-----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, mONxkckbmkWEea+hcstLqqwpt9SzsS96tRUjcihei0h+y+Eeb8bZumEGXeHyfurb IJP89PCqGbRUnqaHlLFXpw== 0000202763-94-000003.txt : 19940404 0000202763-94-000003.hdr.sgml : 19940404 ACCESSION NUMBER: 0000202763-94-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNCOR INTERNATIONAL CORP /DE/ CENTRAL INDEX KEY: 0000202763 STANDARD INDUSTRIAL CLASSIFICATION: 5122 IRS NUMBER: 850229124 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 000-08640 FILM NUMBER: 94519760 BUSINESS ADDRESS: STREET 1: 20001 PRAIRIE ST CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8188867400 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR PHARMACY INC DATE OF NAME CHANGE: 19860309 10-K 1 FORM 10-K FOR FY ENDING 12/31/93 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (X) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR THE TRANSITION PERIOD ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 0-8640 SYNCOR INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 85-0229124 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 20001 PRAIRIE STREET, CHATSWORTH, CALIFORNIA 91311-2185 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 886-7400 Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK $.05 PAR VALUE (Title of Class) 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K (section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K ___ The aggregate market value of the voting stock held by non-affiliates of the Registrant, computed by reference to the average bid and asked prices of such stock on March 11, 1994, is $188,698,131. The number of shares outstanding of the Registrant's $0.05 par value common stock as of March 11, 1994, was 10,527,834 shares. DOCUMENTS INCORPORATED BY REFERENCE Portions of Registrant's Annual Report to shareholders for the period ended December 31, 1993, are incorporated by reference into Parts I, II and IV of this report. Portions of Registrant's definitive Proxy Statement for Registrant's Annual Meeting of Shareholders on May 10, 1994 are incorporated by reference into Part III of this report. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS FORM 10-K TRANSITION REPORT DECEMBER 31, 1993 Item 1. BUSINESS...................................................... 1 Item 2. PROPERTIES.................................................... 4 Item 3. LEGAL PROCEEDINGS............................................. 5 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........... 5 Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................................. 5 Item 6. SELECTED FINANCIAL DATA....................................... 5 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................................... 5 Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA....... 6 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE..................................... 6 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............ 6 Item 11. EXECUTIVE COMPENSATION........................................ 6 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................................... 6 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................ 7 Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.......................................... 7 PART I ITEM 1. BUSINESS. Unless otherwise indicated, the term "SYNCOR" or the "COMPANY" as used in this report refers to Syncor International Corporation incorporated in 1985 under the laws of the state of Delaware or Syncor International Corporation and one or more of its consolidated subsidiaries. GENERAL DEVELOPMENT OF BUSINESS The general development of the Company's business for the seven-month transition period ended December 31, 1993 (the "TRANSITION PERIOD") is covered in the President's letter to the Company's shareholders in the Company's Annual Report to Shareholders for said period and is hereby incorporated by reference. A copy of the Company's Annual Report to Shareholders is attached hereto as Exhibit 13. DESCRIPTION OF BUSINESS Principal Products Produced and Services Rendered The Company is a high-tech pharmacy services company which is primarily engaged in compounding, dispensing and distributing radiopharmaceutical products to hospitals and clinics through its nationwide network of 109 pharmacies. Three of the pharmacies also include Positron Emission Tomography ("PET") pharmacy services. The radiopharmaceuticals provided by the Company are principally used for diagnostic imaging of physiological functions and organ systems. In addition, the Company provides various services in connection with the sale of radiopharmaceuticals, including radiopharmaceutical record keeping required by federal and state government agencies, and radiopharmaceutical technical consulting. The Company estimates that in the United States its pharmacies service approximately 7,000 hospitals and clinics in 36 states throughout the country. During each of the last two fiscal years and the Transition Period, the pharmacies contributed more than 95 percent of the consolidated net sales of the Company. Other activities of the Company include the marketing and distribution of imaging cold kits, isotopes, and medical reference sources in addition to nuclear and pharmacy equipment and accessories. The Company also is involved in a pilot program designed to deliver unit dose chemotherapeutic solutions directly to oncologist's offices and clinics ("SOS"). Early indications point to an acceptance of the concept by oncologists. However, management believes that it should test this concept for an additional period of time before attempting to expand this line of business. The description of Syncor's various activities in the Company's Annual Report to Shareholders for the Transition Period are hereby incorporated by reference. Sources and Availability of Raw Materials The Company pharmacies dispense approximately 50 different radiopharmaceutical products which are obtained primarily from five suppliers. Management believes that, if any one of the suppliers of radiopharmaceuticals failed to supply products then the other suppliers would be able to supply most of those products. If two or more suppliers were unable to provide products at a particular time, it could have an adverse effect on the Company's business. During the quarter ending August 31, 1993 supply of Indium-111 oxine, a proprietary product of one supplier, has been sporadic. However, such problem appears to have been resolved. Otherwise, to date, the pharmacies have not experienced any difficulty in securing supplies of radiopharmaceutical products. Patents, Trademarks, Licenses and Distribution Agreements The Company owns a number of trademarks and has a variety of license agreements. In addition, the Company has entered into exclusive radio- pharmacy distribution agreements with two suppliers of certain proprietary radiopharmaceutical products. While certain of the foregoing items are considered to be of value to the Company, management believes at present its competitive position is dependent principally on the efficient operation of its pharmacies and high quality of its customer service. On December 3, 1993 the Company entered into a new long-term distribution agreement with its principal supplier of radiopharmaceutical products, The Radiopharmaceutical Division of The DuPont Merck Pharmaceutical Company. The agreement became effective February 1, 1994, replacing an existing supply agreement between the companies which has been in place since 1988. Dependence on Customers The Company's operations are such that none of its business is dependent upon a single customer or a very few customers to the extent that the loss of such would have a material impact on operations. Competitive Conditions The Company's pharmacies compete primarily with the large manufacturers of radiopharmaceuticals, which directly supply radiopharmaceutical products to the hospitals. Two of such manufacturers have set-up their own centralized radiopharmacies to supply customers. The Company also competes with a number of other independent entities, each of which operate one or more radiopharmacies. In certain markets, there is competition with universities which own and operate centralized radiopharmacies. The principal competitive practices of the manufacturers and others involve price and service. The management believes that, the advantages to a hospital of using a centralized radiopharmacy rather than preparing its own radiopharmaceutical products include: (I) reduced risk of radiation exposure to hospital personnel; (II) cost savings due to Syncor's volume purchasing power; (III) better utilization of the time sensitive products purchased from the radiopharmaceutical manufacturers; and, (IV) reduction in the time needed to maintain extensive records required by the regulatory agencies. In addition, the Company's pharmacies provide quality controlled unit dose radiopharmaceuticals, comprehensive nuclear medicine product-line availability, professional consultation and delivery services, and specialized computer hardware and proprietary software products for nuclear medicine operations. Government Regulation Each of the Company's domestic pharmacies is licensed by and must comply with the regulations of the United States Nuclear Regulatory Commission ("NRC") or corresponding state agencies. In addition, each such pharmacy is licensed and regulated by the Board of Pharmacy in the state where it is located. Periodic inspections of the Company's pharmacies are conducted by the NRC and various other federal and state agencies. Inspection results which lead to escalated enforcement action could lead to the imposition of fines or the suspension, revocation or denial of renewal of the licenses for the location inspected. The Company devotes substantial human and financial resources to ensure continued regulatory compliance and believes that it is currently in compliance with all material rules and regulations. In addition to the Company being subject to the various federal and state regulations relating to occupational safety and health, and the use and disposal of biohazardous materials, the Company's products are subject to the federal and state regulations relating to drugs and medical devices. Compliance with the applicable environmental control laws or regulations, such as those regulating the use and disposal of radioactive materials, is inherent to the normal operations of the pharmacies and has not had a material adverse effect on the capital expenditures, earnings or competitive position of the Company. Foreign Operations Syncor owns and operates nuclear pharmacies in Taipei, Taiwan and Hong Kong. In 1993, the Company entered into joint venture agreements with various parties in the Republic of China to open and operate pharmacies in Beijing and Shanghai. The Company anticipates expanding its operations in other Pacific Rim countries in the future. Employees As of December 31, 1993, Syncor employed approximately 2,088 people. However, the full time equivalent for the same period was approximately 1,363 people. ITEM 2. PROPERTIES. The Company and its consolidated subsidiaries lease (and in one location own) and operate a number of pharmacies in the United States whose locations are set forth in the following table(1): STATE LOCATION _____ ________ ALABAMA Birmingham Mobile ARIZONA Gilbert (Mesa) Phoenix* Tucson ARKANSAS Little Rock CALIFORNIA Bakersfield Berkeley Colton Fresno Los Angeles* Modesto Orange Torrance Sacramento* San Diego San Jose So. San Francisco** Van Nuys (Los Angeles) COLORADO Colorado Springs Denver CONNECTICUT Glanstonbury (Hartford) Stamford FLORIDA Fort Myers Gainesville Hialeah (Miami Lakes) Jacksonville Jupiter (Palm Beach) Pensacola Pompano Beach (Ft.Lauderdale) St. Petersburg Tampa Winter Park (Orlando) GEORGIA Augusta Columbus Doraville (Atlanta) ILLINOIS Des Plaines Chicago Springfield INDIANA Ft. Wayne Indianapolis Munster (Dyer) IOWA Des Moines KENTUCKY Lexington Louisville LOUISIANA Metairie (New Orleans) MARYLAND Lanham (Washington DC) Timonium (Baltimore) MASSACHUSETTS Woburn (Boston) MICHIGAN Grand Rapids Southfield (Detroit) Swartz Creek (Flint) MINNESOTA Moorhead (Fargo ND) St. Paul MISSISSIPPI Flowood (Jackson) Gulfport MISSOURI Kansas City Overland (St. Louis) NEBRASKA Lincoln Omaha NEVADA Las Vegas Reno NEW JERSEY Fairfield (Newark) NEW MEXICO Albuquerque NEW YORK Cheektowaga (Buffalo) Troy (Albany) Franklin Square (Long Island) Rochester Syracuse NORTH CAROLINA Charlotte OHIO Akron Cincinnati Cleveland Columbus Girard (Youngstown) Holland (Toledo) Miamisburg (Dayton) Youngstown (Girard) OKLAHOMA Oklahoma City Tulsa OREGON Portland PENNSYLVANIA Allentown Bristol (N. Philadelphia) Sharon Hill (Philadelphia) Hummelstown (Harrisburg) Pittsburgh SOUTH CAROLINA Columbia TENNESSEE Chattanooga Knoxville Memphis Nashville TEXAS Amarillo Austin Beaumont Corpus Christi Dallas El Paso Fort Worth Houston Lubbock North Dallas San Antonio VIRGINIA Richmond Virginia Beach WASHINGTON Seattle Spokane WEST VIRGINIA Huntington WISCONSIN Appleton Wauwatosa (Milwaukee) (1) The Company also owns an interest in pharmacies in Salt Lake City, Utah; Midland, Texas; and Huntsville, Alabama. * Cities where the Company has both a nuclear and PET pharmacy. ** Cities where the Company has both a nuclear and SOS pharmacy. Pharmacy lease terms vary from less than one year up to approximately ten years, and average approximately five years. Leased areas average approximately 4,500 square feet each. The Company leases its Corporate Office facilities in Chatsworth, California, pursuant to a lease that commenced on March 1, 1987. The lease is for the term of ten years with two successive five year renewal options. Presently, the Company leases approximately 76,464 square feet at such location. ITEM 3. LEGAL PROCEEDINGS. There are various litigation proceedings in which the Company and its subsidiaries are involved. Many of the claims asserted against the Company in these proceedings are covered by insurance. The results of litigation proceedings cannot be predicted with certainty. However, in the opinion of the Company's General Counsel, such proceedings either are without merit or do not have a potential liability which would materially affect the financial condition of the Company and its subsidiaries on a consolidated basis. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of security holders during the last month of the Transition Period. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The stock information which appears in the Company's Annual Report to Shareholders under the heading of "QUARTERLY STOCK PRICE DATA", included in this Form 10-K Annual Report as EXHIBIT 13, is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA. The selected financial data which appears in the Company's Annual Report to Shareholders for the fiscal year ended December 31, 1993, under the heading of "SELECTED FINANCIAL DATA", included in this Form 10-K Transition Report as EXHIBIT 13, is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Management's discussion and analysis of financial condition and results of operations which appears in the Company's Annual Report to Shareholders for the Transition Period, under the heading of "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" included in this Form 10-K Transition Report as EXHIBIT 13, is incorporated herein by reference. ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA. The consolidated financial statements and the notes thereto which appear in the Company's Annual Report to Shareholders for the Transition Period under the headings of "CONSOLIDATED STATEMENTS OF INCOME" and "CONSOLIDATED BALANCE SHEETS" included in this Form 10-K Transition Report as EXHIBIT 13, are incorporated herein by reference. Schedules containing certain supporting information are also included. See Index to Financial Statement Schedules on page 7. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Except as noted below in this Item, the information called for in/by Item 10 of Form 10-K is incorporated by reference from the Company's definitive Proxy Statement for its Annual Meeting of Shareholders, to be held on May 10, 1994, which will be filed with the Commission pursuant to Regulation 14A within 120 days from December 31, 1993. The Form 3 of Director Dr. Gail R. Wilensky, Chief Operation Officer Robert G. Funari and Chief Financial Officer Michael A. Piraino were filed a few days late due to the error of the Company's Legal Department who filed the same on their behalf. ITEM 11. EXECUTIVE COMPENSATION. The information called for in/by Item 11 of Form 10-K is incorporated by reference from the Company's definitive Proxy Statement for its Annual Meeting of Shareholders to be held on May 10, 1994, which will be filed with the Commission pursuant to Regulation 14A within 120 days from December 31, 1993. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information called for in/by Item 12 of Form 10-K is incorporated by reference from the Company's definitive Proxy Statement for its Annual Meeting of Shareholders to be held on May 10, 1994, which will be filed with the Commission pursuant to Regulation 14A within 120 days from December 31, 1993. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information called for in/by Item 13 of Form 10-K is incorporated by reference from the Company's definitive Proxy Statement for its Annual Meeting of Shareholders to be held on May 10, 1994, which will be filed with the Commission pursuant to Regulation 14A within 120 days from December 31, 1993. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) 1. CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements listed below, together with the report thereon of KPMG Peat Marwick, dated March 10, 1994, appear in the Company's Annual Report to Shareholders for the Transition Period, included in this Form 10-K Tran- sition Report as EXHIBIT 13, is incorporated herein by reference. Independent Auditors' Report Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 2. FINANCIAL STATEMENT SCHEDULES. The following schedules supporting the financial statements of the Company are included herein: Page ____ Schedule II Amounts Receivable from Employees Other than Related Parties...........10 Schedule VIII Valuation and Qualifying Accounts......11 Schedule IX Short-Term Borrowings..................12 Schedule X Supplementary Income Statement Information................13 All other schedules and Financial Statements of the Company are omitted because they are not applicable, not required or because the required information is included in the consolidated financial statements or notes thereto. 3. INDEX TO EXHIBITS The list of exhibits filed as part of this report on Form 10-K or incorporated herein be reference appear as Index to Exhibits on page 14. (b) REPORTS ON FORM 8-K FILED IN THE LAST PERIOD ENDING DECEMBER 31, 1993 On December 15, 1993 a Form 8-K Report was filed reporting: (I) the proposal submitted to the shareholders at the Annual Meeting held on November 15, 1993, to amend the 1990 Master Stock Incentive Plan which would increase the authorized number of shares by 500,000 shares and make other changes to the Plan, which was approved by shareholders; (II) the execution on December 3, 1993 of a new long-term distribution agreement with its principal supplier of radiopharmaceutical products, The Radiopharmaceutical Division of The DuPont Merck Pharmaceutical Company; and (III) the change of its fiscal year to December 31 from May 31, beginning with the seven-months ended December 31, 1993. (c) EXHIBITS The exhibits required by Item 601 of Regulation S-K are filed herewith or are incorporated by reference and the list of the Index to Exhibits on page 14. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. SYNCOR INTERNATIONAL CORPORATION By /s/ Gene R. McGrevin ____________________ Gene R. McGrevin President, Chief Executive Officer Date: 3/30/94 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the regis- trant and in the capacities and on the dates indicated. /s/ Monty Fu ____________________________________________________ Monty Fu, Chairman of the Board and Director Date: 3/30/94 /s/ Gene R. McGrevin ____________________________________________________ Gene R. McGrevin, President, Chief Executive Officer (Principal Executive Officer) and Director Date: 3/30/94 /s/ Michael A. Piraino ____________________________________________________ Michael A. Piraino, Senior Vice-President, (Principal Financial and Accounting Officer) Date: 3/30/94 /s/ George S. Oki ____________________________________________________ George S. Oki, Director Date: 3/30/94 /s/ Joseph Kleiman ____________________________________________________ Joseph Kleiman, Director Date: 3/30/94 /s/ Arnold E. Spangler ____________________________________________________ Arnold E. Spangler, Director Date: 3/30/94 /s/ Steven B. Gerber ____________________________________________________ Steven B. Gerber, Director Date: 3/30/94 /s/ Henry N. Wagner, Jr. ____________________________________________________ Henry N. Wagner, Jr., Director Date: 3/30/94 /s/ Gail R. Wilensky ____________________________________________________ Gail R. Wilensky, Director Date: 3/30/94 SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES SCHEDULE II. AMOUNTS RECEIVABLE FROM EMPLOYEES OTHER THAN RELATED PARTIES (In Thousands) =========================================================================== Balance Balance at Beginning Additions at End Name of Debtor of Period (Deletions) of Period =========================================================================== Seven Months Ended December 31, 1993: Robert G. Funari Chief Operating Officer $ -- $ 200 $200 ============================================= Year Ended May 31, 1993: John Schulze - Executive Director of Marketing 250 (250) -- ============================================= Year Ended May 31, 1992: John Schulze - Executive Director of Marketing 250 -- 250 Greg Hiatt - Director, Western Zone 250 (250) -0- ______________________________________________ $500 $(250) $250 ============================================== Year Ended May 31, 1991: John Schultze - Executive Director of Marketing $250 $ -- $250 Greg Hiatt Director, Western Zone 250 -- 250 ______________________________________________ $500 $ -- $500 ============================================== SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS (In Thousands) ============================================================================ Balance Charged Balance at to Costs at End Beginning and Deductions of Description of Period Expenses (a) Period ============================================================================ Seven Months Ended December 31, 1993: Allowance for doubtful accounts $1,502 $ 224 $ 526 $1,200 Year Ended May 31, 1993: Allowance for doubtful accounts $1,681 $1,123 $1,302 $1,502 Year Ended May 31, 1992: Allowance for doubtful accounts $2,071 $ 605 $ 995 $1,681 Year Ended May 31, 1991: Allowance for doubtful accounts $2,141 $ 611 $ 681 $2,071 (a) Uncollectible accounts written off, net of recoveries, and reduction of reserve. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES SCHEDULE IX. SHORT-TERM BORROWINGS (In Thousands) =============================================================================== During the Period ______________________________ Weighted Maximum Average Weighted Balance Average Amount Amount Average Category of Aggregate at End of Interest Out- Out- Interest Short-Term Borrowings Period Rate standing standing(a) Rate (b) =============================================================================== Note Payable to Bank: Seven Months Ended December 31, 1993 $ -- -- $ -- $ -- -- Year Ended May 31, 1993 $ -- 6.04% $3,700 $1,019 6.07% Year Ended May 31, 1992 $1,000 7.04% $3,500 $1,799 7.16% Year Ended May 31, 1991 $ -- 9.14% $1,000 $ 667 9.12% (a) Based upon actual daily amounts outstanding during the period. (b) Average interest rate for the year is computed by dividing the actual short-term interest expense by the average short-term debt outstanding. SYNCOR INTERNATIONAL CORPORATION AND SUBSIDIARIES SCHEDULE X. SUPPLEMENTARY INCOME STATEMENT INFORMATION (In Thousands) ========================================================================= Year Ended May 31, Seven Months Ended _______________________ December 31, 1993 1993 1992 1991 ========================================================= Maintenance and repairs $813 $1,552 $1,686 $1,544 ========================================================= Amortization of intangible assets, taxes other than payroll and income taxes, advertising and royalties are less than 1% of total net sales for all periods shown. INDEX TO EXHIBITS Exhibit No. 3. Certificate of Incorporation and By-Laws 3.1 Restated Certificate of Incorporation of the Company filed as Exhibit 3.1 to the 8/28/87 Form 10-K and incorporated herein by reference. 3.2 Restated By-Laws of the Company filed as Exhibit 3.2 to the 8/28/87 Form 10-K and incorporated herein by reference. 4. Instruments Defining The Rights of Security Holders 4.1 Stock Certificate for Common Stock of the Company filed as Exhibit 4.1 to the 8/26/86 Form 10-K and incorporated herein by reference. 4.2 Rights Agreement dated as of 11/8/89 between the Company and American Stock Transfer & Trust Company filed as Exhibit 2.1 to the Registration Statement on Form 8-A dated 11/3/89 and incorporated herein by reference. 10. Material Contracts 10.1 Employment Agreement dated 2/1/89, between the Company and Gene R. McGrevin filed as Exhibit 10.2 to 1/27/89 Form 8-K and incorporated herein by reference. 10.2 First Amendment dated 7/11/89 to Employment Agreement dated 2/1/89 between the Company and Gene R. McGrevin filed as Exhibit 10.5 to 8/30/90 Form 10-K and incorporated herein by reference. 10.3 Second Amendment dated 10/16/89 to Employment Agreement dated 2/1/89 between the Company and Gene R. McGrevin filed as Exhibit 10.6 to 8/30/90 Form 10-K and incorporated herein by reference. 10.4 Third amendment dated 1/1/91 to Employment Agreement dated 2/1/89 between the Company and Gene R. McGrevin filed as Exhibit 10.7 to 8/29/91 Form 10-K and incorporated herein by reference. 10.5 Syncor International Corporation 1981 Master Stock Option Plan as amended filed as part of Company's Proxy Statement dated 11/5/85, for its Annual Meeting of Shareholders held 11/26/85 and incorporated herein by reference. 10.6 Stock Option Agreement of Gene R. McGrevin dated 1/2/92 filed as Exhibit 10.16 to 8/27/92 Form 10-K and incorporated herein by reference. 10.7 Form of Indemnity Agreement substantially as entered into between Company and each Director and Officer filed as Exhibit 3.2 Appendix A to the 8/28/87 Form 10-K and incorporated herein by reference. 10.8 Form of Benefits Agreement substantially as entered into between Company and each Director filed as Exhibit 10.31 to 8/30/90 Form 10- K and incorporated herein by reference. 10.9 Form of Benefits Agreement substantially as entered into between Company and certain employees see Exhibit 10.8. 10.10 Syncor International Corporation 1990 Master Stock Incentive Plan As Amended and Restated filed as part of Company's Proxy Statement dated 10/4/93 for its Annual Meeting of Shareholders held 11/15/93 and incorporated herein by reference. 10.11 Syncor International Corporation Deferred Compensation Plan effective July 1, 1991 as Amended and Restated effective April 19, 1993.** 10.12 Employment Agreement dated July 21, 1993 between the Company and Robert G. Funari.** 10.13 Syncor International Corporation McGrevin Deferred Compensation Plan effective June 10, 1993.** 10.14 Split Ownership/Split Dollar Life Insurance Assignment Agreement effective June 10, 1993 between the Company and Gene R. McGrevin.** 10.15 Form of Stock Option Agreement substantially as entered into between Company and certain employee Directors and employees.** 10.16 Form of Stock Option Agreement substantially as entered into between Company and certain non-employee Directors.** 11. Statement Re: Computation of Per Share Earnings Computation can be clearly determined from the material contained in Company's Annual Report to Shareholders for fiscal year ended December 31, 1993. 13. Annual Report to Security Holders (P) Syncor International Corporation Annual Report to Shareholders for the fiscal year ended December 31, 1993, except for specific information in such Annual Report expressly incorporated herein by reference, is furnished for the information of the Commission and is not to be deemed "filed" as part hereof. (P) 21. Subsidiaries of the Registrant State of Name of Company Incorporation ___________________ _____________ Syncor Michigan Corp. Michigan Syncor Corp. New York New York Syncor Management Corporation California Syncor Hong Kong Limited Hong Kong Syncor Taiwan, Inc. Taiwan Syncor Midland, Inc. Texas 23. Consents of Experts and Counsel Consent of KPMG Peat Marwick.** ** Included herewith (P) Filed on paper EXHIBIT 23 INDEPENDENT AUDITORS' REPORT ON SCHEDULES AND CONSENT The Board of Directors and Stockholders Syncor International Corporation: The audits referred to in our report dated March 10, 1994, included the related financial statement schedules as of December 31, 1993, May 31, 1993 and 1992, and for the seven-month period ended December 31, 1993 and for each of the years in the three-year period ended May 31, 1993, included in the registra- tion statement of Syncor International Corporation. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. We consent to incorporation by reference in registration statement (No. 33-44395) on Form S-3 and registration statement (No.'s 33-7325, 33-39251, 33-43692, 33-57762 and 33-52607) on Form S-8 of Syncor International Corpora- ion of our report dated March 10, 1994, relating to the consolidated balance sheets of Syncor International Corporation and subsidiaries as of December 31, 1993, May 31, 1993 and 1992, and the related consolidated statements of income, stockholders' equity and cash flows and related schedules for the seven-month period ended December 31, 1993 and for each of the years in the three-year period ended May 31, 1993, which report appears in the December 31, 1993 transition report on Form 10-K of Syncor International Corporation. Our report refers to a change in the method of accounting for income taxes. Los Angeles, California KPMG Peat Marwick March 29, 1994 EX-1 2 DEFERRED COMPENSATION PLAN EXHIBIT 10.11 SYNCOR INTERNATIONAL CORPORATION DEFERRED COMPENSATION PLAN EFFECTIVE JULY 1, 1991 AMENDED AND RESTATED EFFECTIVE APRIL 19, 1993 TABLE OF CONTENTS 1. Purpose........................................................ 1 2. Definitions.................................................... 1 3. Selection of Participants...................................... 2 4. Period of Participation........................................ 2 5. Deferral of Compensation....................................... 2 6. Investment of Deferred Amounts................................. 3 7. Changes in Investment Alternatives............................. 3 8. Distribution................................................... 3 9. Additional Cash Distribution................................... 3 10. Death Benefit.................................................. 4 11. Insurance...................................................... 4 12. Beneficiary.................................................... 5 13. Amendment or Termination....................................... 5 14. Expenses....................................................... 5 15. No Trust....................................................... 5 16. No Assignability............................................... 5 17. Withholding.................................................... 6 18. No Impact on Directorship or Employment........................ 6 19. Interpretations................................................ 6 20. Successors and Assigns......................................... 6 21. Applicable Law................................................. 6 22. Notice......................................................... 6 SYNCOR INTERNATIONAL CORPORATION DEFERRED COMPENSATION PLAN EFFECTIVE JULY 1, 1991 AMENDED AND RESTATED EFFECTIVE APRIL 19, 1993 1. PURPOSE. The purpose of this Plan is to provide deferred compensation for a select group of management or highly compensated employees and directors of Syncor International Corporation. 2. DEFINITIONS. a. "BENEFICIARY" shall mean the person or persons (including, without limitation, the trustees of any testamentary or inter vivos trust) designated from time to time in writing by a Participant to receive payments under the Plan after the death of such Participant, or, in the absence of any such designation or in the event that such designated persons or person shall predecease such Participant, or shall not be in existence or shall otherwise be unable to receive such payments, the person or persons designated under such Participant's last will and testament or, in the absence of such designation, to the Participant's estate. b. "BOARD OF DIRECTORS" shall mean the board of directors of Syncor International Corporation, as constituted from time to time. c. "COMPANY" shall mean Syncor International Corporation, a Delaware corporation, and any successor thereof, and shall include any affiliated corporation that adopts this Plan with the consent of the Board of Directors of the Company. d. "COMPENSATION" shall mean payments that a Participant receives from the Company for services as a Director or as an employee, including bonuses, if any. e. "DEFERRED AMOUNT" shall mean an amount of Compensation deferred under this Plan up to 15% of Participant's Compensation for any Plan Year; and "NON- MATCHED DEFERRED AMOUNT" shall mean an amount of Compensation deferred under this Plan over and above a Deferred Amount for any Plan Year. f. "DEFERRED COMPENSATION ACCOUNT" shall mean the bookkeeping account established by the Company, directly or indirectly, to record credits for Deferred Amounts and Non-Matched Deferred Amounts under this Plan, plus earnings thereon, and to record debits for distributions to Participants or for the purchase of one or more life insurance policies (not, however, including amounts that the Participant directs be invested in investment alternatives pursuant to Section 6). The Plan Committee may adopt such sub-accounts as the Plan Committee deems necessary or desirable. g. "DIRECTOR" shall mean any member of the Board of Directors of the Company who is not an employee of the Company. h. "EFFECTIVE DATE OF PLAN" shall mean July l, 1991. i. "PARTICIPANT" shall mean any Director or employee who is participating in this Plan from time to time. j. "PLAN" shall mean the Syncor International Corporation Deferred Compensation Plan, as from time to time amended and in effect. k. "PLAN COMMITTEE" shall mean the person or persons appointed by the Chief Executive Officer of Syncor International Corporation to administer the Plan. Some of the routine administrative functions can be assigned to any department of the Company. l. "PLAN YEAR" shall mean any calendar year from January 1 to December 31. m. "TERMINATION OF SERVICE" shall mean the termination (by death, retirement or otherwise) of a Participant's service as a Director or employee of the Company. n. CONSTRUCTION: The masculine gender shall be deemed to include the feminine and neuter genders; the singular to include the plural; and the plural to include the singular; in each case the context requires. 3. SELECTION OF PARTICIPANTS. The Board of Directors shall select Directors and employees of the Company who shall be eligible to become Participants from Directors and from management or highly-compensated employees of the Company who qualify for inclusion in a "select group of management or highly compensated employees" as defined in Sections 201(2), 301(a)(3), 401(a)(l) and 4021(b)(6) of the Employee Retirement Income Security Act of 1974. 4. PERIOD OF PARTICIPATION. A Participant shall continue to participate in this Plan until the amounts credited to his Deferred Compensation Account have been distributed as a result of termination of the Plan pursuant to Section 13 or his Termination of Service, but if he fails to continue to satisfy the eligibility requirements under Section 3, he no longer will be eligible to elect to defer compensation pursuant to Section 5. A Participant may notify the Plan Committee in writing that he no longer wishes to defer compensation pursuant to Section 5 for a year or years, but this will not terminate his participation in this Plan. 5. DEFERRAL OF COMPENSATION. Each Participant who is a Director may elect to have all or a portion of his Compensation for any Plan Year deferred under this Plan, and each other Participant may elect to defer within increments of 5%, up to 25%, of his Compensation for any Plan Year. Such election shall be executed in writing by the Participant and filed with the Plan Committee, prior to the beginning of the Plan Year during which such Compensation is earned, on a form prescribed by the Plan Committee. If no such election is filed the percentage elected for the prior Plan Year shall be continued to be deferred for the new Plan Year. 6. INVESTMENT OF DEFERRED AMOUNTS. The Plan Committee may, but shall not be required to, invest a Participant's Deferred Amounts in one or more insurance policies offered by an insurance company acceptable to the Plan Committee. If such an investment is made and the insurance company offers investment alternatives, the Participant may direct that portions of his Deferred Amounts and/or Non-Matched Deferred Amounts be invested in the various alternatives in multiples of 10%. The investment results of such investments shall be credited or debited to the Participant's Deferred Compensation Account at least annually on such date or dates as determined by the Plan Committee. In the event such an investment is not made by the Plan Committee, investment results shall be credited or debited to the Participant's Deferred Compensation Account as if such an investment had been made in accordance with the investment alternatives chosen by the Participant on his deferral election form filed with the Plan Committee. 7. CHANGES IN INVESTMENT ALTERNATIVES. A Participant may direct that his Deferred Amounts, Non-Matched Deferred Amounts or future Deferred Amounts and future Non-Matched Deferred Amounts be invested in different investment alternatives for each Plan Year, if such alternatives are available. In addition, at the end of each Plan Year (and at such other times as the Plan Committee may designate), a Participant may request that the accumulated current value of all or a portion of his Deferred Compensation Account be changed from previously designated investment alternatives to newly designated investment alternatives. 8. DISTRIBUTION. a. In the event that a Participant has a Termination of Service (or in the event that there is an earlier termination of the Plan pursuant to Section 13), the balance in his Deferred Compensation Account at that time, adjusted to reflect results of investments pursuant to Section 6 at that time and the cash surrender value at that time of the insurance policy, if any, in which the Participant's Deferred Compensation Account is invested on the basis of the Participant's directions, shall be paid to the Participant or his Beneficiary in a lump-sum within 30 days of the event permitting the distribution. b. The Plan Committee is empowered to accelerate the payment of amounts from the Participant's Deferred Compensation Account to a Participant in the event the Plan Committee determines that the Participant: (I) has become totally disabled in that he is prevented from engaging in any suitable gainful employment or occupation, based on medical evidence satisfactory to the Plan Committee, and that such disability will be permanent and continuous for the remainder of his life; or (II) has a demonstrated financial hardship, based on circumstances beyond his control, severely affecting his financial affairs or clearly endangering his family with present or impending want or deprivation. 9. ADDITIONAL CASH DISTRIBUTION. In addition to any distribution under Section 8, the Company shall pay to the Participant or his Beneficiary an additional cash payment equal to 42.857% of the distribution under Section 8 attributable to the Deferred Amount. This distribution shall be made within 30 days of the event permitting the distribution under Section 8. No additional cash payment shall be paid in connection with amounts attributable to the Non-Matched Deferred Amounts. 10. DEATH BENEFIT. If a Participant should die while participating in this Plan but before an event permitting a distribution under Section 8, his Beneficiary shall be paid a death benefit. This death benefit shall be equal to the following: a. With respect to amounts attributable to the Deferred Amount the sum of: (I) the Deferred Compensation Account; (II) the additional Cash Distribution described in Section 9; and (III) fifty percent (50%) of the difference between the portion of the Deferred Compensation Account attributable to the Deferred Account and any death benefit attributable to insurance acquired by the Company attributable to the Deferred Amounts. b. With respect to amounts attributable to the Non-Matched Deferred Amount, one hundred percent (100%) of the amount attributable to insurance acquired by the Company attributable to the Non-Matched Deferred Amount. c. Notwithstanding the forgoing, the death benefit hereunder shall be equal to the sum of Deferred Amounts and Non-Matched Deferred Amounts made by the Participant under this Plan, if the Participant commits suicide, while sane or insane, within 2 years: (I) from the date of issue of any life insurance policy purchased on the life of the Participant pursuant to Section 11; (II) from the Participant's date of entry into this Plan, if no such policy is purchased; or (III) fraudulent misrepresentations of any facts material to any application for such insurance are discovered. This provision shall apply independently to each and every life insurance policy purchased on the life of the Participant. 11. INSURANCE. The death benefit provided for in Section 10 may be provided by the purchase by the Company of one or more insurance policies on the life of the Participant. The Participant shall cooperate fully with the Company and any insurance company in applying for such insurance by submitting to all necessary medical examinations and by submitting such information as may be required by the Company or the insurance company from which the Company intends to purchase the insurance. The insurance company issuing any policy of insurance to the Company shall not be a party to this Plan and shall be bound only by the terms of the insurance policies issued by it. The cost of any insurance under a policy purchased by the Company on the life of a Participant, as opposed to amounts deposited by the Company with the insurance company for investment, shall be debited to the Participant's Deferred Compensation Account, and, prior to the time the Participant has a Termination of Service: a. The Company shall be the beneficiary of the insurance policy, and the Company shall keep possession of the insurance policy; b. All premiums due on the insurance policy shall be paid by the Company from the Participant's Deferred Compensation Account, but shall in no event exceed the Participant's Deferred Compensation Account; c. In the event of the death of the Participant, the Company, its successors or assigns, shall be entitled to receive the insurance proceeds under the insurance policy; and d. The Company shall have each and every right of ownership of such insurance policy. If any insurance policy is transferred by the Company to a grantor trust as described in Section 15, the trust shall be substituted for the term "Company" for purposes of this Section. 12. BENEFICIARY. At the time a Participant elects to defer Compensation pursuant to this Plan, he shall designate on a form prescribed by the Plan Committee a Beneficiary or Beneficiaries for any amount which may become payable under the Plan in the event of his death. Any such designation may be changed by a Participant at any time by filing a new Beneficiary designation on a form prescribed by the Plan Committee. The most recent Beneficiary designation filed by a Participant shall be controlling at the time of the Participant's death. 13. AMENDMENT OR TERMINATION. The Board of Directors may amend or terminate this Plan at any time, for any reason, including, but not limited to, a determination by the Board of Directors that changes in the tax laws or accounting principles negate or diminish the continued value of the Plan. No amendment or termination shall adversely affect any then existing Deferred Compensation Accounts or rights under this Plan. 14. EXPENSES. The expenses of administering the Plan and any grantor trust described in Section 15 shall be borne by the Company. Other expenses shall be borne by the Company but shall be debited to the applicable Participant's Deferred Compensation Account. 15. NO TRUST. No action by the Company or its Board of Directors under this Plan shall be construed as creating a trust, escrow or other secured or segregated fund or other fiduciary relationship of any kind in favor of any Participant, his Beneficiary, or any other persons otherwise entitled to his Deferred Compensation Account, nor shall any of said persons have rights under any agreement or insurance policy in connection therewith between the Company and the insurance company. The status of the Participant and his Beneficiary with respect to any liabilities assumed by the Company hereunder shall be solely those of unsecured creditors of the Company. Any insurance policy or any other asset acquired or held by the Company in connection with liabilities assumed by it hereunder, shall not be deemed to be held under any trust, escrow or other secured or segregated fund or other fiduciary relationship of any kind for the benefit of the Participant or his Beneficiaries or to be security for the performance of the obligations of the Company, but shall be, and remain a general, unpledged, unrestricted asset of the Company at all times subject to the claims of general creditors of the Company. Notwithstanding the foregoing, the Company may transfer assets, including any insurance policies to a grantor trust of the type known as a "Rabbi Trust" with the Company as grantor and owner of such trust but with no Participant or Beneficiary having any right therein other than as a general creditor of the Company. 16. NO ASSIGNABILITY. Neither the Participant nor any other person shall acquire any right to or interest in any amount awarded to the Participant, otherwise than by actual payment in accordance with the provisions of this Plan, or have any power, voluntarily or involuntarily, to transfer, assign, anticipate, pledge, mortgage or otherwise encumber, alienate or transfer any rights hereunder in advance of any of the payments to be made pursuant to the Plan or any portion thereof. With respect to an insurance policy, neither the Participant nor his spouse nor any Beneficiary shall have any rights to transfer, assign, anticipate, pledge, mortgage or otherwise encumber, alienate or transfer any rights thereunder in advance of any right to receive any payments under the insurance policy, which payments and the rights thereto are hereby expressly declared to be non-assignable and non-transferable. 17. WITHHOLDING. The Company shall comply with all federal and state laws and regulations respecting the withholding, deposit and payment of any income or employment taxes relating to payments from Deferred Compensation Accounts under this Plan. 18. NO IMPACT ON DIRECTORSHIP OR EMPLOYMENT. This Plan shall not be construed to confer any right on the part of a Participant to be or remain a Director or employee of the Company or to receive any, or any particular rate of, Compensation. 19. INTERPRETATIONS. Interpretations of, and determinations related to, this Plan made by the Plan Committee in good faith, including any determinations of Deferred Amounts or Deferred Compensation Account balances, shall be conclusive and binding upon all parties; and the Company and the Plan Committee shall not incur any liability to a Participant for any such interpretation or determination so made or for any other action taken by it in connection with this Plan. This Plan under no circumstances shall be deemed a contract of insurance. 20. SUCCESSORS AND ASSIGNS. This Plan shall be binding on and inure to the benefit of the Company and the Participants and their Beneficiaries, and their respective heirs and assigns. 21. APPLICABLE LAW. The provisions of the Plan shall be construed, administered and enforced according to the laws of the State of California. 22. NOTICE. In the event of a Participant's termination, retirement or death, he or his Beneficiary, as the case may be, should notify the Company promptly, and the Company will then provide a claimant's statement form for completion which should be returned to the Company, together with an official death certificate, if applicable. In the event that any claim hereunder is denied, the Company will provide adequate notice in writing to such Participant or Beneficiary, setting forth the specific reason for such denial and, in addition, the Company will afford reasonable opportunity for a full and fair review of those reasons. SYNCOR INTERNATIONAL CORPORATION: By: ___________________________________ Gene R. McGrevin, President and CEO EX-2 3 EMPLOYMENT AGREEMENT - R. FUNARI EXHIBIT 10.12 EMPLOYMENT AGREEMENT This Employment Agreement is entered into as of the 21st day of July, 1993 between Syncor International Corporation (hereinafter sometimes referred to as "Employer") and Robert G. Funari (hereinafter sometimes referred to as "Corporate Officer"). In consideration of the mutual premises hereinafter set forth, the parties hereto agree as follows: 1. Employment. Employer agrees to employ Corporate Officer and Corporate Officer agrees to serve Employer, upon the terms and conditions hereinafter set forth. 2. Term. Unless earlier termination in accordance with this Agreement, the employment of Corporate Officer hereunder shall commence on August 9, 1993 and shall continue for a period of approximately two (2) years ending August 31, 1995. Between May 31, 1995 and August 31, 1995, the parties agree to negotiate in good faith in an attempt to reach agreement on the terms and conditions of an extension of this Agreement. 3. Duties. During the term of this Agreement, Corporate Officer shall be engaged as the Executive Vice President of Employer. Corporate Officer's powers and duties in such capacity will be those determined by the President and Chief Executive Officer. The Corporate Officer shall report to the President and Chief Executive Officer. If Corporate Officer is elected or appointed to an office with any of Employer's subsidiaries or affiliates during the term of this Agreement, the Corporate Officer will serve in such capacity or capacities without additional compensation. 4. Extent of Services. During the term of this Agreement Corporate Officer shall devote substantially the Corporation Officer's entire working time, attention, and energies to the business of Employer, and shall not during the term of service be actively engaged in any other business activities. However, this shall not be construed as preventing Corporate Officer from investing the Corporate Officer's personal assets in such form or manner as may require occasional or incidental services on the part of Corporate Officer in the management, conservation and protection of such investments and provided that such investments cannot be construed as being competitive or in conflict with the business of Employer. 5. Compensation. 5.1 Base Salary. Employer shall pay Corporate Officer during the Corporate Officer's term of service hereunder, as compensation for the Corporate Officer's Services, the sum of Two Hundred Ten Thousand Dollars ($210,000.00) per year (sometimes hereinafter referred to as the "base salary"), payable in biweekly or other installments in accordance with the general practices of the employer. Such base salary shall be reviewed and may be increased at each annual review by the Board of Directors at the meeting of the Board which coincides with Employer's annual shareholders' meeting. 5.2 Sign-On Bonus. In addition Employer shall pay Corporate Officer a sign-on bonus of Twenty Five Thousand Dollars ($25,000.00) payable on August 9, 1993, 5.3 Performance Bonus. 5.3.1 In order to establish a basis for payment of a bonus, if any, a set of objectives both quantitative and qualitative shall be recommended by Corporate Officer and reviewed and approved by the President and Chief Executive Officer and by the Board of Directors at the beginning of each fiscal year. In the event that the President and Chief Executive Officer and the Board do not approve the objectives recommended by Corporate Officer and a set of objectives cannot be mutually agreed upon the bonus will be determined by the Board of Directors in its sole discretion. Typical quantitative objectives may include among other things; Return on Investment, Profitability and Earnings per Share. Typical qualitative objectives may include among other things, employee turnover, customer service, staffing and team building. 5.3.2 To the extent that Employer achieves all of the Board approved objectives for any just completed fiscal year, the Employer may pay to Corporate Officer a bonus in the range of 60% to 100% of base salary earned by Corporate Officer during said year. Compliance or noncompliance with objectives shall not be cause for any adjustment in Corporate Officer's base salary. 5.3.3 Determination of percentile performance shall be made by the Compensation Committee of the Board of Directors after consultation with the President and Chief Executive Officer and with the Corporate Officer. The results for these discussions shall be reported to the full Board and the ultimate determination by the Board shall be final and binding. 5.3.4 As part of the foregoing bonus Employer shall pay Corporate Officer for its 1994 fiscal year a guaranteed bonus of $40,000 payable on August 9, 1993 which amount shall be deducted from the bonus determined as set forth above. 5.4 Stock Options. 5.4.1 The Employer hereby grants Corporate Officer stock option rights pursuant to the current Employer plan for 100,000 common shares in accordance with Employer's standard stock option agreement with the agreement commencement date on April 19, 1993 at an exercise price of $17 1/8 per share but contingent on the Corporate Officer becoming employed by Employer with delivery on August 9, 1993. All other terms and conditions of the options shall be in accordance with the terms and conditions of the options be in accordance with the terms of Employer's 1990 Master Stock Option Plan. All shares of common stock subject to be received by Corporate Officer upon exercise of stock options are currently fully registered and tradable in the National Association of Securities Dealers National Market System and Employer shall use its best efforts to maintain such current registration. This commitment shall apply to any other exchange or trading market on which the Employer's common stock is listed for trading. 5.4.2 At each Board of Directors meeting coinciding with the Employer's annual shareholders' meeting the President and Chief Executive Officer and the Compensation Committee shall consider the adequacy of Corporate Officer's then existing stock options. If in the Board of Directors' sole discretion additional options are warranted, they shall be granted with terms and conditions which the Board deems appropriate and at all time consistent with the company's then existent stock option plans. 5.5 Relocation Allowance. Employer shall provide Corporate Officer Employer's Homeowners's Full Relocation Package to assist Corporate Officer to relocate from Northern California to the Los Angeles area. 5.6 Benefits. 5.6.1 The Corporate Officer shall be entitled to the same benefits generally provided to other executives of Employer of comparable rank and responsibilities as well as those generally provided to all officers of Employer in accordance with the policies of the Board of Directors from time to time. 5.6.2 In the event of Corporate Officer's death, the Employer shall compensate or provide the designated beneficiaries of Corporate Officer with the benefits accrued or vested under any compensation and/or other benefit plan of the Employer in which Corporate Officer was a participant as of the date of his death. 5.7 Loan. Employer shall provide Corporate Officer a loan documented by its standard promissory note on August 9, 1993 for Two Hundred Thousand Dollars ($200,000.00) payable on or before May 31, 1994 with no interest during its first ninety (90) days and then interest at the rate payable by Employer to Bank of America on the ninety first (91) day. 6. Expenses. During the term of employment provided for herein, Employer shall pay or reimburse Corporate Officer, in accordance with its standard policy, upon submission of vouchers by the Corporate Officer for all out-of- pocket expenses for entertainment, travel, living, and the like, incurred by the Corporate Officer in the interest of Employer's business. 7. Termination. 7.1 Termination Events. Subject to the provisions of Paragraph 7.2 of this Section, this Agreement shall terminate: 7.1.1 Upon death of Corporate Officer. 7.1.2 At the option of the Employer if Corporate Officer shall become disabled and remain disabled for a period of six (6) months. Disability shall be defined as Corporate Officer's inability through illness or other cause to perform his normal work load as measured by the twelve (12) months preceding the commencement of such disability. During such disability Corporate Officer shall be compensated in accordance with Employer's standard policy regarding disability. 7.1.3 Upon mutual agreement. 7.1.4 By the Employer for "cause", which shall be defined exclusively for purposes of the Agreement to mean one or more of the following events: (a) A material breach of this Agreement by the Corporate Officer, provided such breach is continuing for a period of thirty (30) days after Employer has given notice of breach, and such breach is not cured by corporate Officer during such period. (b) Corporate Officer shall be adjudicated a bankrupt or be convicted of a felony crime punishable by imprisonment. (c) Corporate Officer shall engage in an activity that constitutes a conflict of interest with the Employer and such activity has not been approved by a disinterested majority of the Board of Directors after full disclosure thereof. 7.2 Consequences of Termination. 7.2.1 Upon death of Corporate Officer, all base salary payments under Section 5.1 and bonus payments provided by Section 5.3 shall be prorated and paid to the date of death. Payments required by Section 5.5 shall be paid in full. Employee benefits shall be governed by Section 5.6.2 hereof. 7.2.2 If the Employer terminates the Corporate Officer because of the disability of the Corporate Officer, such termination will be treated the same as a termination due to death under section 7.2.1 with the termination date being the date specified by the Employer after the six month disability period. 7.2.3 Upon termination by mutual agreement under Section 7.1.3 or for cause under Section 7.1.4, the Corporate Officer shall be paid all salary, but no bonus, prorated to the date of termination, and shall forfeit any non-vested Employer stock options or other employee benefits that are forfeitable upon the kind of termination that occurred. 7.2.4 If Employer shall terminate Corporate Officer for any reason other than one specified in Section 7.1, Employer shall pay Corporate Officer, all salary payments required by Section 5.1 for the full remaining term of this Agreement if the remaining term is at least one year at the salary rate for Corporate Officer in effect on such date. If the remaining term is less than one year and Employer shall terminate Corporate Officer for any reason other than one specified in Section 7.1, Employer shall pay Corporate Officer, all salary payments required by Section 5.1 for one year from the termination date at the salary rate for Corporate Officer in effect on such date. If this Agreement is not extended and Corporate Officer leaves the employment of Employer on the expiration date of the Agreement or if Corporate Officer continues as an employee of Employer after the expiration of this Agreement, and Employer shall terminate Corporate Officer for any reason other than one specified in Section 7.1, Employer shall pay Corporate Officer all salary payments required by Section 5.1 for one year from the expiration date or the termination date, as the case may be, at the salary rate for Corporate Officer in effect on such date. Employer shall pay Corporate Officer the bonus provided in Section 5.3 prorated up to the date of termination or the full bonus if all objectives for the year during which the termination occurred shall have been met. The Employer shall provide Corporate Officer full and immediate vesting of all stock options and other employee benefits and coverage under employee benefits plans of the Employer for the remaining term of this Agreement. 8. General Provisions. 8.1 Secrecy Agreement. The Corporate Officer shall enter into the Invention, Secrecy and Other matters Agreement attached hereto as Schedule A. 8.2 Employee Handbook. Employer maintains an Employee Handbook which applies to Employer's employees, including Corporate Officer, and which contains additional terms and conditions of employment of Corporate Officer. Those terms and conditions, as they may be revised from time to time by Employer, are incorporated by reference into this Agreement. In the event any provision of the Employee Handbook conflicts with a provision of this Agreement, the terms of this Agreement shall govern. 8.3 Arbitration. In the event (a) Corporate Officer disagrees with an Employer decision involving Corporate Officer's compensation, position or other personal employment condition or (b) there is a dispute arising out of the separation of Corporate Officer from employment by Employer then such disagreement or dispute shall first tried to be resolved by the problem solving procedure in the Employer Employee Handbook. If such disagreement or dispute is not resolved by such problem solving procedure, then it shall be resolved by binding arbitration, at the request of either party, in accordance with the rules of the American Arbitration Association. Such rules generally provide that the arbitration costs are split equally. The arbitrator shall apply the law of the state of the location of Corporate Officer's employment to the proceeding. The arbitrator shall have the power to award only actual direct compensatory damages which excludes punitive damages and the parties waive the right to recover punitive damages. The arbitrator shall prepare in writing and provide to the parties an award including factual findings and the reasons on which the decision is based. The arbitrator shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected by judicial review for any such error. 8.4 Notice. Any notice required or permitted to be given under this Employment Contract shall be sufficient if in writing and sent by certified mail by Employer to the residence of Corporate Officer, or by Corporate Officer to Employer's principal office. 8.5 Assignability. This Agreement and the rights, interest and benefits hereunder shall not be assignable or in any way alienated by Corporate Officer. Employer shall have the right of assignment and transfer of its rights hereunder to any successor to the majority of its assets and any such successor shall be bound by the terms hereof. 8.6 Waiver of Breach. The waiver by Employer or Corporate Officer of a breach of any provisions of this Agreement by the other shall not operate or be construed as a waiver of any subsequent breach. 8.7 Entire Agreement. This instrument contains the entire Agreement of the parties. It may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 8.8 Attorney's Fees. In the event that there shall be any litigation or court proceeding with respect to this Agreement or the obligations of the parties hereunder, the prevailing party shall be entitled to recover reasonable attorney's fees and costs from the other party. 8.9 Governing Law. This Employment Agreement shall be governed by the laws of California. IN WITNESS WHEREOF, Employer has caused this Employment Contract to be executed in its corporate name by its corporate officers thereunto duly authorized, the Corporate Officer has executed this Employment Contract. CORPORATE OFFICER /s/ Robert G. Funari ________________________________ Robert G. Funari EMPLOYER SYNCOR INTERNATIONAL CORPORATION /s/ Gene McGrevin ________________________________ Gene McGrevin President & Chief Executive Officer PROMISSORY NOTE Chatsworth, California September 9, 1993 $200,000.00 For value received, I promise to pay Syncor International Corporation or order, at its Chatsworth office in this city, the sum of Two Hundred Thousand Dollars & 00/100 on or before May 31, 1994 plus interest commencing on December 8, 1993 at the rate of six percent (6%). If this note is not paid when due I promise to pay in addition all costs of collection and reasonable attorneys' fees incurred by the holder hereof on account of such collection, whether or not suit is filed hereon. /s/ Robert G. Funari ________________________________ Robert G. Funari (BORROWER) EX-3 4 OFFICER DEFERRE COMPENSATION PLAN EXHIBIT 10.13 SYNCOR INTERNATIONAL CORPORATION OFFICER DEFERRED COMPENSATION PLAN WHEREAS Syncor International Corporation desires to retain the services of the officers and recognizes that the loss of the services of any member of such group would result in substantial loss to the Corporation; and WHEREAS Syncor International Corporation desires to recognize the services rendered in the past and to be rendered in the future by the officers until the respective dates of their termination, retirement or death; NOW THEREFORE, Syncor International Corporation hereby adopts a Deferred Compensation Plan for the officers as hereinafter set forth. ARTICLE 1 - DEFINITIONS 1.1 BENEFICIARY: Any person or persons, as designated pursuant to Article 4.1, to whom any benefits may be payable upon the death of a Participant pursuant to Article 3.2. 1.2 CONSTRUCTION: The masculine gender shall be deemed to include the feminine and neuter genders; the singular to include the plural; and the plural to include the singular; in each case where appropriate. 1.3 EFFECTIVE DATE OF PLAN: _______________ 1.4 EMPLOYER: Syncor International Corporation, any subsidiary thereof which participates in this Plan and which employs a Participant, any predecessor corporation or business, and any corporation or business which was merged into or consolidated with or substantially all of whose assets were acquired by the corporation, that elects to continue this Plan. 1.5 COMPENSATION COMMITTEE: The Compensation Committee of the Employer's Board of Directors. 1.6 PARTICIPANT: A Participant shall be an officer of the Employer who is so designated by the Compensation Committee and who has executed an application for participation pursuant to Article 2.1. 1.7 PLAN: The Plan shall consist of this document and any amendments thereto. 1.8 PLAN YEAR: The first plan year shall be from _______________ to _______________. Thereafter, the plan year shall be from _______________ to _______________. ARTICLE 2 - PARTICIPATION 2.1 Eligibility for participation in this Plan shall be restricted to the officers of the Employer and who are designated as Participants in this Plan by the Compensation Committee. An officer so eligible shall become a Participant by filing with the Employer a written application for participation in a form satisfactory to the Employer, within thirty (30) days of the date when he is first notified, in writing, that he is eligible to participate. 2.2 A Participant shall continue to be covered by this Plan until the earliest date on which any of the following events occur: a. The Plan is terminated pursuant to Article 5.1; b. Termination of employment. ARTICLE 3 - BENEFITS 3.1 TERMINATION OR RETIREMENT BENEFIT: If a Participant's coverage under this Plan ceases for any reason, he shall be paid a lump sum Benefit. This Benefit will be equal to $15,000 for each year of participation under the Plan. A Participant will be credited with a year of participation if he is employed by the Employer on the first day of each plan year. This payment shall be made in a lump sum within thirty (30) days following such termination or retirement. 3.2 DEATH BENEFITS: If a Participant should die while a Participant under the Plan his Beneficiary shall be paid a lump sum Benefit. This Benefit will be equal to the amount which would have been paid to the Participant had he terminated from the Plan on the date of death. This payment shall be made in a lump sum within thirty (30) days following the date the Employer receives the claimant's statement form pursuant,to Article 6.5. The Employer shall have full discretion to determine the amount to be paid in accordance with this Article. 3.3 DISABILITY: The Employer is empowered to accelerate the payment of benefits to a Participant in the event the Employer determines that the Participant has become totally disabled in that he is prevented from engaging in any suitable gainful employment or occupation, based on medical evidence satisfactory to the Employer, and that such disability will be permanent and continuous for the remainder of his life. Payments to a Participant in accordance with this Article shall be made within thirty (30) days following the date the Employer determines the Participant is eligible for such payment. ARTICLE 4 - BENEFICIARY 4.1 Upon applying for participation in the Plan, each Participant shall designate on a form satisfactory to the Employer a Beneficiary or Beneficiaries for any benefits which may become payable hereunder in the event of his death. Any such Beneficiary can be changed by a Participant upon giving written notice to the Employer. 4.2 The Beneficiary will be the person or persons named in the Beneficiary designation most recently filed with the Employer at the time of the Participant's death. ARTICLE 5 - AMENDMENT AND TERMINATION 5.1 The Employer reserves the right to amend, in writing, or to terminate this Plan at any time, with or without notice; provided, however, that no such action shall reduce the amount accrued by any Participant or Beneficiary under the Plan prior to the date of amendment or termination. ARTICLE 6 - MISCELLANEOUS 6.1 The Plan shall under no circumstance be deemed to have any effect upon the terms or conditions of employment of any employee of the Employer whether or not he is a Participant hereunder. The establishment and maintenance of this Plan shall not be construed as creating or modifying any contract between the Employer and its officers, nor is it in lieu of any other benefits. 6.2 Participation by any officer in this Plan shall not give such person the right to be retained in the employ of the Employer or any right or interest in this Plan other than as provided herein. 6.3 Benefits under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by any Participant or Beneficiary and any attempt to do so shall be null and void. Benefits under this Plan shall not be subject to or liable for the debts, contracts, liabilities, engagements or torts of any Participant or any Beneficiary, nor may the nuel be subject to attachment or seizure by any creditor of any Participant or any Beneficiary under any circumstances. 6.4 The Employer, at its sole discretion, shall have the right to waive any provision hereof. 6.5 In the event of a Participant's termination, retirement or death, he or his Beneficiary, as the case may be, should notify the Employer promptly, and the Employer will then provide a claimant's statement form for completion which should be returned to the Employer, together with an official death certificate, if applicable In the event that any claim hereunder is denied, the Employer will provide adequate notice, in writing, to such Participant or Beneficiary, setting forth the specific reason for such denial and, in addition, the Employer will afford reasonable opportunity for a full and fair review of those reasons. 6.6 For purposes of Title I of ERISA, this Plan is intended to qualify as an unfunded plan maintained primarily for the purpose of providing deferred compensation for the officers and shall be interpreted accordingly. No action by the Employer or its Board of Directors under this Plan shall be construed as creating a trust, escrow or other secured or segregated fund or other fiduciary relationship of any kind in favor of any Participant, his Beneficiary, or any other persons otherwise entitled to his plan benefits The status of the Participant and his Beneficiary with respect to any liabilities assumed by the Employer hereunder shall be solely those of unsecured creditors of the Employer. Any asset acquired or held by the Employer in connection with liabilities assumed by it hereunder, shall not be deemed to be held under any trust, escrow or other secured or segregated fund or other fiduciary relationship of any kind for the benefit of the Participant or his Beneficiary or to be security for the performance of the obligations of the Employer, but shall be, and remain a general, unpledged, unrestricted asset of the Employer at all times subject to the claims of general creditors of the Employer. 6.7 The Plan shall be administered by the Employer. The Employer shall have the exclusive authority and responsibility for all matters in connection with the operation and administration of the Plan. The Employer's powers and duties shall include, but not be limited to, the following: (a) responsibility for the compilation and maintenance of all records necessary in connection with the Plan; (b) authorizing the payment of all benefits under the Plan and expenses of the Plan; (c) authority to engage such legal, accounting and other professional services as it may deem proper; (d) discretionary authority to interpret the Plan; and (e) discretionary authority to determine eligibility for benefits under the Plan and to resolve all issues of fact and law in connection with such determination. Decisions by the Employer shall be final and binding upon all the parties. The Employer, from time to time, may allocate to other persons or organizations any of its rights, powers, and duties with respect to the operation and administration of the Plan. Any such allocation shall be reviewed from time to time by the Employer; shall, unless the Employer specifies otherwise, carry such discretionary authority as the Employer possesses regarding the matter; and shall be terminable upon such notice as the Employer, in its sole discretion, deems reasonable and prudent under the circumstances. 6.8 Any payment to a Participant or Beneficiary or the legal representative of either, in accordance with the terms of this Plan shall to the extent thereof be in full satisfaction of all claims such person may have against the Employer. The Employer may require such payee, as a condition to such payment, to execute a receipt and release therefore in such form as shall be determined by the Employer. 6.9 The Plan shall be construed, administered, and governed in all respects in accordance with the laws of the State of California to the extent not preempted by ERISA. If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall continue to be fully effective. ACKNOWLEDGED: ________________________________________ ___________________________ Syncor International Corporation Date EX-4 5 RESOLUTION: SPLIT OWNERSHIP/SPLIT DOLLAR PLAN EXHIBIT 10.14 RESOLUTION: SPLIT OWNERSHIP/SPLIT DOLLAR PLAN WHEREAS, Gene McGrevin, President, has contributed substantially to the success of this Corporation; and WHEREAS, the Corporation desires that Gene McGrevin continue in the employ of the Corporation; and WHEREAS, to retain the services of Gene McGrevin, the Corporation desires to assist in establishing an adequate life insurance program; RESOLVED, THEREFORE, that the Secretary and/or Treasurer of this Corporation is hereby authorized and directed to receive on behalf of the Corporation and by way of Assignment, a limited ownership right in a certain life insurance policy of $2,000,000 Specified Amount, issued to Gene McGrevin by John Hancock Variable Life, on the life of Gene McGrevin, and to contribute an annual premium equal to $60,000 per year for a period of ten consecutive years. Such Assignment shall provide that the Corporation will be reimbursed from the policy values in an amount equal to its cumulative premium contributions, upon the happening of any one of the following events: a. Upon Death Of The Insured; b. Upon The Policy-Owner's Cancellation Of The Policy; c. Upon The Policy-Owner's Request For Release Of The Corporation's Interest BE IT FURTHER RESOLVED, that ________________________________, a duly authorized officer, is expressly authorized to execute such assignment, to contribute, the resultant premium share, to exercise all policy rights conferred by said assignment and to perform all necessary and proper acts required by the Insurer and the policy owner in the maintenance of this Life Insurance Split-Ownership Plan. Date:____________________ Name:___________________________ Title:__________________________ SPLIT OWNER/SPLIT DOLLAR ASSIGNMENT Gene McGrevin, hereinafter referred to as "Owner," has this date applied to John Hancock Variable Life for life insurance in the specified amount of $2,000,000 on the life of Gene McGrevin, the Insured. Syncor International Corporation, of Chatsworth California, hereinafter referred to as "Assignee-Owner," desires to assist Owner in establishing and maintaining the above-described policy on the life of Gene McGrevin. Therefore, Assignee-Owner agrees to receive, by way of this Assignment, a limited policy ownership and to pay corresponding premiums under the Split Dollar variation set forth below. I. SPLIT DOLLAR VARIATION EMPLOYER-PAY-ALL: An annual premium of $60,000 per year for a period of ten consecutive years. II. LIMITED POLICY OWNERSHIP RIGHTS Owner, upon acceptance by John Hancock Variable Life of the insurance applied for above, does thereupon assign, transfer and set over to Assignee-Owner (its successors or assigns), a specific and limited policy ownership interest in said policy in consideration of the premium payment paid by the Assignee-Owner as of the date of issue (receipt of which is hereby acknowledged), and in consideration of such subsequent premium payments made upon each future premium due date. Assignee-Owner, alone, will, to the extent of its policy interest, receive from the Owner an amount equal to such interest upon surrender or cancellation of the policy by the Owner, or receive such interest from the death proceeds, upon the death of the Insured. III. ASSIGNEE-OWNER'S "POLICY INTEREST" -- DEFINED Assignee-Owner's interest in the policy shall be an amount equal to its cumulative premium contributions under the Split Dollar variation set forth earlier. Should the Assignee-Owner elect to continue premiums beyond ten years, in any amount, as determined by Assignee-Owner, then, in such event, the Assignee-Owner's "policy interest" shall be increased in corresponding dollar amount. Should the owner elect to borrow or withdraw policy values in accordance with Article IV in order to repay Assignee-Owner a portion of its policy interest, then Assignee-Owner's policy interest shall be reduced accordingly. A. Upon Death Of Insured In the event of the Insured's death, Assignee-Owner's policy interest shall be an amount equal to the cumulative premium payments made by the Assignee-Owner to the Insurer, under the Split Dollar arrangement set forth above. B. Upon Owner's Cancellation or Termination Of The Policy In the event the Owner elects to surrender or cancel the policy, Assignee-Owner shall receive an amount equal to the lesser of: the cumulative premiums paid under the Split Dollar arrangement. or the policy's cash surrender value. IV. OWNER'S RETAINED INCIDENTS OF OWNERSHIP Except as to the limited policy ownership rights specifically granted Assignee-Owner herein, Owner retains all incidents of ownership (including the right to surrender or cancel the policy and the right to borrow or withdraw against the policy except as limited below). Owner's right to withdraw from the policy cash values under the policy's "Partial Surrender Provision," (which is defined as "the cash value, less any indebtedness, less the cost of insurance until the next monthly anniversary"), shall be limited to such "partial surrender value," as above defined, reduced by the cumulative premiums paid by Assignee-Owner under the Split Dollar arrangement set forth above, and subject to any policy surrender limitations. Owner's rights to borrow or withdraw policy values under the "policy surrender provision" are expressly prohibited during the first ten policy years. After such time period has passed, the Owner shall be free to borrow or withdraw policy values amounts as may be required to repay the Assignee-Owner to the extent of its policy interest as more fully described in Article III. Until Assignee-Owner is fully repaid to the extent of its policy interest, Owner shall not be permitted to borrow or withdraw policy values. V. ASSIGNEE-OWNER'S COOPERATION If the above described policy is in the possession of the Assignee- Owner, Assignee-Owner will, upon notice and request, forward the policy without reasonable delay to the Insurer, if required by the Insurer for any policy transaction or change. VI. INSURER ACTION The Insurer is hereby authorized to recognize either the Assignee-Owner or the Owner's claims to rights as defined hereunder without investigating the reason for such action or the validity or the amount of their respective interest hereunder. The Insurer provides this assignment form solely for the convenience of its policyholders and their counsel and is not responsible for its legal or tax validity or effect. Insurer shall not be responsible to account for the actual premium contributions of the parties hereunder, but shall rely solely upon the written declaration of the parties in any distribution or settlement of the policy's lifetime or death values. Any actions taken by the Insurer in accordance with the policy, any policy endorsements of this assignment shall fully discharge it from all claims, suits and demands of all persons whatsoever. VII. RELEASE OF ASSIGNEE-OWNER'S LIMITED OWNERSHIP INTEREST Upon Owner's request and upon full payment to the Assignee-Owner of its policy interest in the Split Dollar policy, Assignee-Owner agrees to release and re-assign its Split Dollar ownership rights to the Owner. Assignee-Owner, its successors and assigns, agree (solely for the purposes of facilitating payment and release of its limited policy ownership), that Owner (or assignees) may borrow or withdraw from the policy cash values subject to the restrictions described in Article IV. VIII. PREMIUM NOTICES Notices are to be sent to the Assignee-Owner. IN WITNESS WHEREOF, the undersigned Owner and Assignee-Owner have executed this Assignment this ______ day of ______________, 19__, at ______________________. _____________________________ ________________________________ Witness Gene McGrevin _____________________________ ________________________________ Witness Syncor International Corporation Policy #003161211, John Hancock Variable Life Insured: Gene McGrevin Owner: Gene McGrevin Owner-Assignee: Syncor International Corporation This was approved and recorded by John Hancock Variable Life on ____________________, 19__. By:______________________________ SPECIMEN EMPLOYER COVER LETTER TO EXECUTIVE REGARDING ERISA COMPLIANCE Date: _______________________________ To: _______________________________ From: _______________________________ ERISA COMPLIANCE The life insurance split ownership arrangement you recently entered into with your employer is considered a "split dollar" arrangement as that term has been defined in Rev. Rul. 64-328 and related rulings. The Employee Retirement Income Security Act of 1974 (ERISA) considers split dollar plans a "welfare benefit," but exempts such plans from compliance with most of the Act's provisions. Three ERISA provisions would nevertheless seem to apply to Split Dollar Plans: 1. Reporting and Disclosure (Summary Plan Descriptions) 2. Fiduciary Responsibility 3. Administration and Enforcement REPORTING AND DISCLOSURE: Generally, regulatory provisions under Part I of the Act are inapplicable under the "fewer than 100 participants" exemption. Only one aspect of Part I appears to apply to split dollar plans -- "Summary Plan Descriptions." Since the essentials of a summary plan description are included within the ASSIGNMENT FORM creating the split dollar arrangement and the WRITTEN AND COMPUTER-PREPARED ILLUSTRATIONS your receipt of these documents (or photo copies thereof) should constitute compliance. FIDUCIARY RESPONSIBILITY: Part 4 ERISA requires the following for all "welfare plans": 1. A named fiduciary or fiduciaries who have authority to control and manage the operation of the plan. 2. A procedure for carrying out a funding policy and method. 3. A procedure for allocation of responsibilities. 4. A procedure for amending the plan. 5. A basis upon which payments are made to and from the plan. Language to satisfy these Part 4 requirements is included in the attached "SPLIT DOLLAR ERISA PROVISIONS." ADMINISTRATION AND ENFORCEMENT: Part 5 of ERISA requires a "claims procedure." Language to satisfy this provision is likewise included in the attached "SPLIT DOLLAR ERISA PROVISIONS." SUMMARY The split dollar arrangement provided you offers an extremely valuable fringe benefit at nominal costs to you. Your receipt of reproduced copies of the: SPLIT OWNERSHIP ASSIGNMENT: COMPUTER AND WRITTEN PROPOSALS: and the attached SPLIT DOLLAR ERISA PROVISIONS should fully inform you of all your rights and privileges under this special, additional fringe benefit. ________________________________________ Corporation SPLIT DOLLAR ERISA PROVISIONS A Split Dollar Fringe Benefit for Gene McGrevin, was established through a special Split-Owner Assignment by and between, Gene McGrevin and Syncor International Corporation on _________________________________________, 19__. This Supplemental Agreement and the terms of the Split Owner-Assignment (the provisions of which are hereby incorporated by reference, as though fully restated), are intended to meet the requirements of "ERISA '74." I. NAMED FIDUCIARY AND PLAN ADMINISTRATOR (Corporate Officer) is hereby designated the "Named Fiduciary" and Plan Administrator. II. FUNDING The funding policy for the Split Dollar arrangement shall be to maintain the subject policy in force by paying, when due, all premiums required. III. AMENDMENT The Split Dollar plan may be amended at any time and from time to time, by a written instrument executed by the Policy Owner and the Corporation. IV. BASIS OF PREMIUM PAYMENTS AND BENEFITS Payments to and from the Split Dollar Plan adopted herein shall be in accordance with the provisions of the Split Ownership Assignment, described above. V. CLAIMS PROCEDURE FOR LIFE INSURANCE POLICY AND SPLIT DOLLAR PLAN A. Claim forms or claim information as to the subject policy can be obtained by contacting: Thomas E. Miller, CLU, ChFC, CFP 3 Imperial Promenade Suite 100 Santa Ana, CA 92707 When the named fiduciary has a claim which may be covered under the provisions described in the insurance policy, he should contact the agent or agency named above, who will either complete a claim form and forward it to the Insurer or advise the named fiduciary what further requirements are necessary. The Insurer will evaluate the claim and make a decision as to payment within 90 days of the date the claim is received by the Insurer. If the claim is payable, a benefit check will be issued to the named fiduciary and forwarded through the office or person named above. If for any reason a claim for benefits under the policy is denied by the Insurer, the Insurer will notify the named fiduciary of the denial. Such notification will be made in writing, within 90 days of the date the claim is received, and will be transmitted through the office of the agent or agency named above. The notification will include the specific reasons for the denial, as well as specific reference to the policy provisions upon which the denial is based. The named fiduciary will also be informed as to the steps which may be taken to have the claim denial reviewed. A decision as to the validity of a claim will ordinarily be made within 10 working days of the date the claim is received by the Insurer. Occasionally, however, certain questions may prevent the Insurer from rendering a decision on the validity of the claim within the specific 90-day period. If this occurs, the named fiduciary will be notified of the reasons for the delay, as well as the anticipated length of the delay, in writing and through the office of the agent or agency named above. If further information or other material is required, the named fiduciary will be so informed. If the named fiduciary is dissatisfied with the denial of the claim, or the amount paid, he has 60 days from the date he receives notice of a claim denial to file his objections to the action taken by the Insurer. If the named fiduciary wishes to contest a claim denial, he should notify the agent or agency named above, who will assist in making inquiry to the Insurer. All objections to the Insurer's actions should be in writing and submitted to the agent or agency named above for transmittal to the Insurer. The Insurer will review the claim denial and render a decision on the claim denial. The named fiduciary will be informed in writing of the decision of the Insurer within 60 days of the date the claim request is received by the Insurer. This decision will be final. B. Once a decision has been rendered as to the distribution of proceeds under the claim procedure described above as to the policy, claims for any benefits due under the Plan or the surrender of the policy may be made in writing by the corporation or the corporation's designated beneficiary, and policy owner or their designated beneficiary, as the case may be, to the named fiduciary. In the event a claim for benefits is wholly or partly denied or disputed, the named fiduciary shall within a reasonable period of time, after receipt of the claim, notify the corporation or the corporation's designated beneficiary, and policy owner or their designated beneficiary as the case may be of such total or partial denial or dispute listing: (a) The specific reason or reasons for the denial or dispute; (b) Specific reference to pertinent plan provisions upon which the denial or dispute is based; (c) A description of any additional information necessary for the claimant to perfect the claim, and an explanation of why such material or information is necessary; and (d) An explanation of-the plan's review procedure. Within 60 days of denial or notice of claim under the plan, a claimant may request that the claim be reviewed by the named fiduciary in a full and fair hearing. A final decision shall be rendered by the named fiduciary within 60 days after receipt of request for review. This supplemental agreement was executed at _____________________________, this _________________ day of ____________, 19__. __________________________________ __________________________________ Witness Witness __________________________________ __________________________________ Witness Witness EX-5 6 1990 MASTER STOCK INCENTIVE PLAN AWARD AGREEMENT EXHIBIT 10.15 SYNCOR INTERNATIONAL CORPORATION 1990 MASTER STOCK INCENTIVE PLAN AWARD AGREEMENT Name of Participant : Address of Participant : Social Security Number : Number of Shares : Exercise Price Per Share : Award Date : Expiration Date : WHEREAS, pursuant to the Corporation's 1990 Master Stock Incentive Plan (the "Plan"), the Participant has been granted an Incentive Stock Option (the "Option" or "Award") to purchase shares of Common Stock of the Corporation upon the terms and conditions hereinafter set forth; NOW, THEREFORE, the Participant and the Corporation agree as follows: 1. GRANT OF OPTION. The Corporation has granted to the Participant as a matter of separate inducement and agreement in connection with his or her employment, and not in lieu of any salary or other compensation for his or her services, the right and option to purchase, in accordance with the Plan and on the terms and conditions of the Plan and those hereinafter set forth, all or any part of the number of shares of Common Stock stated above (the "Common Stock") at the price stated above (the "Price"), exercisable from time to time subject to the provisions of this Award Agreement prior to the close of business on the Expiration Date stated above. 2. EXERCISABILITY OF OPTION. Except as otherwise provided in the Plan or this Award Agreement, the Option shall become exercisable from time to time as follows: (i) 25% of the Common Stock shall become purchasable twelve months after the Award Date; (ii) an additional 25% of the Common Stock shall become purchasable twenty-four months after the Award Date; (iii) an additional 25% of the Common Stock shall become purchasable thirty-six months after the Award Date; and (iv) an additional 25% of the Common Stock shall become pur- chasable forty-eight months after the Award Date; provided, however, that the Option may not be exercised as to less than 10 shares at any one time unless the number of shares purchased is the total number at the time available for purchase under an installment of the Option. If the Participant does not, in any given installment period, purchase all of the shares which he or she is entitled to purchase in such installment period, the Participant's right to purchase any shares not so purchased shall continue until the Expiration Date, unless theretofore terminated in accordance with the provisions hereof and of the Plan. The Option may be exercised only as to whole shares. 3. LIMITATION ON TREATMENT OF OPTIONS AS "INCENTIVE" OPTIONS FOR TAX PURPOSES. Pursuant to Section 422(d) of the Internal Revenue Code of 1986, as amended, the aggregate Fair Market Value of the stock with respect to which Incentive Stock Options are exercisable for the first time in any calendar year (under all plans of the Corporation or its subsidiaries) cannot exceed $100,000 determined as of the dates such options were granted. To the extent that such aggregate Fair Market Value exceeds $100,000, the number of options treated as Incentive Stock Options shall be reduced to meet the $100,000 limit, and the most recently granted options shall be first treated as Nonqualified Options. To the extent a reduction of simultaneously granted options is necessary to meet the $100,000 limit, or in the event said aggregate Fair Market Value exceeds $100,000 in any calendar year as a result of an acceleration of awards pursuant to Section 6.4 of the Plan or otherwise, the Corporation may, in the manner and to the extent permitted by law, designate which shares are to be treated as stock acquired pursuant to the exercise of an Incentive Stock Option. 4. METHOD OF EXERCISE AND PAYMENT. Each exercise of the Option shall be by means of written notice of exercise duly delivered to the Corporation, specifying the number of whole shares with respect to which the Option is being exercised, together with any written statements required pursuant to Section 11 below and payment of the Price made in accordance with Section 2.2 of the Plan. 5. NOT A CONTRACT FOR EMPLOYMENT. Nothing contained in this Award Agreement or in the Plan shall confer upon the Participant any right to continue in the employ of the Corporation or constitute any contract or agreement of employment. The Participant acknowledges that the Corporation has the right to terminate the Participant at will. Nothing contained in this Award Agreement or in the Plan shall interfere in any way with the right of the Corporation to (a) terminate the employment of the Participant at any time for any reason whatsoever, with or without cause, or (b) reduce the compensation received by the Participant from the rate in existence on the Award Date. 6. EFFECT OF TERMINATION OF EMPLOYMENT. (a) The Option and all other rights hereunder, to the extent such rights shall not have been exercised prior thereto, shall terminate and become null and void on the date the Participant ceases to be employed by the Cor- poration; provided, however, that the Participant may, to the extent the Option shall have become exercisable prior to such date, exercise the Option at any time within (1) up to three months after termination of employment other than termination for Retirement, Total Disability, death or through discharge for cause; (2) up to twelve months after such termination if such termination occurs by reason of Retirement or Total Disability; or (3) up to twelve months after the Participant's death, if the Participant dies while in the employ of the Company or during the period referred to in clause (2) above. During the period after death, the Option may, to the extent exercisable on the date of death (or earlier termination), be exercised by the person or persons to whom the Par- ticipant's rights under the Plan and this Award Agreement shall pass by will or by the applicable laws of descent and distribution. Unless sooner terminated pursuant to the Plan, the Option shall expire at the end of the applicable period specified in clauses (1), (2) or (3) above, to the extent not exercised within that period. (b) Notwithstanding the foregoing, the Award will cease to be an Incentive Stock Option and will be treated for tax purposes as a Nonqualified Stock Option unless such Award is exercised prior to (1) three months after the Participant's termination of employment for any reason other than death or Total Disability, (2) one year after the Participant's termination of employment, if such termination is by reason of Total Disability or if the Participant's Total Disability occurs within the three-month period following termination of employment for a reason other than Total Disability, or (3) the Expiration Date, if the Participant's termination of employment is by reason of death or if the Participant dies within the three-month period following termination of employ- ment for a reason other than death. In no event may any Option be exercised by any person after the Expiration Date. 7. NON-ASSIGNABILITY OF OPTION. The Option shall not be subject to sale, transfer, pledge, assignment or alienation other than by will or the laws of descent and distribution regardless of any community property or other interest therein of the Participant's spouse or such spouse's successor in interest. In the event that the spouse of the Participant shall have acquired a community property interest in the Option, the Participant, or such transferees, may exercise it on behalf of the spouse of the Participant or such spouse's successor in interest. 8. ADJUSTMENTS UPON SPECIFIED CHANGES. As set forth in Section 6.2 of the Plan, upon the occurrence of specified events relating to the Cor- poration's stock, adjustments will be made in the number and kind of shares that may be issuable under, or in the consideration payable with respect to, an Award. 9. ACCELERATION. Upon the occurrence of an Event as defined in the Plan, including a Change of Control, the Award shall become immediately exer- cisable to the full extent theretofore not exercisable unless prior to an Event the Board determines otherwise; subject, however, to compliance with applicable regulatory requirements, including without limitation Rule 16b-3 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 422A of the Internal Revenue Code of 1986, as amended. 10. PARTICIPANT NOT A SHAREHOLDER. Neither the Participant nor any other person entitled to exercise the Option shall have any of the rights or privileges of a shareholder of the Corporation as to any shares of Common Stock for which stock certificates have not been actually issued and delivered to him or her. No adjustment will be made for dividends or other rights for which the record date is prior to the date on which such stock certificate or certificates are issued even if such record date is subsequent to the date upon which notice of exercise was delivered and the tender of payment was accepted. 11. APPLICATION OF SECURITIES LAWS. (a) No shares of Common Stock may be purchased pursuant to the Option unless and until any then applicable requirements of federal and state securi- ties laws and regulations, and any exchanges upon which the Common Stock may be listed, shall have been fully satisfied. The Participant represents, agrees and certifies that: (1) If the Participant exercises the Option in whole or in part at a time when there is not in effect under the Securities Act of 1933, as amended (the "Securities Act"), a registration statement relating to the Common Stock issuable upon exercise and available for delivery to him or her a prospectus meeting the requirements of Section 10 of the Securities Act ("Prospectus"), the Participant will acquire the Common Stock issuable upon such exercise for the purpose of investment and not with a view to resale or distribution and that, as a condition to each such exercise, he or she will furnish to the Corporation a written statement to such effect, satisfactory in form and substance to the Corporation; and (2) If and when the Participant proposes to publicly offer or sell the Common Stock issued to him or her upon exercise of the Option, the Participant will notify the Corporation prior to any such offering or sale and will abide by the opinion of counsel to the Corporation as to whether and under what conditions and circumstances, if any, he or she may offer and sell such shares, but such procedure need not be fol- lowed if a Prospectus was delivered to the Participant with the shares of Common Stock and the Common Stock was and is listed on a national securities exchange or traded as a National Market System security through the facilities of NASDAQ. (b) The Participant understands that the certificate or certificates representing the Common Stock acquired pursuant to the Option may bear a legend referring to the foregoing matters and any limitations under the Securities Act and state securities laws with respect to the transfer of such Common Stock, and the Corporation may impose stop transfer instructions to implement such limita- tions, if applicable. Any person or persons entitled to exercise the Option under the provisions of Section 6 above shall be bound by and obligated under the provisions of this Section 11 to the same extent as is the Participant. (c) The Board of Directors of the Corporation may impose such con- ditions on an Award or on its exercise or acceleration or on the payment of any withholding obligation (including without limitation restricting the time of exercise to specified periods) as may be required to satisfy applicable regula- tory requirements, including, without limitation, Rule 16b-3 (or any successor rule) promulgated by the Commission pursuant to the Exchange Act. 12. NOTICES. Any notice to be given to the Corporation under the terms of the Award Agreement or pursuant to the Plan shall be in writing and addressed to the Secretary of the Corporation at its principal office and any notice to be given to the Participant shall be addressed to him or her at the address stated above, or at such other address as either party may hereafter designate in writing to the other party. Any such notice shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or cer- tification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 13. EFFECT OF AWARD AGREEMENT. The Award Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors of the Corporation to the extent provided in Section 6.2(b) of the Plan. 14. TAX WITHHOLDING. The provisions of Section 6.6 of the Plan are hereby incorporated and shall govern any withholding that the Corporation or Subsidiary employing the Participant is required to make with respect to an exercise of the Option, as well as the Company's right to condition a transfer of Common Stock upon compliance with the applicable withholding requirements of federal, state and local authorities. 15. TERMS OF PLAN GOVERN. The Award and this Award Agreement are subject to, and the Corporation and the Participant agree to be bound by, all of the terms and conditions of the Plan. Capitalized terms used in this Award Agreement have the meanings defined in the Plan. The Participant acknowledges receipt of a copy of the Plan. The rights of the Participant are subject to limitations, adjustments, modifications, suspension and termination in certain circumstances and upon the occurrence of certain conditions as set forth in the Plan. 16. LAW APPLICABLE TO CONSTRUCTION. The interpretation, performance and enforcement of the Award and this Award Agreement shall be governed by the laws of the State of Delaware. 17. NOTICE OF DISPOSITION. The Participant agrees to notify the Corporation of any sale or other disposition of any shares of Common Stock received upon exercise of the Option if such sale or disposition occurs within two years after the Award Date or within one year after the date of exercise of the Option. IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set his or her hand as of the Award Date. COMPANY: OPTIONEE: SYNCOR INTERNATIONAL CORPORATION, a Delaware corporation By: /s/ Gene R. McGrevin By: /s/ Charles A. Smith ____________________________ _________________________ GENE R. MCGREVIN CHARLES A. SMITH President and Chief Executive Officer Date: Date: __________________________ __________________________ CONSENT OF SPOUSE I join with my spouse, the Participant herein named, in executing the foregoing Incentive Stock Option Award Agreement and agree to be bound by all of the terms and provisions thereof and of the Plan. ___________________________________ Signature of Participant's Spouse EX-6 7 NON-EMPLOYEE DIRECTOR 1990 STOCK INCEN PLAN AGMT EXHIBIT 10.16 SYNCOR INTERNATIONAL CORPORATION NON-EMPLOYEE DIRECTOR 1990 MASTER STOCK INCENTIVE PLAN AWARD AGREEMENT NAME OF NON-EMPLOYEE DIRECTOR ("PARTICIPANT") : ADDRESS OF PARTICIPANT : SOCIAL SECURITY NUMBER : NUMBER OF SHARES : EXERCISE PRICE PER SHARE : AWARD DATE : EXPIRATION DATE : WHEREAS, pursuant to the Corporation's 1990 Master Stock Incentive Plan (the "Plan"), the Participant has been granted a Nonqualified Stock Option (the "Option" or "Award") to purchase shares of Common Stock of the Corporation upon the terms and conditions hereinafter set forth; NOW, THEREFORE, the Participant and the Corporation agree as follows: 1. GRANT OF OPTION. The Corporation has granted to the Participant as a matter of separate inducement and agreement in connection with his or her status as a Non-Employee Director, and not in lieu of any salary or other compensation for his or her services, the right and option to purchase, in accordance with the Plan and on the terms and conditions of the Plan and those hereinafter set forth, all or any part of the number of shares of Common Stock stated above (the "Common Stock") at the price stated above (the "Price"), exercisable from time to time subject to the provisions of this Award Agreement prior to the close of business on the Expiration Date stated above. 2. EXERCISABILITY OF OPTION. Except as otherwise provided in the Plan or this Award Agreement, the Option shall become exercisable from time to time as follows: (i) 33% of the Common Stock shall become purchasable twelve months after the Award Date; (ii) an additional 33% of the Common Stock shall become purchasable twenty-four months after the Award Date; and (iii) an additional 34% of the Common Stock shall become purchasable thirty-six months after the Award Date; provided, however, that the Option may not be exercised as to less than 10 shares at any one time unless the number of shares purchased is the total number at the time available for purchase under an installment of the Option. If the Participant does not, in any given installment period, purchase all of the shares which he or she is entitled to purchase in such installment period, the Participant's right to purchase any shares not so purshased shall continue until the Expiration Date, unless theretofore terminated in accordance with the provisions hereof and of the Plan. The Option may be exercised only as to whole shares. 3. METHOD OF EXERCISE AND PAYMENT. Each exercise of the Option shall be by means of written notice of exercise duly delivered to the Corporation, specifying the number of whole shares with respect to which the Option is being exercised, together with any written statements required pursuant to Section 9 below and payment of the Price made in accordance with Section 2.8 of the Plan. 4. EFFECT OF TERMINATION OF DIRECTORSHIP. The Option and all other rights hereunder, to the extent such rights shall not have been exercised prior thereto, shall terminate on the date the Participant ceases to serve as a director of the Corporation; provided, however, that the Participant may, to the extent the Option shall have become exercisable prior to such date, exercise the Option at any time within (1) up to twelve months after such termination; or (2) up to twelve months after the Participant's death, if the Participant dies while serving as a director of the Corporation or during the period referred to in clause (1) above. During the period after death, the Option may, to the extent exercisable on the date of death (or earlier termination), be exercised by the person or persons to whom the Participant's rights under the Plan and this Award Agreement shall pass by will or by the applicable laws of descent and distribution. Unless sooner terminated pursuant to the Plan, the Option shall expire at the end of the applicable period specified in clauses (1) or (2) above, to the extent not exercised within that period. In no event may the Option be exercised by any person after the Expiration Date. 5. NON-ASSIGNABILITY OF OPTION. The Option shall not be subject to sale, transfer, pledge, assignment or alienation other than by will or the laws of descent and distribution regardless of any community property or other interest therein of the Participant's spouse or such spouse's successor in interest. In the event that the spouse of the Participant shall have acquired a community property interest in the Option, the Participant, or such transferees, may exercise it on behalf of the spouse of the Participant or such spouse's successor in interest. 6. ADJUSTMENTS UPON SPECIFIED CHANGES. As set forth in Section 6.2 of the Plan, upon the occurrence of specified events relating to the Corporation's stock, adjustments will be made in the number and kind of shares that may be issuable under, or in the consideration payable with respect to, an Award. 7. ACCELERATION. Upon the occurrence of an Event, as defined in the Plan, including a Change of Control, the Award shall become immediately exer- cisable to the full extent theretofore not exercisable unless prior to an Event the Board determines otherwise; subject, however, to compliance with applicable regulatory requirements including without limitation Rule 16b-3 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 8. PARTICIPANT NOT A SHAREHOLDER. Neither the Participant nor any other person entitled to exercise the Option shall have any of the rights or privileges of a shareholder of the Corporation as to any shares of Common Stock for which stock certificates have not been actually issued and delivered to him or her. No adjustment will be made for dividends or other rights for which the record date is prior to the date on which such stock certificate or certificates are issued even if such record date is subsequent to the date upon which notice of exercise was delivered and the tender of payment was accepted. 9. APPLICATION OF SECURITIES LAWS. 9.1 No shares of Common Stock may be purchased pursuant to the Option unless and until any then applicable requirements of federal and state securities laws and regulations, and any exchanges upon which the Common Stock may be listed, shall have been fully satisfied. The Participant represents, agrees and certifies that: 9.1.1 If the Participant exercises the Option in whole or in part at a time when there is not in effect under the Securities Act of 1933, as amended (the "Securities Act"), a registration state- ment relating to the Common Stock issuable upon exercise and available for delivery to him or her a prospectus meeting the requirements of Section 10 of the Securities Act ("Prospectus"), the Participant will acquire the Common Stock issuable upon such exercise for the purpose of investment and not with a view to resale or distribution and that, as a condition to each such exercise, he or she will furnish to the Cor- poration a written statement to such effect, satisfactory in form and substance to the Corporation; and 9.1.2 If and when the Participant proposes to publicly offer or sell the Common Stock issued to him or her upon exercise of the Option, the Participant will notify the Corporation prior to any such offering or sale and will abide by the opinion of counsel to the Corporation as to whether and under what conditions and circumstances, if any, he or she may offer and sell such shares, but such procedure need not be followed if a Prospectus was delivered to the Participant with the shares of Common Stock and the Common Stock was and is listed on a national securities exchange or traded as a National Market System security through the facilities of NASDAQ. 9.2 The Participant understands that the certificates representing the Common Stock acquired pursuant to the Option may bear a legend referring to the foregoing matters and any limitations under the Securities Act and state securities laws with respect to the transfer of such Common Stock, and the Corporation may impose stop transfer instructions to implement such limitations, if applicable. Any person or persons entitled to exercise the Option under the provisions of Section 4 above shall be bound by and obligated under the pro- visions of this Section 9 to the same extent as is the Participant. 9.3 The Board of Directors of the Corporation may impose such conditions on an Award or on its exercise or acceleration or on the payment of any withholding obligation (including without limitation restricting the time of exercise to specified periods) as may be required to satisfy applicable regula- tory requirements, including, without limitation, Rule 16b-3 (or any successor rule) promulgated by the Commission pursuant to the Exchange Act. 10. NOTICES. Any notice to be given to the Corporation under the terms of the Award Agreement or pursuant to the Plan shall be in writing and addressed to the Secretary of the Corporation at its principal office and any notice to be given to the Participant shall be addressed to him or her at the address stated above, or at such other address as either party may hereafter designate in writing to the other party. Any such notice shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 11 EFFECT OF AWARD AGREEMENT. The Award Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors of the Corporation to the extent provided in Section 6.2(b) of the Plan. 12. TAX WITHHOLDING. The provisions of Section 6.6 of the Plan are hereby incorporated and shall govern any withholding that the Corporation is required to make with respect to an exercise of the Option, as well as the Corporation's right to condition a transfer of Common Stock upon compliance with the applicable withholding requirements of federal, state and local authorities. 13. TERMS OF THE PLAN GOVERN. The Award and this Award Agreement are subject to, and the Corporation and the Participant agree to be bound by, all of the terms and conditions of the Plan. Capitalized terms used in this Award Agreement have the meanings defined in the Plan. The Participant acknowledges receipt of a copy of the Plan. The rights of the Participant are subject to limitations, adjustments, modifications, suspension and termination in certain circumstances and upon the occurrence of certain conditions as set forth in the Plan. 14. LAW APPLICABLE TO CONSTRUCTION. The interpretation, performance and enforcement of the Award and this Award Agreement shall be governed by the laws of the State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set his or her hand as of the Award Date. COMPANY: OPTIONEE: SYNCOR INTERNATIONAL CORPORATION a Delaware corporation By:/s/ Gene R. McGrevin /s/ Henry N. Wagner, Jr. _____________________________ ________________________________ GENE R. MCGREVIN HENRY N. WAGNER, JR. President & Chief Executive Officer Date: Date: _____________________________ ____________________________ CONSENT OF SPOUSE I join with my spouse, the Participant herein named, in executing the foregoing Non-Employee Director Stock Option Award Agreement and agree to be bound by all of the terms and provisions thereof and of the Plan. _________________________________ SIGNATURE OF PARTICIPANT'S SPOUSE -----END PRIVACY-ENHANCED MESSAGE-----