-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XhoTJdby3zYH0yVJkBmwLybCedBS4yYzrUPnlsKoT3aw8MCnlZ0fxg9dzzo2s51o chrJJ5WHwVeGGs9cp9jkVg== 0000950152-94-000494.txt : 19940516 0000950152-94-000494.hdr.sgml : 19940516 ACCESSION NUMBER: 0000950152-94-000494 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARDINAL HEALTH INC CENTRAL INDEX KEY: 0000721371 STANDARD INDUSTRIAL CLASSIFICATION: 5122 IRS NUMBER: 310958666 STATE OF INCORPORATION: OH FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12591 FILM NUMBER: 94527130 BUSINESS ADDRESS: STREET 1: 655 METRO PL SOUTH STE 925 CITY: DUBLIN STATE: OH ZIP: 43017 BUSINESS PHONE: 6147618700 MAIL ADDRESS: STREET 1: 655 METRO PLACE SOUTH STREET 2: SUITE 925 CITY: DUBLIN STATE: OH ZIP: 43017 FORMER COMPANY: FORMER CONFORMED NAME: CARDINAL DISTRIBUTION INC DATE OF NAME CHANGE: 19920703 10-Q 1 CARDINAL HEALTH 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1994 Commission File Number 0-12591 -------------- ------- CARDINAL HEALTH, INC. (formerly known as Cardinal Distribution, Inc.) ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 31-0958666 ---- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 655 METRO PLACE SOUTH, SUITE 925, DUBLIN, OHIO 43017 (Address of principal executive offices and zip code) Registrant's telephone number, including area code (614) 761-8700 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Shares, without par value -------------------------------- Class A 27,659,355 (Outstanding at April 12, 1994) Class B 2,377,100 (Outstanding at April 12, 1994) 2 PART I. FINANCIAL INFORMATION CARDINAL HEALTH, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) (In Thousands)
March 31, 1994 June 30, 1993 -------------- ------------- ASSETS - - - ------ Current Assets: Cash and equivalents $ 311 $ 61,210 Marketable securities 71,988 Trade receivables 326,149 257,901 Merchandise inventories 909,391 628,566 Prepaid expenses and other 9,482 13,237 ----------- ----------- Total 1,245,333 1,032,902 Property and Equipment - at cost 115,384 107,326 Accumulated depreciation and amortization (55,511) (45,731) ----------- ----------- Property and equipment-net 59,873 61,595 Other assets 50,485 55,926 ----------- ----------- Total $ 1,355,691 $1,150,423 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY - - - ------------------------------------ Current Liabilities: Notes payable - banks $ 92,300 $ Current portion of long-term obligations 3,188 3,733 Accounts payable 624,360 524,617 Other accrued liabilities 75,171 65,838 ----------- ----------- Total 795,019 594,188 Long - term obligations - less current portion 210,277 274,908 Other liabilities 2,464 3,010 Redeemable preferred stock 20,400 Shareholders Equity: Common shares-without par value 250,451 175,200 Retained earnings 104,668 88,866 Common shares in treasury, at cost (3,283) (3,083) Unamortized restricted stock award (3,905) (3,066) ----------- ----------- Total shareholders' equity 347,931 257,917 ----------- ----------- Total $ 1,355,691 $1,150,423 =========== =========== See notes to consolidated financial statements.
3 CARDINAL HEALTH, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) (In thousands, except per share data)
3-Months Ended 9-Months Ended --------------------------- --------------------------- March 31, March 31, March 31, March 31, 1994 1993 1994 1993 ----------- ----------- ----------- ----------- NET SALES $1,510,674 $ 1,205,873 $4,199,913 $ 3,395,873 COST OF PRODUCTS SOLD 1,412,303 1,123,514 3,940,455 3,176,501 --------- --------- --------- --------- GROSS MARGIN 98,371 82,359 259,458 219,372 SELLING, GENERAL & ADMINISTRATIVE EXPENSES (61,531) (51,664) (169,942) (150,526) UNUSUAL ITEMS Merger costs (35,880) (35,880) Termination fee 13,466 Nonrecurring charges (9,022) (18,904) --------- --------- --------- --------- OPERATING EARNINGS 960 21,673 53,636 63,408 OTHER INCOME (EXPENSE): Interest expense (5,255) (7,371) (13,793) (19,665) Other, net 441 1,002 2,702 4,076 --------- --------- --------- --------- EARNINGS (LOSS) BEFORE INCOME TAXES (3,854) 15,304 42,545 47,819 PROVISION FOR INCOME TAXES (5,076) (5,643) (24,056) (18,155) --------- --------- --------- --------- NET EARNINGS (LOSS) (8,930) 9,661 18,489 29,664 PREFERRED DIVIDENDS DECLARED/ACCRETION (166) (719) (1,205) (2,157) --------- --------- --------- --------- NET EARNINGS (LOSS) AVAILABLE FOR COMMON SHARES $ (9,096) $ 8,942 $ 17,284 $ 27,507 ========= ========= ========= ========= EARNINGS (LOSS) PER COMMON SHARE: Primary $ (.29) $ .33 $ .55 $1.00 Fully diluted $ (.29) $ .32 $ .55 $ .97 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: Primary 31,704 27,473 31,453 27,460 Fully diluted 31,704 30,928 31,516 30,906 See notes to consolidated financial statements.
4 CARDINAL HEALTH, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) (In thousands)
9-Months Ended ------------------------------------ March 31, March, 31 1994 1993 ------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 18,489 $ 29,664 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 12,319 13,020 Stock compensation charge 5,247 Provision for bad debts 5,372 3,059 Change in operating assets and liabilities net of effects from acquisitions: Trade receivables (65,554) (30,021) Merchandise inventories (273,361) (152,741) Accounts payable 89,038 84,893 Other operating items 15,193 (3,249) --------- --------- Net cash used in operating activities (198,504) (50,128) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property and equipment 952 94 Additions to property and equipment (7,389) (9,757) Purchase of marketable securities (115,241) (233,465) Proceeds from sale of marketable securities 187,229 251,203 --------- --------- Net cash provided by investing activities 65,551 8,075 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net short-term borrowings 92,300 Reduction of short-term borrowings of an acquired subsidiary (5,226) Proceeds from long-term obligations 100,000 59,448 Reduction of long-term obligations (91,774) (3,697) Proceeds from issuance of common shares 403 1,018 Dividends paid (3,036) (2,763) Redemption of preferred stock (20,400) Purchase of treasury shares (200) (690) Debenture conversion costs charged to common shares (13) --------- --------- Net cash provided by financing activities 72,054 53,316 --------- --------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (60,899) 11,263 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 61,210 55,465 --------- --------- CASH AND EQUIVALENTS AT END OF PERIOD $ 311 $ 66,728 ========= ========= Supplemental Disclosure of Noncash Investing & Financing Activities: Capital lease obligations incurred $ 830 $ 2,351 Debentures converted to common shares 74,920 Unamortized debenture offering costs charged to common shares (1,767) See notes to consolidated financial statements.
5 CARDINAL HEALTH, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) Note 1. The accompanying unaudited financial statements of Cardinal Health, Inc. (formerly known as Cardinal Distribution, Inc.) and subsidiaries, all collectively referred to as "Cardinal" or the "Company", have been prepared to give retroactive effect to the merger of a wholly owned subsidiary of Cardinal with and into Whitmire Distribution Corporation ("Whitmire") on February 7, 1994 (see Note 3). On March 1, 1994, the Company made the decision to change its fiscal year end from March 31 to June 30. As such, the prior period comparative unaudited consolidated balance sheet presented herein combines the consolidated balance sheet of Cardinal as of June 30, 1993, with the balance sheet of Whitmire as of July 3, 1993. The prior period comparative unaudited consolidated statements of earnings presented herein combine the consolidated statements of earnings of Cardinal for the three and nine months ended March 31, 1993, with the statements of earnings of Whitmire for the three and nine months ended March 27, 1993. The prior period comparative unaudited statement of cash flows presented herein combines the statement of cash flows of Cardinal for the nine months ended March 31, 1993, with the statement of cash flows of Whitmire for the nine months ended March 27, 1993. The unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by generally accepted accounting principles for interim reporting. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Certain customer service costs, historically reported by Cardinal in Cost of Products Sold, have been reclassified to Selling, General, and Administrative Expenses in the consolidated statements of earnings in order to conform with Whitmire's presentation. Note 2. Primary earnings per common share are based on the weighted average number of shares outstanding during each period and the dilutive effect of stock options and warrants from the date of grant computed using the treasury stock method. Fully diluted earnings per common share reflect: (a) the dilutive effect of stock options and warrants from the date of grant computed using the treasury stock method; and (b) the full conversion of the 7 1/4% Convertible Subordinated Debentures due 2015 (the "Subordinated Debentures") since issuance in July 1990 (see Note 6). Note 3. On January 27, 1994, shareholders of Cardinal and Whitmire approved and adopted the Agreement and Plan of Reorganization dated October 11, 1993 (the "Reorganization Agreement"), pursuant to which Cardinal Merger Corporation, a wholly owned subsidiary of Cardinal, was merged with and into Whitmire effective February 7, 1994 (the "Effective Time"). In the merger, which was accounted for as a pooling of interests, holders of outstanding Whitmire stock at the Effective Time received an aggregate of approximately 5,442,000 Cardinal common shares, without par value ("Common Shares"), and approximately 1,488,000 shares of Cardinal's newly authorized Class b common shares, without par value ("Class B Shares"), in exchange for all of the previously outstanding stock of Whitmire. In addition, Whitmire stock options outstanding at the Effective Time were converted into options to purchase an aggregate of approximately 1,377,000 additional Cardinal Common Shares pursuant to the terms of the Reorganization Agreement. Note 4. In the three-month period ended September 30, 1992, Cardinal received a termination fee of approximately $13,466,000, resulting from the termination by Durr-Fillauer Medical, Inc. of its agreement to merge with the Company. 6 Cardinal recorded nonrecurring charges of approximately $9,882,000 in the three-month period ended September 30, 1992, and Whitmire recorded nonrecurring charges of approximately $3,775,000 in the three-month period ended March 27, 1993. The nonrecurring charges primarily related to the closing of certain non-core operations and the rationalization of selected distribution operations, information systems and support functions and included the write-down of certain assets, moving costs and other costs associated with the affected operations, and modification costs necessary to centralize and standardize certain information systems and support functions. In the three-month period ended March 27, 1993, Whitmire recorded a one-time stock option compensation charge of approximately $5,247,000 related to the modification of the terms of certain of its stock options. In the three-month period ended March 31, 1994, the Company recorded a nonrecurring charge to reflect the estimated Whitmire merger costs of approximately $28.2 million (net ot tax). The merger costs include (a) fees and other transaction costs related to the merger and (b) other nonrecurring costs expected to be incurred in connection with the subsequent integration of the two companies' business operations. These estimated expenses include approximately $7 million for anticipated investment banking, legal, accounting, and other related transaction fees and costs associated with the merger; $13 million for corporate restructuring and distribution rationalization; $6 million for integration of information systems; and $2 million for restructuring Whitmire's revolving credit agreement. Of these estimated expenses, approximately $7 million pertain to the revaluation of certain operating assets and $2 million pertain to employee relocation, retraining and termination costs. These amounts are based on a preliminary estimate of expenses to be incurred by Whitmire and Cardinal, and actual expenses may differ from such estimate. The following supplemental information summarizes the results of operations of the Company, adjusted on a pro forma combined basis to reflect (a) the elimination of the effect of the unusual items discussed above, and (b) the redemption of Whitmire's preferred stock pursuant to the terms of the Reorganization Agreement. Solely for purposes of the summary presented below, such redemption is assumed to have been funded from the liquidation of Cardinal's investments in tax-exempt marketable securities.
3-Months Ended 9-Months Ended ------------------------------------------- --------------------------------------- March 31, March 31, March 31, March 1994 1993 1994 1993 ----------------- ----------------- ------------------ ---------------- Operating earnings $ 36,840 $ 30,695 $ 89,516 $ 68,846 Net earnings $ 19,228 $ 14,650 $ 46,397 $ 32,125 Net earnings per common share Primary $ .61 $ .53 $ 1.48 $ 1.17 Fully Diluted $ .61 $ .50 $ 1.47 $ 1.12
Note 5. On May 4, 1993, Cardinal acquired all of the outstanding capital stock of Solomons Company, a wholesale drug distributor based in Savannah, Georgia, in exchange for 849,358 of the Company's Common Shares. The Solomons transaction was accounted for by the purchase method. Had the acquisition occurred at the beginning of fiscal 1993, operating results on a pro forma basis would not have been significantly different. Note 6. On June 11, 1993, Cardinal called for redemption, effective as of July 2, 1993, the $75 million outstanding principal amount of its Subordinated Debentures. Following this call, $74,920,000 of Subordinated Debentures outstanding as of March 31, 1993, were converted at the conversion price of $21.89 per share, into 3,422,521 Common Shares of Cardinal. The 7 remaining $80,000 of Subordinated Debentures outstanding as of March 31, 1993 were redeemed for cash. The pro forma primary net earnings per share of the Company, as if the above conversion and redemption had occurred at July 1, 1992 (the beginning of Fiscal 1993), would have been $0.32 and $0.97 for the three and nine months ended March 31, 1993. Note 7. On December 17, 1993, Cardinal issued 236,626 Common Shares in a merger transaction for all of the capital stock of PRN Services, Inc. ("PRN"), a distributor of pharmaceuticals and medical supplies to oncologists and oncology clinics. The PRN transaction was accounted for as a pooling of interests. The impact of the PRN merger, on both an historical and pro forma basis, is not significant. Accordingly, prior periods have not been restated for the PRN merger. Note 8. On February 23, 1994, the Company sold $100 million of 6 1/2% Notes Due 2004 (the "Notes"). The Company used the proceeds of this sale for general corporate purposes, including the repayment of bank lines of credit incurred as part of the Whitmire merger. In anticipation of the sale of the Notes, the Company entered into an interest rate hedge agreement, which was terminated at the approximate time of the issuance of the Notes, resulting in a deferred gain of approximately $1.3 million which will be amortized as a reduction of interest expense over the period the Notes are outstanding. Note 9. On April 27, 1994, the Company entered into an agreement to acquire all of the capital stock of Humiston-Keeling, Inc. in a cash purchase transaction. Humiston-Keeling is a Calumet City, Illinois, based wholesale drug distributor serving independent and retail chain pharmacies, hospitals, and managed care facilities located in Illinois, Indiana, Wisconsin, Michigan, and portions of adjoining states. The Humiston-Keeling transaction is currently expected to be completed by July, 1994. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Management's discussion and analysis presented below is for Cardinal Health, Inc. (formerly known as Cardinal Distribution, Inc.) and subsidiaries, all collectively referred to as "Cardinal" or the "Company", and has been prepared to give retroactive effect to the merger of a wholly owned subsidiary of Cardinal with and into Whitmire Distribution Corporation ("Whitmire") on February 7, 1994 (see Note 3 of "Notes to Consolidated Financial Statements"). The discussion and analysis presented below is concerned with material changes in financial condition and results of operations for the Company's consolidated balance sheets as of March 31, 1994 and June 30, 1993, and for the consolidated statements of earnings for the three and nine months ended March 31, 1994 and March 31, 1993. On March 1, 1994, the Company made the decision to change its fiscal year end from March 31 to June 30. As such, the prior period comparative unaudited consolidated balance sheet presented herein combines the consolidated balance sheet of Cardinal as of June 30, 1993, with the balance sheet of Whitmire as of July 3, 1993. The prior period comparative unaudited consolidated statements of earnings presented herein combine the consolidated statements of earnings of Cardinal for the three and nine months ended March 31, 1993, with the statements of earnings of Whitmire for the three and nine months ended March 27, 1993. The prior period comparative unaudited statement of cash flows presented herein combines the statement of cash flows of Cardinal for the nine months ended March 31, 1993 with the statement of cash flows of Whitmire for the nine months ended March 27, 1993. Unless indicated to the contrary for purposes of this discussion, all references to "1994" and "1993" shall mean the three and nine-month periods ended June 30, 1994 and June 30, 1993, respectively. NET SALES. Net sales increased 25% for the third quarter of 1994 and 24% for the nine-month period. The increase in the third quarter was due to internal growth of 20% and sales resulting from the acquisitions of Solomons Company ("Solomons") on May 4, 1993 (see Note 5 of "Notes to Consolidated Financial Statements"), and PRN Services, Inc. ("PRN") on December 17, 1993. (See Note 7 of "Notes to Consolidated Financial Statements"). The increase in the nine-month period was due to internal business growth of 19% and sales resulting from the acquisitions of Solomons and PRN. The internal business growth in both the third quarter and nine-month period resulted primarily from the addition of new customers (partially as a result of expanded sales territories), increased sales to existing customers and price increases. GROSS MARGIN. As a percentage of net sales, gross margin for the third quarter was 6.51% versus 6.83% last year. For the nine-month period, gross margin was 6.18% versus 6.46% last year. The decreases in the gross margin percentages were due to (a) lower selling margin rates, reflecting a more competitive market and a greater mix of higher volume customers, where a lower cost of distribution and better asset management and cash flow enabled the Company to offer lower selling margins, and (b) reduced purchasing gains associated with lower drug price inflation. The reduced purchasing gains were partially offset by a lower LIFO charge. The Company expects the decline in gross margin rates to be a continuing trend in the immediate but not the long-term future. The above gross margin percentages reflect the fact that certain customer service costs, historically reported by Cardinal in Cost of Products Sold, have been reclassified to Selling, General, and Administrative expenses in the consolidated statements of earnings in order to conform with Whitmire's presentation (see "Selling, General, and Administrative Expenses" below). 9 SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. For the third quarter, selling, general, and administrative expenses improved as a percentage of net sales to 4.07% from 4.28%. For the nine-month period, selling, general and administrative expenses improved to 4.05% from 4.43% last year. The improvements are due primarily to economies associated with the Company's significant sales growth, particularly with major customers where support costs are generally lower, and to productivity improvements. The above selling, general, and administrative expenses percentages reflect the fact that certain customer service costs, historically reported by Cardinal in Cost of Products Sold, have been reclassified to Selling, General, and Administrative Expenses in the consolidated statements of earnings in order to conform with Whitmire's presentation. UNUSUAL ITEMS. In the three-month period ended March 31, 1994, the Company recorded a nonrecurring charge to reflect estimated Whitmire merger and subsequent integration costs of approximately $28.2 million (net of tax). These costs include (a) fees and other transaction costs related to the merger, and (b) other nonrecurring costs expected to be incurred in connection with the subsequent integration of the two companies' business operations. These estimated expenses include approximately $7 million for anticipated investment banking, legal, accounting, and other related transaction fees and costs associated with the merger; $13 million for corporate restructuring and distribution rationalization; $6 million for integration of information systems; and $2 million for restructuring Whitmire's revolving credit agreement. Of these estimated expenses, approximately $7 million pertain to the revaluation of certain operating assets and $2 million pertain to employee relocation, retraining and termination costs. These amounts are based on a preliminary estimate of expenses to be incurred by Whitmire and Cardinal, and actual expenses may differ from such estimate. (See Note 4 of "Notes to Consolidated Financial Statements"). In the three-month period ended September 30, 1992, Cardinal received a termination fee of approximately $13.5 million, resulting from the termination by Durr-Fillauer Medical, Inc. of its agreement to merge with the Company. Cardinal recorded nonrecurring charges of approximately $9.9 million in the three-month period ended September 30, 1992, and Whitmire recorded nonrecurring charges of approximately $3.8 million in the three-month period ended March 27, 1993. The nonrecurring charges primarily related to the closing of certain non-core operations and the rationalization, standardization and improvement of selected distribution operations, information systems and support functions. The charges include the write-down of certain assets, moving costs and other costs associated with the affected operations, and modification costs necessary to centralize and standardize certain information systems and support functions. In the three-month period ended March 27, 1993, Whitmire also recorded a one-time stock option compensation charge of approximately $5.2 million related to the modification of the terms of certain of its stock options. INTEREST EXPENSE. The decrease in interest expense of $2.1 and $5.9 million in the third quarter and nine-month period of 1994, respectively, was due primarily to (a) the conversion of debt to equity following the call for redemption, effective July 2, 1993, of the Company's $75 million face amount of 7-1/4% Convertible Subordinated Debentures Due 2015 (the "Subordinated Debentures") (see Note 6 of "Notes to Consolidated Financial Statements"), and (b) reduced borrowings under Whitmire's revolving credit arrangements. The reductions in interest expense as discussed above were partially offset by increased interest expense resulting from the sale by the Company of $100 million of 6 1/2% Notes Due 2004 (the "Notes") on February 23, 1994. (See Note 8 of "Notes to Consolidated Financial Statements"). PROVISION FOR INCOME TAXES. The Company's provision for income taxes relative to pretax earnings increased significantly in both the third quarter and nine month-period of 1994 versus the same periods of 1993. The increase in both the third quarter and nine-month period was primarily due to (a) the 1993 Omnibus Budget Reconciliation Act's 1% tax rate increase enacted on August 11, 1993 retroactive to 10 January 1, 1993, (b) the reduction of income from tax-advantaged investments in 1994 versus 1993, and (c) certain nondeductible merger costs recorded in the third quarter of 1994. LIQUIDITY AND CAPITAL RESOURCES. Net working capital increased to $450.3 million at March 31, 1994, from $438.7 million at June 30, 1993, and included increased investments in merchandise inventories and trade receivables of $273.4 million and $60.2 million respectively, offset primarily by (a) a reduction in cash and equivalents and marketable securities of $132.9 million, (b) an increase in notes payable-banks of $92.3 million, and (c) an increase in accounts payable of $89.0 million. The increases in merchandise inventories and accounts payable reflect the timing of seasonal purchases and related payments. The increase in trade receivables was due primarily to increased sales. The decrease in cash and marketable securities and the increase in notes payable-banks resulted primarily from (a) the increased investments in merchandise inventories and trade receivables (net of the increase in accounts payable) as described above, (b) the repayment of amounts outstanding under Whitmire's revolving credit arrangements at the time of the merger (approximately $120 million, including a prepayment penalty of approximately $1.2 million), and (c) the redemption of Whitmire's preferred stock (approximately $20.4 million). Long-term obligations decreased from $274.9 million at June 30, 1993, to $210.3 million at March 31, 1994, due primarily to (a) the conversion of debt to equity following the call for redemption, effective July 2, 1993, of the $75 million Subordinated Debentures, and (b) the repayment of amounts outstanding under Whitmire's revolving credit arrangements, offset primarily by the sale of the $100 million Notes described above. Shareholders' equity increased to $347.9 million at March 31, 1994, from $257.9 million at June 30, 1993, due primarily to (a) the issuance of additional Common Shares upon the conversion of $74.9 million of the Subordinated Debentures, offset by approximately $1.8 million of unamortized debenture offering costs charged to Common Shares, and (b) net earnings of approximately $18.5 million, offset by dividends paid of approximately $3.0 million. The Company has line-of-credit agreements with various bank sources aggregating $326 million, of which $95 million is represented by committed line-of-credit agreements and the balance is uncommitted. The Company drew upon $92.3 million of the available lines-of-credit at March 31, 1994, leaving $233.7 million available under the Company's existing lines-of-credit agreements. On May 6, 1993, the Company filed with the Securities and Exchange Commission a Registration Statement for the public offering, from time-to-time, of its debt securiities (the "Debt Securities") issuable in one or more series in an aggregate principal amount not to exceed $150 million. On February 23, 1994, the Company sold $100 million of the Notes (see Note 8 of "Notes to Consolidated Financial Statements"), the net proceeds of which were used for general corporate purposes, including the repayment of bank lines of credit incurred as part of the Whitmire merger. At March 31, 1994, $50 million of the Debt Securities remain issuable. The Company believes that it has adequate resources at its disposal to meet currently anticipated capital expenditures, routine business growth and expansion, and current and projected debt service, including the additional liquidity and capital resources associated with recent and prospective business combinations. 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings As disclosed in the Company's Report on 10-Q for the quarter ended December 31, 1993 (No. 0-12591), in November 1993, the Company and Whitmire Distribution Corporation, a wholly-owned subsidiary of the Company ("Whitmire"), were each named as defendants in a series of nine purported class action lawsuits (the "Brand Name Prescription Drug Litigation") filed in the United States District Court for the Southern District of New York, together with 24 pharmaceutical manufacturers and six other wholesale distributors. The Southern District of New York cases were very similar to over 50 other cases filed throughout the United States. Only the Southern District of New York cases named wholesalers as defendants. The Judicial Panel for Multi-District Litigation has ordered all of the cases consolidated and transferred to the United States District Court for the Northern District of Illinois. Subsequent to the consolidation, a new consolidated complaint was filed which included allegations that the wholesaler defendants, including the Company and Whitmire, conspired with manufacturers to inflate prices by using a chargeback pricing system. The Company and Whitmire have filed answers denying the allegations in the complaint. The Company and Whitmire believe that the allegations are without merit, and they intend to contest such allegations vigorously. Item 4. Submission of Matters to Security Holders. (a) A Special Meeting of the Company's shareholders was held on January 27, 1994. (b) Proxies were solicited by the Company's management pursuant to Regulation 14 under the Securities Exchange Act of 1934; there was no solicitation in opposition to management's nominees as listed in the proxy statement, and all director nominees were elected pursuant to the vote of the Company's shareholders. (c) Matters voted on at the Special Meeting were as follows: (1) Approval and adoption of the Agreement and Plan of Reorganization dated as of October 11, 1993, by and among the Company, Cardinal Merger Corp. ("Subcorp."), Whitmire Distribution Corporation ("Whitmire"), and the other persons named therein providing for the merger of Subcorp with and into Whitmire (the "Merger"). The results of the shareholder vote on this proposal were: 20,157,359 for; 20,476 against; 91,558 abstained; and 959,435 broker non-vote. (2) Approval of three proposals to amend the Company's Articles of Incorporation, as Amended and Restated, as follows: (i) To establish the terms and preferences of the new Class B Common Shares issuable in the Merger. The results of the shareholder vote on this proposal were: 20,061,520 for; 100,571 against; 107,301 abstained; and 959,436 broker non-vote. (ii) To increase the number of the Company's authorized Common Shares, without par value, from 40 million to 60 million. The results of the shareholder vote on this proposal were: 20,834,064 for; 300,123 against; 94,641 abstained; and 0 broker non-vote. (iii) To change the Company's name to Cardinal Health, Inc. The results of the shareholder vote on this proposal were: 21,137,888 for; 22,781 against; 68,159 abstained; and 0 broker non-vote. 12 (3) Approval of a proposal to amend the Company's Restated Code of Regulations, as amended, to increase the size of the Company's Board of Directors from ten to fourteen members and to authorize the Company's Board of Directors to establish from time to time the size of the Company's Board of Directors between nine and fourteen members. The results of the shareholder vote on this proposal were: 21,072,960 for; 128,167 against; 72,701 abstained; and 0 broker non-vote. (4) Election of Mitchell J. Blutt, M.D., John F. Finn, Michael S. Gross, and Melburn G. Whitmire to the Company's Board of Directors. The results of the shareholder vote on this proposal were: Dr. Blutt, 21,173,952 for, 54,876 withheld, and 0 broker non-vote; Mr. Finn, 21,176,463 for, 52,365 withheld, and 0 broker non-vote; Mr. Gross, 21,175,970 for, 52,858 withheld, and 0 broker non-vote; and Mr.Whitmire, 21,175,751 for, 53,077 withheld, and 0 broker non-vote. Item 6. Exhibits and reports on Form 8-K (a) Listing of Exhibits: Exhibit 3.01 Amended and Restated Articles of Incorporation of the Company, as amended. Exhibit 3.02 Restated Code of Regulations of the Company, as amended. Exhibit 4.01 See Exhibit 3.01, Amended and Restated Articles of Incorporation, as amended, for the terms and preferences of the new Class B Common Shares of the Company. Exhibit 4.02 Indenture between the Company and Bank One Indianapolis, NA relating to the Company's 6 1/2% Notes Due 2004. Exhibit 10.01 Employment Agreement dated October 11, 1993, among Whitmire, James Clare, and the Company. Exhibit 10.02 Form of Amended and Restated Stock Option Agreement entered into February 7, 1994, by the Company, Whitmire, and certain officers of the Company. Exhibit 10.03 Form of Amended and Restated Stock Option Agreement entered into February 7, 1994, by the Company, Melco Managers, a California corporation, and certain officers of the Company. Exhibit 11.01 Computation of Fully Diluted Earnings Per Share. (b) Reports on Form 8-K: (i) On February 11, 1994, the Company filed a current report on Form 8-K containing restated supplemental consolidated financial statements of the Company pursuant to Part I Item II (b) (iii) of Form S-3 in conjunction with the Company's shelf registration statement previously filed on Form S-3 (file No. 33-62198). (ii) On March 8, 1994, the Company filed a current report on Form 8-K reporting that on March 1, 1994, the Company made the decision to change its fiscal year end to June 30. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CARDINAL HEALTH, INC. Date: May 9, 1994 By: /s/ Robert D. Walter -------------------------- Robert D. Walter Chairman and Chief Executive Officer By: /s/ David Bearman -------------------------- David Bearman Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) 14 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ___________________ CARDINAL HEALTH, INC. --------------------- (Exact name of Registrant as specified in its charter) ___________________ EXHIBIT VOLUME ___________________ 15 Exhibit Index -------------
Exhibit Number Exhibit Description ------ ------------------- 3.01 Amended and Restated Articles of Incorporation of the Company, as amended. 3.02 Restated Code of Regulations of the Company, as amended. 4.01 See Exhibit 3.01, Amended and Restated Articles of Incorporation, as amended, for the terms and preferences of the new Class B Common Shares of the Company. 4.02 Indenture between the Company and Bank One Indianapolis, NA relating to the Company's 6 1/2% Notes Due 2004. 10.01 Employment Agreement dated October 11, 1993, among Whitmire, James Clare, and the Company. 10.02 Form of Amended and Restated Stock Option Agreement entered into February 7, 1994, by the Company, Whitmire, and certain officers of the Company. 10.03 Form of Amended and Restated Stock Option Agreement entered into February 7, 1994, by the Company, Melco Managers, a California corporation, and certain officers of the Company. 11.01 Computation of Fully Diluted Earnings Per Share.
EX-3.01 2 EXHIBIT 1 Exhibit 3.01 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CARDINAL DISTRIBUTION, INC. These constitute the amended and restated articles of incorporation of Cardinal Distribution, Inc., a corporation for profit formed under the Ohio General Corporation Law, which amended and restated articles of incorporation supersede the previously existing articles of incorporation of the corporation, as heretofore amended: FIRST: The name of the corporation shall be "Cardinal Dis- tribution, Inc." SECOND: The place in Ohio where the principal office of the corporation is to be located is the City of Columbus, Franklin County. THIRD: The purpose or purposes for which the corporation is formed are to engage in any lawful act or activity for which corpora- tions may be formed under Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code and any amendments heretofore or hereafter made thereto. FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 10,500,000, consisting of 10,000,000 common shares without par value and 500,000 nonvoting preferred shares without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the dividend rate, 2 (c) the dates of payment of dividends and the dates from which they are cumulative, (d) liquidation price, (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. Each common share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. Subject to the preferences of any outstanding preferred shares, each common share shall be entitled to participate equally in such dividends as may be declared by the board of directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. FIFTH: The amount of stated capital with which the corporation will begin business shall be not less than five hundred dollars ($500). SIXTH: The board of directors may fix and determine, and vary, the amount of working capital of the corporation; determine whether any (and, if any, what part) of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to share- holders; and, without action by the shareholders, use and apply such surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the laws of the State of Ohio, at any time or from time to time, in the purchase or acquisition of shares of any class, voting-trust certificates for shares, bonds, deben- tures, notes, scrip, warrants, obligations, evidence of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the board of directors shall deem expedient and without regard to any provisions which may hereafter be contained in the corporation's articles of incor- poration with respect to the redemption of shares of any class at the option of the corporation. SEVENTH: Every statute of the State of Ohio hereafter enacted, whereby rights or privileges of the shareholders of a corporation organ- -2- 3 ized under the Ohio General Corporation Law are increased, diminished, or in any way affected, or whereby effect is given to any action author- ized, ratified, or approved by less than all the shareholders of any such corporation, shall apply to the corporation and shall bind every shareholder to the same extent as if such statute had been in force at the date of the filing of these articles of incorporation. EIGHTH: A director or officer of the corporation shall not be disqualified by his office from dealing or contracting with the corporation as a vendor, purchaser, employee, agent, or otherwise. No transaction or contract or act of the corporation shall be void or voidable or in any way affected or invalidated by reason of the fact that any director or officer, or any firm of which any director or officer is a shareholder, director, or trustee, or any trust of which any director or officer is a trustee or beneficiary, is in any way interested in such transaction or contract or act. No director or officer shall be accountable or responsible to the corporation for or in respect to any transaction or contract or act of the corporation or for any gains or profits directly or indirectly realized by him by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, director, or trustee, or any trust of which he is a trustee or beneficiary, is interested in such transaction or contract or act; provided the fact that such director or officer or such firm or corporation or such trust is so interested shall have been disclosed or shall have been known to the board of directors or such members thereof as shall be present at any meeting of the board of directors at which action upon such contract or transaction or act shall have been taken. Any director may be counted in determining the existence of a quorum at any meeting of the board of directors which shall authorize or take action in respect to any such contract or transaction or act, and may vote thereat to authorize, ratify, or approve any such contract or transaction or act, and any officer of the corporation may take any action within the scope of his authority respecting such contract or transaction or act with like force and effect as if he or any firm of which he is a member, or any corporation of which he is a shareholder, director, or trustee, or any trust of which he is a trustee or beneficiary, were not interested in such transaction or contract or act. Without limiting or qualifying the foregoing, if in any judicial or other inquiry, suit, cause, or proceeding, the question of whether a director or officer of the corpora- tion has acted in good faith is material, then notwithstanding any statute or rule of law or of equity to the contrary (if any there be), his good faith shall be presumed, in the absence of proof to the contrary by clear and convincing evidence. NINTH: No holder of shares of any class of the corporation shall be entitled as such, as a matter of right, to subscribe for or purchase shares of any class, now or hereafter authorized, or to purchase or to subscribe for securities convertible into or exchangeable for shares of the corporation, or to which shall appertain or be attached -3- 4 any warrants or rights entitling the holder thereto to subscribe for or purchase shares, except such rights of subscription or purchase, if any, at such price or prices, and upon such terms and conditions as the board of directors in its discretion may from time to time deter- mine. TENTH: Except as otherwise provided in these Articles of Incorporation or the Code of Regulations of the corporation, notwithstand- ing any provision of any statute of the State of Ohio, now or hereafter in force, requiring for any purpose the vote, consent, waiver, or release of the holders of shares entitling them to exercise two-thirds or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, any action may be taken by the vote of the holders of shares entitling them to exercise a majority of the voting power of the corporation, or of such class or classes, unless the proportion designated by such statute cannot be altered by these articles. 5 CERTIFICATE OF AMENDMENT TO THE AMMENDED AND RESTATED ARTICLES OF INCORPORATION OF CARDINAL DISTRIBUTION, INC. Robert D. Walter and Michael E. Moritz hereby certify that they are the duly elected and acting chairman and secretary, respectively, of Cardinal Distribution, Inc., an Ohio corporation (the "Company"), and further certify that the following is a true copy of a resolution amending the Company's Amended and Restated Articles of Incorporation duly adopted by the affirmative vote of the holders of shares of the Company entitling them to exercise a majority of the voting power of the Company at the annual meeting of shareholders duly held on August 30, 1989: RESOLVED, That the Amended and Restated Articles of Incorporation of the Company be amended by deleting ARTICLE FOURTH thereof in its entirety and by substituting in lieu thereof following ARTICLE FOURTH: FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 20,500,000, consisting of 20,000,000 common shares without par value and 500,000 nonvoting preferred shares without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the dividend rate, (c) the dates of payment of dividends and the dates from which they are cumulative, (d) liquidation price, 6 (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. Each common share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. Subject to the preferences of any outstanding preferred shares, each common share shall be entitled to participate equally in such dividends as may be declared by the board of directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. August 30, 1989 CARDINAL DISTRIBUTION, INC. By /s/ Robert D. Walter ------------------------------ Robert D. Walter, Chairman By /s/ Michael E. Moritz ------------------------------ Michael E. Moritz, Secretary 7 CERTIFICATE OF AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CARDINAL DISTRIBUTION, INC. Robert D. Walter and George H. Bennett, Jr. hereby certify that they are the duly elected and acxting chairman and assistant secretary, respectively, of Cardinal Distribution, Inc., an Ohio corporation (the "Company"), and further certify that the following is a true copy of a resolution amending the Company's Amended and Restated Articles of Incorporation duly adopted by the affirmative vote of the holder of shares of the Company entitling them to exercise a majority of the voting power of the Company at the annual meeting of shareholders duly held on August 15, 1991: REVOLVED, that Article FOURTH of the Company's Amended and Restated Articles of Incorporation be, and the same hereby is, deleted in its entirety and there is substituting the following: FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 40,500,000 consisting of 40,000,000 common shares without par value and 500,000 nonvoting preferred shares without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any other series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the divided rate, (c) the dates of payment of dividends and the dates from which they are cumulative, 8 (d) liquidation price, (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. Each common share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholder of the corporation, on all propositions before such meetings. Subject to the preferences of any outstanding preferred shares, each common share shall be entitled to participate equally in such dividends as may be decalred by the board of directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. August 15, 1991 CARDINAL DISTRIBUTION, INC. By /s/ Robert D. Walter --------------------------- Robert D. Walter, Chairman By /s/ George H. Bennett, Jr. --------------------------- George H. Bennett, Jr., Assistant Secretary 9 EXHIBIT A TO CERTIFICATE OF AMENDMENT TO AMENDED AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED OF CARDINAL DISTRIBUTION, INC. Resolved, that Article FIRST, of the Amended and Restated Articles of Incorporation, as amended, of Cardinal Distribution, Inc. be, and the same hereby is, deleted in its entirety and there is substituted therefor the following: FIRST: The name of the corporation shall be "Cardinal Health, Inc." Resolved, that Article FOURTH of the Amended and Restated Articles of Incorporation, as amended, of Cardinal Distribution, Inc. be, and the same hereby is, deleted in its entirety and there is substituted therefor the following: FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 65,500,000, consisting of 60,000,000 common shares, without par value ("Class A Common Shares"), 5,000,000 Class B common shares, without par value ("Class B Common Shares") (the Class A Common Shares and the Class B Common Shares are sometimes referred to herein collectively as the "Common Shares"), and 500,000 nonvoting preferred shares, without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the dividend rate, (c) the dates of payment of dividends and the dates from which they are cumulative, (d) liquidation price, (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. All common shares shall be identical and will entitle the holders thereof to the same rights and privileges, except as otherwise provided herein. A. VOTING RIGHTS. 1. CLASS A COMMON SHARES. Exchept as set forth herein or as otherwise required by law, each outstanding Class A Common Share shall entitle the holder thereof to one vote, in person or by 10 proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. 2. CLASS B COMMON STOCK. Except as set forth herein or as otherwise required by law, each outstanding Class B Common Share shall entitle the holder thereof to one-fifth (1/5) of one vote, in person or by proxy, at any and all meetings of shareholders of the corporation, on all propositions before such meetings. Notwithstanding the foregoing, holders of the Class B Common Shares shall be entitled to vote as a separate class on any amendment to this paragraph 2 of this Section A, on the issuance in the aggregate by the corporation of additional Class B Common Shares in excess of the number of Class B Common Shares held by Chemical Equity Associates and its Affiliates or issuable pursuant to Section 3(c) hereof and on any amendment, repeal or modification of any provision of these Articles that adversely affects the powers, preferences or special rights of the holders of the Class B Common Shares. B. DIVIDENDS; LIQUIDATION. Subject to the preferences of any preferred shares, each Common Share shall be entitled to participate equally in such dividends as may be declared by its board of directors out of funds legally available therefor or to participate equally in all distributions of assets upon liquidation; provided, that in the case of dividends payable in Common Shares of the Corporation, or options, warrants or rights to acquire such Common Shares, or securities convertible into or exchangeable for such Common Shares, the shares, options, warrants, rights or securities so payable shall be payable in shares of, or options, warrants or rights to acquire, or securities convertible into or exchangeable for, Common Shares of the same class upon which the dividend or distribution is being paid. C. CONVERSION. 1. CONVERSION OF CLASS A COMMON SHARES. Any Regulated Shareholder (defined below) shall be entitled to convert, at any time and from time to time, any or all of the Class A Common Shares held by such shareholder into the same number of Class B Common Shares. 2. CONVERSION OF CLASS B COMMON SHARES. Each holder of Class B Common Shares may convert such shares into Class A Common Shares if such holder reasonably believes that such converted shares will be transferred within fifteen (15) days pursuant to a Conversion Event (defined below) and such holder agrees not to vote any such Class A Common Shares prior to such Conversion Event and undertakes to promptly convert such shares back into Class B Common Shares if such shares are not transferred pursuant to a Conversion Event. Each Regulated Shareholder may provide for further restrictions or limitations upon the conversion of any Class B Common Shares by providing the corporation with signed, written instructions specifying such additional restrictions and legending such shares as to the existence of such restrictions. 3. CONVERSION PROCEDURE. Each conversion of Copmmon Shares of the corporation into shares of another class of Common Shares of the Corporation shall be effected by the surrender of the certificate or certificates representing the shares to be converted (the "Converting Shares") at the principal office of the corporation (or such other office or agency of the corporation as the corporation may designate by written notice to the holders of common shares) at any time during its usual business hours, together with written notice by the holder of such Converting Shares, stating that such holder desires to convert the Converting Shares, or a stated number of the shares represented by such certificate or certificates, into an equal number of shares of the class into which such shares may be converted (the "Converted Shares"). Such notice shall also state the name or names (with addresses) and denominations in which the certificate or certificates for Converted Shares are to be issued and shall include instructions for the delivery thereof. Promptly after such surrender and the receipt of such written notice, the corporation will issue and deliver in accordance with the surrendering holder's intructions the certificate or certificates evidencing the Converted Shares issuable upon such conversion, and the corporation will deliver to the converting holder a certificate representing any shares which were represented by the certificate or certificates that were delivered to the coropration with such conversion, but which were not converted. 11 Such conversion shall be deemed to have been effected as of the close of business on the date on which such certificate or certificates shall have been surrendered and such notice shall have been received by the corporation, and at such time the rights of the holder of the Converting Shares as such holder shall cease and the person or persons in whose name or names the certificate or certificates for the Converted Shares are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the Converted Shares. Upon issuance of shares in accordance with this Section C, such Converted Shares shall be deemed to be duly authorized, validly issued, fully paid and non-assessable. Each holder of Class B Common Shares shall be entitled to convert Class B Common Shares in connection with any Conversion Event if such holder reasonably believes that such Conversion Event will be consummated, and a written request for conversion from any holder of Class B Common Shares to the corporation stating such holder's reasonable belief that a Conversion Event shall occur shall be conclusive and shall obligate the corporation to effect such conversion in a timely manner so as to enable each such holder to participate in such Conversion Event. The corporation will not cancel the Class B Common Shares so converted before the 15th day following such Conversion Event and will reserve such shares until such 15th day for reissuance in compliance with the next sentence. If any Class B Common Shares are converted into Class A Common Shares in connection with a Conversion Event and such Class A Common Shares are not actually distributed, disposed of or sold pursuant to such Conversion Event, such Class A Common Shares shall be promptly converted back into the same number of Class B Common Shares. 4. STOCK SPLITS; ADJUSTMENTS. If the Corporation shall in any manner subdivide (by stock split, stock dividend or otherwise) or combine (by reverse stock split or otherwise) the outstanding Class A Common Shares or the Class B Common Shares, then the outstanding shares of each other class of common shares shall be subdivided or combined, as the case may be, to the same extent, share and share alike, and effective provision shall be made for the protection of the conversion rights hereunder. In the case of any reorganization, reclassification or change of shares of the Class A Common Shares or Class B Common Shares (other than a change in par value or from par to no par value as a result of a subdivision or combination), or in case of any consolidation of the corporation with one or more corporations or a merger of the corporation with another corporation (other than a consolidation or merger in which the corporation is the resulting or surviving corporation and which does not result in any reclassification or change of outstanding Class A Common Shares or Class B Common Shares), each holder of Class A Common Shares or Class B Common Shares shall have the right at any time thereafter, so long as the conversion right hereunder with respect to such share would exist had such event not occurred, to convert such share into the kind and amount of shares of stock and other securities and properties (including cash) receivable upon such reorganization, reclassification, change, consolidation or merger by a holder of the number of Class A Common Shares or Class B Common Shares into which such Class A Common Shares or Class B Common Shares, as the case may be, might have been converted immediately prior to such reorganization, reclassification, change, consolidation or merger. In the event of any such reorganization, reclassification, change, consolidation or merger which will have the effect of causing any Regulated Shareholder's direct or indirect ownership of shares of capital stock of the resulting or surviving corporation immediately following such transaction to equal or exceed 5% of the voting power thereof (calculated as if all such Regulated Shareholder's Class B Common Shares were converted to Class A Common Shares immediately prior to consummation of such transaction) then provision shall be made in the certificate of incorporation of the resulting or surviving corporation for the protection of the conversion rights of Class A Common Shares and Class B Common Shares that shall be applicable, as nearly as reasonably may be, to any such other shares of stock and other securities and property deliverable upon conversion of such Class A Common Shares or Class B Common Shares ionto which such Class A Common Shares or Class B Common Shares might have been converted prior to such event. 12 5. RESERVATION OF SHARES. The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Shares and Class B Common Shares or its treasury shares, for the purpose of issuance upon the conversion of Class A Common Shares and Class B Common Shares, such number of shares of such class as are then issuable upon the conversion of all outstanding shares of Class A Common Shares and Class B Common Shares which may be converted. 6. NO CHARGE. The issuance of certificates for shares of any class of common shares upon conversion of shares of any other class of common shares shall be made without charge to the holders of such shares for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such conversion and the related issuance of common shares; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the holder of the common shares converted. D. As used herein, the following terms shall have the meanings shown below: 1. "AFFILIATES" shall mean with respect to any Person, any other person, directly or indirectly controlling, controlled by or under common control with such Person. For the purpose of the above definition, the term "control" (including with correlative meaning, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. 2. "CONVERSION EVENT" shall mean (a) any public offering or public sale of securities of the Corporation (including a public offering registered under the Securities Act of 1933 and a public sale pursuant to Rule 144 of the Securities and Exchange Commission or any similar rule then in force), (b) any sale of securities of the corporation to a person or group of persons (withing the meaning of the Securities Exchange Act of 1934, as amended (the "1934 Act")) if, after such sale, such person or group of persons in the aggregate would own or control securities which possess in the aggregate the ordinary voting power to elect a majority of the corporation's directors (provided that such sale has been approved by the corporation's Board of Directors or a committee thereof), (c) any sale of securities of the corporation to a person or group of persons (within the meaning of the 1934 Act) if, after such sale, such person or group of persons in the aggregate would own or control securities of the corporation (excluding any Class B Common Shares being converted and disposed of in connection with such Conversion Event) which possess in the aggregate the ordinary voting power to elect a majority of the corporation's directors, (d) any sale of securities of the corporation to a person or group of persons (within the meaning of the 1934 Act) if, after such sale, such person or group of persons would not, in the aggregate, own, control or have the right to acquire more than two percent (2%) of the outstanding securities or any class of voting securities of the corporation (for purposes of this clause, treating Class A Common Stock and Class B Common Stock as a single class), and (e) a merger, consolidation or similar transaction involving the corporation if, after such transaction, a person or group of persons (within the meaning of the 1934 Act) in the aggregate would own or control securities which possess in the aggregate the ordinary voting power to elect a majority of the surviving corporation's directors (provided that the transaction has been approved by the corporation's Board of Directors or a committee thereof). 3. "PERSON" or "PERSON" shall mean an individual, a partnership, a corporation, a trust, a joint venture, an unincorporated organization or a government or any department or agency thereof. 4. "REGULATED SHAREHOLDER" shall mean Chemical Equity Associates and its Affiliates. EX-3.02 3 EXHIBIT 1 Exhibit 3.02 RESTATED CODE OF REGULATIONS ---------------------------- OF -- CARDINAL HEALTH, INC. --------------------------- ADOPTED JUNE 14, 1983 AMENDED SEPTEMBER 14, 1984 AMENDED JANUARY 27, 1994 2 TABLE OF CONTENTS ----------------- Page Article 1: Meetings of Shareholders ---- ------------------------ +SC1.1 Annual Meeting 1 +SC1.2 Special Meetings 1 +SC1.3 Place of Meetings 1 +SC1.4 Notice of Meetings 1 +SC1.5 Waiver of Notice 2 +SC1.6 Quorum 2 +SC1.7 Organization 2 +SC1.8 Order of Business 2 +SC1.9 Voting 2 +SC1.10 Proxies 3 +SC1.11 Inspectors of Elections 3 +SC1.12 Record Date 3 +SC1.13 List of Shareholders at Meeting 3 +SC1.14 Action in Writing in Lieu of Meeting 3 Article 2: Board of Directors ------------------ +SC2.1 General Powers of Board 3 +SC2.2 Number and Qualifications 4 +SC2.3 Compensation and Expenses 4 +SC2.4 Election of Directors 4 +SC2.5 Term of Office 4 +SC2.6 Resignations 4 +SC2.7 Removal of Directors 4 +SC2.8 Vacancies 5 +SC2.9 Organization of Meetings 5 +SC2.10 Place of Meetings 5 +SC2.11 Regular Meetings 5 +SC2.12 Special Meetings 5 +SC2.13 Notices of Meetings 5 +SC2.14 Notice of Adjournment of Meeting 6 +SC2.15 Quorum and Manner of Acting 6 +SC2.16 Order of Business 6 +SC2.17 Action in Writing in Lieu of Meeting 6 +SC2.18 Executive and Other Committees 6 Article 3: Officers -------- +SC3.1 Number and Titles 7 +SC3.2 Election, Terms of Office, Qualifications, and Compensation 7 3 +SC3 3 Additional Officers, Agents, Etc. 8 +SC3.4 Removal 8 +SC3.5 Resignations 8 +SC3.6 Vacancies 8 +SC3.7 Powers, Authority, and Duties of Officers 8 Article 4: Shares and Their Transfer ------------------------- +SC4.1 Certificates for Shares 8 +SC4.2 Transfer of Shares 9 +SC4.3 Regulations 9 +SC4.4 Lost, Destroyed, and Stolen Certificates 9 Article 5: Examination of Books by Shareholders 10 ------------------------------------ Article 6: Indemnification and Insurance ----------------------------- +SC6.1 Costs Incurred 10 +SC6.2 Indemnification Procedure 11 +SC6.3 Advance Payment of Costs 11 +SC6.4 Non-Exclusive 11 +SC6.5 Insurance 11 +SC6.6 Survival 11 +SC6.7 Successors 11 Article 7: Seal 12 ---- Article 8: Fiscal Year 12 ----------- Article 9: Control Share Acquisitions 12 -------------------------- Article 10: Amendment of Regulations 12 ------------------------ ii 4 ARTICLE 1 Meetings of Shareholders ------------------------ +SC 1.1 ANNUAL MEETING. The annual meeting of the shareholders, for the purpose of electing directors and transacting such other business as may come before the meeting, shall be held on such date and at such time during the first six months of each fiscal year of the Company as may be fixed by the board of directors and stated in the notice of the meeting. +SC1.2 SPECIAL MEETINGS. A special meeting of the shareholders may be called by the chairman of the board, or the president, or a majority of the directors acting with or without a meeting, or the holders of shares entitling them to exercise twenty-five percent of the voting power of the Company entitled to be voted at the meeting. Upon delivery to the chairman, president, or secretary of a request in writing for a shareholders' meeting by any persons entitled to call such meeting, the officer to whom the request is delivered shall give notice to the shareholders of such meeting. Any such request shall specify the purposes and the date and hour for such meeting. The date shall be at least 14 and not more than 65 days after delivery of the request. If such officer does not call the meeting within five days after any such request, the persons making the request may call the meeting by giving notice as provided in +SC1.4 or by causing it to be given by their designated representative. +SC1.3 PLACE OF MEETINGS. All meetings of shareholders shall be held at such place or places, within or without the State of Ohio, as may be fixed by the board of directors or, if not so fixed, as shall be specified in the notice of the meeting. +SC 1.4 NOTICE OF MEETINGS. Every shareholder shall furnish the secretary of the Company with an address at which notices of meetings and all other corporate notices may be served on or mailed to him. Except as other- wise expressly required by law, notice of each shareholders' meeting, whether annual or special, shall, not more than 60 days and at least 7 days before the date specified for the meeting, be given by the chairman, president, or secretary or, in case of their refusal or failure to do so, by the person or persons entitled to call such meeting, to each shareholder entitled to notice of the meeting, by delivering a written or printed notice to him personally or by mailing the notice in a postage-prepaid envelope addressed to him at his address furnished by him as above provided, or, if he shall not have furnished such address, at his post office address last known to the sender. Except when expressly required by law, no publication of any notice of a sharehold- ers' meeting shall be required. If shares are transferred after notice has been given, notice need not be given to the transferee. A record date may be fixed for determining the shareholders entitled to notice of any meeting of shareholders, in accordance with the provisions of +SC 1.12. Every notice of a shareholders' meeting, besides stating the time and place of the meeting, shall state briefly the purposes of the meeting as may be specified by the 5 person or persons requesting or calling the meeting. Only the business provided for in such notice shall be considered at the meeting. Notice of the adjournment of a meeting need not be given if the time and place to which it is adjourned are fixed and announced at the meeting. +SC 1.5 WAIVER OF NOTICE. Any shareholder, either before or after any meeting, may waive any notice required by law, the articles, or these regulations. Waivers must be in writing and filed with or entered upon the records of the meeting. Notice of a meeting will be deemed to have been waived by any shareholder who attends the meeting either in person or by proxy, and who does not, before or at the commencement of the meeting, protest the lack of proper notice. +SC 1.6 QUORUM. The holders of shares entitling them to exercise a majority of the voting power of the Company entitled to vote at a meeting, present in person or by proxy, shall constitute a quorum for the transaction of business, except when a greater number is required by law, the articles of incorporation, or these regulations. In the absence of a quorum at any meeting or any adjournment of the meeting, the holders of shares entitling them to exercise a majority of the voting power of the shareholders present in person or by proxy and entitled to vote may adjourn the meeting from time to time. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. +SC 1.7 ORGANIZATION. At each shareholders' meeting the chairman of the board, or, in his absence, the president, or, in the absence of both of them, a chairman chosen by the holders of shares entitling them to exercise a majority of the voting power of the shareholders present in person or by proxy and entitled to vote, shall act as chairman, and the secretary of the Company, or, in his absence, any assistant secretary, or, in the absence of all of them, any person whom the chairman of the meeting appoints, shall act as secretary of the meeting. +SC 1.8 ORDER OF BUSINESS. The order of business at each share- holders' meeting shall be fixed by the chairman of the meeting at the begin- ning of the meeting but may be changed by the vote of the holders of shares entitling them to exercise a majority of the voting power of the shareholders present in person or by proxy and entitled to vote. +SC 1.9 VOTING. Each holder of a share or shares of the class or classes entitled to vote by law or the articles of incorporation shall be entitled to one vote in person or by proxy for each such share registered in his name on the books of the Company. As provided in +SC 1.12, a record date for determining which shareholders are entitled to vote at any meeting may be fixed. Shares of its own stock belonging to the Company shall not be voted directly or indirectly. Persons holding voting shares in a fiduciary capacity shall be entitled to vote the shares so held. A shareholder whose shares are pledged shall be entitled to vote the shares standing in his name on the books of the Company. Upon a demand by any shareholder present in person or by proxy at any meeting and entitled to vote, any vote shall be by ballot. Each ballot shall be signed by the shareholder or his proxy and shall state the number of shares voted by him. Otherwise, votes shall be made orally. -2- 6 +SC1.10 PROXIES. Any shareholder who is entitled to attend or vote at a shareholders' meeting shall be entitled to exercise such right and any other of his rights by proxy or proxies appointed by a writing signed by such shareholder, which need not be witnessed or acknowledged. Except as otherwise specifically provided in these regulations, actions taken by proxy shall be governed by the provisions of +SC1701.48. Ohio Revised Code, or any future statute of like tenor or effect, including the provisions relating to the sufficiency of the writing, duration of the validity of the proxy, power of substitution, revocation, and all other provisions. +SC1.11 INSPECTORS OF ELECTIONS. Inspectors of elections may be appointed and act as provided in +SC1701.50, Ohio Revised Code, or any future statute of like tenor or effect. +SC1.12 RECORD DATE. The board of directors may fix a record date for any lawful purpose, including without limitation the determination of shareholders entitled to: (a) receive notice of or to vote at any meeting, (b) receive payment of any dividend or other distribution, (c) receive or exercise rights of purchase of, subscription for, or exchange or conversion of, shares or other securities, subject to any contract right with respect thereto, or (d) participate in the execution of written consents, waivers, or releases. Any such record date shall not be more than sixty days preceding the date of such meeting, the date fixed for the payment of any dividend or other distribution, or the date fixed for the receipt or the exercise of rights, as the case may be. +SC1.13 LIST OF SHAREHOLDERS AT MEETING. Upon request of any shareholder at any meeting of shareholders, there shall be produced at the meeting an alphabetically arranged list, or classified lists, of the shareholders of record as of the applicable record date who are entitled to vote, showing their respective addresses and the number and classes of shares held by them. +SC1.14 ACTION IN WRITING IN LIEU OF MEETING. Any action which may be authorized or be taken at a meeting of the shareholders, may be authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or writings signed by, all the shareholders who would be entitled to notice of a meeting of the shareholders held for that purpose. ARTICLE 2 Board of Directors ------------------ +SC2.1 GENERAL POWERS OF BOARD. The powers of the Company shall be exercised, its business and affairs shall be conducted, and its property shall be controlled by the board of directors, except as otherwise provided by law of Ohio, the articles, or these regulations. - 3 - 7 +SC 2.2 NUMBER AND CLASSIFICATION. The number of directors of the Corporation shall be fourteen (14). The number of directors may be increased or decreased by action of the board of directors upon the vote of a majority of the board; provided, however, that in no case shall the number of directors be fewer than nine (9) or more than fourteen (14) without an amendment to this +SC 2.2 approved in the manner specified in Article 10 of these regulations; and provided further that no decrease in the numbers of directors shall have the effect of removing any director prior to the expiration of his term of office. The directors shall be divided into three classes. Initially, two of such classes shall consist of five members each and one shall consist of four members. The term of office of the first class (initially having four members) shall expire at the 1994 annual meeting of shareholders, the term of office of the second class (initially having five members) shall expire at the 1995 annual meeting of shareholders, and the term of office of the third class (initially having five directors) shall expire at the 1996 annual meeting of shareholders. At each annual meeting of shareholders after the 1994 annual election of directors, directors elected to succeed those whose terms then expire shall be elected for a term of office expiring at the annual meeting of shareholders during the third year after their election. In case of any increase in the number of directors (after a reduction below fourteen), the additional directors shall be distributed among the several classes so as to make the classes as nearly equal in number as possible. [As amended January 27, 1994.] +SC 2.3 COMPENSATION AND EXPENSES. The directors shall be enti- tled to such compensation, on a monthly or annual basis, or on the basis of meetings attended, or on both bases, as the board of directors may from time to time determine and establish. No director shall be precluded from serving the Company as an officer or in any other capacity, or from receiving compen- sation for so serving. Directors may be reimbursed for their reasonable expenses incurred in the performance of their duties, including the expense of traveling to and from meetings of the board, if such reimbursement is autho- rized by the board of directors. +SC2.4 ELECTION OF DIRECTORS. At each meeting of the sharehold- ers for the election of directors of a particular class at which a quorum is present, the persons receiving the greatest number of votes shall be deemed elected the directors of that class. Any shareholder may cumulate his votes at an election of directors upon fulfillment of the conditions prescribed in +SC 1701.55, Ohio Revised Code, or any future statute of like tenor or effect. +SC2.5 TERM OF OFFICE. Each director shall hold office until the annual meeting of shareholders in the year of the expiration of his term of office, or, if the election of directors shall not be held at that annual meeting, until a special meeting of the shareholders for the purpose of electing directors is held as provided in +SC1.2, or the taking of action by all the shareholders in writing in lieu of either such meetings, and in any case until his successor is elected and qualified or until his earlier resignation, removal from office, or death. +SC2.6 RESIGNATIONS. Any director may resign by giving written notice to the chairman, the president, or the secretary of the Company. Such resignation shall take effect at the time specified therein. Unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. +SC2.7 REMOVAL OF DIRECTORS. All the directors, or all the directors of a particular class, or any individual director may be removed from office, without assigning any cause, by the affirmative vote of the holders of record of not less than 75% of the shares having voting power of the Company with respect to the election of directors, provided that unless - 4 - 8 all the directors, or all the directors of a particular class, are removed, no individual director shall be removed in case the votes of a sufficient number of shares are cast against his removal which, if cumulatively voted at an election of all the directors, or all the directors of a particular class, as the case may be, would be sufficient to elect at least one director. In case of any such removal, a new director may be elected at the same meeting for the unexpired term of each director removed. Any director may also be removed by the board of directors for any of the causes specified in +SC 1701.58(B), Ohio Revised Code, or any future statute of like tenor or effect. [As amended September 14, 1984.] +SC2.8 VACANCIES. A vacancy in the board of directors may be filled by majority vote of the remaining directors, even though they are less than a quorum, until the shareholders hold an election to fill the vacancy. Shareholders entitled to elect directors may elect a director to fill any vacancy in the board (whether or not the vacancy has previously been tempo- rarily filled by the remaining directors) at any shareholders' meeting called for that purpose. +SC2. 9 ORGANIZATION OF MEETINGS. At each meeting of the board of directors, the chairman of the board, or, in his absence, the president, or, in his absence, a chairman chosen by a majority of the directors present, shall act as chairman. The secretary of the Company, or, if the secretary shall not be present, any person whom the chairman of the meeting shall appoint, shall act as secretary of the meeting. +SC2.10 PLACE OF MEETINGS. Meetings of the board shall be held at such place or places, within or without the State of Ohio, as may from time to time be fixed by the board of directors or as shall be specified or fixed in the notice of the meeting. +SC2.11 REGULAR MEETINGS. Regular meetings of the board will not be held unless this code of regulations shall be amended to provide therefor. +SC2.12 SPECIAL MEETINGS. Special meetings of the board of directors shall be held whenever called by the chairman of the board, if any, or by the president, or by any two directors. +SC2.13 NOTICES OF MEETINGS. Every director shall furnish the secretary of the Company with an address at which notices of meetings and all other corporate notices may be served on or mailed to him. Unless waived before, at, or after the meeting as hereinafter provided, notice of each board meeting shall be given by the chairman, the president, the secretary, an assistant secretary, or the persons calling such meeting, to each director in any of the following ways: (a) By orally informing him of the meeting in person or by telephone not later than two days before the date of the meeting. (b) By delivering written notice to him not later than two days before the date of the meeting. -5- 9 (c) By mailing written notice to him, or by sending notice to him by telegram, cablegram, or radio- gram, postage or other costs prepaid, addressed to him at the address furnished by him to the secretary of the Company, or to such other address as the person sending the notice shall know to be correct. Such notice shall be posted or dispatched a sufficient length of time before the meeting so that in the ordinary course of the mail or the transmission of telegrams, cablegrams, or radiograms, delivery would normally be made to him not later than two days before the date of the meeting. Unless otherwise required by the articles of incorporation, this code of regulations, or the laws of the State of Ohio (for example, see the provisions of the code of regulations with respect to the election or removal of directors), the notice of any meeting need not specify the purposes of the meeting. Notice of any meeting of the board may be waived by any director, either before, at, or after the meeting, in writing, or by telegram, cable- gram, or radiogram. +SC2.14 NOTICE OF ADJOURNMENT OF MEETING. Notice of adjournment of a meeting need not be given if the time and place to which it is adjourned are fixed and announced at the meeting. +SC2.15 QUORUM AND MANNER OF ACTING. A majority of the number of directors fixed or established pursuant to +SC2.2 as of the time of any meeting of the board of directors must be present in person at such meeting in order to constitute a quorum for the transaction of business, provided that meetings of the directors may include participation by directors through any communica- tions equipment if all directors participating can hear each other, and such participation in a meeting shall constitute presence at such meeting. The act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors. In the absence of a quorum, a majority of those present may adjourn a meeting from time to time until a quorum is present. Notice of an adjourned meeting need not be given. The directors shall act only as a board. Individual directors shall have no power as such. +SC2.16 ORDER OF BUSINESS. The order of business at meetings of the board shall be such as the chairman of the meeting may prescribe or follow, subject, however, to his being overruled with respect thereto by a majority of the members of the board present. +SC2.17 ACTION IN WRITING IN LIEU OF MEETING. Any action which may be authorized or taken at a meeting of the directors, may be authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or writings signed by all the directors. +SC2.18 EXECUTIVE AND OTHER COMMITTEES. The directors may create and from time to time abolish or reconstitute an executive committee and any other committee or committees of directors each to consist of not less than - 6 - 10 three directors, and may delegate to any such committee or committees any or all of the authority of the directors, however conferred, other than that of filling vacancies in the board of directors or in any committee of directors. Each such committee shall serve at the pleasure of the directors, and shall act only in the intervals between meetings of the board of directors, and shall be subject to the control and direction of the board of directors. The directors may adopt or authorize the committees to adopt provisions with respect to the government of any such committee or committees which are not inconsistent with applicable law, the articles of incorporation of the Company, or these regulations. An act or authorization of any act by any such committee within the authority properly delegated to it by the directors shall be as effective for all purposes as the act or authorization of the directors. Any right, power, or authority conferred in these regulations to the "directors" or to the "board of directors" shall also be deemed conferred upon each committee or committees of directors to which any such right, power, or authority is delegated (expressly, or by general delegation, or by necessary implication) by the board of directors. ARTICLE 3 Officers -------- +SC3.1 NUMBER AND TITLES. The officers of the Company shall be a chairman of the board, a president, one or more vice presidents, if needed, a secretary, one or more assistant secretaries, if needed, a treasurer, and one or more assistant treasurers, if needed. The board shall have the discretion to determine from time to time the number of vice presidents, if any, the Company shall have, whether or not assistant secretaries and assistant treasurers are needed, and, if so, the number of assistant secretaries and assistant treasurers the Company shall have. Furthermore, if there is more than one vice president, the board may, in its discretion, establish designations for the vice presidencies so as to distinguish among them as to their functions or their order, or both. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge, or verify any instrument in more than one capacity if such instrument is required by law, the articles, or these regulations to be executed, acknowledged, or verified by two or more officers. +SC3.2 ELECTION, TERMS OF OFFICE, QUALIFICATIONS, AND COMPENSA- TION. The officers shall be elected by the board of directors. Each shall be elected for an indeterminate term and shall hold office during the pleasure of the board of directors. The board of directors may hold annual elections of officers; in that event, each such officer shall hold office until his succes- sor is elected and qualified unless he earlier is removed by the board of directors. The chairman of the board shall be a director, but no other officer need be a director. The other qualifications of all officers shall be such as the board of directors may establish. The board of directors shall fix the compensation, if any, of each officer. - 7 - 11 +SC3.3, ADDITIONAL OFFICERS, AGENTS ETC. In addition to the officers mentioned in +SC3.1, the Company may have such other officers, agents, and committees as the board of directors may deem necessary and may appoint, each of whom or each member of which shall hold office for such period, have such authority, and perform such duties as may be provided in these regula- tions or as may, from time to time, be determined by the board. The board of directors may delegate to any officer or committee the power to appoint any subordinate officer, agents, or committees. In the absence of any officer, or for any other reason the board of directors may deem sufficient, the board of directors may delegate, for the time being, the powers and duties, or any of them, of such officer to any other officer, or to any director. +SC3.4 REMOVAL. Any officer may be removed, either with or without cause, at any time, by the board of directors at any meeting, the notices (or waivers of notices) of which shall have specified that such removal action was to be considered. Any officer appointed by an officer or committee to which the board shall have delegated the power of appointment may be removed, either with or without cause, by the committee or superior officer (including successors) who made the appointment, or by any committee or officer upon whom such power of removal may be conferred by the board of directors. +SC3.5 RESIGNATIONS. Any officer may resign at any time by giving written notice to the board of directors, the chairman, the president, or the secretary. Any such resignation shall taken effect at the time specified therein. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. +SC3.6 VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification, or otherwise, shall be filled in the manner prescribed for regular appointments or elections to such office. +SC3.7 POWERS, AUTHORITY, AND DUTIES OF OFFICERS. Officers of the Company shall have the powers and authority conferred and the duties prescribed by law, in addition to those specified or provided for in these regulations and such other powers, authority, and duties as may be determined by the board of directors from time to time. ARTICLE 4 Shares and Their Transfer ------------------------- +SC4. 1 CERTIFICATES FOR SHARES. Every owner of one or more shares in the Company shall be entitled to a certificate or certificates, which shall be in such form as may be approved by the board of directors, certifying the number and class of shares in the Company owned by him. The certificates for the respective classes of such shares shall be numbered in the order in which they are issued and shall be signed in the name of the Company by the chairman and the secretary; provided that, if such certificates are countersigned by a transfer agent or registrar, the signatures of such - 8 - 12 officers upon such certificates may be fascimiles, stamped, or printed. If an officer who has signed or whose facsimile signature has been used, stamped, or printed on any certificates ceases to be such officer because of death, resignation or other reason before such certificates are delivered by the Company, such certificates shall nevertheless be conclusively deemed to be valid if countersigned by any such transfer agent or registrar. A record shall be kept of the name of the owner or owners of the shares represented by each such certificate and the number of shares represented thereby, the date thereof, and in case of cancellation, the date of cancellation. Every certif- icate surrendered to the Company for exchange or transfer shall be cancelled and no new certificate or certificates shall be issued in exchange for any existing certificates until such existing certificates shall have been so cancelled, except in cases provided for in +SC4.4. +SC4.2 TRANSFER OF SHARES. Any certificate for shares of the Company shall be transferable in person or by attorney upon the surrender of the certificate to the Company or any transfer agent for the Company (for the class of shares represented by the certificate surrendered) properly endorsed for transfer and accompanied by such assurances as the Company or its transfer agent may require as to the genuineness and effectiveness of each necessary endorsement. The person in whose name any shares stand on the books of the Company shall, to the full extent permitted by law, be conclusively deemed to be the unqualified owner and holder of the shares and entitled to exercise all rights of ownership, for all purposes relating to the Company. Neither the Company nor any transfer agent of the Company shall be required to recognize any equitable interest in, or any claim to, any such shares on the part of any other person, whether disclosed on the certificate or any other way, nor shall they be required to see to the performance of any trust or other obligation. +SC4.3 REGULATIONS. The board of directors may make such rules and regulations as it may deem expedient or advisable, not inconsistent with these regulations, concerning the issue, transfer, and registration of certif- icates for shares. It may appoint one or more transfer agents or one or more registrars, or both, and may require all certificates for shares to bear the signature of either or both. +SC4.4 LOST, DESTROYED OR STOLEN CERTIFICATES. A new share certificate or certificates may be issued in place of any certificate theretofore issued by the Company which is alleged to have been lost, destroyed, or wrongfully taken upon: (a) the execution and delivery to the Company by the person claiming the certificate to have been lost, destroyed, or wrongfully taken of an affidavit of that fact in form satisfactory to the Company, specifying whether or not the certificate was endorsed at the time of such alleged loss, destruction or taking, and (b) the receipt by the Company of a surety bond, indemnity agreement, or any other assurances satisfactory to the Company and to all transfer agents and registrars of the class of shares represented by the certificate against any and all losses, damages, costs, expenses, liabilities or claims to which they or any of them may be subjected by reason of the issue and delivery of such new certificate or certificates or with respect to the original certificate. - 9 - 13 ARTICLE 5 Examination of Books by Shareholders ------------------------------------ The board of directors may make reasonable rules and regulations prescribing under what conditions the books, records, accounts, and documents of the Company, or any of them, shall be open to the inspection of the share- holders. No shareholder shall be denied any right which is conferred by +SC 1701.37, Ohio Revised Code, or any other applicable law to inspect any book, record, account, or document of the Company. An original or duplicate stock ledger showing the names and addresses of the shareholders and the number and class of shares issued or transferred of record to or by them from time to time shall at all times during the usual hours for business be open to the examination of every shareholder at the principal office or place of business of the Company in the State of Ohio. ARTICLE 6 Indemnification and Insurance ----------------------------- +SC6.1 COSTS INCURRED. The Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he is or was a director, officer, employee, or agent of the Company, or is or was serving at the request of the Company as a director, trustee, officer, employee, or agent of another corporation, domestic or foreign, nonprofit or for profit, partner- ship, joint venture, trust, or other enterprise, against expenses, including attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding provided that: (a) he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; (b) with respect to any criminal action or proceeding, he had no reasonable cause to believe his conduct was unlawful; and (c) in any action or suit by or in the right of the Company, no indemnification shall be made with respect to any amounts paid in settlement or with respect to any claim, issue, or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Company unless and only to the extent that the Court of Common Pleas or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful. - 10 - 14 +SC 6.2 INDEMNIFICATION PROCEDURE. Any indemnification under +SC6.1 shall be made by the Company only if and as authorized in the specific case upon a determination that indemnification of the director, trustee, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in +SC6.1. Such determination shall be made by one of the following methods: (a) by a majority vote of a quorum consisting of directors of the Company who were not and are not parties to or threatened with any such action, suit, or proceeding; or (b) if such a quorum is not obtainable or if a majority vote of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel retained by the Company, other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the Company or any person to be indemnified within the past five years; or (c) by the shareholders; or (d) by the Court of Common Pleas of Franklin County, Ohio, or the court in which such action, suit, or proceeding was brought. +SC6.3 ADVANCE PAYMENT OF COSTS. Expenses, including attorneys' fees, incurred in defending any action, suit, or proceeding referred to in +SC6.1 may be paid by the Company in advance of the final disposition of such action, suit, or proceeding as authorized by the directors in the specific case upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee, or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Company as autho- rized in this Article. +SC6.4 NON-EXCLUSIVE. The indemnification authorized in this Article shall not be deemed exclusive of any other rights to which persons seeking indemnification may be entitled under any agreement, vote of share- holders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. +SC6.5 INSURANCE. The Company may purchase and maintain insur- ance on behalf of any person who is or was a director, officer, employee, or agent of the Company, or is or was serving at the request of the Company as a director, trustee, officer, employee, or agent of another corporation, domes- tic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under this Article or under Chapter 1701, Ohio Revised Code. +SC6.6 SURVIVAL. The indemnification authorized in this Article shall continue as to a person who has ceased to be a director, trustee, officer, employee, or agent. +SC6.7 SUCCESSORS. The indemnification authorized in this Article shall inure to the benefit of the heirs, executors, and administrators of any person entitled to indemnification under this Article. - 11 - 15 ARTICLE 7 Seal ---- The board of directors may adopt and alter a corporate seal and use the same or a facsimile thereof, but failure to affix the corporate seal, if any, shall not affect the validity of any instrument. ARTICLE 8 Fiscal Year ----------- The fiscal year of the Company shall be fixed and may be changed from time to time by the board of directors. ARTICLE 9 Control Share Acquisitions -------------------------- Section 1701.831, Ohio Revised Code, shall not apply to control share acquisitions of shares of the Company. ARTICLE 10 Amendment of Regulations ------------------------ These regulations may be amended or new regulations may be adopted: (a) at any meeting of the shareholders held for such purpose by the affirm- ative vote of the holders of record of shares entitling them to exercise a majority of the voting power on such proposal, except that the affirmative vote of the holders of record of not less than 75% of the shares having voting power with respect to any such proposal shall be required to amend, change, adopt any provision inconsistent with, or repeal +SC+SC2.2, 2.5, or 2.7 or to amend, change, or repeal the provisions of this Article 10 establishing the voting requirements for amending, changing, adopting any provision incon- sistent with, or repealing +SC+SC2.2, 2.5, or 2.7; or (b) without a meeting of the shareholders, by the written consent of the holders of record of shares entitling them to exercise a majority of the voting power on such proposal, except that the written consent of the holders of record of not less than 75% of the shares having voting power with respect to any such proposal shall be required to amend, change, adopt any provision inconsistent with, or repeal +SC+SC2.2, 2.5, or 2.7 or to amend, change, or repeal the provisions of this Article 10 establishing the consent requirements for amending, changing, adopting any provisions inconsistent with, or repealing +SC +SC2.2, 2.5, or 2.7. If any amendment or new regulations are adopted without a meeting of the shareholders, the secretary shall mail a copy of the amendment or new regu- lations to each shareholder who would have been entitled to vote on the proposal but who did not participate in the adoption of the amendment or new regulations. [As amended September 14, 1984.] - 12 - EX-4.02 4 EXHIBIT 1 Exhibit 4.02 ============================================================ CARDINAL DISTRIBUTION, INC. AND BANK ONE, INDIANAPOLIS, NA, Trustee Indenture Dated as of May 1, 1993 __________ ============================================================ 2 TABLE OF CONTENTS __________ Page ---- PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . 1 RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . 1 Authorization of Indenture . . . . . . . . . . . . . . . . . . . 1 Compliance with Legal Requirements . . . . . . . . . . . . . . . 1 Purpose of and Consideration for Indenture . . . . . . . . . . . 1 ARTICLE ONE DEFINITIONS SECTION 1.1. Certain Terms Defined . . . . . . . . . . . . . . . . . . 1 Attributable Debt . . . . . . . . . . . . . . . . . . . . 2 Board of Directors . . . . . . . . . . . . . . . . . . . 2 Business Day . . . . . . . . . . . . . . . . . . . . . . 2 Commission . . . . . . . . . . . . . . . . . . . . . . . 2 Consolidated Net Tangible Assets . . . . . . . . . . . . 3 Consolidated Subsidiary . . . . . . . . . . . . . . . . . 3 Corporate Trust Office . . . . . . . . . . . . . . . . . 3 Event of Default . . . . . . . . . . . . . . . . . . . . 3 Exempted Debt . . . . . . . . . . . . . . . . . . . . . . 3 Funded Indebtedness . . . . . . . . . . . . . . . . . . . 3 Holder, holder of securities, Securityholder . . . . . . . . . . . . . . . . . . . . 3 Indebtedness . . . . . . . . . . . . . . . . . . . . . . 3 Indenture . . . . . . . . . . . . . . . . . . . . . . . . 4 Interest . . . . . . . . . . . . . . . . . . . . . . . . 4 Issuer . . . . . . . . . . . . . . . . . . . . . . . . . 4 Officers' Certificate . . . . . . . . . . . . . . . . . . 4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . 4 Original Issue Discount Security . . . . . . . . . . . . 4 Outstanding . . . . . . . . . . . . . . . . . . . . . . . 4 Person . . . . . . . . . . . . . . . . . . . . . . . . . 5 Principal . . . . . . . . . . . . . . . . . . . . . . . . 5 Responsible officer . . . . . . . . . . . . . . . . . . . 5 Security or Securities . . . . . . . . . . . . . . . . . 6 Senior Funded Indebtedness . . . . . . . . . . . . . . . 6 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 6 Trustee . . . . . . . . . . . . . . . . . . . . . . . . 6 i 3 Page ---- Trust Indenture Act of 1939 . . . . . . . . . . . . . . . 6 vice president . . . . . . . . . . . . . . . . . . . . . 6 Yield to Maturity . . . . . . . . . . . . . . . . . . . . 6 ARTICLE TWO SECURITIES SECTION 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . 6 SECTION 2.2. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . 7 SECTION 2.3. Amount Unlimited; Issuable in Series . . . . . . . . . . . 7 SECTION 2.4. Authentication and Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 2.5. Execution of Securities . . . . . . . . . . . . . . . . . 10 SECTION 2.6. Certificate of Authentication . . . . . . . . . . . . . . 10 SECTION 2.7. Denomination and Date of Securities; Payments of Interest . . . . . . . . . . . 11 SECTION 2.8. Registration, Transfer and Exchange . . . . . . . . . . . 12 SECTION 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . 13 SECTION 2.10. Cancellation of Securities; Destruction Thereof . . . . . . . . . . . . . . . . . . 14 SECTION 2.11. Temporary Securities . . . . . . . . . . . . . . . . . . . 14 ARTICLE THREE COVENANTS OF THE ISSUER AND THE TRUSTEE SECTION 3.1. Payment of Principal and Interest . . . . . . . . . . . . 15 SECTION 3.2. Offices for Payments, etc . . . . . . . . . . . . . . . . 15 SECTION 3.3. Appointment to Fill a Vacancy in Office of Trustee . . . . . . . . . . . . . . . . . . . 15 SECTION 3.4. Paying Agents . . . . . . . . . . . . . . . . . . . . . . 16 SECTION 3.5. Certificate of the Issuer . . . . . . . . . . . . . . . . 17 SECTION 3.6. Securityholders' Lists . . . . . . . . . . . . . . . . . . 17 SECTION 3.7. Reports by the Issuer . . . . . . . . . . . . . . . . . . 17 SECTION 3.8. Reports by the Trustee . . . . . . . . . . . . . . . . . . 17 SECTION 3.9. Limitations on Liens . . . . . . . . . . . . . . . . . . 18 SECTION 3.10. Limitation on Sale and Lease-Back . . . . . . . . . . . . 21 ii 4 Page ---- ARTICLE FOUR REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT SECTION 4.1. Event of Default Defined; Acceleration of Maturity; Waiver of Default . . . . . . . . . . . . 21 SECTION 4.2. Collection of Indebtedness by Trustee; Trustee May Prove Debt . . . . . . . . . . . . . . . . 24 SECTION 4.3. Application of Proceeds . . . . . . . . . . . . . . . . . 27 SECTION 4.4. Suits for Enforcement . . . . . . . . . . . . . . . . . . 28 SECTION 4.5. Restoration of Rights on Abandonment of Proceedings . . . . . . . . . . . . . . . . . . . . 29 SECTION 4.6. Limitations on Suits by Securityholders . . . . . . . . . . . . . . . . . . . . 29 SECTION 4.7. Unconditional Right of Securityholders to Institute Certain Suits . . . . . . . . . . . . . . . . . . . . . 29 SECTION 4.8. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default . . . . . . . . . . . . . . . . . . . . . . . . 30 SECTION 4.9. Control by Securityholders . . . . . . . . . . . . . . . . 30 SECTION 4.10. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 31 SECTION 4.11. Trustee to Give Notice of Default, But May Withhold in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . 31 SECTION 4.12. Right of Court to Require Filing of Undertaking to Pay Costs . . . . . . . . . . . . . . 32 ARTICLE FIVE CONCERNING THE TRUSTEE SECTION 5.1. Duties and Responsibilities of the Trustee; During Default; Prior to Default . . . . . . . . . . . . . . . . . . . . . . . . 33 SECTION 5.2. Certain Rights of the Trustee . . . . . . . . . . . . . . 34 SECTION 5.3. Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof . . . . . . . . . . . . 36 SECTION 5.4. Trustee and Agents May Hold Securities; Collections, etc . . . . . . . . . . . . . 36 SECTION 5.5. Moneys Held by Trustee . . . . . . . . . . . . . . . . . . 36 SECTION 5.6. Compensation and Indemnification of Trustee and Its Prior Claim . . . . . . . . . . . . 36 SECTION 5.7. Right of Trustee to Rely on Officers' Certificate, etc . . . . . . . . . . . . . . 37 iii 5 Page ---- SECTION 5.8. Persons Eligible for Appointment as Trustee . . . . . . . . . . . . . . . . . . . . . . 37 SECTION 5.9 Resignation and Removal; Appointment of Successor Trustee . . . . . . . . . . . . . . . . . 37 SECTION 5.10. Acceptance of Appointment by Successor Trustee . . . . . . . . . . . . . . . . . . . 39 SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . . . . 40 SECTION 5.12. Indentures Not Creating Potential Conflicting Interests for the Trustee . . . . . . . . . . . . . . . . . . . . . . . . 41 ARTICLE SIX CONCERNING THE SECURITYHOLDERS SECTION 6.1. Evidence of Action Taken by Securityholders . . . . . . . . . . . . . . . . . . . . 41 SECTION 6.2. Proof of Execution of Instruments and of Holding of Securities; Record Date . . . . . . . . . . . . . . . . . . . . . . . . . 41 SECTION 6.3. Holders to Be Treated as Owners . . . . . . . . . . . . . 42 SECTION 6.4. Securities Owned by Issuer Deemed Not Outstanding . . . . . . . . . . . . . . . . . . . . . . 42 SECTION 6.5. Right of Revocation of Action Taken . . . . . . . . . . . 43 ARTICLE SEVEN SUPPLEMENTAL INDENTURES SECTION 7.1. Supplemental Indentures Without Consent of Securityholders . . . . . . . . . . . . . . 43 SECTION 7.2. Supplemental Indentures With Consent of Securityholders . . . . . . . . . . . . . . . . . . 45 SECTION 7.3. Effect of Supplemental Indenture . . . . . . . . . . . . . 46 SECTION 7.4. Documents to Be Given to Trustee . . . . . . . . . . . . . 46 SECTION 7.5. Notation on Securities in Respect of Supplemental Indentures . . . . . . . . . . . . . . . . 47 iv 6 Page ---- ARTICLE EIGHT CONSOLIDATION, MERGER, SALE OR CONVEYANCE SECTION 8.1. Issuer may Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . . . . . . . . 47 SECTION 8.2. Successor Corporation Substituted . . . . . . . . . . . . 47 SECTION 8.3. Opinion of Counsel to Trustee . . . . . . . . . . . . . . 48 ARTICLE NINE SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS SECTION 9.1. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . 48 SECTION 9.2. Application by Trustee of Funds Deposited for Payment of Securities . . . . . . . . . . 50 SECTION 9.3. Repayment of Moneys Held by Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . 50 SECTION 9.4. Return of Moneys Held By Trustee and Paying Agent Unclaimed for Three Years . . . . . . . . . . . . . . . . . . . . . . . . . 50 ARTICLE TEN MISCELLANEOUS PROVISIONS SECTION 10.1. Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual Liability . . . . . . . . . . . . . . . . . 51 SECTION 10.2. Provisions of Indenture for the Sole Benefit of Parties and Security- holders . . . . . . . . . . . . . . . . . . . . . . . . 51 SECTION 10.3. Successors and Assigns of Issuer Bound by Indenture . . . . . . . . . . . . . . . . . . 51 SECTION 10.4. Notices and Demands on Issuer, Trustee and Securityholders . . . . . . . . . . . . . . 51 SECTION 10.5. Officers' Certificates and Opinions of Counsel; Statements to Be Con- tained Therein . . . . . . . . . . . . . . . . . . . . 52 SECTION 10.6. Payments Due on Saturdays, Sundays and Holidays . . . . . . . . . . . . . . . . . . . . . 53 v 7 Page ---- SECTION 10.7. Conflict of Any Provision of Indenture with Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . . . . . . . 53 SECTION 10.8. Ohio Law to Govern . . . . . . . . . . . . . . . . . . . . 54 SECTION 10.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . 54 SECTION 10.10. Effect of Headings . . . . . . . . . . . . . . . . . . . . 54 ARTICLE ELEVEN REDEMPTION OF SECURITIES AND SINKING FUNDS SECTION 11.1. Applicability of Article . . . . . . . . . . . . . . . . . 54 SECTION 11.2. Notice of Redemption; Partial Redemptions . . . . . . . . . . . . . . . . . . . . . . 54 SECTION 11.3. Payment of Securities Called for Redemption . . . . . . . . . . . . . . . . . . . . . . 56 SECTION 11.4. Exclusion of Certain Securities from Eligibility for Selection for Redemption . . . . . . . . . . . . . . . . . . . . . . 56 SECTION 11.5. Mandatory and Optional Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . . 57 TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .61-62 vi 8 THIS INDENTURE, dated as of May 1, 1993 between CARDINAL DISTRIBUTION, INC., an Ohio corporation (the "Issuer"), and BANK ONE, INDIANAPOLIS, NA, a national banking association duly incorporated and existing under the laws of the United States of America (the "Trustee"), W I T N E S S E T H: WHEREAS, the Issuer has duly authorized the issue from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities") up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture and to provide, among other things, for the authentication, delivery and administration thereof, the Issuer has duly authorized the execution and delivery of this Indenture; and WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done; NOW, THEREFORE: In consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities as follows: ARTICLE ONE DEFINITIONS ----------- SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities Act of 1933 (except as herein otherwise expressly provided or unless the context otherwise clearly requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally 9 accepted accounting principles, and the term "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means such accounting principles as are generally accepted at the time of any computation. The words "HEREIN", "HEREOF" and "HEREUNDER" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular. "ATTRIBUTABLE DEBT" when used in connection with a sale and lease-back transaction shall mean, as of any particular time, the lesser of (a) the fair value of the assets subject to such arrangement or (b) the aggregate of present values (discounted at a rate per annum equal to the weighted average Yield to Maturity of the Securities of all series then outstanding and compounded semi-annually) of the obligations of the Issuer or any Consolidated Subsidiary for net rental payments during the remaining term of all leases (including any period for which such lease has been extended or may, at the option of the lessor, be extended). The term "net rental payments" under any lease of any period shall mean the sum of the rental and other payments required to be paid in such period by the lessee thereunder, not including, however, any amounts required to be paid by such lessee (whether or not designated as rental or additional rental) on account of maintenance and repairs, reconstruction, insurance, taxes, assessments, water rates or similar charges required to be paid by such lessee thereunder or any amounts required to be paid by such lessee thereunder contingent upon the amount of sales, maintenance and repairs, reconstruction, insurance, taxes, assessments, water rates or similar charges. "BOARD OF DIRECTORS" means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act hereunder. "BUSINESS DAY" means, with respect to any Security, a day that in the city (or in any of the cities, if more than one) in which amounts are payable, as specified in the form of such Security, is not a day on which banking institutions are authorized by law or regulation to close. "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date. 2 10 "CONSOLIDATED NET TANGIBLE ASSETS" means the aggregate amount of assets after deducting therefrom (a) all current liabilities (excluding any thereof constituting Funded Indebtedness by reason of being renewable or extendible) and (b) all goodwill, tradenames, trademarks, patents, unamortized debt discount and expense and other like intangibles, all as set forth on the most recent balance sheet of the Issuer and its Consolidated Subsidiaries and computed in accordance with generally accepted accounting principles. "CONSOLIDATED SUBSIDIARY" means any Subsidiary substantially all the property of which is located, and substantially all the operations of which are conducted, in the United States of America whose financial statements are consolidated with those of the Issuer in accordance with generally accepted accounting principles. "CORPORATE TRUST OFFICE" means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located at 111 Monument Circle, Suite 1611, Indianapolis, Indiana 46204. "EVENT OF DEFAULT" means any event or condition specified as such in Section 4.1 which shall have continued for the period of time, if any, therein designated. "EXEMPTED DEBT" means the sum of the following items outstanding as of the date Exempted Debt is to be determined: (a) Indebtedness of the Issuer and its Consolidated Subsidiaries incurred after the date of this Indenture and secured by liens not permitted to be created or assumed pursuant to Section 3.9 of the Indenture, and (b) Attributable Debt of the Issuer and its Consolidated Subsidiaries in respect of every sale and lease-back transaction entered into after the date of this Indenture, other than those leases expressly permitted by Section 3.10. "FUNDED INDEBTEDNESS" means all Indebtedness having a maturity of more than 12 months from the date as of which the amount thereof is to be determined or having a maturity of less than 12 months but by its terms being renewable or extendible beyond 12 months from such date at the option of the borrower. "HOLDER", "HOLDER OF SECURITIES", "SECURITYHOLDER" or other similar terms mean the registered holder of any Security. "INDEBTEDNESS" means all items classified as indebtedness on the most recently available balance sheet of 3 11 the Issuer and its Consolidated Subsidiaries, in accordance with generally accepted accounting principles. "INDENTURE" means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder. "INTEREST" means, when used with respect to non-interest bearing Securities, interest payable after maturity. "ISSUER" means (except as otherwise provided in Article Five) Cardinal Distribution, Inc., an Ohio corporation, and, subject to Article Eight, its successors and assigns. "OFFICERS' CERTIFICATE" means a certificate signed by the chairman of the Board of Directors or the president or any vice president and by the treasurer or the secretary or any assistant secretary of the Issuer and delivered to the Trustee. Each such certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for in Section 10.5. "OPINION OF COUNSEL" means an opinion in writing signed by legal counsel who may be an employee of or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for in Section 10.5, if and to the extent required hereby. "ORIGINAL ISSUE DISCOUNT SECURITY" means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 4.1. "OUTSTANDING", when used with reference to Securities, shall, subject to the provisions of Section 6.4, mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and 4 12 held in trust by the Issuer for the holders of such Securities (if the Issuer shall act as its own paying agent), PROVIDED that if such Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 2.9 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the Issuer). In determining whether the holders of the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 4.1. "PERSON" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "PRINCIPAL" whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include "and premium, if any". "RESPONSIBLE OFFICER" when used with respect to the Trustee means the chairman of the board of directors, any vice chairman of the board of directors, the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice president, the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. 5 13 "SECURITY" or "SECURITIES" has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered under this Indenture. "SENIOR FUNDED INDEBTEDNESS" means any Funded Indebtedness of the Company that is not subordinated in right of payment to any other Indebtedness of the Company. "SUBSIDIARY" means any corporation of which at least a majority of the outstanding stock having the voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Issuer, or by one or more of the Subsidiaries, or by the Issuer and one or more Subsidiaries. "TRUSTEE" means the Person identified as "Trustee" in the first paragraph hereof and, subject to the provisions of Article Five, shall also include any successor trustee. "TRUST INDENTURE ACT OF 1939" (except as otherwise provided in Sections 7.1 and 7.2) means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was originally executed. "VICE PRESIDENT" when used with respect to the Issuer or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title of "vice president". "YIELD TO MATURITY" means the yield to maturity on a series of Securities, calculated at the time of issuance of such series, or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice. ARTICLE TWO SECURITIES ---------- SECTION 2.1 FORMS GENERALLY. The Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall be established by or pursuant to a resolution of the Board of Directors or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced 6 14 thereon such legend or legends, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities, as evidenced by their execution of the Securities. The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's certificate of authentication on all Securities shall be in substantially the following form: This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. BANK ONE, INDIANAPOLIS, NA, as Trustee By______________________ Authorized Officer SECTION 2.3 AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a resolution of the Board of Directors and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series, (1) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities); (2) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, 7 15 other Securities of the series pursuant to Section 2.8, 2.9, 2.11 or 11.3); (3) the date or dates on which the principal of the Securities of the series is payable; (4) the rate or rates at which the Securities of the series shall bear interest, if any, or the method by which such rate shall be determined, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable and the record dates for the determination of Holders to whom interest is payable; (5) the place or places where the principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.2); (6) the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer, pursuant to any sinking fund or otherwise; (7) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation; (8) if other than denominations of $1,000 and any multiple thereof, the denominations in which Securities of the series shall be issuable; (9) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 4.1 or provable in bankruptcy pursuant to Section 4.2; (10) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture); and (11) any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series. 8 16 All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such resolution of the Board of Directors or in any such indenture supplemental hereto. SECTION 2.4 AUTHENTICATION AND DELIVERY OF SECURITIES. At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Securities of any series executed by the Issuer to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver such Securities to or upon the written order of the Issuer, signed by both (a) the Chairman of its Board of Directors, or any vice chairman of its Board of Directors, or its president or any vice president and (b) by its treasurer or any assistant treasurer, without any further action by the Issuer. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities the Trustee shall be entitled to receive, and (subject to Section 5.1) shall be fully protected in relying upon: (1) a certified copy of any resolution or resolutions of the Board of Directors authorizing the action taken pursuant to the resolution or resolutions delivered under clause (2) below; (2) a copy of any resolution or resolutions of the Board of Directors relating to such series, in each case certified by the Secretary or an Assistant Secretary of the Issuer; (3) an executed supplemental indenture, if any; (4) an Officers' Certificate setting forth the form and terms of the Securities as required pursuant to Sections 2.1 and 2.3, respectively and prepared in accordance with Section 10.5; (5) an Opinion of Counsel, prepared in accordance with Section 10.5, to the effect that (a) the form or forms and terms of such Securities have been established by or pursuant to a resolution of the Board of Directors or by a supplemental indenture as permitted by Sections 2.1 and 2.3 in conformity with the provisions of this Indenture; (b) such Securities, when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions 9 17 specified in such Opinion of Counsel, will constitute valid and binding obligations of the Issuer; (c) all laws and requirements in respect of the execution and delivery by the Issuer of the Securities have been complied with; and (d) covering such other matters as the Trustee may reasonably request. The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose the Trustee to personal liability to existing Holders. SECTION 2.5 EXECUTION OF SECURITIES. The Securities shall be signed on behalf of the Issuer by both (a) the chairman of its Board of Directors or any vice chairman of its Board of Directors or its president or any vice president and (b) by its treasurer or any assistant treasurer or its secretary or any assistant secretary. Such signatures may be the manual or facsimile signatures of the present or any future such officers. Typographical and other minor errors or defects in any such reproduction of any such signature shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee. In case any officer of the Issuer who shall have signed any of the Securities shall cease to be such officer before the Security so signed shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or disposed of as though the person who signed such Security had not ceased to be such officer of the Issuer; and any Security may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of such Security, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer. SECTION 2.6 CERTIFICATE OF AUTHENTICATION. Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of this Indenture or be valid or obligatory for any 10 18 purpose. Such certificate by the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. SECTION 2.7 DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF INTEREST. The Securities shall be issuable as registered securities without coupons and in denominations as shall be specified as contemplated by Section 2.3. In the absence of any such specification with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any multiple thereof. The Securities shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plan as the officers of the Issuer executing the same may determine with the approval of the Trustee as evidenced by the execution and authentication thereof. Each Security shall be dated the date of its authentication, shall bear interest, if any, from the date and shall be payable on the dates, in each case, which shall be specified as contemplated by Section 2.3. The person in whose name any Security of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any transfer or exchange of such Security subsequent to the record date and prior to such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such series, in which case such defaulted interest shall be paid to the persons in whose names Outstanding Securities for such series are registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the holders of Securities not less than 15 days preceding such subsequent record date. The term "record date" as used with respect to any interest payment date (except a date for payment of defaulted interest) shall mean the date specified as such in the terms of the Securities of any particular series, or, if no such date is so specified, if such interest payment date is the first day of a calendar month, the fifteenth day of the next preceding calendar month or, if such interest payment date is the fifteenth day of a calendar month, the first day of such calendar month, whether or not such record date is a Business Day. 11 19 SECTION 2.8 REGISTRATION, TRANSFER AND EXCHANGE. The Issuer will keep or cause to be kept at each office or agency to be maintained for the purpose as provided in Section 3.2 a register or registers in which, subject to such reasonable regulations as it may prescribe, it will register, and will register the transfer of, Securities as in this Article provided. Such register shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable time. At all reasonable times such register or registers shall be open for inspection by the Trustee. Upon due presentation for registration of transfer of any Security of any series at any such office or agency to be maintained for the purpose as provided in Section 3.2, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or Securities of the same series in authorized denominations for a like aggregate principal amount. Any Security or Securities of any series may be exchanged for a Security or Securities of the same series in other authorized denominations, in an equal aggregate principal amount. Securities of any series to be exchanged shall be surrendered at any office or agency to be maintained by the Issuer for the purpose as provided in Section 3.2, and the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor the Security or Securities of the same series which the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding. All Securities presented for registration of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the holder or his attorney duly authorized in writing. The Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction. The Issuer shall not be required to exchange or register a transfer of (a) any Securities of any series for a period of 15 days next preceding the first mailing of notice of redemption of Securities of such series to be redeemed, or (b) any Securities selected, called or being called for redemption except, in the case of any Security where public notice has been given that such Security is to 12 20 be redeemed in part, the portion thereof not so to be redeemed. All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange. SECTION 2.9 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN SECURITIES. In case any temporary or definitive Security shall become mutilated, defaced or be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the Issuer, the Trustee shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Security, or in lieu of and substitution for the Security so destroyed, lost or stolen. In every case the applicant for a substitute Security shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof. Upon the issuance of any substitute Security, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any Security which has matured or is about to mature or has been called for redemption in full shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated or defaced Security), if the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof. Every substitute Security of any series issued pursuant to the provisions of this Section by virtue of the fact that any such Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen 13 21 Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities of such series duly authenticated and delivered hereunder. All Securities shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, defaced or destroyed, lost or stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. SECTION 2.10 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All Securities surrendered for payment, redemption, registration of transfer or exchange, or for credit against any payment in respect of a sinking or analogous fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee, shall be delivered to the Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall destroy cancelled Securities held by it and deliver a certificate of destruction to the Issuer. If the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation. SECTION 2.11 TEMPORARY SECURITIES. Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee). Temporary Securities of any series shall be issuable as registered Securities without coupons, of any authorized denomination, and substantially in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee. Temporary Securities may contain such reference to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Securities of such series may be surrendered in 14 22 exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.2, and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series a like aggregate principal amount of definitive Securities of the same series of authorized denominations. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series. ARTICLE THREE COVENANTS OF THE ISSUER AND THE TRUSTEE --------------------------------------- SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the Securities of such series at the place or places, at the respective times and in the manner provided in such Securities. Unless otherwise specified in accordance with Section 2.3, each instalment of interest on the Securities of any series may be paid by mailing checks for such interest payable to or upon the written order of the holders of Securities entitled thereto as they shall appear on the registry books of the Issuer. SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any of the Securities remain outstanding, the Issuer will maintain in Indianapolis, Indiana or in any other city where the Corporate Trust Office of any successor Trustee may be located, the following for each series: an office or agency (a) where the Securities may be presented for payment, (b) where the Securities may be presented for registration of transfer and for exchange as in this Indenture provided and (c) where notices and demands to or upon the Issuer in respect of the Securities or of this Indenture may be served. The Issuer will give to the Trustee written notice of the location of any such office or agency and of any change of location thereof. Unless otherwise specified in accordance with Section 2.3, the Issuer hereby initially designates the Corporate Trust Office of the Trustee, as the office to be maintained by it for each such purpose. In case the Issuer shall fail to so designate or maintain any such office or agency or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the Corporate Trust Office. SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in 15 23 the manner provided in Section 5.9, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder. SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section, (a) that it will hold all sums received by it as such agent for the payment of the principal of or interest on the Securities of such series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the holders of the Securities of such series or of the Trustee, (b) that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal of or interest on the Securities of such series when the same shall be due and payable, and (c) pay any such sums so held in trust by it to the Trustee upon the Trustee's written request at any time during the continuance of the failure referred to in clause (b) above. The Issuer will, on or prior to each due date of the principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee of any failure to take such action. If the Issuer shall act as its own paying agent with respect to the Securities of any Series, it will, on or before each due date of the principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the holders of the Securities of such series a sum sufficient to pay such principal or interest so becoming due. The Issuer will promptly notify the Trustee of any failure to take such action. Anything in this Section to the contrary notwithstanding, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such 16 24 sums to be held by the Trustee upon the trusts herein contained. Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 9.3 and 9.4. SECTION 3.5 CERTIFICATE OF THE ISSUER. The Issuer will furnish to the Trustee on or before March 31 in each year (beginning with 1994) a brief certificate (which need not comply with Section 10.5) from the principal executive, financial or accounting officer of the Issuer as to his or her knowledge of the Issuer's compliance with all conditions and covenants under this Indenture (such compliance to be determined without regard to any period of grace or requirement of notice provided under this Indenture). SECTION 3.6 SECURITYHOLDERS' LISTS. If and so long as the Trustee shall not be the Security registrar for the Securities of any series, the Issuer will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the holders of the Securities of such series pursuant to Section 312 of the Trust Indenture Act of 1939 (a) semi-annually not more than 15 days after each record date for the payment of interest on such Securities, as hereinabove specified, as of such record date and on dates to be determined pursuant to Section 2.3 for non-interest bearing securities in each year, and (b) at such other times as the Trustee may request in writing, within thirty days after receipt by the Issuer of any such request as of a date not more than 15 days prior to the time such information is furnished. SECTION 3.7 REPORTS BY THE ISSUER. The Issuer covenants to file with the Trustee, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports which the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. SECTION 3.8 REPORTS BY THE TRUSTEE. Any Trustee's report required under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or before July 15 in each year following the date hereof, so long as any Securities are outstanding hereunder, and shall be dated as of a date convenient to the Trustee no more than 60 nor less than 45 days prior thereto. 17 25 SECTION 3.9 LIMITATIONS ON LIENS. The Issuer will not create or assume, and will not permit any Consolidated Subsidiary to create or assume, any Indebtedness for money borrowed which is secured by a mortgage, pledge, security interest or lien ("liens") of or upon any assets, whether now owned or hereafter acquired, of the Issuer or any such Consolidated Subsidiary without equally and ratably securing the Securities by a lien ranking ratably with and equal to (or at the Issuer's option prior to) such secured Indebtedness. The foregoing restriction, however, will not apply to: (a) liens existing on the date of this Indenture; (b) liens on any assets of any corporation existing at the time such corporation becomes a Consolidated Subsidiary; (c) liens on any assets existing at the time of acquisition of such assets by the Issuer or a Consolidated Subsidiary, or liens to secure the payment of all or any part of the purchase price of such assets upon the acquisition of such assets by the Issuer or a Consolidated Subsidiary or to secure any indebtedness incurred or guaranteed by the Issuer or a Consolidated Subsidiary prior to, at the time of, or within 360 days after such acquisition (or in the case of real property, the completion of construction (including any improvements on an existing asset) or commencement of full operation of such asset, whichever is later) which indebtedness is incurred or guaranteed for the purpose of financing all or any part of the purchase price thereof or, in the case of real property, construction or improvements thereon; PROVIDED, HOWEVER, that in the case of any such acquisition, construction or improvement, the lien shall not apply to any assets theretofore owned by the Issuer or a Consolidated Subsidiary, other than, in the case of any such construction or improvement, any real property on which the property so constructed, or the improvement, is located; (d) liens on any assets to secure indebtedness of a Consolidated Subsidiary to the Issuer or to another wholly-owned domestic Subsidiary; (e) liens on any assets of a corporation existing at the time such corporation is merged into or consolidated with the Issuer or a Subsidiary or at the time of a purchase, lease or other acquisition of the assets of a corporation or firm 18 26 as an entirety or substantially as an entirety by the Issuer or a Subsidiary; (f) liens on any assets of the Issuer or a Consolidated Subsidiary in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof, or in favor of any other country, or any political subdivision thereof, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred or guaranteed for the purpose of financing all or any part of the purchase price (or, in the case of real property, the cost of construction), of the assets subject to such liens (including, but not limited to, liens incurred in connection with pollution control, industrial revenue or similar financings); (g) any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part of any lien referred to in the foregoing clauses (a) to (f), inclusive; PROVIDED, HOWEVER, that the principal amount of indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the time of such extension, renewal or replacement and that such extension, renewal or replacement shall be limited to all or a part of the assets which secured the lien so extended, renewed or replaced (plus improvements and construction on such real property); (h) liens imposed by law, such as mechanics', workmen's, repairmen's, materialmen's, carriers', warehousemen's, vendors' or other similar liens arising in the ordinary course of business, or governmental (federal, state or municipal) liens arising out of contracts for the sale of products or services by the Issuer or any Consolidated Subsidiary, or deposits or pledges to obtain the release of any of the foregoing liens; (i) pledges, liens or deposits under worker's compensation laws or similar legislation and liens or judgments thereunder which are not currently dischargeable, or in connection with bids, tenders, contracts (other than for the payment of money) or leases to which the Issuer or any Consolidated Subsidiary is a party, or to secure public or statutory obligations of the Issuer or any Consolidated Subsidiary, or in connection with 19 27 obtaining or maintaining self-insurance or to obtain the benefits of any law, regulation or arrangement pertaining to unemployment insurance, old age pensions, social security or similar matters, or to secure surety, appeal or customs bonds to which the Issuer or any Consolidated Subsidiary is a party, or in litigation or other proceedings such as, but not limited to, interpleader proceedings, and other similar pledges, liens or deposits made or incurred in the ordinary course of business; (j) liens created by or resulting from any litigation or other proceeding which is being contested in good faith by appropriate proceedings, including liens arising out of judgments or awards against the Issuer or any Consolidated Subsidiary with respect to which the Issuer or such Consolidated Subsidiary is in good faith prosecuting an appeal or proceedings for review or for which the time to make an appeal has not yet expired; or final unappealable judgment liens which are satisfied within 15 days of the date of judgment; or liens incurred by the Issuer or any Consolidated Subsidiary for the purpose of obtaining a stay or discharge in the course of any litigation or other proceeding to which the Issuer or such Consolidated Subsidiary is a party; or (k) liens for taxes or assessments or governmental charges or levies not yet due or delinquent, or which can thereafter be paid without penalty, or which are being contested in good faith by appropriate proceedings; landlord's liens on property held under lease; and any other liens or charges incidental to the conduct of the business of the Issuer or any Consolidated Subsidiary or the ownership of the assets of any of them which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not, in the opinion of the Issuer, materially impair the use of such assets in the operation of the business of the Issuer or such Consolidated Subsidiary or the value of such assets for the purposes of such business. Notwithstanding the restrictions set forth in the preceding paragraph, the Issuer or any Consolidated Subsidiary will be permitted to create or assume any Indebtedness which is secured by a lien without equally and ratably securing the Securities, provided that at the time of such creation or assumption, and after giving effect thereto, 20 28 Exempted Debt does not exceed 10% of Consolidated Net Tangible Assets. SECTION 3.10 LIMITATION ON SALE AND LEASE-BACK. The Issuer will not, nor will it permit any Consolidated Subsidiary to, enter into any sale and lease-back transaction with respect to any assets, other than any such transaction involving a lease for a term of not more than three years, unless either (a) the Issuer or such Consolidated Subsidiary would be entitled to incur Indebtedness secured by a lien on the assets to be leased, in an amount at least equal to the Attributable Debt with respect to such sale and lease-back transaction, without equally and ratably securing the Securities, pursuant to clauses (a) through (k) inclusive of Section 3.9, or (b) the proceeds of the sale of the assets to be leased are at least equal to the fair value of such assets (as determined by the Board of Directors of the Issuer) and the proceeds are applied to the purchase or acquisition (or, in the case of property, the construction) of assets or to the retirement (other than at maturity or pursuant to a mandatory sinking fund or redemption provision) of Senior Funded Indebtedness. This limitation, however, will not apply if at the time the Issuer or any Consolidated Subsidiary enters into such sale and lease-back transaction, and after giving effect thereto, Exempted Debt does not exceed 10% of Consolidated Net Tangible Assets. ARTICLE FOUR REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT ------------------------------------------- SECTION 4.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER OF DEFAULT. "Event of Default" with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of any instalment of interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of all or any part of the principal, or premium, if any, on any of the Securities of such series as and when the same shall 21 29 become due and payable either at maturity, upon redemption, by declaration or otherwise; or (c) default in the payment of any sinking fund instalment as and when the same shall become due and payable by the terms of the Securities of such series; or (d) failure on the part of the Issuer duly to observe or perform any other of the covenants or agreements of the Issuer in respect of the Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default in whose performance or whose breach is elsewhere in this Section specifically dealt with) for a period of 90 days after the date on which written notice specifying such failure, stating that such notice is a "Notice of Default" hereunder and demanding that the Issuer remedy the same, has been given by registered or certified mail, return receipt requested, to the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of all series affected thereby; or (e) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (f) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of its property, or make any general assignment for the benefit of creditors; or (g) any other Event of Default provided in the supplemental indenture or resolution of the Board of Directors under which such series of Securities is issued or in the form of Security for such series. 22 30 If an Event of Default described in clauses (a), (b), (c), (d) or (g) above (if the Event of Default under clause (d) or (g) is with respect to less than all series of Securities then Outstanding) occurs and is continuing, then, and in each and every such case, unless the principal of all of the Securities of such series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding hereunder (each such series voting as a separate class) by notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities of such series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) of all Securities of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default described in clause (d) or (g) (if the Event of Default under clause (d) or (g), as the case may be, is with respect to all series of Securities then Outstanding) or (e) or (f) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then Outstanding hereunder (treated as one class), by notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the entire principal (or, if any Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then outstanding and interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. The foregoing provisions, however, are subject to the condition that if, at any time after the principal (or, if the Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of the Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured instalments of interest upon all the Securities of such series (or of all the Securities, as the case may be) and the principal of any and all Securities of such series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue instalments of interest, at the same rate as the 23 31 rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series (or at the respective rates of interest or Yields to Maturity of all the Securities, as the case may be) to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of negligence or bad faith, and if any and all Events of Default under the Indenture, other than the non-payment of the principal of Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein--then and in every such case the holders of a majority in aggregate principal amount of all the Securities of such series, each series voting as a separate class (or of all the Securities, as the case may be, voting as a single class), then outstanding, by written notice to the Issuer and to the Trustee, may waive all defaults with respect to such series (or with respect to all the Securities, as the case may be) and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon. For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities. SECTION 4.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE DEBT. The Issuer covenants that (a) in case default shall be made in the payment of any instalment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have continued for a period of 30 days or (b) in case default shall be made in the payment of all or any part of the principal of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise--then upon demand of the Trustee, the Issuer will pay to the 24 32 Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue instalments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series); and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of its negligence or bad faith. Until such demand is made by the Trustee, the Issuer may pay the principal of and interest on the Securities of any series to the registered holders, whether or not the principal of and interest on the Securities of such series be overdue. In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Issuer or other obligor upon such Securities and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Securities, wherever situated, the moneys adjudged or decreed to be payable. In case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of any Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the 25 33 provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise: (a) to file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor, (b) unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and (c) to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith and all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 5.6. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan 26 34 of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person. All rights of action and of asserting claims under this Indenture, or under any of the Securities, may be enforced by the Trustee without the possession of any of the Securities or the production thereof on any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the holders of the Securities in respect of which such action was taken. In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the holders of the Securities in respect to which such action was taken, and it shall not be necessary to make any holders of such Securities parties to any such proceedings. SECTION 4.3 APPLICATION OF PROCEEDS. Any moneys collected by the Trustee pursuant to this Article in respect of any series shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid: FIRST: To the payment of costs and expenses applicable to such series in respect of which monies have been collected, including reasonable compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith, and all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 5.6; SECOND: In case the principal of the Securities of such series in respect of which moneys have been 27 35 collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the instalments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue instalments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference; THIRD: In case the principal of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue instalments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest or yield to maturity, without preference or priority of principal over interest or yield to maturity, or of interest or yield to maturity over principal, or of any instalment of interest over any other instalment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest or yield to maturity; and FOURTH: To the payment of the remainder, if any, to the Issuer or any other person lawfully entitled thereto. SECTION 4.4 SUITS FOR ENFORCEMENT. In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. 28 36 SECTION 4.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Issuer and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue as though no such proceedings had been taken. SECTION 4.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than 25% in aggregate principal amount of the Securities of such series then outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 4.9; it being understood and intended, and being expressly covenanted by the taker and Holder of every Security with every other taker and Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. SECTION 4.7 UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE CERTAIN SUITS. Notwithstanding any other provision in this Indenture and any provision of any Security, the right of any Holder of any Security to receive 29 37 payment of the principal of and interest on such Security on or after the respective due dates expressed in such Security, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 4.8 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER OF DEFAULT. Except as provided in Section 4.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Securityholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. No delay or omission of the Trustee or of any Securityholder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and, subject to Section 4.6, every power and remedy given by this Indenture or by law to the Trustee or to the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders. SECTION 4.9 CONTROL BY SECURITYHOLDERS. The Holders of a majority in aggregate principal amount of the Securities of each series affected (with each series voting as a separate class) at the time outstanding shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Securities of such series by this Indenture; PROVIDED that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and PROVIDED FURTHER that (subject to the provisions of Section 5.1) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee, or a trust committee of directors or responsible officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not 30 38 joining in the giving of said direction, it being understood that (subject to Section 5.1) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders. Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders. SECTION 4.10 WAIVER OF PAST DEFAULTS. Prior to a declaration of the acceleration of the maturity of the Securities of any series as provided in Section 4.1, the Holders of a majority in aggregate principal amount of the Securities of such series at the time Outstanding (each such series voting as a separate class) may on behalf of the Holders of all the Securities of such series waive any past default or Event of Default described in clause (d) or (g) of Section 4.1 which relates to less than all series of Securities then Outstanding, except a default in respect of a covenant or provision hereof which cannot be modified or amended without the consent of each Holder affected as provided in Section 7.2. Prior to a declaration of acceleration of the maturity of the Securities of any series as provided in Section 4.1, the Holders of Securities of a majority in principal amount of all the Securities then Outstanding (voting as one class) may on behalf of all Holders waive any past default or Event of Default referred to in said clause (d) or (g) which relates to all series of Securities then Outstanding, or described in clause (e) or (f) of Section 4.1, except a default in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Security affected as provided in Section 7.2. In the case of any such waiver, the Issuer, the Trustee and the Holders of the Securities of each series affected shall be restored to their former positions and rights hereunder, respectively. Upon any such waiver, such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. SECTION 4.11 TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall give to the Securityholders of any series, as the names and addresses of such Holders appear on the registry books, notice by mail of all defaults known to the Trustee which have occurred with respect to such series, such notice to be transmitted within 90 days after the occurrence 31 39 thereof, unless such defaults shall have been cured before the giving of such notice (the term "default" or "defaults" for the purposes of this Section and Section 5.2(h) being hereby defined to mean any event or condition which is, or with notice or lapse of time or both would become, an Event of Default); PROVIDED that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking or purchase fund instalment with respect to the Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or responsible officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series. SECTION 4.12 RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY COSTS. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series, or, in the case of any suit relating to or arising under clauses (d) or (g) of Section 4.1 (if the suit relates to Securities of more than one but less than all series), 10% in aggregate principal amount of Securities Outstanding affected thereby, or in the case of any suit relating to or arising under clauses (d) or (g) (if the suit relates to all the Securities then Outstanding), (e) or (f) of Section 4.1, 10% in aggregate principal amount of all Securities Outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest on any Security on or after the due date expressed in such Security. 32 40 ARTICLE FIVE CONCERNING THE TRUSTEE ---------------------- SECTION 5.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT; PRIOR TO DEFAULT. With respect to the Holders of any series of Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities of a series has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct, except that (a) prior to the occurrence of an Event of Default with respect to the Securities of any series and after the curing or waiving of all such Events of Default with respect to such series which may have occurred: (i) the duties and obligations of the Trustee with respect to the Securities of any Series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such statements, certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine 33 41 whether or not they conform to the requirements of this Indenture; (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders pursuant to Section 4.9 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it. The provisions of this Section 5.1 are in furtherance of and subject to Sections 315 and 316 of the Trust Indenture Act of 1939. SECTION 5.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of and subject to the Trust Indenture Act of 1939, and subject to Section 5.1: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officers' Certificate or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Issuer; 34 42 (c) the Trustee may consult with counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (d) the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby; (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture; (f) prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security, or other paper or document unless requested in writing so to do by the holders of not less than a majority in aggregate principal amount of the Securities of all series affected then outstanding; PROVIDED that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer upon demand; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder; and 35 43 (h) except for the defaults set forth in Section 4.1(a), (b) and (c), the Trustee will not have knowledge of a default unless notified thereof. SECTION 5.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities or of the proceeds thereof. SECTION 5.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS, ETC. The Trustee or any agent of the Issuer or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not the Trustee or such agent. SECTION 5.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of Section 9.4 hereof, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under any liability for interest on any moneys received by it hereunder. SECTION 5.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR CLAIM. The Issuer covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except to the extent any such expense, disbursement or advance may arise from its negligence or bad faith. The Issuer also covenants to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, 36 44 any loss, liability or expense arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and the performance of its duties hereunder, including the costs and expenses of defending itself against or investigating any claim of liability in the premises, except to the extent such loss, liability or expense is due to the negligence or bad faith of the Trustee or such predecessor Trustee. The obligations of the Issuer under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a senior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities, and the Securities are hereby subordinated to such senior claim. SECTION 5.7 RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE, ETC. Subject to Sections 5.1 and 5.2, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. SECTION 5.8 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee for each series of Securities hereunder shall at all times be a corporation having a combined capital and surplus of at least $50,000,000, and which is eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of a Federal, State or District of Columbia supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. SECTION 5.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with 37 45 respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by mailing notice thereof by first class mail to Holders of the applicable series of Securities at their last addresses as they shall appear on the Security register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 4.12, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any of the following shall occur: (i) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; or (ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act of 1939 and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or (iii) the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for such series by written 38 46 instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. (c) The Holders of a majority in aggregate principal amount of the Securities of each series at the time outstanding may at any time remove the Trustee with respect to Securities of such series and appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided for in Section 6.1 of the action in that regard taken by the Securityholders. (d) Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any of the provisions of this Section 5.9 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 5.10. SECTION 5.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any successor trustee appointed as provided in Section 5.9 shall execute and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall, subject to Section 9.4, pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights 39 47 and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 5.6. If a successor trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor Trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of any series as to which the predecessor Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts under separate indentures. Upon acceptance of appointment by any successor trustee as provided in this Section 5.10, the Issuer shall mail notice thereof by first-class mail to the Holders of Securities of any series for which such successor trustee is acting as trustee at their last addresses as they shall appear in the Security register. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 5.9. If the Issuer fails to mail such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Issuer. SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF TRUSTEE. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, PROVIDED that such corporation shall be eligible under the provisions of Section 5.8, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of 40 48 the Securities of any series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee shall have; PROVIDED, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. SECTION 5.12. INDENTURES NOT CREATING POTENTIAL CONFLICTING INTERESTS FOR THE TRUSTEE. The following indenture is hereby specifically described for the purposes of Section 310(b)(1) of the Trust Indenture Act of 1939: Indenture dated as of March 1, 1992 between the Issuer and Bank One, Indianapolis, NA, as Trustee, pursuant to which the Issuer's 8% Notes Due March 1, 1997 were issued. ARTICLE SIX CONCERNING THE SECURITYHOLDERS ------------------------------ SECTION 6.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 5.1 and 5.2) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article. SECTION 6.2 PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF SECURITIES; RECORD DATE. Subject to Sections 5.1 and 5.2, the execution of any instrument by a Securityholder or his agent or proxy may be proved in accordance with such reasonable rules and regulations as may be 41 49 prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Securities shall be proved by the Security register or by a certificate of the registrar thereof. The Issuer may set a record date for purposes of determining the identity of holders of Securities of any series entitled to vote or consent to any action referred to in Section 6.1, which record date may be set at any time or from time to time by notice to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other provisions hereof, only holders of Securities of such series of record on such record date shall be entitled to so vote or give such consent or revoke such vote or consent. SECTION 6.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the person in whose name any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of and, subject to the provisions of this Indenture, interest on such Security and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. All such payments so made to any such person, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Security. SECTION 6.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In determining whether the Holders of the requisite aggregate principal amount of Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities which are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver only Securities which the Trustee knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the 42 50 pledgee is not the Issuer or any other obligor upon the Securities or any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in accordance with such advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any of the above-described persons; and, subject to Sections 5.1 and 5.2, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any such determination. SECTION 6.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 6.1, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may, by filing written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities affected by such action. ARTICLE SEVEN SUPPLEMENTAL INDENTURES ----------------------- SECTION 7.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes: 43 51 (a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets; (b) to evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Issuer pursuant to Article Eight; (c) to add to the covenants of the Issuer such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection of the Holders of Securities, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; PROVIDED, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default; (d) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture; or to make such other provisions in regard to matters or questions arising under this Indenture or under any supplemental indenture as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of the Holders of the Securities in any material respect; (e) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 2.3; and (f) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or 44 52 facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 5.10. The Trustee is hereby authorized to join with the Issuer in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 7.2. SECTION 7.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS. With the consent (evidenced as provided in Article Six) of the Holders of not less than 66 2/3 percent in aggregate principal amount of the Securities at the time Outstanding of all series affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a resolution of its Board of Directors, and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of each such series; PROVIDED, that no such supplemental indenture shall (a) extend the final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 4.1 or the amount thereof provable in bankruptcy pursuant to Section 4.2, or impair or affect the right of any Securityholder to institute suit for the payment thereof or, if the Securities provide therefor, any right of repayment at the option of the Securityholder without the consent of the Holder of each Security so affected, or (b) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, without the consent of the Holders of each Security so affected. 45 53 Upon the request of the Issuer, accompanied by a copy of a resolution of the Board of Directors certified by the secretary or an assistant secretary of the Issuer authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders as aforesaid and other documents, if any, required by Section 6.1, the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Issuer shall mail a notice thereof by first class mail to the Holders of Securities of each series affected thereby at their addresses as they shall appear on the registry books of the Issuer, setting forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 7.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 7.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee, subject to the provisions of Sections 5.1 and 5.2, may receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article Seven complies with the applicable provisions of this Indenture. 46 54 SECTION 7.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL INDENTURES. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture or as to any action taken at any such meeting. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then outstanding. ARTICLE EIGHT CONSOLIDATION, MERGER, SALE OR CONVEYANCE ----------------------------------------- SECTION 8.1 ISSUER MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. The Issuer covenants that it will not merge or consolidate with any other corporation or sell, lease or convey all or substantially all of its assets to any Person, unless (i) either the Issuer shall be the continuing corporation, or the successor corporation or the Person which acquires by sale, lease or conveyance substantially all the assets of the Issuer (if other than the Issuer) shall be a corporation organized under the laws of the United States of America or any State thereof or the District of Columbia and shall expressly assume the due and punctual payment of the principal of and interest on all the Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Issuer, by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such corporation, and (ii) the Issuer or such successor corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale, lease or conveyance, be in default in the performance of any such covenant or condition. SECTION 8.2 SUCCESSOR CORPORATION SUBSTITUTED. In case of any such consolidation, merger, sale or conveyance, and following such an assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Issuer, with the same effect as if it had been named herein. Such successor corporation may cause to be signed, and may issue either in its own name or in the name of the Issuer prior to such succession any or all of the Securities issuable hereunder which theretofore shall not have been signed by the Issuer 47 55 and delivered to the Trustee; and, upon the order of such successor corporation instead of the Issuer and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities which previously shall have been signed and delivered by the officers of the Issuer to the Trustee for authentication, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale, lease or conveyance such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate. In the event of any such sale or conveyance (other than a conveyance by way of lease) the Issuer or any successor corporation which shall theretofore have become such in the manner described in this Article shall be discharged from all obligations and covenants under this Indenture and the Securities and may be liquidated and dissolved. SECTION 8.3 OPINION OF COUNSEL TO TRUSTEE. The Trustee, subject to the provisions of Sections 5.1 and 5.2, may receive an Opinion of Counsel, prepared in accordance with Section 10.5, as conclusive evidence that any such consolidation, merger, sale, lease or conveyance, and any such assumption, and any such liquidation or dissolution, complies with the applicable provisions of this Indenture. ARTICLE NINE SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS. ----------------- SECTION 9.1 SATISFACTION AND DISCHARGE OF INDENTURE. If at any time (a) the Issuer shall have paid or caused to be paid the principal of and interest on all the Securities of any series outstanding hereunder (other than Securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.9) as and when the same shall have become due and payable, or (b) the Issuer shall have delivered to the Trustee for cancellation all securities of any series theretofore authenticated (other than any Securities of such 48 56 series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.9) or (c) (i) all the securities of such series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (ii) the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Issuer in accordance with Section 9.4) sufficient to pay at maturity or upon redemption all Securities of such series (other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.9) not theretofore delivered to the Trustee for cancellation, including principal and interest due or to become due on or prior to such date of maturity as the case may be, and if, in any such case, the Issuer shall also pay or cause to be paid all other sums payable hereunder by the Issuer with respect to Securities of such series, then this Indenture shall cease to be of further effect with respect to Securities of such series (except as to (i) rights of registration of transfer and exchange of securities of such series, and the Issuer's right of optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (iii) rights of holders to receive payments of principal thereof and interest thereon, and remaining rights of the holders to receive mandatory sinking fund payments, if any, (iv) the rights, obligations and immunities of the Trustee hereunder and (v) the rights of the Securityholders of such series as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them), and the Trustee, on demand of the Issuer accompanied by an Officers' Certificate and an Opinion of Counsel and at the cost and expense of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture with respect to such series; PROVIDED, that the rights of Holders of the Securities to receive amounts in respect of principal of and interest on the Securities held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange upon which the Securities are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series. 49 57 SECTION 9.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF SECURITIES. Subject to Section 9.4, all moneys deposited with the Trustee pursuant to Section 9.1 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Issuer acting as its own paying agent), to the Holders of the particular Securities of such series for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law. SECTION 9.3 REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys. SECTION 9.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT UNCLAIMED FOR THREE YEARS. Any moneys deposited with or paid to the Trustee or any paying agent for the payment of the principal of or interest on any Security of any series and not applied but remaining unclaimed for three years after the date upon which such principal or interest shall have become due and payable, shall, upon the written request of the Issuer and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Security of such series shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease. 50 58 ARTICLE TEN MISCELLANEOUS PROVISIONS ------------------------ SECTION 10.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past, present or future stockholder, officer or director, as such, of the Issuer or of any successor, either directly or through the Issuer or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities by the holders thereof and as part of the consideration for the issue of the Securities. SECTION 10.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES AND SECURITYHOLDERS. Nothing in this Indenture or in the Securities, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors and the Holders of the Securities, any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of the Holders of the Securities. SECTION 10.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE. All the covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the Issuer shall bind its successors and assigns, whether so expressed or not. SECTION 10.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND SECURITYHOLDERS. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer may be given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to Cardinal Distribution, Inc., 655 Metro Place South, Suite 925, Dublin, Ohio 43017, Attention: Chairman. Any notice, direction, request or demand by the Issuer or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at the Corporate Trust Office. 51 59 Where this Indenture provides for notice to Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his last address as it appears in the Security register. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer and Securityholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. SECTION 10.5 OFFICERS' CERTIFICATES AND OPINIONS OF COUNSEL; STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished. Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based, (c) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been 52 60 complied with and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of or representations by an officer of officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate or opinion of any independent firm of public accountants filed with the Trustee shall contain a statement that such firm is independent. SECTION 10.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the date of maturity of interest on or principal of the Securities of any series or the date fixed for redemption or repayment of any such Security shall not be a Business Day, then payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date. SECTION 10.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE ACT OF 1939. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture 53 61 by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939 (an "incorporated provision"), such incorporated provision shall control. SECTION 10.8 OHIO LAW TO GOVERN. This Indenture and each Security shall be deemed to be a contract under the laws of the State of Ohio, and for all purposes shall be construed in accordance with the laws of such State, except as may otherwise be required by mandatory provisions of law. SECTION 10.9 COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. SECTION 10.10 EFFECT OF HEADINGS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. ARTICLE ELEVEN REDEMPTION OF SECURITIES AND SINKING FUNDS ------------------------------------------ SECTION 11.1 APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.3 for Securities of such series. SECTION 11.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice of redemption to the Holders of Securities of any series to be redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities of such series at their last addresses as they shall appear upon the registry books. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series. The notice of redemption to each such Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price, the place or places of 54 62 payment, that payment will be made upon presentation and surrender of such Securities, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. In case any Security of a series is to be redeemed in part only the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued. The notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer's request, by the Trustee in the name and at the expense of the Issuer. At least one Business Day prior to the redemption date specified in the notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.4) an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption at the appropriate redemption price, together with accrued interest to the date fixed for redemption. If less than all the outstanding Securities of a series are to be redeemed, the Issuer will deliver to the Trustee at least 70 days prior to the date fixed for redemption an Officers' Certificate stating the aggregate principal amount of Securities to be redeemed. If less than all the Securities of a series are to be redeemed, the Trustee shall select, in such manner as it shall deem appropriate and fair, Securities of such Series to be redeemed in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed. 55 63 SECTION 11.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice of redemption has been given as above provided, the Securities or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue and, except as provided in Sections 5.5 and 9.4, such Securities shall cease from and after the date fixed for redemption to be entitled to any benefit or security under this Indenture, and the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified in said notice, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; PROVIDED that any semiannual payment of interest becoming due on the date fixed for redemption shall be payable to the Holders of such Securities registered as such on the relevant record date subject to the terms and provisions of Section 2.4 hereof. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by the Security. Upon presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion of the Security so presented. SECTION 11.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized officer of the Issuer and delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement 56 64 directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer. SECTION 11.5 MANDATORY AND OPTIONAL SINKING FUNDS. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". The date on which a sinking fund payment is to be made is herein referred to as the "sinking fund payment date". In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.7, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities. On or before the sixtieth day next preceding each sinking fund payment date for any series, the Issuer will deliver to the Trustee a written statement (which need not contain the statements required by Section 10.5) signed by an authorized officer of the Issuer (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of Securities of such series, (b) stating that none of the Securities of such series has theretofore been so credited, (c) stating that no defaults in the payment of interest or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment which the Issuer intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the 57 65 Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such written statement (or reasonably promptly thereafter if acceptable to the Trustee). Such written statement shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any such sixtieth day, to deliver such written statement and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section. If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or a lesser sum if the Issuer shall so request) with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $50,000 or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 is available. The Trustee shall select, in the manner provided in Section 11.2, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb said cash, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer of the serial numbers of the Securities of such series (or portions thereof) so selected. Securities of any series which are (a) owned by the Issuer or an entity known by the Trustee to be directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer, as shown by the Security register, and not known to the Trustee to have been pledged or hypothecated by the Issuer or any such entity or (b) identified in an Officers' Certificate at least 60 days prior to the sinking fund payment date as being beneficially owned by, and not pledged or hypothecated by, the Issuer or an entity directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer shall be excluded from Securities of such series eligible for selection for redemption. The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it 58 66 shall so request the Trustee in writing) shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 11.2 (and with the effect provided in Section 11.3) for the redemption of Securities of such series in part at the option of the Issuer. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series at maturity. At least one Business Day before each sinking fund payment date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date. The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or mail any notice of redemption of Securities for such series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article Four and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 4.9 or the default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities. 59 67 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of May 1, 1993. CARDINAL DISTRIBUTION, INC. By /s/ Thomas S. Summer ____________________________ Vice President and Treasurer Attest: By /s/ George H. Bennett, Jr. ___________________________ Assistant Secretary BANK ONE, INDIANAPOLIS, NA By /s/ Christopher R. Buechner ______________________________ [CORPORATE SEAL] Christopher R. Buechner Assistant Vice President and Trust Officer Attest: By /s/ John H. Pease ________________________________ John H. Pease Vice President and Trust Officer 60 EX-10.01 5 EXHIBIT 1 Exhibit 10.01 EMPLOYMENT AGREEMENT -------------------- AGREEMENT by and among Whitmire Distribution Corporation, a Delaware corporation (the "Company"), the undersigned executive (the "Executive"), and Cardinal Distribution, Inc. ("Cardinal"), dated as of the 11th day of October, 1993. WHEREAS, the Company has entered into an Agreement and Plan of Reorganization (the "Merger Agreement") whereby Cardinal will acquire all of the outstanding common stock of the Company (the "Transaction"); and WHEREAS, it is a condition to the consummation of the Transaction that the Company enter into employment agreements with key executives of the Company, including the Executive; and WHEREAS, Cardinal desires to obtain for itself, through its future ownership of the Company, the benefit of the Executive's services as set forth in this Agreement; and WHEREAS, the Company and the Executive desire to set forth in a written agreement the terms and conditions under which the Executive will continue to be employed by the Company after the Transaction; 2 NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. EMPLOYMENT PERIOD. The Company shall employ the Executive, and the Executive shall serve the Company, on the terms and conditions set forth in this Agreement, for the period commencing on the Effective Time (as that term is defined in the Merger Agreement) and ending on the third anniversary of the Effective Time (the "Employment Period"). 2. POSITION AND DUTIES. (a) During the Employment Period, the Executive shall be employed by the Company with such responsibilities of an executive nature as may be determined from time to time by the Company's Board of Directors or its lawfully designated representative (the "Board"). (b) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive shall devote full business attention and time to the business and affairs of the Company, using the Executive's best efforts to carry out faithfully and efficiently the responsibilities assigned to the Executive under this Agreement. It shall not be considered a violation of the foregoing for the Executive to (i) serve on corporate boards with the approval of Cardinal, (ii) serve on -2- 3 civic or charitable boards or committees, (iii) deliver lectures or fulfill speaking engagements and (iv) manage personal investments, so long as such activities do not interfere with the performance of the Executive's responsibilities under this Agreement. (c) The Executive's services shall be performed primarily at the location specified on Schedule A or any other location within 30 miles thereof, except as may be otherwise provided on Schedule A. Travel in connection with the business of the Company may be reasonably requested from time to time by the Board. 3. COMPENSATION. (a) BASE SALARY. During the Employment Period, the Executive shall receive an annual base salary (the "Annual Base Salary") in an amount not less than the amount specified on Schedule A, payable in accordance with the Company's payroll practices for executives, as in effect from time to time. During the Employment Period, the Annual Base Salary shall be reviewed for possible increase at least annually. Any increase in the Annual Base Salary shall not limit or reduce any other obligation of the Company under this Agreement. The Annual Base Salary shall not be reduced after any such increase, unless the annual base salaries of all executives of Cardinal and Company are proportionately reduced, and in any event shall not be reduced below -3- 4 the amount specified on Schedule A. After any such increase (or decrease), the term "Annual Base Salary" shall refer to the Annual Base Salary as so increased (or decreased). (b) ANNUAL BONUS. In addition to the Annual Base Salary, the Executive shall be eligible to receive annual bonuses (each, an "Annual Bonus") as follows. The Executive shall be eligible to receive an Annual Bonus (including, to the extent earned, both a "base bonus" and a "flex bonus") for the plan year ending June 30, 1994 under the Company's Management Incentive Plan (calculated as provided in the Merger Agreement) on terms and conditions consistent with the Executive's participation in that plan immediately before the beginning of the Employment Period (the "Company Bonus"). Thereafter, the Executive shall participate in the annual bonus plan in which executives of Cardinal participate from time to time (each, a "Cardinal Bonus Plan") with an initial target bonus under such plan as set forth on Schedule A; PROVIDED, that with respect to any plan year under a Cardinal Bonus Plan that begins before July 1, 1994 and ends after June 30, 1994, the Executive shall receive a pro-rata amount based on the portion of such plan year that occurs after June 30, 1994 and with respect to any plan year under a Cardinal Bonus Plan that begins before and ends after the end of the Employment Period, the Executive shall receive a pro-rata amount based on the portion of such plan year that occurs -4- 5 before the end of the Employment Period, payable at such time as other bonuses are paid under the Cardinal Bonus Plan (but without regard to any requirement that the recipient be employed by Cardinal or any of the Affiliated Companies at the time of such payment). (c) OTHER BENEFITS. During the Employment Period: (i) Prior to July 1, 1994, the Company shall continue, and the Executive (and/or the Executive's family to the extent so provided under the applicable terms of such plans) shall be eligible to participate in and to receive benefits under those welfare benefit, incentive, deferred compensation, savings and retirement, and vacation plans of the Company in effect on the date of this Agreement and listed in the Whitmire Disclosure Schedule delivered under the Merger Agreement as applying to Company executives; and (ii) thereafter, the Executive shall be entitled to participate in the group health, life, disability insurance, retirement savings and other employee benefit plans (collectively, "Group Plans") generally offered to the Company's employees in accordance with the standard terms and conditions of such plans as in effect from time to time, which plans shall be substantially equivalent in the aggregate to either (A) the Company's Group Plans as in effect on the date of this Agreement or (B) the Group Plans maintained from time to time by Cardinal and in which the executives of Cardinal participate. In addition, -5- 6 the Executive shall be eligible to participate in Cardinal's Stock Incentive Plan, although actual awards and benefits, if any, to be granted to the Executive thereunder shall be in the sole discretion of Cardinal's Board of Directors. (d) EXPENSES. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all normal and customary expenses incurred by the Executive's duties under this Agreement, provided that the Executive complies with the policies, practices and procedures of the Company for submission of expense reports, receipts, or similar documentation of such expenses. (e) FRINGE BENEFITS. During the Employment Period, the Executive shall be entitled to the fringe benefits set forth on Schedule B to this Agreement. (f) VACATION. (i) During the Employment Period, (A) prior to July 1, 1994, the Executive shall be entitled to annual paid vacations based upon completed years of service with the Company and its predecessors as provided in the vacation policy of the Company in effect on the date hereof and (B) thereafter the Executive shall be entitled to annual paid vacations as provided in the Company's vacation policy in effect from time to time; PROVIDED, however, that the annual vacations shall not in the aggregate be less than three weeks -6- 7 and that all of Executive's completed years of service with the Company and its predecessors, and with Cardinal and any Affiliated Companies, shall be used to determine the vacation to which the Executive is from time to time entitled. (ii) At the Effective Time (as defined in the Merger Agreement), the Company shall pay the Executive in full for all vacations accrued in calendar years prior to calendar 1993 and not yet taken as of the Effective Time. 4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. The Company shall be entitled to terminate the Executive's employment because of the Executive's Disability during the Employment Period. "Disability" means that (i) the Executive has failed, over a period of 180 consecutive days, to perform the Executive's duties under this Agreement, as a result of physical or mental illness or injury, and (ii) a physician selected by the Company or its insurers, and reasonably acceptable to the Executive or the Executive's legal representative, has determined that the Executive's incapacity constitutes a disability for purposes of the Company's long-term disability insurance coverage. A termination of the Executive's employment by the Company for Disability shall be communicated to the Executive by written notice, and -7- 8 shall be effective upon receipt of such notice by the Executive (the "Disability Effective Date"). (b) BY THE COMPANY. (i) The Company may terminate the Executive's employment during the Employment Period for Cause or without Cause. "Cause" shall mean (A) fraud, misappropriation, embezzlement or willful misconduct materially injurious to the Company, Cardinal or any of the Affiliated Companies on the part of the Executive, (B) the Executive's (x) persistent and continued failure to substantially perform his duties for the Company when and to the extent reasonably requested by the Board to do so and (y) failure to correct same within twenty (20) days after notice from the Board requesting the Executive to do so (it being understood that this standard is intended to assure the Company of the reasonable attendance, efforts and good faith business attention of the Executive to his duties on behalf of the Company, but may not be relied upon by the Company to terminate the Executive based upon the operating performance of the Company), or (C) the Executive's breach of any material provision of this Agreement, which breach has not been cured in all material respects within 20 days after notice of such breach is given to the Executive by the Company. No act or failure to act on the part of the Executive shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that -8- 9 the Executive's action or omission was in the best interests of the Company. Any act or failure to act that is based upon authority given pursuant to a resolution duly adopted by the Board, the instructions of the Chief Executive Officer or any other officer of the Company who is senior to the Executive, or the advice of counsel for the Company, shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The Executive shall not be deemed to have been terminated for Cause unless such notice is accompanied by a copy of a resolution duly adopted by the Board to such effect. (ii) A termination of the Executive's employment by the Company without Cause shall be effected by giving the Executive written notice of the termination. (c) GOOD REASON. (i) The Executive may terminate employment for Good Reason or without Good Reason. "Good Reason" means: (A) the assignment to the Executive of duties inconsistent in any material respect with paragraph (a) of Section 2 of this Agreement, other than actions that are not taken in bad faith and are remedied by the Company promptly after receipt of notice thereof from the Executive; (B) any failure by the Company to comply with any provision of Section 3 of this Agreement other than failures that are not taken in bad faith and are remedied by the Company promptly after receipt of notice thereof from the Executive; -9- 10 (C) any requirement by the Company that the Executive's services be rendered primarily at a location or locations not complying with the provisions of paragraph (c) of Section 2 of this Agreement; or (D) any failure by the Company to require any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or Cardinal expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company or Cardinal, as the case may be, would have been required to perform if no such succession had taken place. (ii) A termination of employment by the Executive for Good Reason shall be effectuated by giving the Company written notice ("Notice of Termination for Good Reason") of the termination, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provision(s) of this Agreement on which the Executive relies. A termination of employment by the Executive for Good Reason shall be effective on the tenth business day following the date when the Notice of Termination for Good Reason is given, unless the notice sets forth a later date (which date shall in no event by later than 30 days after the notice is given); PROVIDED, that such a termination of employment shall not become effective if the Company shall have previously corrected to the reasonable satisfaction of the Executive the circumstance giving rise to the Notice of Termination. -10- 11 (iii) A termination of the Executive's employment by the Executive without Good Reason shall be effected by giving the Company written notice of the termination. (d) DATE OF TERMINATION. The "Date of Termination" means the date of the Executive's death, the Disability Effective Date, the date on which the termination of the Executive's employment by the Company for Cause or by the Executive for Good Reason is effective, the date on which the Company gives the Executive notice of termination of employment without Cause, or the date on which the Executive gives the Company notice of a termination of employment without Good Reason, as the case may be. 5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH, DISABILITY, CAUSE; WITHOUT GOOD REASON. If, during the Employment Period, the Executive's employment is terminated because of death, disability, for Cause, or as a result of the Executive's termination of his employment without Good Reason, then except as provided in Section 8, the Executive shall not be entitled to any compensation provided for under this Agreement, other than Annual Base Salary through the effective date of any such termination or resignation, benefits under the long-term disability insurance coverage in the case of termination because of Disability, and (without -11- 12 limiting the provisions of Section 6 hereof) vested benefits, if any, required to be paid or provided by law. (b) WITHOUT CAUSE; GOOD REASON. If, during the Employment Period, the Executive's employment is terminated by the Company without Cause or by the Executive for Good Reason, the Executive shall not be entitled to any compensation provided for under this Agreement except as set forth in the following sentence. The Company (i) shall continue to pay the Executive for and with resepct to the unexpired portion of the Employment Period (in the same manner as specified herein) (A) his Annual Base Salary and (B) an amount equal to seventy-five percent (75%) of the Executive's Imputed Annual Bonuses and (ii) shall continue during the unexpired portion of the Employment Period the welfare benefits set forth in Section 3 (in the same manner as specified herein); PROVIDED that (x) if any such benefits cannot be provided to nonemployees under the terms of the applicable plans or applicable law, the Company shall provide the Executive with substitute benefits that are comparable and equal in value to such benefits, and (y) during any period when the Executive is eligible to receive any such benefits under another employer-provided plan, the benefits provided by the Company under this paragraph may be made secondary to those provided under such other plan. As used herein, "Imputed Annual Bonuses" shall mean the Company Bonus and the "target" -12- 13 bonuses or similar amounts under Cardinal Bonus Plans that the Executive would have received had received had he remained an employee of the Company and achieved targeted performance with respect to any personal goals under the Company's Management Incentive Plan and the Cardinal Bonus Plan, as applicable, taking into account the actual performance with respect to any applicable goals relating to the performance of the Company, Cardinal, any of the Affiliated Companies, or any of their divisions. 6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by Cardinal or any of the Affiliated Companies for which the Executive may qualify, nor, subject to paragraph (f) of Section 10, shall anything in this Agreement limit or otherwise affect such rights as the Executive may have under any contract or agreement with Cardinal or any of the Affiliated Companies. Vested benefits and other amounts that the Executive is otherwise entitled to receive under any plan, policy, practice or program of, or any contract or agreement with, Cardinal or any the Affiliated Companies on or after the Date of Termination whall be payable in accordance with such plan, policy, practice, program, contract or agreement, as the case may be, except as explicitly modified by this Agreement. -13- 14 7. NO MITIGATION OR REDUCTION. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced, regardless of whether the Executive obtains other employment. 8. CONFIDENTIAL INFORMATION; NONCOMPETITION. (a) The Executive shall hold in a fiduciary capacity for the benefit of the Company, Cardinal and the Affiliated Companies all secret or confidential information, knowledge or data relating to the Company, Cardinal or any of the Affiliated Companies and their respective businesses that the Executive obtains during the Executive's employment by the Company and that is not public knowledge (other than as a result of the Executive's violation of this paragraph (a) of Section 8) ("Confidential Information"). The Executive shall not communicate, divulge or disseminate Confidential Information at any time during or after the Executive's employment with the Company, except with the prior written consent of the Company or as otherwise required by law or legal process. (b) During the Noncompetition Period (as defined below), except as otherwise provided in paragraph (d) of this Section 8, the Executive shall not, without the prior written consent of the Board, engage in or become associated with a -14- 15 Competitive Activity. For purposes of this paragraph (b) of Section 8: (i) the "Noncompetition Period" means (A) the period during which the Executive is employed by the Company, plus (B) if the Executive's employment terminates before the end of the Employment Period, the remainder of the Employment Period, plus (C) any Extension Periods (as defined in paragraph (e) of this Section 8), to the extent provided in paragraph (e); (ii) a "Competitive Activity" means any business or other endeavor that engages in the wholesale drug distribution business or other healthcare distribution business in which the Company, Cardinal or any of the Affiliated Companies is at the date hereof, or at the time Executive's employment terminates, engaged in the United States (including Puerto Rico); and (iii) except as provided on Schedule A, the Executive shall be considered to have become "associated with a Competitive Activity" if he becomes directly or indirectly involved as an owner, employee, officer, director, independent contractor, agent, partner, advisor, lender, or in any other capacity with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity. Notwithstanding the foregoing: (i) the Executive may make and retain investments during the Employment Period in not more than five percent of the equity of any entity engaged in a Competitive Activity, if such equity is listed on a national securities exchange or regularly traded in an -15- 16 over-the-counter market; and (ii) if the Executive's employment is terminated because of Disability, the provisions of this paragraph (b) or Section 8 shall only apply if, following notice from Executive that his disability has ended and that he intends to seek employment in a Competitive Activity, the Company (A) promptly provides Executive with a lump-sum cash amount equal in value to the compensation and benefits set forth in Section 5(b) that would have been paid from the Disability Effective Date through the date such lump sum payment is made if the Executive's employment had been terminated by the Company without Cause on the Disability Effective Date, less any amounts the Executive has received under any long-term disability plans sponsored by the Company, Cardinal or any of the Affiliated Companies (to the extent coverage under such plans was provided without cost to the Executive) and (B) continues such compensation and benefits throughout the remainder of the Employment Period. (c) The Executive agrees that he will not, for a period of one (1) year after the expiration or termination of the Executive's employment with the Company, Cardinal or any of the Affiliated Companies, without the prior written consent of the Company, whether directly or indirectly, employ, whether as an employee, officer, director, agent, consultant or independent contractor, or solicit the employment of, any person who was or is at any time during the previous twelve -16- 17 (12) months an employee, representative, officer or director of the Company, Cardinal or any of the Affiliated Companies. (d) The Executive acknowledges and agrees that the Company's remedy at law for any breach of the Executive's obligations under this Section 8 would be inadequate and agrees and consents that temporary and permanent injunctive relief may be granted in any proceeding which may be brought to enforce any provision of such Section without the necessity of proof of actual damage. With respect to any provision of this Section 8 finally determined by a court of competent jurisdiction to be unenforceable, the Executive and the Company hereby agree that such court shall have jurisdiction to reform this Agreement or any provision hereof so that it is enforceable to the maximum extent permitted by law, and the parties agree to abide by such court's determination. (e) The Company shall have the right to elect to have the provisions of paragraph (b) of this Section 8 apply for the period (the "First Extension Period") beginning on the later of (i) the day the Executive's employment with the Company terminates and (ii) the first day after the end of the Employment Period and ending on the earlier of (x) the first anniversary of the first day of the First Extension Period and (y) the death of the Executive; and if the Company -17- 18 does so elect, it shall also have the right to elect to have the provisions of paragraph (b) of this Section 8 apply for the period (the "Second Extension Period") beginning on the day after the last day of the First Extension Period and ending on the earlier of (x) the first anniversary of the first day of the Second Extension Period and (y) the death of the Executive. (The First Extension Period together with the Second Extension Period are referred to as the "Extension Periods"). The election to extend for the First Election Period shall be made by giving the Executive notice of such election (A) in the case of a termination of the Executive's employment by reason of the expiration of the Employment Period, no later than sixty days before the end of the Employment Period, and (B) in the case of any other termination, within thirty days after such termination. The election to extend for the Second Election Period shall be made by giving the Executive notice of such election no later than sixty days before the expiration of the First Extension Period. (The elections described in the preceding two sentences are referred to as the "Extension Elections.") (f) During any Extension Period with respect to which the Company has made an Extension Election, the Company shall provide the compensation and benefits set forth in Section 5(b) as if (i) the Executive had been terminated without Cause and (ii) the Employment Period had extended through the -18- 19 last day of such Extension Period; PROVIDED, that in lieu of receiving an amount equal to seventy-five percent (75%) of the Executive's Imputed Annual Bonus, the Executive shall receive an amount equal to fifty percent (50%) of such Imputed Annual Bonus. Notwithstanding any other provision of this Agreement, the Extension Periods shall end, and the Executive's obligations under paragraph (b) of this Section 8 shall cease and be of no further effect, if the Company fails to provide any of the compensation and benefits required by the preceding sentence or by paragraph (a) of Section 5 and such failure continues for ten (10) days after notice from the Executive to the Company of such failure. 9. SUCCESSORS. (a) This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 10. MISCELLANEOUS. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not -19- 20 part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: -------------------- To the address set forth on Schedule A If to the Company: ------------------ Whitmire Distribution Corporation 81 Blue Ravine Road Folsom, California 95630 Attention: General Counsel (with a copy to Cardinal) If to Cardinal: --------------- Cardinal Distribution, Inc. 655 Metro Place South, Suite 925 Dublin, Ohio 43017 Attention: General Counsel or to such other address as either party furnishes to the other in writing in accordance with this paragraph (b) of -20- 21 Section 10. Notices and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. (e) The Executive's or the Company's failure to insist upon strict compliance with any provision of, or to assert any right under, this Agreement (including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to paragraph (c) of Section 4 of this Agreement) shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement except to the extent any other party hereto is materially prejudiced by such failure. (f) The Executive and the Company acknowledge that this Agreement supersedes any other agreement between them concerning the subject matter hereof. -21- 22 (g) The term "Affiliated Companies" means all companies controlled by, controlling or under common control with Cardinal, including, without limitation, the Company. 11. GUARANTEE. Cardinal hereby irrevocably, absolutely and unconditionally guarantees the payment by the Company of all compensation and benefits (the "Payments") that the Company is obligated to provide to the Executive under Sections 3, 6 and 8 of this Agreement. This is a guarantee of payment and not of collection, and is the primary obligation of Cardinal, and the Executive may enforce this guarantee against Cardinal without any prior enforcement of the obligation to make the Payments against the Company. -22- 23 IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization of their respective Boards of Directors, each of the Company and Cardinal has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written. /s/ James Clare ------------------------ James Clare WHITMIRE DISTRIBUTION CORPORATION By: /s/ Gary E. Close _____________________________ CARDINAL DISTRIBUTION, INC. By: _____________________________ -23- 24 IN WITNESS HEREOF, the Executive has hereunto set the Executive's hand and, pursuant tot he authorization of their respective Boards of Directors, each of the Company and Cardinal has caused this Agreement to be executed in its name on its befalf, all as of the day and year first above written. -------------------------------- James Clare WHITMIRE DISTRIBUTION CORPORATION By: _____________________________ CARDINAL DISTRIBUTION, INC. By: /s/ Robert D. Walter _____________________________ -23- 25 SCHEDULE A
Name: James Clare Address: Location: Executive has agreed to move to a new location at the request of the Company, provided that the Company provides relocation benefits equal to those available to executives of the Company under Cardinal's relocation policy as in effect on the date hereof. Annual Base Salary: $98,400, as adjusted after the date of this Agreement in accordance with the Company's usual compensation review policies Initial Target $39,360
-24- 26 SCHEDULE B (a) Category I automobile policy for executives (see Whitmire Disclosure Schedule) (b) Annual physical examinations (see Whitmire Disclosure Schedule) (c) Estate planning (see Whitmire Disclosure Schedule) (d) Tax planning and return preparation (see Whitmire Disclosure Schedule) -25- EX-10.02 6 EXHIBIT 1 Exhibit 10.02 The following is the form of Amended and Restated Stock Option Agreement entered into February 7, 1994, by the Company, Whitmire Distribution Corporation and certain officers of the Company. The only material difference between this form and the other agreements (other than the different parties) is the number of shares subject to each option. 2 CARDINAL HEALTH, INC. --------------------- AMENDED AND RESTATED -------------------- NONSTATUTORY STOCK OPTION AGREEMENT ----------------------------------- W I T N E S S E T H: WHEREAS, Cardinal Health, Inc. (fka Cardinal Distribution, Inc.; herein, "Cardinal") and Whitmire Distribution Corporation ("Whitmire") have effected an Agreement and plan of Reorganization, dated as of October 11, 1993 (the "Merger Agreement"), which Merger Agreement provides, among other things, that at the Effective Time (as defined therein) each unexpired and unexercised option heretofore granted to the undersigned optionee (the "Optionee") by Whitmire (a "Whitmire Option") is to be automatically converted into an option (a "Cardinal Exchange Option") to purchase that number of Cardinal Class A Common Shares (as defined in the Merger Agreement) equal to the number of Whitmire Common Shares issuable immediately prior to the Effective Time upon exercise of the Whitmire Option (without regard to actual restrictions on exercisability) multiplied by the Exchange Ratio at a per share exercise price equal to the exercise price which existed under the corresponding Whitmire Option divided by the Exchange Ratio; and WHEREAS, Cardinal, Whitmire, and Optionee intend this option to be a Cardinal Exchange Option as described in the Merger Agreement; NOW, THEREFORE, the Nonstatutory Stock Option Agreement heretofore granted by Whitmire to Optionee is hereby amended and restated (the "Amendment and Restatement") as follows: Section 1. Exchange of Option. - - - ---------- ------------------- On the terms and subject to the conditions stated in this Amendment and Restatement Cardinal hereby exchanges with the Optionee an option (the "Option") to purchase up to that number of Cardinal Class A Common Shares specified under (A) on the signature page hereof (the "Shares") for a purchase price per Share as specified under (B) on the signature page hereof (as adjusted from time to time in accordance with the terms of this Amendment and Restatement, the "Exercise Price") in exchange for the Whitmire Option identified under (C) on the signature page hereof, a copy of which is appended hereto. Section 2. No Transfer or Assignment of Option. - - - ---------- ------------------------------------ Except as otherwise provided in this Amendment and Restatement, the Option and the rights and privileges conferred hereby shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be -1- 88WOV 3 subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option, or of any right or privilege conferred hereby, contrary to the provisions hereof, or upon any attempted sale under any execution, attachment or similar process upon the rights and privileges conferred hereby, the Option shall automatically expire and the rights and privileges conferred hereby shall immediately become null and void. Section 3. Right to Exercise. - - - ---------- ------------------ On the terms and subject to the conditions set forth in this Amendment and Restatement, the Optionee shall have the right to exercise the Option at any time or from time to time after the date hereof and prior to the Expiration Date for a number of Shares equal to (i) the total number of Shares minus (ii) the aggregate number of Shares for which the Option was theretofore exercised. Section 4. Exercise Procedures. - - - ---------- -------------------- (a) NOTICE OF EXERCISE. The Optionee or the Optionee's representative may exercise this Option by giving written notice to Cardinal pursuant to Section 9(d). The notice shall specify the election to exercise the Option and the number of Shares for which it is being exercised. In the event that this Option is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory to Cardinal) of the representative's right to exercise this Option. The notice shall be signed by the Optionee. The Optionee or his representative shall deliver to Cardinal at the time of giving the notice payment of the Purchase Price in accordance with Section 5. (b) ISSUANCE OF SHARES. Upon the exercise of the Option, Cardinal agrees to issue to the Optionee as soon as practicable following payment of the Purchase Price a certificate or certificates for the number of Shares with respect to which the Option is exercised, registered in the name of the person exercising this Option (or in the names of such person and his or her spouse as community property or as joint tenants with right of survivorship). Cardinal shall cause such certificate or certificates to be delivered to or upon the order of the person exercising this Option. Section 5. Payment for Stock. - - - ---------- ------------------ The entire Purchase Price may be paid in lawful money of the United States of America. Alternatively, to the extent that applicable law permits, all or part of the Purchase Price may be paid by the surrender of Shares in good form for transfer. Such Shares must have been owned for more than twelve (12) months by the Optionee or the Optionee's representative and must have a fair market value on the date of exercise of this Option which, together with any amount paid in lawful money, is equal to the Purchase Price. -2- 88WOV 4 Section 6. Term and Expiration. - - - ---------- -------------------- (a) BASIC TERM. This Option shall in any event expire on the date ten (10) years after the Date of Grant. (b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's service as an Employee terminates for any reason other than death, then this Option shall expire on the earliest of the following occasions: (i) the expiration date determined pursuant to Subsection (a) above; (ii) the date forty five (45) days after the termination of the Optionee's service as an Employee for any reason other than Total and Permanent Disability; (iii) the date six (6) months after the termination of the Optionee's service as an Employee by reason of Total and Permanent Disability. The Optionee may exercise all or part of this Option at any time before its expiration under the preceding sentence. In the event that the Optionee dies after the termination of service but before the expiration of this Option, all or part of this Option may be exercised (prior to expiration) by the executors or administrators of the Optionee's estate or by any person who has acquired this Option directly from the Optionee by bequest, beneficiary designation or inheritance. (c) DEATH OF OPTIONEE. If the Optionee dies as an Employee, this Option shall expire on the earlier of the following dates: (i) the expiration date determined pursuant to Subsection (a) above; or (ii) the date six (6) months after the Optionee's death. All or part of this Option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the Optionee's estate or by any person who has acquired this Option directly from the Optionee by bequest, beneficiary designation or inheritance. (d) LEAVES OF ABSENCE. For purposes of this Section 6, the Employee relationship shall be deemed to continue during any period when the Optionee is on military leave, sick leave or other bona fide leave of absence. Section 7. Restrictions on Transfer of Shares. - - - ---------- ----------------------------------- (a) INVESTMENT INTENT AT GRANT. The Optionee represents and agrees that the Shares to be acquired upon exercising the Option will be acquired for the Optionee's own account for investment -3- 88WOV 5 and not with a view to or for sale in connection with any distribution thereof in violation of the Securities Act. (b) INVESTMENT INTENT AT EXERCISE. In the event that the sale of Shares under this Amendment and Restatement is not registered under the Securities Act but an exemption is available which requires an investment representation, the Optionee shall represent and agree at the time of exercise that the Shares being acquired upon exercising the Option are being acquired for investment and not with a view to the sale or distribution thereof in violation of the Securities Act. (c) LEGEND. All certificates evidencing Shares acquired under this Amendment and Restatement in an unregistered transaction shall bear the following restrictive legend (and such other restrictive legends as are required or deemed advisable under the provisions of any applicable law): "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO CARDINAL AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED." (d) REMOVAL OF LEGENDS. If, in the opinion of Cardinal and its counsel, any legend placed on a stock certificate representing Shares sold under this Amendment and Restatement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but lacking such legend; provided, however, that upon the effectiveness of the registration provided for in Section 10 hereof, the legend shall be so removed. Section 8. Shares and Adjustments. - - - ---------- ----------------------- (a) GENERAL. In the event of a subdivision of the outstanding Shares, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a material effect on the value of Shares, a combination or consolidation of the outstanding Shares (by reclassification or otherwise) into a lesser number of Shares, a recapitalization or a similar occurrence, an appropriate adjustment shall be made in one or both of (i) the number of Shares covered by this Option or (ii) the Exercise Price. (b) MERGER; REORGANIZATION. In the event that Cardinal is a party to a merger or other reorganization, this Option shall be subject to the agreement of merger or reorganization. Such agreement may provide (i) for the assumption of this Option by the surviving corporation or its parent, (ii) for its continu- ation by Cardinal, if Cardinal is a surviving corporation, (iii) for payment of a cash settlement equal to the difference between the amount to be paid for one Share under such agreement and the Exercise Price, or (iv) for the acceleration of its exercis- -4- 88WOV 6 ability followed by its cancellation if not exercised, in all cases other than clause (iii) without the Optionee's consent. (The Optionee's consent shall be required for a cash settlement.) Any cancellation shall not occur earlier than 30 days after such acceleration is effective after the Optionee has been notified of such acceleration. (c) RESERVATION OF RIGHTS. Except as provided in this Section 8, the Optionee shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issue by Cardinal of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of the Shares subject to this Option. Except as expressly provided herein, this Option shall not affect in any way the right or power of Cardinal to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. Section 9. Miscellaneous Provisions. - - - ---------- ------------------------- (a) WITHHOLDING TAXES. In the event that Cardinal determines that it is required to withhold foreign, federal, state or local tax as a result of the exercise of this Option, the Optionee, as a condition to the exercise of this Option, shall make arrangements satisfactory to Cardinal to enable it to satisfy all withholding requirements. (b) RIGHTS AS A STOCKHOLDER. Neither the Optionee nor the Optionee's representative shall have any rights as a stockholder with respect to any Shares subject to this Option until such Shares have been issued in the name of the Optionee or the Optionee's representative. (c) NO EMPLOYMENT RIGHTS. Nothing in this Amendment and Restatement shall be construed as giving the Optionee the right to be retained as an Employee. Except as may be provided in any written employment agreement between Optionee and Whitmire or Cardinal, Whitmire and Cardinal reserve the right to terminate the Optionee's service at any time, with or without cause. (d) NOTICE. Any notice required by the terms of this Amendment and Restatement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail with postage and fees prepaid and addressed to the party entitled to such notice at the address shown below such party's signature on this Agreement, or at such other address as such party may designate by ten (10) days' advance written notice to the other party to this Agreement. -5- 88WOV 7 (e) ENTIRE AGREEMENT. This Amendment and Restatement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. (f) CHOICE OF LAW. This Amendment and Restatement shall be governed by, and construed in accordance with, the laws of the State of California, as such laws are applied to contracts entered into and performed in such State. SECTION 10. REGISTRATION. Cardinal shall file with the Securities and Exchange Commission within six (6) months of the Closing Date (as defined in the Merger Agreement), and shall use all reasonable efforts to have declared effective, a registration statement on Form S-8 or other appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), to register the Shares and shall use all reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of this Option. Section 11. Definitions. - - - ----------- ------------ (a) "DATE OF GRANT" shall mean the date on which the Whitmire Option for which this Option has been exchanged was granted, as specified under (C) on the signature page hereof. (b) "EMPLOYEE" shall mean any individual who is a common-law employee of Cardinal, Whitmire or any entity controlling, controlled by, or under the common control of either. (c) "EXERCISE PRICE" shall mean the amount for which one Share may be purchased upon exercise of this Option, as specified in Section 1. (d) "PURCHASE PRICE" shall mean the Exercise Price multiplied by the number of Shares with respect to which this Option is being exercised. (e) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. (f) "SHARE" shall mean one Cardinal Class A Common Share (as defined in the Merger Agreement), as adjusted in accordance with Section 8 (if applicable). (g) "TOTAL AND PERMANENT DISABILITY" shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months. (h) Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the Merger Agreement. -6- 88WOV 8 IN WITNESS WHEREOF, Cardinal and Whitmire have caused this Amendment and Restatement to be executed on their behalf by their officers duly authorized and the Optionee has personally executed this Amendment and Restatement. OPTIONEE Optionee's Address: /s/ Melburn G. Whitmire - - - ------------------------- ------------------------------------ (signature) ------------------------------------ MELBURN G. WHITMIRE WHITMIRE DISTRIBUTION CORPORATION By /s/ Glenn Frese --------------------------------- Address: 81 Blue Ravine Road Folsom, California 95630 Attn: Secretary CARDINAL HEALTH, INC. By /s/ George H. Bennett Jr. --------------------------------- Address: 655 Metro Place South, Suite 925 Dublin, OH 43017 Attn: General Counsel (A) Number of Class A Common Shares: 8.35 (B) Exercise Price: $5.20 (C) Whitmire Option: Date of Grant: 2/9/93 Number of Whitmire Common Shares: 1 Exercise Price: $43.39 -7- 88WOV EX-10.03 7 EXHIBIT 1 Exhibit 10.03 The following is the form of Amended and Restated Stock Option Agreement entered into February 7, 1994, by the Company, Melco Managers, a California corporation, and certain officers of the Company. The only material difference between this form and the other agreements (other than the different parties) is the number of shares subject to each option. 2 CARDINAL HEALTH, INC. --------------------- AMENDED AND RESTATED -------------------- STOCK OPTION AGREEMENT ---------------------- W I T N E S S E T H: WHEREAS, Melco Managers ("Melco") has granted to the undersigned Optionee ("Optionee") an option to purchase Whitmire Common Shares pursuant to a Nonstatutory Stock Option Agreement referred to below; and WHEREAS, Cardinal Health, Inc. (fka Cardinal Distribution, Inc.; herein, "Cardinal") and Whitmire Distribution Corporation ("Whitmire") have effected an Agreement and Plan of Reorganization, dated as of October 11, 1993 (the "Merger Agreement"), which Merger Agreement provides, among other things, that at the Effective Time (as defined therein) each unexpired and unexercised option to purchase stock of Whitmire which has been granted by Melco to a current or former officer or employee of Whitmire (a "Whitmire Option") is to be automatically converted into an option (a "Cardinal Exchange Option") to purchase that number of shares of Cardinal Class A Common Shares (as defined in the Merger Agreement) equal to the number of Whitmire Common Shares issuable immediately prior to the Effective Time upon exercise of the Whitmire Option (without regard to actual restrictions upon exercisability) multiplied by the Exchange Ratio at a per share exercise price equal to the exercise price which existed under the corresponding Whitmire Option divided by the Exchange Ratio; WHEREAS, Cardinal, Melco and Optionee intend this option to be a Cardinal Exchange Option as described in the Merger Agreement; NOW, THEREFORE, the Nonstatutory Stock Option Agreement identified below heretofore granted by Melco to Optionee is hereby amended and restated (the "Amendment and Restatement") as follows: 1. Exchange of Option. ------------------ On the terms and subject to the conditions stated in this Amendment and Restatement, Melco hereby exchanges with the Optionee an option (the "Option") to purchase up to that number of Cardinal Class A Common Shares specified under (A) on the signature page hereof (the "Shares") for a purchase price per Share specified under (B) on the signature page hereof (as adjusted from time to time in accordance with the terms of this Amendment and Restatement, the "Exercise Price") in exchange for the Whitmire Option identified under (C) on the signature page hereof, a copy of which is appended hereto. -1- MELCO 3 2. No Transfer or Assignment of Option. ----------------------------------- Except as otherwise provided in this Amendment and Restatement, the Option and the rights and privileges conferred hereby shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option, or of any right or privilege conferred hereby, contrary to the provisions hereof, or upon any attempted sale under any execution, attachment or similar process upon the rights and privileges conferred hereby, the Option shall automatically expire and the rights and privileges conferred hereby shall immediately become null and void. 3. Right to Exercise. ----------------- On the terms and subject to the conditions set forth in this Amendment and Restatement, the Optionee shall have the right to exercise the Option at any time or from time to time after the date hereof and prior to the Expiration Date for a number of Shares equal to (i) the total number of Shares minus (ii) the aggregate number of Shares for which the Option was theretofore exercised. 4. Exercise Procedures. ------------------- (a) NOTICE OF EXERCISE. The Optionee or the Optionee's representative may exercise this Option by giving written notice to Melco pursuant to Section 9(c). The notice shall specify the election to exercise the Option and the number of Shares for which it is being exercised. In the event that this Option is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory to Melco) of the representative's right to exercise this Option. The notice shall be signed by the Optionee. The Optionee or his representative shall deliver to Melco at the time of giving the notice payment of the Purchase Price in accordance with Section 5. (b) TRANSFER OF SHARES. Upon the exercise of the Option, Melco agrees to transfer to the Optionee as soon as practicable following payment of the Purchase Price a certificate or certificates for the number of Shares with respect to which the Option is exercised, registered in the name of the person exercising this Option (or in the names of such person and his or her spouse as community property or as joint tenants with right of survivorship). Melco shall cause such certificate or certificates to be delivered to or upon the order of the person exercising this Option. 5. Payment for Stock. ----------------- The entire Purchase Price shall be paid in lawful money of the United States of America by certified or cashier's check. -2- MELCO 4 6. Expiration. ---------- The Option shall expire at 12 o'clock midnight California time on the 548th calendar day following the Pooling Press Release (as defined in the Merger Agreement). All or part of this Option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the Optionee's estate or by any person who has acquired this Option directly from the Optionee by bequest, beneficiary designation or inheritance. 7. Restrictions on Transfer of Shares. ---------------------------------- (a) INVESTMENT INTENT AT GRANT. The Optionee represents and agrees that the Shares to be acquired upon exercising the Option will be acquired for the Optionee's own account for investment and not with a view to or for sale in connection with any distribution thereof in violation of the Securities Act. (b) INVESTMENT INTENT AT EXERCISE. In the event that the sale of Shares under this Amendment and Restatement is not registered under the Securities Act but an exemption is available which requires an investment representation, the Optionee shall represent and agree at the time of exercise that the Shares being acquired upon exercising the Option are being acquired for investment and not with a view to the sale or distribution thereof in violation of the Securities Act. 8. Shares and Adjustments. ---------------------- (a) GENERAL. In the event of any stock dividend, stock split or share combination, a proportionate adjustment will be made in (i) the number of Shares, and (ii) the Exercise Price, in each case to prevent dilution or enlargement of the rights under this Amendment and Restatement. (b) ORGANIC CHANGE. If an Organic Change occurs, in lieu of the Shares issuable upon exercise of the Option, the Option will thereafter be exercisable for such shares of stock, securities or assets (including cash) as may be issued or payable with respect to or in exchange for the number of Shares immediately theretofore acquirable and receivable upon exercise of the Option had such Organic Change not taken place. (c) RESERVATION OF RIGHTS. Except as expressly provided in this Section 8, the Optionee shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issue by Cardinal of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of the Shares subject to the Option. Except as expressly provided herein, this Option shall not affect in any way the right or power of Cardinal -3- MELCO 5 to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 9. Miscellaneous Provisions. ------------------------ (a) WITHHOLDING TAXES. In the event that Melco determines that it is required to withhold foreign, federal, state or local tax as a result of the exercise of the Option, the Optionee, as a condition to the exercise of the Option, shall make arrangements reasonably satisfactory to Melco to enable Melco to satisfy all withholding requirements. (b) RIGHTS AS A STOCKHOLDER. The Optionee shall have no rights as a stockholder of Cardinal with respect to any Shares subject to the Option until such Shares have been issued in the name of the Optionee. Nothing contained in this Subsection (b) will impair any contract rights which the Optionee may hold. (c) NOTICE. Any notice required by the terms of this Amendment and Restatement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail with postage and fees prepaid and addressed to the party entitled to such notice at the address shown on the signature page to this Amendment and Restatement, or at such other address as such party may designate by 10 days' advance written notice to the other party to this Amendment and Restatement. (d) CHOICE OF LAW. This Amendment and Restatement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State. (e) NO STRICT CONSTRUCTION. The language of this Amendment and Restatement will be deemed to be the language chosen by the parties hereto to express their mutual intent and no rule of strict construction will be applied against any person. (f) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN AND ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO. (g) LEGEND. All certificates evidencing Shares acquired under this Amendment and Restatement in an unregistered transaction shall bear the following restrictive legend (and such other -4- MELCO 6 restrictive legends as are required or deemed advisable under the provisions of any applicable law): "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO MELCO AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED." If, in the opinion of Melco and its counsel, any legend placed on a stock certificate representing Shares sold under this Agreement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but lacking such legend, provided, however, that upon the effectiveness of the registration provided for in Section 11 hereof, the legend shall be so removed. (h) NO EMPLOYMENT RIGHTS. Nothing in this Amendment and Restatement shall be construed as giving the Optionee the right to be retained as an employee of Whitmire, Cardinal or any affiliate of either. (i) ADMINISTRATION. Any determination by Melco in connection with any of the matters set forth in this Amendment and Restatement shall be conclusive and binding on the Optionee and all other persons. 10. Definitions. ----------- "EXCHANGE RATIO" shall have the meaning ascribed to it in the Merger Agreement. "CARDINAL CLASS A COMMON SHARES" shall have the meaning ascribed to it in the Merger Agreement. "ORGANIC CHANGE" means any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of Cardinal's assets to another Person or other transaction which is effected in such a way that holders of Cardinal Class A Common Shares are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for such Cardinal Class A Common Shares. "PERSON" shall be construed broadly and shall include, without limitation, an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "PURCHASE PRICE" shall mean the Exercise Price multiplied by the number of shares with respect to which this Option is being exercised. -5- MELCO 7 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. "SHARE" shall mean one Cardinal Class A Common Share, as adjusted in accordance with Section 8 (if applicable). "TRANSFER" shall be construed broadly and shall include any transfer of any Cardinal Class A Common Share, including without limitation, by way of issuance, sale, participation, pledge, gift, bequeath, intestate transfer, distribution, liquidation, merger or consolidation. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement. 11. REGISTRATION. Cardinal shall cause to be filed with the Securities and Exchange Commission within six months of the Closing Date (as defined in the Merger Agreement), and shall use all reasonable efforts to have declared effective, a registration statement on Form S-8 or other appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), to register the Shares and shall use all reasonable efforts to cause such registration statement to remain effective until the exercise or expiration of this Option. 12. GUARANTEE. Cardinal hereby irrevocably, absolutely and unconditionally guarantees the performance by Melco of all obligations of Melco to the Optionee under this Agreement. Effective upon the earlier of any liquidation or dissolution of Melco or the merger of Melco with and into Whitmire or Cardinal, Cardinal's obligations hereunder shall be as principal and not as guarantor and each reference to Melco herein shall become a [INTENTIONALLY LEFT BLANK] -6- MELCO 8 reference to Cardinal for all purposes herein. IN WITNESS WHEREOF, Melco and Cardinal have caused this Amendment and Restatement to be executed on their behalf by their officers duly authorized, and the Optionee has personally executed this Amendment and Restatement. OPTIONEE MELCO MANAGERS /s/ Melburn G. Whitmire By /s/ Glenn Frese - - - ------------------------- ---------------------------- (signature) Address: MELBURN G. WHITMIRE 81 Blue Ravine Road Optionee's Address: Folsom, California 95630 Attn: Secretary - - - -------------------------- CARDINAL HEALTH, INC. - - - -------------------------- By /s/ George H. Bennett Jr. ---------------------------- Address: 655 Metro Place South, Ste. 925 Dublin, Ohio 43017 Attn: General Counsel (A) Number of Class A Common Shares: 250333 (B) Exercise Price: $1.73 (C) Whitmire Option: Number of Shares: 29980 Exercise Price: $14.4375 -7- MELCO EX-11.01 8 EXHIBIT 1 Exhibit 11.01 CARDINAL HEALTH, INC. COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE (In thousands, except per share data)
3-Months Ended 9-Months Ended ------------------------- -------------------------- March 31, March 31, March 31, March 31, 1994 1993 1994 1993 ---------- ----------- ----------- ----------- Weighted Average Number of Common Shares Outstanding 29,089 23,791 28,036 23,722 Net Effect of Dilutive Stock Options and Warrants 2,615 3,711 3,480 3,758 Effect of Assumed Conversion of 7 1/4% Convertible Subordinated Debentures 3,426 3,426 Weighted Average Number of Common ---------- ---------- ---------- ---------- Shares Outstanding-Fully Diluted 31,704 30,928 31,516 30,906 ========== ========== ========== ========== Net Earnings (Loss) Available for Common Shares $ (9,096) $ 8,942 $ 17,284 $ 27,507 Add 7-1/4% Convertible Subordinated Debenture Interest, Net of Income Tax Effect 816 2,448 ---------- ---------- ---------- ---------- Total $ (9,096) $ 9,758 $ 17,284 $ 29,955 ========== ========== ========== ========== Per Share Amount $ (.29) $ .32 $ .55 $ .97 ========== ========== ========== ==========
-----END PRIVACY-ENHANCED MESSAGE-----