Filed by Syncor International Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: Syncor International Corporation
Commission File No. 0-8640
THE FOLLOWING IS A QUESTION AND ANSWER SHEET FOR SYNCOR INTERNATIONAL
CORPORATION EMPLOYEES:
Syncor
6464 CANOGA AVENUE
WOODLAND HILLS
CALIFORNIA 91367 USA
818.737.4000
WWW.SYNCOR.COM
NASDAQ: SCOR
MEMORANDUM
Cardinal Health and Syncor Transaction
Frequently Asked Questions and Answers
June 16, 2002
Employee Concerns
Q1 Will I have a job?
A1 There are no job eliminations occurring at this time; however, in the
future, Syncor and Cardinal Health will be working together to determine
where duplicative functions exist in both organizations. Once that analysis
is completed, we will create a transition plan and notify the impacted
individuals. Individuals who are impacted will be given a severance package
to assist them with the transition.
Q2 What happens to my benefits?
A2 You will remain on Syncor's benefits plan (i.e. medical, ESSOP, etc.)
until a transition to the Cardinal Health plan can be completed. This
transition period will take several months. Most likely, Syncor will
transition onto the Cardinal Health plan during their regular annual
enrollment in May of 2003 for an effective date of July 1, 2003.
Q3 What happens to my UPEPP?
A3 All of the provisions of the UPEPP remain intact. You will still have
the right to exercise your shares upon accelerated vesting if you choose
to. Once the transaction is completed you will have the right to purchase
Cardinal Health shares instead of Syncor shares. Once this occurs, you will
use Cardinal Health's Stock Option vendor, Smith Barney to complete your
transaction instead of Fidelity. You will receive more information about
the details in the future.
Q4 Are there going to be lay-offs at Syncor?
A4 This was answered in question number 1. There may be lay-offs at some
time in the future when we determine where there are duplicate functions.
Q5 Will I get paid differently? How will my incentives, other compensation
and/or perquisites be affected?
A5 There are no plans at this time to change Syncor's compensation
programs. Syncor's compensation programs will be compared to Cardinal
Health's compensation programs during the integration period after the
transaction is completed. During this process we will determine how
Syncor's programs compare and what changes, if any, will need to be made.
Cardinal Health offers a competitive compensation program for its employees
and will most likely be similar.
Q6 How do Cardinal Health benefits compare with our benefits?
A6 Cardinal Health has a very competitive benefits portfolio, which offers
employees more choices than the current Syncor plan offers. Cardinal
Health's cost sharing philosophy is different than Syncor's, which will
result in modest premiums. However, when you look at the big picture, it is
a very competitive and attractive program.
Q7 How is the corporate headquarters of Cardinal Health organized?
A7 Cardinal Health's world headquarters and corporate staff center is
located in Dublin, Ohio, just northwest of Columbus. The company operates
under a management philosophy of operating unit autonomy and
accountability. Therefore, the corporate functions are staffed to provide
those services required as a publicly traded company (e.g. tax, corporate
law, investor relations) or in those areas deemed strategically critical to
future growth (e.g. leadership planning, quality, business development).
The corporate staff functions are organized under six senior executives:
o Chief Financial Officer
o Executive Vice President, Business Development
o Chief Information Officer
o Executive Vice President, Human Resources
o Chief Legal Officer and General Counsel
o Chief Administrative Officer
The staffing levels and annual operating budget of these functions
are relatively low compared to national benchmark data among other
large-cap companies. This is by design, and consistent with the objective
to stay agile and entrepreneurial, and to have operating units assume
primary accountability for all aspects of their performance. The legal
function is centralized, with all attorneys reporting directly through to
the general counsel. In all other major staff functions (Human Resources,
Quality and Regulatory Affairs, Business Development, Finance, IT and
Communications) the operating unit staff in these areas report directly to
the general manager of the business, with a dotted-line reporting
relationship to the corporate staff executive.
Business Specific
Q8 What happens to those markets where Syncor and CPSI (owned by Cardinal
Health) have overlapping pharmacies?
A8 We are not yet in a position to answer this question. This is primarily
due to the regulatory approvals required that affect this issue as well as
the need to make decisions regarding business and customer needs going
forward in these markets.
Q9 How does this transaction affect Syncor's contract with Bristol Myers
Squibb (BMS)?
A9 Syncor's contract with BMS will remain unchanged as a result of this
transaction.
Q10 How will this transaction affect Syncor's management infrastructure?
A10 For the immediate future, there will be no changes to our management
infrastructure. Our past and present successes have been built on the
capabilities and contributions of literally hundreds of managers and all of
Syncor's business partners. Both Syncor and Cardinal Health will hold
discussions over the course of the next few months to help understand the
needs and possible decisions that will need to be made going forward.
Q11 Will the Syncor Offices in Woodland Hills, California or in Alpharetta,
Georgia remain?
A11 There are no plans at this time to change the location of the Syncor
Offices in Woodland Hills or Alpharetta Georgia. If a decision such as this
is made, you will be notified as soon as possible.
Syncor Pharmacy Services
Q12 How will this transaction change the organization structure in the SPS
field organization?
A12 It is too soon to know what impact this will have on the field
organization structure. Both Syncor and Cardinal Health will be meeting to
discuss the best ways to use the talent in both organizations going
forward.
Q13 Do we have any plans to communicate this transaction to our customers
and suppliers?
A13 Immediately following the distribution of the press release announcing
this transaction, key Syncor managers and executives placed calls and
contacted our major customers and suppliers to let them know about Syncor's
acquisition by Cardinal Health. Activities surrounding this effort will
continue.
Q14 What are pharmacy managers and the business partners working in the
field expected to do differently following this announcement?
A14 Simply stated, all business partners should continue supporting their
customers, whether they are internal or external, just like they have done
up until now. In other words, it is business as usual.
Q15 What happens to Syncor Overseas?
A15 Syncor Overseas will continue to be integrated into the Syncor
Pharmaceutical Business as part of Cardinal Health.
Comprehensive Medical Imaging (CMI)
Q16 Why do Syncor and Cardinal Health want to sell CMI?
A16 For some period of time, Syncor has been conducting a comprehensive
review of its business strategy in an effort to make sure we were making
the best use of our resources. The conclusion of this review was that the
long-term objective of profitable growth could best be achieved by focusing
our efforts and resources on two emerging growth opportunities within
Syncor Pharmacy Services, complex pharmaceuticals and nuclear oncology. The
merger with Cardinal Health will allow Syncor to accelerate the pace with
which these opportunities can be pursued - through Cardinal Health's access
to both pharmaceutical and biotech companies. Unfortunately, the management
of diagnostic imaging centers does not fit into that plan. Imaging is a
capital-intensive business and CMI's network needs to grow in order to
achieve its optimal return on investment. Without that strategic fit and
commitment, divestiture makes the most business sense.
Q17 As an employee at CMI, what can I expect to see happen in the future
when the medical imaging division is sold?
A17 Both Syncor/CMI and Cardinal Health executives will be holding
discussions with interested buyers to explore the sale of CMI. If, and
when, a possible buyer is identified, a thorough review of CMI's business
will take place. During this period, it is important that all of CMI's
business partners continue to focus on meeting their job expectations and
the needs of their customers and patients. Should an agreement be reached
with a buyer, it is typical for a closing period of at least 30 to 60 days
before the sale is completed.
Q18 Will I keep my job if and when CMI is sold?
A18 Since we do not know specifically what companies or organizations may
want to purchase CMI's assets, it is difficult to predict what needs they
will have going forward to support the imaging center network. What we do
know from experience however, is that it is likely that most if not all of
the business partners that work in or support the imaging centers at a
local level will be needed by the purchasing organization to continue the
successful operation of the imaging centers.
Q19 What will happen with Project LIGHT?
A19 Cardinal Health and Syncor/CMI will be holding conversations regarding
a number of significant initiatives at CMI, including Project LIGHT, in
order to make decisions that will be in the best interests of Cardinal
Health, Syncor/CMI and prospective buyers. As you know, the deployment of
the IDXRAD system has been significantly delayed. As a result of Syncor's
decision to divest CMI, it is likely that this decision may be delayed
until CMI's eventual buyer has identified their needs going forward.
Q20 What impact will CMI's sale have on the Billing and Collections
functions and business partners?
A20 Similar to the responses to other questions, we do not know the answer
to that question until we have finally identified the party that will
purchase CMI. An unknown factor will be the current system and process the
buyer uses to bill and collect for services. Consequently, at this time,
there are a lot of unknown variables. As stated before, since we don't
believe any immediate changes will take place as a result of the Cardinal
Health acquisition and CMI's pending sale, we are urging our billing and
collection business partners to continue to focus on their key job
functions in order to accelerate our cash collections.
Q21 How long does Cardinal Health and Syncor/CMI believe it will take
before the CMI sale is completed?
A21 It is virtually impossible to predict the answer to this question.
While Syncor has already started the process to seek buyers for CMI, the
activities associated with negotiating a sale are complex and time
consuming. At this point in time, it would be unlikely that a sale could be
completed in less than 45 to 60 days.
General
Q22 Will Syncor's officers continue to be employed by Cardinal Health?
A22 All of Syncor's Officers have agreed to work with their Cardinal Health
counterparts and colleagues through a transition period. We will provide
you more information once firm decisions are made at a later date.
Q23 Why did we not hear about this transaction before it was announced
publicly?
A23 As a publicly traded company, there are many issues that could not be
discussed prior to this time because the agreement is not final and legal
restrictions prevent us from communicating information..
Q24 What is a stock swap?
A24 A stock swap is one of a number of financial arrangements used between
publicly held companies to execute a merger or acquisition. In this
transaction, it means that Cardinal Health is going to pay for the
acquisition of Syncor by exchanging Cardinal Health stock with Syncor
shareholders. The transaction must be approved by U.S. regulatory agencies
and Syncor's shareholders. In this transaction, Syncor's Board of Directors
will be asking our shareholders to approve a transaction that will provide
each Syncor shareholder .52 shares of Cardinal Health stock for each share
of Syncor stock that they own.
Q25 What is the historical performance of Cardinal Health stock?
A25 Cardinal Health's stock price, similar to other publicly traded
companies as well as Syncor, has experienced fluctuations over time.
Between January 1, 2002 and June 7, 2002 the Cardinal Health stock had a
low of $61.61 and a high of $73.00
Q26 When will I have additional information regarding the acquisition and
its impact on me personally?
A26 At this point, it is business as usual. Once the acquisition is
approved by regulators, a transition plan will be developed and
communicated.
****
THE FOLLOWING IS A LETTER DIRECTED TO SYNCOR CUSTOMERS:
Dear Valued Customer:
For the last 27 years, Syncor International Corporation has been the leader
in nuclear medicine through our commitment to service and value. This
commitment has been built on three pillars of service excellence:
innovation, operational efficiency, and customer service. As the
environment in healthcare continues to change and your demand for more
value continues to grow, Syncor will continue to focus on these service
excellence pillars to support you and your mission of delivering high
quality health care to your patients.
Syncor has been proud to support your efforts in providing high quality
care with the highest service standards in the industry. This high quality
customer service is reflected in our innovative products as well as the
rigorous safety and quality practices at our pharmacies. Our innovative new
products include the SECURE Safety Insert System(TM), SYNtrac(TM),
Piglet(TM) line of tungsten products, and the new SECUREPlus(TM) tungsten
pigs to reduce exposed lead in the nuclear medicine department. These
innovations have required significant investments, however, we have been
able to fund these investments through aggressive control of material costs
and operating costs to reduce operating expenses.
Moving forward, we recognize that we must continue to raise the value bar
for you. With this in mind, we are excited to announce that Syncor
International Corporation has agreed to a merger with Cardinal Health Inc.
Cardinal Health, Inc. is a large healthcare company that has four business
segments including 1) Pharmaceutical Distribution and Provider Services, 2)
Medical - Surgical Products and Services, 3) Pharmaceutical Technologies
and Services, and 4) Automation and Information Services. Over the past
five years, Cardinal has diversified through a series of acquisitions
including Allegiance Healthcare Corporation, R.P. Scherer Inc.,
Bindley-Western, Medicine Shoppe and Pyxis Corporation. Cardinal and its
subsidiaries provide products and services to healthcare providers and
manufacturers, helping them improve the efficiency and quality of their
healthcare services.
By combining with Cardinal, Syncor will be better positioned to generate
new supply chain efficiencies with manufacturers. The result will be a
better managed supply chain with improved pharmacy operations and enhanced
customer service. Also, as a part of Cardinal, Syncor will continue to
introduce innovative products and services through a broader service
portfolio, which includes new biotechnology products to treat disease.
As Syncor enters this new era with Cardinal, we will remain focused on our
partnership with you and on ways to assist you in delivering high quality,
cost-effective patient care. If you have any immediate questions regarding
this announcement, please contact your local Syncor representative.
Sincerely,
Rod Boone
# # #
Cardinal Health, Inc. ("Cardinal") intends to file a registration statement
on Form S-4 in connection with the transaction, and Syncor International
Corporation ("Syncor") intends to mail a proxy statement/prospectus to its
stockholders in connection with the transaction. Investors and security
holders of Syncor are urged to read the proxy statement/prospectus when it
becomes available because it will contain important information about
Cardinal, Syncor and the transaction. Investors and security holders may
obtain a free copy of the proxy statement/prospectus (when it is available)
at the SEC's web site at www.sec.gov. A free copy of the proxy
statement/prospectus may also be obtained from Cardinal or Syncor. Syncor
and its executive officers and directors may be deemed to be participants
in the solicitation of proxies from the stockholders of Syncor in favor of
the transaction. Information regarding the interests of Syncor's officers
and directors in the transaction is set forth in a Schedule 14A filed on
June 14, 2002 with the SEC. In addition to the registration statement on
Form S-4 to be filed by Cardinal in connection with the transaction, and
the proxy statement/prospectus to be mailed to the stockholders of Syncor
in connection with the transaction, each of Cardinal and Syncor file
annual, quarterly and special reports, proxy and information statements,
and other information with the SEC. Investors may read and copy any of
these reports, statements and other information at the SEC's public
reference room located at 450 5th Street, N.W., Washington, D.C., 20549.
Investors should call the SEC at 1-800-SEC-0330 for further information on
these public reference rooms. The reports, statements and other information
filed by Cardinal and Syncor with the SEC are also available for free at
the SEC's web site at www.sec.gov. A free copy of these reports, statements
and other information may also be obtained from Cardinal or Syncor.