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EXHIBIT 2.07
AMENDMENT TO CHANGE
IN CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is made as of October 8, 1998, by and between
Allegiance Corporation, a Delaware corporation ("Company"), Cardinal Health,
Inc., an Ohio corporation ("Cardinal"), and Xxxxxx X. Xxxxxx ("Employee").
WHEREAS, Company and Employee have entered into a change in
control severance agreement under the Allegiance Corporation Change in Control
Plan, effective as of October 1, 1996 (the "Change in Control Agreement");
WHEREAS, Company has entered into an Agreement and Plan of
Merger Among Cardinal, BOXES Merger Corp. and Company, dated as of October 8,
1998 (the "Merger Agreement");
WHEREAS, Company wishes to encourage the retention of Employee
following consummation of the merger contemplated by the Merger Agreement; and
WHEREAS, in connection with Company entering into the Merger
Agreement, Company and Employee have determined to amend the Change in Control
Agreement to, among other things, provide that certain modifications to
Employee's employment status following the consummation of the merger
contemplated by the Merger Agreement will not be treated as a basis for a "Good
Reason" termination by Employee under the Change in Control Agreement during the
Minimum Transition Period (as defined below) and to provide certain
modifications to the non-competition and non-solicitation provisions of the
Change in Control Agreement;
NOW, THEREFORE, in consideration of these mutual premises and
the mutual and dependent promises hereinafter set forth, the parties hereto
agree as follows:
1. Section 1 of the Change in Control Agreement is hereby
amended by deleting the second, third and fifth sentences of such Section, and
by adding the following sentences to the end of such Section:
Notwithstanding the foregoing, upon consummation of the merger
(the "Cardinal Merger") contemplated by the Agreement and Plan
of Merger Among Cardinal, BOXES Merger Corp. and Company,
dated as of October 8, 1998 (the "Cardinal Merger Agreement"),
the term of this Agreement and Employee's Plan participation
shall automatically be extended for a period of sixty (60)
months after the end of the month in which the Cardinal Merger
is consummated. Furthermore, Employee may terminate this
Agreement and his participation in the Plan at any time by
giving Company thirty (30) days' advance written notice;
provided, however, that in no case shall such termination of
this Agreement or
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participation in the Plan release Employee from the provisions
of Section 5 hereof.
2. The first sentence of Section 2 of the Change in Control
Agreement is hereby amended by substituting the phrase "sixty (60) months after
the end of month in which the Cardinal Merger is consummated" for the phrase
"twenty-four (24) months following a Change in Control" in the introductory
paragraph to such Section.
3. Paragraph 2(c)(iii) of the Change in Control Agreement will
not apply to Cardinal stock options granted after the consummation of the
Cardinal Merger.
4. Section 5 of the Change in Control Agreement is hereby
amended to read in its entirety as follows:
5. NON-SOLICITATION AND NON-COMPETITION. In consideration for
the severance benefits called for under paragraph 2(c) and
Section 3 above, Employee agrees that:
(a) during the greater of the twelve (12) month period
following his Date of Termination and the twenty-four (24)
month period following the end of the month in which the
Cardinal Merger is consummated, Employee will not, without
the prior written consent of Company, alone or in
association with others, solicit on behalf of Employee, or
any other person, firm, corporation or entity, any employee
of Company, or any of its operating divisions, subsidiaries
or affiliates; and
(b) during the twenty-four (24) month period following his
Date of Termination (the "Noncompete Period"), Employee
will not, without the prior written consent of Company,
directly or indirectly, engage or invest in, counsel or
advise or be employed by any of the entities set forth on
Exhibit A attached to this Agreement (the "Listed
Entities"), or by any person, entity, firm or corporation
which is now an affiliate of any of the Listed Entities,
until such time during the Noncompete Period as such Listed
Entity is acquired or consolidated with any entity other
than any of the Listed Entities. Notwithstanding the
foregoing, Employee shall be entitled to passively own not
more than four and nine-tenths percent (4.9%) of any of the
Listed Entities.
Should Employee fail to comply with the non-solicitation
and/or non-competition restrictions contained in this Section
5, this Agreement shall immediately terminate and Employee
shall forfeit any remaining unpaid benefits under this
Agreement and Company shall have the right (in addition to,
and not in lieu of, any other right or remedy that may be
available to it) to temporary and permanent injunctive relief
from a court of competent jurisdiction, without posting any
bond or other security and without the necessity of proof of
actual damage. With respect to any provision of this Section 5
finally determined by a court of
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competent jurisdiction to be unenforceable, Employee and
Company hereby agree that such court shall have
jurisdiction to reform this Agreement or any provision
hereof so that it is enforceable to the maximum extent
permitted by law, and the parties agree to abide by such
court's determination. If the non-solicitation or
noncompetition covenant of this Section 5 is determined to
be wholly or partially unenforceable in any jurisdiction,
such determination shall not be a bar to or in any way
diminish Company's right to enforce either such covenant in
any other jurisdiction.
5. Section 8 of the Change in Control Agreement is hereby
amended to read in its entirety as follows:
8. TERMINATION FOR CAUSE AND GOOD REASON. Employee will be
considered to have been terminated for "Cause" if the
termination is by reason of Employee willfully engaging in
conduct demonstrably and materially injurious to Company,
Employee being convicted of or confessing to a crime involving
dishonesty or moral turpitude or Employee's willful and
continued failure for a significant period of time to perform
Employee's duties after a demand for substantial performance
has been delivered to Employee by the Board of Directors of
Company which demand specifically identifies the manner in
which the Board believes that Employee has not substantially
performed his duties. Employee's termination shall be
considered to have been for "Good Reason" if Employee's
termination is by reason of the occurrence of any of the
following events within twelve (12) months after the end of
the month in which the Cardinal Merger is consummated (the
"Minimum Transition Period") without Employee's express
written consent:
(a) a significant adverse change in the title or duties of
Employee, which change is inconsistent with Employee's
position as President of Allegiance Corporation; Executive
Vice-President of Cardinal; Group President-Allegiance
Corporation following the Cardinal Merger;
(b) a reduction in or failure to pay any portion of
Employee's Annual Base Salary as in effect on the date of
the Change in Control or as the same may be increased from
time to time thereafter;
(c) the failure by Company to provide Employee with
compensation and benefits (including, without limitation,
annual and long-term incentives, bonus and other
compensation plans and any vacation, medical,
hospitalization, life insurance, dental or disability
benefit plan), or cash compensation in lieu thereof, which
are, in the aggregate, no less favorable than those
provided by Company to Employee immediately prior to the
occurrence of the Change in Control;
(d) any material breach by Company of this Agreement; and
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(e) the failure of Company to obtain a satisfactory
agreement from any successor or assign of Company to assume
and agree to perform this Agreement (as amended), as
required in Section 10 of this Agreement.
If, during the Minimum Transition Period, Employee elects to
terminate Employee's employment for Good Reason, Employee
shall so notify Company in writing after the occurrence of the
event constituting Good Reason, specifying the basis for such
termination. If Company fails, within ten (10) days after
receiving such written notice, to remedy the facts and
circumstances that provided Good Reason, Employee's employment
shall be deemed to have terminated for Good Reason on the
tenth day after Company receives such written notice. If,
during the Minimum Transition Period, Company does remedy such
facts and circumstances within such ten (10) days, Employee
shall be deemed to no longer have Good Reason, and shall
continue in the employ of Company as if no notice had been
given. Employee's continued employment after the longer of (i)
the expiration of sixty (60) days from any action which would
constitute Good Reason under paragraph 8(a) above and (ii) the
expiration of the Restricted Period (as defined below) shall
constitute a waiver of rights with respect to such action
constituting Good Reason under this Agreement. "Restricted
Period" shall mean any period during which Employee is
prohibited from selling Cardinal common shares or shares of
Company common stock pursuant to the restrictions in
connection with the pooling-of-interests method of accounting
under XXX Xx. 00 or any other restrictions under federal or
state securities law; provided, that the Restricted Period
shall in no event extend beyond the expiration of six (6)
months after the consummation of the Cardinal Merger; and
provided, further, that there shall not be taken into account
for purposes of determining the Restricted Period any
restrictions under federal or state securities laws that arise
as a result of actions of Employee after the consummation of
the Cardinal Merger.
Following the Minimum Transition Period, any termination of
Employee's employment (other than a termination by Company for
Cause, or a termination by reason of Employee's disability,
retirement or death) during the remainder of the term of this
Agreement, shall be treated as a termination by Employee for
Good Reason.
6. This Agreement shall be effective upon execution of the
Cardinal Merger Agreement, and may not be modified, waived or discharged unless
such modification, waiver or discharge is agreed to in writing and signed by
each of the parties. In the event of the termination of the Cardinal Merger
Agreement prior to the consummation of the Cardinal Merger, this Agreement shall
be void and of no further force or effect, and the Change in Control Agreement
will continue to remain in effect in accordance with its terms without
amendment.
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IN WITNESS WHEREOF, Company, Cardinal and Employee have signed
this Agreement as of the date first written above.
ALLEGIANCE CORPORATION
By: ___________________________
Name:
Title:
CARDINAL HEALTH, INC.
By: ___________________________
Name:
Title:
______________________________
Xxxxxx X. Xxxxxx
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EXHIBIT A
AmeriSource
Bergen Xxxxxxxx (including Bergen Medical and any successor
in interest to the Bergen Medical business)
Bindley Western
X.X. Xxxxx
D & K Healthcare
McKesson (including General Medical and any successor
in interest to the General Medical business)
Xxxxxx & Xxxxxxx
Xxxxxx
Xxxxx & Minor
Omnicell
PSS World Medical
Xxxxx Xxxxxx
Medline
Diebold
ServiceMaster
Xxxxxxx Scientific
Maxxim
Safeskin
DeRoyal
VWR