SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): December 4, 2002
(December 3, 2002)
SYNCOR INTERNATIONAL CORPORATION
---------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-8640 85-0229124
--------------------------------------------------------------------------------
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
6464 Canoga Avenue, Woodland Hills, California 91367
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (818)737-4000
N/A
-------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS
On December 3, 2002, the registrant entered into Amendment No. 2
to the Agreement and Plan of Merger with Cardinal Health, Inc. and Mudhen
Merger Corp. A copy of such amendment is filed herewith as Exhibit 2.1 and
is incorporated herein by reference.
On December 3, 2002, the regisrant entered into a letter agreement
with Mr. Monty Fu. A copy of such agreement is filed herewith as Exhibit
10.1 and is incorporated herein by reference.
The text of a press release issued on December 4, 2002 by Syncor
International Corporation and Cardinal Health, Inc. (collectively, the
"Companies") is attached as Exhibit 99.1 hereto and is incorporated by
reference herein. Syncor obtained the consent of Cardinal Health prior to
entering into separate agreements with the U.S. Department of Justice and
the staff of the U.S. Securities and Exchange Commission related to the
previously disclosed improper payments made by Syncor subsidiaries in
certain foreign countries.
The text of a press release issued on December 4, 2002 by Syncor
International Corporation ("Syncor") is attached as Exhibit 99.2 hereto and
is incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
2.1 Amendment No.2 to the Agreement and Plan of Merger, dated
as of December 3, 2002, by and among Cardinal Health,
Inc., Mudhen Merger Corp. and Syncor International
Corporation.
10.1 Letter Agreement, dated as of December 3, 2002, by and
among Syncor International Corporation and Mr. Monty Fu.
99.1 Press Release issued by the Companies, dated December 4,
2002.
99.2 Press Release issued by Syncor, dated December 4, 2002.
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 hereunto duly authorized.
SYNCOR INTERNATIONAL CORPORATION
By: /s/ Robert G. Funari
---------------------------------
Name: Robert G. Funari
Title: President and
Chief Executive Officer
Dated: December 4, 2002
Exhibit 2.1
AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 2, dated as of December 3, 2002 (this "Amendment No.
2"), to the Agreement and Plan of Merger, dated as of June 14, 2002 (as
amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of
November 22, 2002 ("Merger Agreement Amendment No. 1"), the "Merger
Agreement") by and among Cardinal Health, Inc., an Ohio corporation
("Cardinal"), Mudhen Merger Corp., a Delaware corporation and a wholly owned
subsidiary of Cardinal ("Subcorp"), and Syncor International Corporation, a
Delaware corporation ("Syncor," and, together with Cardinal and Subcorp, the
"Parties"). Capitalized terms not otherwise defined herein have the respective
meanings set forth in the Merger Agreement.
W I T N E S S E T H :
WHEREAS, the Parties desire to exercise their right pursuant to
Section 7.3 of the Merger Agreement to amend the Merger Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the Parties hereby agree as follows:
1. Amendment to Preliminary Statement C. Preliminary Statement C of the
Merger Agreement is hereby amended to change the reference to
"Section 368(a)(1)(B)" in such Section to "Section 368(a)".
2. Amendment to Sections 2.2(a). Section 2.2(a) of the Merger Agreement
is hereby amended to change the reference to "0.52" in such Section
to "0.47", it being understood that all references to the term
"Exchange Ratio" in the Merger Agreement shall refer to "0.47", as
provided by this Amendment No. 2.
3. Amendment to Section 4.24. Section 4.24 of the Merger Agreement is
hereby amended and supplemented to include the following sentence at
the end:
As of December 3, 2002, the Board of Directors of Syncor has received
the oral opinion, to be confirmed in writing, of Salomon Smith
Barney, Syncor's financial advisor, to the effect that, as of
December 3, 2002, the Exchange Ratio is fair to the holders of Syncor
Common Stock from a financial point of view. Syncor will provide a
written copy of such opinion to Cardinal solely for informational
purposes promptly after receipt by Syncor of such opinion, and, on
December 3, 2002, such opinion has not been withdrawn or revoked or
otherwise modified in any material respect.
4. Amendment to Section 4.25. (a) Section 4.25 of the Merger Agreement
is hereby amended by replacing the first sentence of such Section set
forth in the Merger Agreement with the following:
The Board of Directors of Syncor, at a meeting duly called and held,
has, by unanimous vote of those directors present (who constituted
all of the directors then in office other than Monty Fu), (a)
determined that this Agreement and the transactions contemplated by
this Agreement, including the Merger, are advisable and fair to and
in the best interests of the Syncor Stockholders, and (b) resolved,
as of December 3, 2002, to recommend that the Syncor Stockholders
approve this Agreement (the "Syncor Board Recommendation").
(b) It is expressly agreed that the actions of the Board of Directors
of Syncor described in Section 4(a) of this Amendment No. 2 shall not
constitute a "Change in Recommendation" for purposes of the Merger
Agreement.
5. Amendment to Section 5.3(f). Section 5.3(f) of the Merger Agreement
is hereby amended and supplemented to include the following sentence
at the end:
Syncor acknowledges that Cardinal intends to continue its due
diligence efforts until the Closing Date and Syncor agrees that it
will provide its full cooperation in order to give Cardinal a level
of access consistent with that provided during the investigation
related to the Syncor Disclosure Matter (defined below) and with the
preceding four sentences of Section 5.3(f) so that Cardinal may
complete as much of its due diligence as reasonably possible prior to
the Syncor Stockholder Meeting, it being agreed that the level of
access provided prior to December 3, 2002 during the investigation
related to the Syncor Disclosure Matter has been consistent with the
preceding four sentences of Section 5.3(f) and that level of access
accorded by Syncor during the investigation related to the Syncor
Disclosure Matter shall be the level of access to be provided in
connection with Cardinal's continued due diligence efforts.
6. Amendment to Section 6.3. Section 6.3 of the Merger Agreement is
hereby amended by adding a new subsection (e) to read as follows:
(e) a guilty plea (the "Plea") shall have been entered into by Syncor
Taiwan, Inc. pursuant to the agreement (the "Agreement"), dated
December 3, 2002, between counsel for Syncor and the United States
Department of Justice (the "DOJ") and the plea agreement, dated
December 3, 2002 (together with the Agreement, the "DOJ Agreement"),
between Syncor Taiwan, Inc. and the DOJ, and the DOJ Agreement shall
have remained in effect without modification to the terms thereof;
except any such modification that would not (i) be materially adverse
to Cardinal or (ii) have a Material Adverse Effect on Syncor;
7. Amendment to Section 6.3(b). Section 6.3(b) is hereby amended and
supplemented to include the following clause at the end:
; it being agreed that any failure to so perform or comply with (x)
Section 5.3(c) of the Merger Agreement prior to December 3, 2002 or
(y) after December 3, 2002, to the extent permitted pursuant to Annex
I to Amendment No. 2, in each case, as a result of the Syncor
Disclosure Matter, shall not be included in determining whether the
condition set forth in this Section 6.3(b) has been satisfied.
8. Amendment to Section 7.1(c). Section 7.1(c) of the Merger Agreement
is hereby amended and restated in its entirety to read as follows:
by either Cardinal or Syncor if the Merger shall not have been
consummated before the date that is the earlier of (x) the date that
is 23 business days (within the meaning of Rule 14d-1(g)(3) of the
Securities Exchange Act of 1934) following the date that the
Commission declares the final post-effective amendment to the
Registration Statement effective and (y) March 21, 2003; provided,
further, that the right to terminate this Agreement under this
Section 7.1(c) shall not be available to any party to this Agreement
whose failure or whose affiliate's failure to perform any material
covenant or obligation under this Agreement (a "Material Failure")
has been the primary cause of or resulted in the failure of the
Merger to occur on or before such date, it being agreed that any
failure to perform or comply with (i) Section 5.3(c) of the Merger
Agreement prior to December 3, 2002, or (ii) after December 3, 2002,
to the extent permitted by Annex I to Amendment No. 2, in each case,
as a result of the Syncor Disclosure Matter, shall not be deemed a
Material Failure;
9. Amendment to Sections 7.1(f) and 7.1(g). Sections 7.1(f) and 7.1(g)
of the Merger Agreement are hereby amended to change the references
to "January 15, 2003" in such Sections to "March 21, 2003".
10. Amendment to Section 8.2(b). Section 8.2(b) of the Merger Agreement
is hereby amended to change the reference in such Section to "Monty
Fu Chairman" to "Robert G. Funari President and Chief Executive
Officer".
11. Amendment to Sections 8.3.
(a) The fourth sentence of Section 8.3 of the Merger Agreement is hereby
amended and restated in its entirety to read as follows:
A "Material Adverse Effect" with respect to any party to this
Agreement shall be deemed to occur if there shall have been a
material adverse effect on the business, financial condition or
results of operations of such party to this Agreement and its
subsidiaries, taken as a whole, except to the extent that such
adverse effect results from (a) changes (i) in prevailing interest
rates in the United States or financial market conditions in the
United States, (ii) in general economic conditions in the United
States or (iii) in GAAP; (b) any developments, changes or
consequences relating to or that could arise from the actual or
prospective renewal of (or failure to renew) the BMS Contract, any
new terms that may be negotiated in any proposed or actual amended or
new BMS Contract, any negotiations with BMS (or the substitute
counterparty) directly relating to the BMS Contract or any amendment
to the BMS Contract or a new BMS Contract, in each case, regardless
of whether or not BMS owns the product covered by the BMS Contract;
(c) any developments, changes or consequences relating to the process
for the possible sale of all or a portion of the business of CMI (the
"CMI Business"), including the failure to sell all or any portion of
the CMI Business, the level of interest of any parties in pursuing a
sale or the value or other terms for a sale indicated by such
parties, and the pricing or other terms of any such sale, or the
effect of any accounting charges, adjustments and changes ("CMI
Changes") set forth in Section 5.3(c) to the Syncor Disclosure
Schedule; or (d) the Syncor Disclosure Matter.
(b) Section 8.3 of the Merger Agreement is hereby amended and
supplemented to include the following sentence at the end:
The "Syncor Disclosure Matter" shall mean (x) the information set
forth in the written reports prepared by Ernst & Young LLP; Skadden,
Arps, Slate, Meagher & Flom LLP; and PricewaterhouseCoopers LLP
relating to Syncor's and its subsidiaries' operations outside of the
continental United States, Alaska and Hawaii as disclosed to each of
the DOJ, the Commission and Cardinal (or its outside legal counsel),
(y) any Actions, judgments, settlements, fines, penalties or orders
by or before any Governmental Authority, whether existing, pending,
threatened or hereafter arising (and including the terms and status
thereof), arising from the matters identified in clause (x) above or
the disclosure, fiduciary, contractual or other obligations of the
Parties and their subsidiaries and their respective directors,
officers, employees and representatives relating to the matters
identified in clause (x) above, including the Actions listed on Annex
II to Amendment No. 2, and (z) any costs, fees and expenses of Syncor
or its subsidiaries relating to the investigation of the matters
identified in clauses (x) and (y) above; the renegotiation of the
Merger Agreement; the solicitation of proxies after December 3, 2002;
and any pre-existing indemnity rights of any directors, officers,
employees and representatives of Syncor or of any of its subsidiaries
in connection with any of the matters identified in clauses (x) and
(y).
12. Miscellaneous.
(a) From and after the date hereof, all references in the Merger
Agreement to "this Agreement" shall be deemed to mean the Merger
Agreement as amended by Merger Agreement Amendment No. 1 and this
Amendment No. 2.
(b) The section headings in this Amendment No. 2 are intended solely for
convenience and shall be given no effect in the construction and
interpretation hereof.
(c) This Amendment No. 2 shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the
principles of conflicts of laws thereof. All actions and proceedings
arising out of or relating to this Amendment No. 2 shall be heard and
determined in any state or federal court sitting in the State of
Delaware.
(d) This Amendment No. 2 may be executed in counterparts, which together
shall constitute one and the same Amendment No. 2. The Parties to
this Amendment No. 2 may execute more than one copy of this Amendment
No. 2, each of which shall constitute an original.
IN WITNESS WHEREOF, Cardinal, Subcorp and Syncor have executed this
Amendment No. 2 to the Merger Agreement or caused this Amendment No. 2 to the
Merger Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.
CARDINAL HEALTH, INC.
By /s/ Brendan A. Ford
-------------------------------------------------
Name: Brendan A. Ford
Title: Executive Vice-President - Corporate
Development
Mudhen Merger Corp.
By /s/ Brendan A. Ford
-----------------------------------------------
Name: Brendan A. Ford
Title: Executive Vice-President - Corporate
Development
Syncor International Corporation
By /s/ Robert G. Funari
------------------------------------------------
Name: Robert G. Funari
Title: President and Chief Executive Officer
Exhibit 10.1
[LETTERHEAD OF SYNCOR INTERNATIONAL]
CONFIDENTIAL
December 3, 2002
Mr. Monty Fu
c/o Gordon Greenberg, Esq.
2049 Century Park East
34th Floor
Los Angeles, CA
90067-3208
Dear Monty:
Set forth below are the terms of certain agreements between you and Syncor
International Corporation ("Syncor"). For good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, you hereby agree with
Syncor as follows:
1. In order to help facilitate the orderly and timely consummation of
the merger contemplated by that certain Agreement and Plan of
Merger, dated as of June 14, 2002, among Syncor, Cardinal Health,
Inc. ("Cardinal") and a wholly owned subsidiary of Cardinal (as
amended from time to time, the "Merger Agreement"), if and to the
extent Syncor or any of its subsidiaries pays any penalties in
connection with any action brought by the Securities and Exchange
Commission (the "SEC") in connection with those matters that are the
subject of a continuing investigation (the "Investigation Matters")
by the special committee of the board of directors of Syncor, then
immediately prior to the consummation of the merger contemplated by
the Merger Agreement or at such earlier time as determined by Syncor
on at least three days' prior notice to you from Syncor, subject to
your obligations under the Voting Agreement (as defined below), you
will surrender to Syncor for cancellation shares of common stock of
Syncor ("Syncor Shares") having a value (as determined in accordance
with paragraph 3 below) equal to the amount of such civil penalties,
up to a maximum of $500,000.
2. In order to help facilitate the orderly and timely consummation of
the merger contemplated by the Merger Agreement, if and to the
extent Syncor or any of its subsidiaries pays any fines or similar
penalties in connection with any action brought by the United States
Department of Justice (the "DOJ") in connection with the
Investigation Matters, then immediately prior to the consummation of
the merger contemplated by the Merger Agreement or at such earlier
time as determined by Syncor on at least three days' prior notice to
you from Syncor, subject to your obligations under the Voting
Agreement, you will surrender to Syncor for cancellation Syncor
Shares having a value (as determined in accordance with paragraph 3
below) equal to the amount of such fines or similar penalties, up to
a maximum of $2,000,000.
3. For purposes of paragraphs 1 and 2 above, the Syncor Shares so
surrendered shall be valued based on the average closing per share
sale price of Syncor Shares on The Nasdaq National Market for the
five full trading days ending on the third trading day prior to the
payment date of the relevant fine or penalties. If and to the extent
all or any portion of the relevant fines or penalties are paid after
the effective time of the merger contemplated by the Merger
Agreement, you will surrender to Syncor no later than the fifth day
following the date of such payment Cardinal common shares into which
the Syncor Shares have been converted (in lieu of the surrender of
Syncor Shares) having a value equal to the amount of such fines or
penalties so paid. Such Cardinal common shares will be valued based
on the average closing per share sale price for Cardinal common
shares as shown on the New York Stock Exchange Composite Tape for
the five full trading days ending on the third trading day prior to
the payment date of the relevant fines or penalties.
4. Upon any surrender of Syncor Shares pursuant to paragraphs 1 and 2
above or Cardinal common shares pursuant to paragraph 3, you will
represent to Syncor that you are the sole record and beneficial
owner of such Syncor Shares or Cardinal common shares, as the case
may be, free and clear of all liens, charges, encumbrances, and
voting agreements (other than that certain voting agreement, dated
June 14, 2002, between you and Cardinal (the "Voting Agreement")).
You hereby represent that you have received a consent letter from
Cardinal in the form attached as Exhibit A hereto.
5. Syncor hereby acknowledges that you may be requested by the DOJ to
place approximately $5 million of Syncor Shares (or common shares of
Cardinal into which Syncor Shares are converted) in escrow (the "DOJ
Escrow") in connection with your discussions with the DOJ. Subject
to your obtaining any consent that may be required from Cardinal
pursuant to the terms of any agreement between you and Cardinal,
including the Voting Agreement, Syncor will not object to the DOJ
Escrow.
6. You hereby agree that, immediately prior to, and subject to, the
consummation of the merger contemplated by the Merger Agreement, you
will irrevocably waive and forego any and all rights and claims you
may have to any payments or benefits of any kind pursuant to (x)
Sections 6.1(A), (C) and (D) of that certain Severance Agreement,
dated as of August 24, 2001, between you and Syncor (the "Severance
Agreement"), and (y) Sections 7.2(a) and 7.3.1 of that certain
Employment Agreement, dated as of January 1, 2000, between you and
Syncor (the "Employment Agreement"). You hereby agree that, subject
to the consummation of the merger contemplated by the Merger
Agreement, such waiver will have effect from and after the date of
this letter agreement and that you will execute any such further
agreement or other instrument as may be reasonably requested by
Syncor in connection with such waiver. Syncor hereby acknowledges
that nothing in this paragraph 6 or this letter agreement shall be
construed as a waiver of any other section of any other agreement
except as expressly set forth in this letter agreement. You and
Syncor each hereby agree to treat the foregoing waiver of payments
and benefits in this paragraph 6 as "payments and benefits that you
never received" for tax purposes and that neither you nor Syncor
shall take any position on any initial tax return that is
inconsistent with such treatment.
7. Syncor agrees, based on the facts known to it on the date of this
letter agreement, that it will not challenge or contest your right
to advancement of reasonable expenses incurred by you in connection
with the Investigation Matters (or governmental actions or other
litigation proceedings relating thereto) pursuant to Article VI,
Section 4 of Syncor's By-laws and Section 7 of that certain
Indemnitee Agreement, dated as of June 20, 1996, between you and
Syncor (the "Indemnitee Agreement"). You hereby acknowledge that any
such advances by Syncor would be made in advance of the final
disposition of such matters. In consideration for any such advances,
you will undertake in writing to promptly repay to Syncor the full
amount of expenses so advanced if it shall ultimately be determined
that you are not entitled to be indemnified by Syncor as authorized
in each of Section 145 of the Delaware General Corporation Law,
Article VI of Syncor's By-laws and the Indemnitee Agreement. Nothing
herein shall prejudice, or be considered a waiver of, the rights of
Syncor or any of its subsidiaries to contest your entitlement to (x)
indemnification under Syncor's By-laws, the Indemnitee Agreement,
the governing documents of any subsidiary of Syncor, or otherwise,
or (y) further advancement of expenses under Syncor's By-laws, the
Indemnitee Agreement and the governing documents of any subsidiary
of Syncor (in the case of (y), based on information learned by
Syncor following the date of this letter agreement).
8. You and Syncor agree that immediately prior to the effective time of
the merger contemplated by the Merger Agreement, you will cease to
be an officer and/or employee of Syncor and any of its subsidiaries
and you will resign as a director of Syncor and any of its
subsidiaries. Notwithstanding the previous sentence, each of you and
Syncor (and its subsidiaries) reserve any and all rights in respect
of, and nothing shall prejudice the rights of you and Syncor in
respect of, (x) such ceasing and resignation, including, without
limitation, the reasons therefor and characterizations thereof, and
(y) taking any further action in respect of your status as an
officer, director and/or employee of Syncor and any of its
subsidiaries.
9. By entering into this letter agreement, Syncor hereby acknowledges
that you are not hereby admitting liability for any matters,
including (1) the Investigation Matters, (2) a Criminal Information
to be filed against Syncor Taiwan, Inc. in the United States
District Court for the Central District of California, (3) any
action commenced by the SEC, or (4) any of the class action or
stockholder derivative lawsuits that have been or may be filed
against Syncor, its subsidiaries or any of its officers, directors,
employees or agents, including yourself. You acknowledge that Syncor
(and its subsidiaries) reserve any and all rights in respect of, and
nothing shall prejudice or be deemed a waiver of any rights of
Syncor (and its subsidiaries) in respect of, any of the matters set
forth in the preceding sentence. You and Syncor hereby agree that
neither this letter agreement nor any of the terms herein shall be
used against either you or Syncor in a proceeding of any kind,
except one in which the terms of this letter agreement are the
subject of such proceeding. Without limiting the foregoing, you
hereby agree that you will not assert, in any proceeding or
otherwise, that this letter agreement or any of the terms hereof
were entered into in connection with or in anticipation of a "Change
in Control" for purposes of the Severance Agreement, nor will you
assert that the provisions set forth in paragraph 8 of this letter
agreement were at the request or direction of any party other than
Syncor. You and Syncor agree that the inclusion in this letter
agreement of the provisions of paragraph 8 shall not constitute a
resignation or termination of your employment for purposes of the
Severance Agreement or the Employment Agreement.
10. You and Syncor each hereby represent that you or it have the
necessary power and authority to enter into this letter agreement.
Assuming the due authorization, execution and delivery by other
party, this letter agreement is the legal, valid and binding
agreement of you or Syncor, as applicable, and is enforceable
against you or Syncor, as applicable, in accordance with its terms.
11. You and Syncor each hereby agree that Sections 6 and 8 of this
letter agreement shall automatically terminate in the event that the
merger contemplated by the Merger Agreement is not consummated on or
prior to March 21, 2003 (or such later date as may be agreed by
Syncor and Cardinal to replace March 21, 2003 in Section 7.1(c) of
the Merger Agreement in any amendment from time to time to the
Merger Agreement).
12. You and Syncor each hereby agree that damages are an inadequate
remedy for the breach by you or Syncor of any term or condition of
this letter agreement, and that you and Syncor shall be entitled to
a temporary restraining order and preliminary and permanent
injunctive relief in order to enforce the agreements in this letter
agreement against the breaching party.
13. This letter agreement shall be governed by the laws of the State of
Delaware.
14. The rights and liabilities of the parties hereto shall bind and
inure to the benefit of their respective successors, heirs,
executors, administrators, transferees and assigns, as the case may
be, and each of the parties hereto and their respective legal
representative shall take any and all reasonable actions necessary
to obtain and deliver to the other party the written confirmation
from such successor, assignee or transferee that he is bound by the
terms of this letter agreement.
15. You and Syncor hereby acknowledge that they have consulted with
their respective counsel with respect to the terms of this letter
agreement.
Please indicate your agreement with the terms of this letter agreement by
executing this letter agreement where indicated below and by returning one
original executed copy of this letter to the attention of our counsel,
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, NY
10036, Attention: Paul T. Schnell, Esq.
Very truly yours,
SYNCOR INTERNATIONAL CORPORATION
By: /s/ Robert G. Funari
-------------------------------------------------
Name: Robert G. Funari
Title: President and Chief Executive Officer
Agreed to as of the date set forth above:
MONTY FU
/s/ Monty Fu
-----------------------------------------