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EXHIBIT 10.02
AMENDMENT TO EMPLOYMENT AGREEMENT
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This is an amendment made November 14, 1995, to the Employment
Agreement dated as of October 11, 1993 (the "Agreement") by and among Xxxxxxxx
Distribution Corporation (the "Company"), Xxxxxxx X. Xxxxxxxx (the
"Executive"), and Cardinal Health, Inc. (fka Cardinal Distribution, Inc.,
"Cardinal").
Background Information
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A. The Company, Cardinal, and the Executive originally entered into
the Agreement in connection with the consummation of Cardinal's acquisition of
all of the outstanding common stock of the Company on February 7, 1994 (the
"Effective Time").
B. The Parties now mutually desire to modify certain of the terms and
conditions of the Executive's continued employment with the Company, which
modifications will become effective as of February 7, 1996 (the "Trigger
Date").
Statement of Agreement
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The Parties hereby acknowledge the accuracy of the above Background
Information and agree as follows:
Section 1. DEFINITIONS. All capitalized terms used but not otherwise
defined or revised in this amendment shall have the respective meanings given
those terms in the Agreement.
Section 2. EMPLOYMENT PERIOD. The Employment Period shall be
extended for a period of three years following the Trigger Date (i.e.,
continuing through February 6, 1999) on the terms and conditions set forth in
this amendment.
Section 3. DUTIES. From and after the Trigger Date and for the
balance of the Employment Period, the requirement that Executive devote his
full business attention and time to the business and affairs of the Company
shall be modified to instead require the performance of those duties (of an
executive nature) as may be reasonably determined by the mutual agreement of
Executive and the Company.
Section 4. ACCELERATION OF NON-COMPETE PAYMENTS. The Company shall
accelerate the $1.2 million in non-compete payments owed to the Executive under
paragraph 8(f) of the Agreement, such that the first installment of $600,000
shall be made on or before March 7, 1996, and the final installment of $600,000
shall be made on or before March 7, 1997.
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These accelerated payments shall be made in lieu and in full satisfaction of
the Company's existing obligations under paragraph 8(f) of the Agreement.
Section 5. ANNUAL BASE SALARY AND BONUS. From and after the Trigger
Date and for the balance of the Employment Period, the Executive's Annual Base
Salary shall be reduced to $25,000 per annum, payable in accordance with the
Company's payroll practices for executives as in effect from time to time. For
the Company's fiscal year ending June 30, 1996, the Executive shall be eligible
to receive an Annual Bonus (payable at such time as other bonuses are paid
under the Cardinal Bonus Plan) in an amount equal to the product obtained when
$177,072 is multiplied by the same MIP payout percentage awarded to Xxxxxx X.
Xxxxxx, Cardinal's Chairman and Chief Executive Officer for such fiscal year
(i.e., actual MIP payment awarded to Xx. Xxxxxx divided by his maximum MIP
potential for the fiscal year). The Executive shall not be eligible to receive
an Annual Bonus for any fiscal year (or portion thereof) after the fiscal year
ending June 30, 1996.
Section 6. STOCK INCENTIVES. In connection with the annual grant of
stock options anticipated to be made to Cardinal managers in March of 1996, the
Executive shall receive a grant of 13,350 option shares on the same terms and
conditions contained in grants to other Cardinal managers; provided, however,
that these option shares shall vest not later than the last day of the
Employment Period. The Executive shall not be eligible to receive option
grants following the March 1996 grant.
Section 7. OTHER BENEFITS. During the Employment Period, the
Executive (and/or the Executive's family to the extent so provided under the
applicable terms of such benefit plans) shall continue to be eligible to
participate in and receive benefits under: (a) Cardinal's group health, life,
and disability plan; and (b) Cardinal's profit sharing and retirement savings
plan, in accordance with the standard terms and conditions of such plans as in
effect from time to time; provided, however, that Executive understands and
agrees that the non-compete payments described in Section 4, above, shall not
be counted as "credited compensation" for purposes of calculating benefits
under Cardinal's profit sharing or other benefit plans. At or prior to the
Trigger Date, the Executive shall also be permitted to purchase his Company car
at its then book value.
Except as specifically set forth above in this amendment and
notwithstanding anything to the contrary contained elsewhere in the Agreement
or any plan document, the Executive (and/or the Executive's family to the
extent so provided under the applicable terms of such benefit plans) shall
cease to receive or be eligible for any other benefits from and after the
Trigger Date, including those fringe benefits listed in Schedule B of the
Agreement. It is currently anticipated that the Xxxxxxxx Selective Deferred
Compensation Plan will be terminated prior to the Trigger Date and, upon such
termination, Executive acknowledges and agrees that his net vested account
balance in such plan shall be calculated and distributed in accordance with the
termination provisions permitted under such plan.
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Section 8. CONFIDENTIAL INFORMATION; NONCOMPETITION. The provisions
contained in paragraph 8 of the Agreement are hereby acknowledged and
reconfirmed by the Parties and shall continue in full force and effect;
provided, however, that: (a) the "Noncompetition Period" shall not be extended
by the amendment to the Employment Period contained in Section 1 of this
amendment, but shall instead be modified to mean the period ending on February
6, 1999, in all events, which period includes all applicable Extension Periods
on an automatic basis, without the requirement of notice being given to or by
the Executive; and (b) the payments provided for in paragraph 8(f) of the
Agreement shall be accelerated as provided in Section 4 of this amendment.
Section 9. REGISTRATION RIGHTS AGREEMENT. The Executive shall,
simultaneously with his execution of this amendment, deliver to the Company and
Cardinal his written confirmation of the termination of the Registration Rights
Agreement dated October 11, 1993, which termination will be effective as of
November 14, 1995.
Section 10. CONSTRUCTION. In the event of any inconsistency between
the provisions of this amendment and the Agreement, the provisions of this
amendment shall control. The headings of the various sections of this
amendment are not part of the context of this amendment and shall be ignored in
construing this amendment. If any court of competent jurisdiction determines
that any provision of this amendment is invalid or unenforceable, such court
shall have jurisdiction to reform this amendment to the extent necessary to
make such provision valid and enforceable, and, as reformed, such provision
shall be binding on the parties to this amendment.
Section 11. NO OTHER CHANGES. Except as set forth in this amendment,
the terms and conditions of the Agreement shall continue in full force and
effect without change.
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Xxxxxxxx Distribution Corporation
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Cardinal Health, Inc.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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