (60) days after the date of such casualty. In such
event, rent shall be apportioned to and shall cease as of the date of such
casualty. (For purposes of this Lease, a loss of Landlord that is "uninsured
or underinsured" means a loss or partial loss as to which Landlord is not
reimbursed by insurance proceeds that are available to reconstruct or restore
the Building or Premises, including, without limitation, losses not insured due
to policy deductibles, losses as to which a mortgagee of the Real Estate
applied available insurance proceeds to indebtedness secured by the Real
Estate, or other circumstances resulting in insurance proceeds payable and
available to Landlord with respect to a loss being less than the amount of the
loss). If Landlord does not exercise this
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option to terminate, then the Premises shall be reconstructed and restored, at
Landlord's expense, to substantially the same condition as it was prior to the
casualty; provided however, that Landlord's obligation hereunder shall be
limited to the reconstruction of the Premises as originally existed upon
commencement of this Lease, and further provided that if Tenant has made any
improvements to the Premises Tenant shall reimburse Landlord for the cost of
reconstructing the same. In the event of such reconstruction, monthly
installments of Minimum Rental and Tenant's Pro Rata Share of Operating
Expenses shall be abated from the date of the casualty until substantial
completion of the reconstruction repairs; and this Lease shall continue in full
force and effect for the balance of the Term. In addition to the foregoing, if
the Premises should be substantially destroyed or damaged (which, as used
herein, means destruction or material damage to at least fifty percent (50%) of
the Premises) so that such portion is unusable for the permitted purposes under
this Lease, and it shall require more than sixty (60) days to repair and
restore the Premises, Tenant shall have the right to terminate this Lease by
giving written notice of such termination to Landlord within ten (10) days
after receipt of notice from the Landlord of the time it will take to complete
the repair and restoration of the Premises. Landlord shall provide written
notice to Tenant of the time it will take to repair and restore the Premises
within fifteen (15) days after the fire or other casualty.
If the Premises should be damaged by fire or other casualty but not
substantially destroyed or damaged to the extent provided in Section 10.1 and
if the uninsured and/or underinsured loss attributable thereto does not exceed
$100,000 in the aggregate, then such damaged part of the Premises shall be
reconstructed and restored by Landlord at Landlord's expense to substantially
the same condition as it was prior to the casualty; provided however, that
Landlord's obligation hereunder shall be limited to the reconstruction of the
Premises as originally existed upon commencement of this Lease, and further
provided that if Tenant has made any additional improvements to the Premises
Tenant shall reimburse Landlord for the cost of reconstructing the same. In
such event, if the damage is expected to prevent Tenant from carrying on its
business in the Premises to an extent exceeding fifty percent (50%) of its
normal business activity, monthly installments of Minimum Rental shall be
abated in the proportion which the approximate area of the damaged part bears
to the total area in the Premises from the date of the casualty until
substantial completion of the reconstruction repairs; and this Lease shall
continue in full force and effect for the balance of the Term. Landlord shall
use reasonable diligence in completing such reconstruction repairs. In
addition to the foregoing, if the Premises should be partially destroyed as
described in this paragraph so that such portion is unusable for the permitted
proposes under this Lease, and it shall require more than sixty (60) days to
repair and restore the Premises, Tenant shall have the right to terminate this
Lease by giving written notice of such termination to Landlord within ten (10)
days after receipt of notice from the Landlord of the time it will take to
complete the repair and restoration of the Premises. Landlord shall provide
written notice to the Tenant of the time it will take to repair and restore the
Premises within fifteen (15) days after the fire or other casualty.
The provisions of this Section are not intended to limit, modify or
release Tenant from any liability it may have for damages.
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Notwithstanding the foregoing provisions of this Section XI, if the
unexpired portion of the Term is less than one year at the time a fire or other
casualty renders all or not less than fifty percent (50%) of the Premises
untenantable for Tenant's permitted use hereunder, Tenant may terminate this
Lease upon written notice of termination to Landlord at any time within ten
(10) days after the date of such fire or other casualty.
XII. CONDEMNATION.
If the Premises are condemned or taken in whole or in part by any
public authority under the power of eminent domain, either Landlord or Tenant
shall have the right as of the day possession shall be taken by such public
authority to terminate this Lease by notice thereof to the other in writing and
rent shall be paid to the date of such possession or proportionate refund made
by the Landlord if rent has been paid in advance. If neither party shall elect
to terminate this Lease by reason of such condemnation, the Minimum Rent shall
be reduced by the proportion of the floor area of the Premises taken by such
condemnation and Landlord shall make all necessary repairs or alterations so as
to constitute the remaining Premises a complete architectural unit.
All damages awarded for such taking, whether for a whole or a part of
the Premises, shall belong to and be the property of the Landlord, whether such
damages shall be awarded as compensation for diminution in value to the
leasehold or to the fee of the Premises; provided, however, that the Landlord
shall not be entitled to the award made to Tenant for loss of business or
depreciation to or the cost of removal of stock and trade fixtures.
XIII. UTILITIES/JANITORIAL SERVICE AND TRASH REMOVAL.
Landlord shall furnish utility services to the Real Estate, including,
without limiting the generality thereof, electricity, telephone, gas, heat,
water and air conditioning, and Tenant shall pay Tenant's Pro Rata Share of
such charges that shall be calculated and paid in the manner specified in
Section V(B) of this Lease with respect to the payment of Operating Expenses,
provided, however, that Tenant shall pay directly to the utility providing the
same all charges for utilities that are supplied exclusively to the Premises
and are separately metered and/or billed with respect to the Premises.
Landlord shall provide janitorial service and trash removal service
for the Real Estate, and Tenant shall pay Tenant's Pro Rata Share of the
charges for such services that shall be calculated and paid in the manner
specified in Section V(B) of this Lease with respect to the payment of
Operating Expenses; provided, however, that the removal of Medical Wastes (as
hereinafter defined) from the Premises shall be in accordance with Section XIV
of this Lease.
XIV. HANDLING OF MEDICAL WASTES.
Tenant, at its sole cost and expense, shall arrange and provide for
the disposal and removal from the Premises of any and all Medical Wastes (as
hereinafter defined). Tenant shall
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pay directly to the provider of any services regarding the disposal or removal
from the Premises of Medical Wastes all costs and expenses in connection with
such disposal or removal. In the event any of such costs and expenses for the
disposal or removal of Medical Wastes from the Premises are paid by Landlord,
Tenant shall immediately reimburse Landlord upon Landlord's submitting a
written statement to Tenant for such costs and expenses.
In Tenant's handling of Medical Wastes, including, without limitation,
the generation, storage, packaging, transportation, shipment, removal or
disposal thereof (hereinafter collectively referred to as "handling"), Tenant
shall comply with all applicable federal, state and local laws, rules,
regulations and ordinances including, without limitation, those laws, rules,
regulations and ordinances requiring the use of properly licensed transporters
of Medical Wastes. Tenant shall indemnify, defend and hold harmless Landlord
from and against any loss, costs, damages, fines, penalties, liability,
expenses or fees, including attorneys' fees, arising from any remedial or
enforcement action mandated or taken by any governmental authority with respect
to Tenant's handling of Medical Wastes on or about the Premises, or in any
manner arising from, resulting from or connected with any third party's claim,
action, cause of action or demand with respect to Tenant's handling of Medical
Wastes on or about the Premises.
As used in this Lease, "Medical Wastes" shall mean any waste,
material, pollutant or substance which is or becomes regulated by any federal,
state or local governmental authority, including, without limitation, any waste
defined as "hazardous waste" under Indiana Code 13-7-1-12, as it may be amended
from time to time, or defined as "infectious waste" under 410 Indiana
Administrative Code 1-3-10, as it may be amended from time to time.
XV. ENVIRONMENTAL COMPLIANCE
Tenant covenants and agrees that Tenant, at Tenant's sole cost and
expense, shall comply at all times with all federal, state, municipal and local
statutes, laws, regulations, rules, orders, judgments, injunctions, ordinances
and directives of any kind whatsoever ("governmental requirements") governing
the use, generation, storage, treatment and/or disposal of any "Hazardous
Materials."
"Hazardous Materials" shall mean (i) any biologically or chemically
active or other toxic or hazardous wastes, pollutants or substances, including,
without limitation, asbestos, PCBs, petroleum products and by-products,
substances defined or listed as "hazardous substances" or "toxic substances" or
similarly identified in or pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., and
as hazardous wastes under the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6010 et seq., (ii) any chemical substance or mixture regulated under
the Toxic Substance Control Act of 1976, as amended, 15 U.S.C. Section 2601 et
seq., (iii) any "toxic pollutant" under the Clean Water Act, 33 U.S.C. Section
466 et seq., as amended, (iv) any hazardous air pollutant under the Clean Air
Act, 42 U.S.C. Section 7401 et seq., (v) hazardous materials identified in or
pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. Section 1802
et seq., and (vi) any hazardous or toxic substances or pollutant regulated
under any other governmental requirements.
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Tenant shall, and does hereby, indemnify Landlord from and against any
loss, cost, damage, liability or expense (including attorneys fees and
disbursements) arising by reason of any clean-up, removal, remediation,
detoxification action or any other activity required or recommended of Landlord
by any governmental authority by reason of the presence on, in or about the
Real Estate or the Premises of any Hazardous Materials, as a result of or in
connection with the act or omission of Tenant or persons within Tenant's
control or the breach of this Lease by Tenant or persons within Tenant's
control. The foregoing covenants and indemnity shall survive the expiration or
any termination of this Lease.
XVI. COMMON AREAS.
Landlord agrees to maintain the Common Areas, to keep the Common Areas
reasonably clear of snow and debris as is necessary and to adequately
illuminate the parking and sidewalk areas. Tenant shall pay its Pro Rata Share
of the costs incurred by Landlord in maintaining the Common Areas as herein
described in the manner provided under Section V(B) of this Lease with respect
to the payment of Operating Expenses.
Tenant shall not use the Common Areas for any display or storage of
merchandise or use the Common Areas in any way that would interfere with the
use of the Common Areas by the public or others without the express written
consent of Landlord.
XVII. DEFAULT/REMEDIES.
(A) Events of Default. The occurrence of any one or more of
the following shall constitute an Event of Default hereunder:
(i) Failure of Tenant to pay any installment of rent
when due and such failure continues for a period of ten (10)
days, or failure of Tenant to perform any other of its
covenants under this Lease and the continuation of Tenant's
failure to perform such other covenants for thirty (30) days
after written notice thereof is given to Tenant;
(ii) The making by Tenant of an assignment for the benefit of its
creditors;
(iii) The levying of a writ of execution or attachment on or against
Tenant;
(iv) The institution of proceedings for
reorganization, liquidation, voluntary or involuntary
bankruptcy of Tenant or its adjudication as a bankrupt or
insolvent or the appointment of a receiver, trustee or
liquidator to take charge of its assets;
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(v) The doing or permitting to be done by Tenant of
any act which creates a mechanic's lien or claim therefor
against the land or Building of which the Premises are a part
and the same are not released or otherwise provided for by
indemnity within ten (10) days after written notice thereof is
first given to the Tenant; or
(vi) The abandonment of the Leased Premises by
Tenant.
(B) Remedies. Upon the occurrence of any Event of Default,
Landlord may, at its option, in addition to any other remedy or right
it has hereunder or by law:
(i) Re-enter the Premises, without demand or
notice, and resume possession by an action in law or equity or
otherwise and without being liable in trespass or for any
damages and without terminating this Lease. Landlord may
remove all persons and property from the Premises and such
property may be removed and stored at Tenant's cost.
(ii) Terminate this Lease at any time upon the
date specified in a notice to Tenant. Tenant's liability for
damages shall survive such termination. Upon termination such
damages recoverable by Landlord from Tenant shall, at
Landlord's option, be either an amount equal to "Liquidated
Damages" or an amount equal to "Indemnity Payments," as
hereinafter defined.
(iii) Without terminating this Lease, re-let the
Premises without the same being deemed an acceptance of a
surrender of this Lease nor a waiver of Landlord's rights or
remedies and Landlord shall be entitled to Indemnity Payments,
as hereinafter defined, from Tenant. Any re-letting by
Landlord may be for a period equal to or less than, or
extending beyond the remainder of the Term, or for the whole
or any part of the Premises, separately or with other
premises, or for any reasonable sum, or to any lessee or for
any use Landlord deems appropriate.
(iv) Liquidated Damages means an amount equal to
the excess of the rentals including the Minimum Rental and
Additional Rental, provided for in this Lease which would have
been payable hereunder by Tenant, had this Lease not so
terminated, for the period commencing with such termination
and ending with the date set for the expiration of the Term
(hereinafter the "Unexpired Term"), over the reasonable rental
value of the Premises for such Unexpired Term.
(v) "Indemnity Payments" means an amount equal to
the rentals, including the Minimum Rent and Additional Rent,
and other payments provided for in this Lease which would have
become due and owing thereunder from time to time during the
Unexpired Term plus the cost and expenses paid or incurred by
Landlord from time to time in connection with:
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(a) Obtaining possession of the Leased
Premises;
(b) Removal and storage of Tenant's
personal property;
(c) Care, maintenance and repair of the
Premises while vacant;
(d) Re-letting the whole or any part of
the Premises;
(e) Repairing, altering, renovating,
partitioning, enlarging, remodeling or otherwise
putting the Premises, either separately or as part of
large premises, into condition acceptable to, and
reasonably necessary to obtain new tenants; or
(f) Making all repairs, alterations and
improvements required to be made by Tenant hereunder
and performing all covenants of the Tenant relating
to the condition of the Premises;
less the rentals and other payments, if any, actually
collected and allocable to the Premises or to the portions
thereof re-let by Landlord. Tenant shall on demand make
Indemnity Payments monthly and Landlord can sue for all
Indemnity Payments as they accrue.
Landlord shall be entitled to recover its costs and reasonable
attorney fees incurred in enforcing against Tenant any covenant, term or
condition of this Lease and/or in pursuing its remedies under this Section XVI
or pursuing other remedies available to Landlord under the law.
XVIII. ADVANCES AND INTEREST.
Upon the occurrence of Event of Default, as defined in Section XVI of
this Lease, Landlord may, if such Event of Default has not been cured, cure the
Event of Default for the account and at the expense of Tenant. If Landlord, in
curing such Event of Default, is compelled to pay or elects to pay any sum of
money or do any acts which will require the payment of any sum of money, the
sum so paid or incurred shall be reimbursed by Tenant upon demand by Landlord.
All sums as to which Tenant is in default of payment shall bear interest at the
rate of twelve percent (12%) per annum until paid.
XVIX. ASSIGNMENT AND SUBLETTING BY TENANT.
Tenant may from time to time assign and or sublet all or any part of
this Lease and/or the Premises and/or Additional Area to any subsidiary or
subsidiaries of Tenant or Priority Healthcare Corporation, and shall notify
Landlord in writing of the making of any such assignment and/or subletting
within 30 days after the making thereof; provided, however, Bindley Western
Industries, Inc. shall remain liable for the performance of all obligations of
Tenant hereunder notwithstanding any such assignment and/or subletting. Except
as provided
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above, Tenant shall have no right to assign this Lease nor to sublet all or any
portion of the Premises unless the consent in writing of Landlord shall first
have been obtained, and then only in the manner and upon the terms and
conditions set forth in such consent.
XX. RIGHT OF INSPECTION.
Landlord shall have the right to enter the Premises during regular
business hours for the purpose of inspecting the Premises or of making repairs
to the Premises, or for purposes of exhibiting the Premises to prospective
purchasers, tenants or lenders. Landlord may not enter the Premises for any
purpose at any time other than when the Premises are open for business except
at times agreed upon by Tenant and only when accompanied by Tenant's
representative.
XXI. QUIET ENJOYMENT.
Landlord covenants that Tenant, upon making the rental payments
required under this Lease and upon performing and keeping all other covenants
and agreements on its part to be kept and performed hereunder, shall have
peaceful and quiet possession of the Premises during the Term.
XXII. NON-WAIVER PROVISIONS.
No waiver of any term, condition or covenant of this Lease or failure
to exercise a remedy by either of the parties hereto shall be considered to
imply or constitute a further waiver by such party of the same or any other
term, condition, covenant or remedy.
XXIII. NOTICES.
Any notice or demand required or permitted under this Lease shall be
given or served in writing, by personal delivery or certified or registered
mail, addressed as follows:
(a) To the Landlord at:
NORTH MERIDIAN MEDICAL REALTY COMPANY
10610 North Pennsylvania Street, Suite A
Carmel, Indiana 46032
(b) To the Tenant at:
BINDLEY WESTERN INDUSTRIES, INC.
10333 North Meridian Street, Suite 300
Indianapolis, Indiana 46290
Attention: Executive Vice President and General Counsel
15
<PAGE> 16
All rent payments shall be made to Landlord at the above address.
These addresses may be changed from time to time by either party by serving
notice to the other party as above provided.
XXIV. GOVERNING LAW.
This Lease shall be governed and construed according to the laws of the
State of Indiana.
XXV. MEMORANDUM OF LEASE.
Landlord and Tenant agree not to place this Lease of record but agree
to execute for recording purposes a Memorandum of Lease describing the
Premises, the Term, and other provisions with respect to which notice to third
parties is deemed advisable but omitting rent and other terms of this Lease.
XXVI. REPRESENTATION AND ACKNOWLEDGEMENT.
Tenant represents that the space leased hereunder, including the
additional space to be leased (if any) pursuant to Section VII hereof, is
legitimate and necessary for Tenant's and its subsidiaries' business purposes
and acknowledges that the rent payable by Tenant hereunder is consistent with
the fair market (fair rental) value for comparable facilities.
XXVII. GENERAL AGREEMENT OF PARTIES.
This Lease shall extend to and be binding upon the heirs, personal
representatives, successors and assigns of the parties. This provision,
however, shall not be construed to permit the assignment of this Lease by
Tenant, except as may be permitted hereby. When applicable, use of the
singular form of any word shall mean or apply to the plural and the neuter form
shall mean or apply to the feminine or masculine.
The captions and article numbers appearing in this Lease are inserted
only as a matter of convenience and are not intended to define, limit, construe
or describe the scope or intent of such provisions. No waiver by Landlord of
any default by Tenant shall be effective unless in writing, nor operate as a
waiver of any other default or of the same default on a future occasion.
Landlord's acceptance of rent shall not be deemed a waiver as to any preceding
or subsequent default.
16
<PAGE> 17
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease
Agreement as of the date first above written.
LANDLORD
NORTH MERIDIAN MEDICAL REALTY COMPANY
By /s/ Thomas G. Slama, MD
--------------------------------
Thomas G. Slama, M.D., President
TENANT
BINDLEY WESTERN INDUSTRIES, INC.
By /s/ Michael D. McCormick
--------------------------------
Michael D. McCormick, Executive Vice President
and General Counsel
<PAGE> 18
EXHIBIT A
PARCEL 1
Part of the Southwest Quarter and Part of the Southeast Quarter of Section 2,
Township 17 North, Range 3 East in Hamilton County, Indiana, more particularly
described as follows:
Beginning at the Southeast corner of the Southwest Quarter of Section 2,
Township 17 North, Range 3 East; thence North 89 degrees 45 minutes 00 seconds
West (assumed bearing) on and along the South line thereof 225.70 feet; thence
North 00 degrees 44 minutes 45 seconds East parallel with the East line of said
Quarter 400.00 feet; thence North 89 degrees 45 minutes 00 seconds West
parallel with the South line of the Southwest Quarter of said Section 246.75
feet to the Easterly right-of-way line of U.S. Highway 31 per I.S.H.C.
description for Parcel 63A, dated 4-2-1971; thence North 00 degrees 52 minutes
41 seconds East on and along said right of way 238.00 feet; thence South 89
degrees 45 minutes 00 seconds East parallel with the South line of said Quarter
and the Easterly prolongation thereof 497.66 feet, to a point on the West line
of Meridian Highlands, lst Section, the plat of which is recorded in Plat Book
2, page 184 in the Office of the Recorder of Hamilton County, Indiana, which
point is 637.89 feet North 00 degrees 58 minutes 48 seconds East of the South
line of the Southeast Quarter of said Meridian Highlands, lst Section, 637.89
feet to the South line of said Southwest Quarter; thence South 89 degrees 56
minutes 00 seconds West on and along said South line 23.15 feet to the
Beginning Point; containing 5.010 acres more or less.
EXCEPTING FROM PARCEL I THE FOLLOWING TWO TRACTS OF REAL ESTATE:
(EXCEPTION I)
A part of the Southwest Quarter and a part of the Southeast Quarter of Section
2, Township 17 North, Range 3 East, Hamilton County, Indiana, described as
follows:
Commencing at the Southeast corner of said Quarter Section; thence South 88
degrees 58 minutes 37 seconds West 225.70 feet along the South line of said
section to the Southwest corner of the owner's land; thence North 0 degrees 31
minutes 38 seconds West 15.02 feet along the West line of the owner's land to
the North boundary of 106th Street and the point of beginning of this
description: thence North 0 degrees 31 minutes 38 seconds West 24.32 feet
along the west line of the owner's land; thence North 88 degrees 51 minutes 36
seconds East 249.21 feet to the West line of Meridian highlands lst Section;
thence South 88 degrees 00 minutes 15 seconds East 24.81 feet along the West
line of said Meridian Highlands lst Section to the North boundary of said 106th
Street; thence South 88 degrees 56 minutes 28 seconds West 23.41 feet along the
boundary of said 106th Street; thence South 88 degrees 58 minutes 37 seconds
West 225.56 feet along said boundary to the point of beginning and containing
0.104 acres more or less.
A-1
<PAGE> 19
(EXCEPTION II)
Part of the Southwest Quarter of Section 2, Township 17 North, Range 3 East in
Hamilton County, Indiana, described as follows:
Commencing at the southeast corner of said southwest quarter section; thence on
an assumed bearing of North 89 degrees 45 minutes 00 seconds West along the
south line of said southwest quarter section a distance of 225.70 feet; thence
North 00 degrees 44 minutes 45 seconds East parallel with the east line of
said quarter section a distance of 400.00 feet; thence North 89 degrees 45
minutes 00 seconds West parallel with the south line of said southwest quarter
section a distance of 6.75 feet to a 5/8 inch rebar with yellow plastic cap
marked "SCHNEIDER ENG FIRM #0001" (hereinafter referred to as a "rebar") at the
Beginning Point; thence continuing North 89 degrees 45 minutes 00 seconds West
parallel with the said south line a distance of 240.00 feet to a "rebar" on the
Easterly right-of-way line of U.S. Highway 31 per I.S.H.C. description for
Parcel 63A, dated 4/2/1971; thence North 00 degrees 52 minutes 41 sconds East
along said right-of-way line a distance of 238.00 feet to a "rebar"; thence
South 89 degrees 45 minutes 00 seconds East parallel with the south line of
said quarter section a distance of 274.88 feet to a "rebar"; thence South 00
degrees 52 minutes 41 seconds West parallel with the said easterly right-of-way
line of U.S. 31 a distance of 127.01 feet to a p.k. nail; thence North 89
degrees 45 minutes 00 seconds West parallel with the said south line a
distance of 34.88 feet to a "rebar"; thence South 00 degrees 52 minutes 41
seconds West parallel with the said easterly right-of-way line of U.S. 31 a
distance of 111.00 feet to the Beginning Point. Containing 1.413 acres, more or
less.
ALSO INCLUDING:
PARCEL II
Part of the Southwest Quarter of Section 2, Township 17 North, Range 3 East in
Hamilton County, Indiana, more particularly described as follows:
Commencing at the Southeast Corner of the said Quarter Section; thence
North 89 degrees 45 minutes 00 seconds West (Assumed bearing) along the South
line of the said Quarter Section a distance of 225.70 feet to the Southeast
corner of a Tract of Land decribed in a deed to K.S.M. Realty, recorded in Deed
Record 316, page 567, in the Office of the Recorder of Hamilton County,
Indiana; thence North 00 degrees 44 minutes 45 seconds East parallel with the
East line of the said Quarter Section and along the East line of said K.S.M.
Realty Tract a distance of 39.34 feet to the point of beginning, being the
intersection of said East line of said K.S.M. Realty Tract with the North line
of a Tract of Land described in a deed to the State of Indiana recorded as
Instrument 89-27932; thence continuing North 00 degrees 44 minutes 45 seconds
East parallel with the East line of the said Quarter Section and along the East
line of said K.S.M. Realty Tract a distance of 360.66 feet to the Northeast
corner of said K.S.M. Realty Tract; thence North 89 degrees 45 minutes 00
seconds West parallel with the South line of said Quarter Section and along the
North line of said K.S.M. Realty Tract a distance of 13.00 feet; thence South 00
degrees 44 minutes 45 seconds West parallel with the east line of said Quarter
Section and the East line of said K.S.M. Realty Tract a distance of 360.07 feet
to the North line of said State of Indiana Tract: thence South 87 degrees 08
minutes 05 secods East along the North line of said State of Indiana Tract a
distance of 13.01 feet to the point of beginning, containing 0.108 acres, more
or less.
A-2
<PAGE> 20
[FLOOR PLAN OF FIRST FLOOR EXHIBIT B]
<PAGE> 21
[FLOOR PAN OF SECOND FLOOR FINISH PLAN]
<PAGE> 22
EXHIBIT B PAGE 3
1. Waiting room, receptionist area, and exam and dictation rooms (IDI
only)
2. Garage (IDI only)
3. Infusion services area (BWI only)
4. Storage area (BWI only)
5. Exercise/locker/shower room, etc. (IDI only)
6. Administrative offices, waiting room and receptionist area (BWI only)
7. Offices, kitchen/dining room, etc (IDI only)
<PAGE> 23
[FLOOR PLAN FIRST FLOOR]
EXHIBIT C
ROCHE BIOMEDICAL LABORATORIES, INC.
<PAGE> 24
[FLOOR PLAN]
ROCHE PROFESSIONAL SERVICE CENTERS, INC.
FIRST FLOOR
<PAGE> 25
[FLOOR PLAN]
ROCHE PROFESSIONAL SERVICE CENTERS, INC.
SECOND FLOOR FINISH PLAN
<PAGE> 26
[FLOOR PLAN]
First Floor
NORTHWEST RADIOLOGISTS, P.C.
<PAGE> 1
EXHIBIT 21
BINDLEY WESTERN INDUSTRIES, INC.
LIST OF SUBSIDIARIES
1. BW Food Distributors, Inc. -- Methuen, MA
2. BW Transportation Services, Inc. -- Indianapolis, IN
3. First Choice, Inc. of Maine (formerly Glenlawn, Inc.) --
Indianapolis, IN
4. Special Services Company -- Orange, CT
5. Priority Healthcare Corporation -- Altamonte Springs, FL
Note: All are Indiana corporations. Priority Healthcare Corporation
operates three wholly-owned subsidiaries, each of which is a Florida
corporation: IV-1, Inc.; IV-One Services, Inc.; and National Pharmacy
Providers, Inc. Additionally, National Infusion Services, Inc., an Indiana
corporation, is a 94% owned subsidiary of IV-1, Inc.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No.'s 33-15471, 33-37781, 33-58947 and 33-64828) of our
report dated February 28, 1996 appearing on page F-1 of Bindley Western
Industries, Inc. Annual Report on Form 10-K for the year ended December 31,
1995.
Price Waterhouse LLP
Indianapolis, Indiana
March, 29, 1996
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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 34,819
<SECURITIES> 0
<RECEIVABLES> 397,924
<ALLOWANCES> 3,057
<INVENTORY> 332,054
<CURRENT-ASSETS> 772,761
<PP&E> 59,468
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0
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<OTHER-SE> 197,447
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<SALES> 4,670,153
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<CGS> 4,565,750
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<OTHER-EXPENSES> 0
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<INCOME-CONTINUING> 16,381
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