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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.
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CARDINAL HEALTH, INC.
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AMENDED AND RESTATED
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STOCK OPTION AGREEMENT
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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.
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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.
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2. No Transfer or Assignment of Option.
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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.
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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.
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(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.
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The entire Purchase Price shall be paid in lawful money of the
United States of America by certified or cashier's check.
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6. Expiration.
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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.
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(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.
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(a) GENERAL. In the event of any stock dividend, stock split
or share combination, a proportionate adjustment will be made in
(i) the number of Shares, and (ii) the Exercise Price, in each
case to prevent dilution or enlargement of the rights under this
Amendment and Restatement.
(b) ORGANIC CHANGE. If an Organic Change occurs, in lieu of
the Shares issuable upon exercise of the Option, the Option will
thereafter be exercisable for such shares of stock, securities or
assets (including cash) as may be issued or payable with respect
to or in exchange for the number of Shares immediately
theretofore acquirable and receivable upon exercise of the Option
had such Organic Change not taken place.
(c) RESERVATION OF RIGHTS. Except as expressly provided in
this Section 8, the Optionee shall have no rights by reason of
(i) any subdivision or consolidation of shares of stock of any
class, (ii) the payment of any dividend or (iii) any other
increase or decrease in the number of shares of stock of any
class. Any issue by Cardinal of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made
with respect to, the number or Exercise Price of the Shares
subject to the Option. Except as expressly provided herein, this
Option shall not affect in any way the right or power of Cardinal
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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.
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(a) WITHHOLDING TAXES. In the event that Melco determines that
it is required to withhold foreign, federal, state or local tax
as a result of the exercise of the Option, the Optionee, as a
condition to the exercise of the Option, shall make arrangements
reasonably satisfactory to Melco to enable Melco to satisfy all
withholding requirements.
(b) RIGHTS AS A STOCKHOLDER. The Optionee shall have no rights
as a stockholder of Cardinal with respect to any Shares subject
to the Option until such Shares have been issued in the name of
the Optionee. Nothing contained in this Subsection (b) will
impair any contract rights which the Optionee may hold.
(c) NOTICE. Any notice required by the terms of this Amendment
and Restatement shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit with the United
States Postal Service, by registered or certified mail with
postage and fees prepaid and addressed to the party entitled to
such notice at the address shown on the signature page to this
Amendment and Restatement, or at such other address as such party
may designate by 10 days' advance written notice to the other
party to this Amendment and Restatement.
(d) CHOICE OF LAW. This Amendment and Restatement shall be
governed by, and construed in accordance with, the laws of the
State of Delaware, as such laws are applied to contracts entered
into and performed in such State.
(e) NO STRICT CONSTRUCTION. The language of this Amendment and
Restatement will be deemed to be the language chosen by the
parties hereto to express their mutual intent and no rule of
strict construction will be applied against any person.
(f) MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY
AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND
THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE
JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHT TO TRIAL BY JURY IN AND ACTION, SUIT OR PROCEEDING BROUGHT
TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT
OR ANY DOCUMENTS RELATED HERETO.
(g) LEGEND. All certificates evidencing Shares acquired under
this Amendment and Restatement in an unregistered transaction
shall bear the following restrictive legend (and such other
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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.
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"EXCHANGE RATIO" shall have the meaning ascribed to it in the
Merger Agreement.
"CARDINAL CLASS A COMMON SHARES" shall have the meaning ascribed
to it in the Merger Agreement.
"ORGANIC CHANGE" means any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or
substantially all of Cardinal's assets to another Person or other
transaction which is effected in such a way that holders of
Cardinal Class A Common Shares are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or
assets with respect to or in exchange for such Cardinal Class A
Common Shares.
"PERSON" shall be construed broadly and shall include, without
limitation, an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"PURCHASE PRICE" shall mean the Exercise Price multiplied by the
number of shares with respect to which this Option is being
exercised.
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"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SHARE" shall mean one Cardinal Class A Common Share, as adjusted
in accordance with Section 8 (if applicable).
"TRANSFER" shall be construed broadly and shall include any
transfer of any Cardinal Class A Common Share, including without
limitation, by way of issuance, sale, participation, pledge,
gift, bequeath, intestate transfer, distribution, liquidation,
merger or consolidation.
Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Merger Agreement.
11. REGISTRATION. Cardinal shall cause to be filed with the
Securities and Exchange Commission within six months of the
Closing Date (as defined in the Merger Agreement), and shall use
all reasonable efforts to have declared effective, a registration
statement on Form S-8 or other appropriate form under the
Securities Act of 1933, as amended (the "Securities Act"), to
register the Shares and shall use all reasonable efforts to cause
such registration statement to remain effective until the
exercise or expiration of this Option.
12. GUARANTEE. Cardinal hereby irrevocably, absolutely and
unconditionally guarantees the performance by Melco of all
obligations of Melco to the Optionee under this Agreement.
Effective upon the earlier of any liquidation or dissolution of
Melco or the merger of Melco with and into Whitmire or Cardinal,
Cardinal's obligations hereunder shall be as principal and not as
guarantor and each reference to Melco herein shall become a
[INTENTIONALLY LEFT BLANK]
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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
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(signature)
Address:
MELBURN G. WHITMIRE
81 Blue Ravine Road
Optionee's Address: Folsom, California 95630
Attn: Secretary
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CARDINAL HEALTH, INC.
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By /s/ George H. Bennett Jr.
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Address:
655 Metro Place South, Ste. 925
Dublin, Ohio 43017
Attn: General Counsel
(A) Number of Class A
Common Shares: 250333
(B) Exercise Price: $1.73
(C) Whitmire Option:
Number of Shares: 29980
Exercise Price: $14.4375
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