UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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SYNCOR INTERNATIONAL CORPORATION
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On November 7, 2002, Syncor International Corporation (the "Company") issued
the following communications to employees of the Company:
SCRIPT OF VOICE-MAIL
MESSAGE FROM ROD BOONE
TO SYNCOR EMPLOYEES (11/7/02)
Hello, this is Rod Boone and this message is going out to the entire SPS
team. I would like to make a few brief comments as a result of the
announcements yesterday. As professionals, reputation and public trust are
essential ingredients in what we do. With this in mind, I want to reassure
you of two things.
First of all, under no circumstance will we tolerate any improper behavior
by any Syncor employee, regardless of his or her role in the company.
Second, and probably even more important, the conduct under investigation
should not-and will not- be allowed to taint the reputation of the
thousands of honest, ethical professionals who have made Syncor the
unquestioned leader in its field.
I want to personally thank all of our managers, directors, pharmacists,
technologists, drivers, sales people and support folks for your continuing
commitment to outstanding service and quality.
I know I can count of each of you to continue to act as the strong leaders
that you are in these challenging times.
We are - and should - be justly proud of who we are and what we stand for.
If you have any further questions or concerns, please don't hesitate to
contact me.
SCRIPT OF VOICE-MAIL MESSAGE
FROM ROBERT FUNARI TO SYNCOR EMPLOYEES
(11/7/02)
As you can imagine, yesterday was a very intense time. We had over one hundred
phone calls as a follow up to the press releases we sent out earlier in the
day, but I wanted to make sure that I communicate with you again this morning.
Like many of you, I felt angry and betrayed by the recent disclosures of
potentially improper payments to the customers of some of our overseas
subsidiaries. This is not the way I do business, nor is it the way Syncor does
business.
I am not going to allow the apparent bad behavior by some people to damage
our sense of who we are and what we stand for. The people in our company who
consistently demonstrate our values in their behavior have built Syncor's
strong reputation for service, safety, professionalism, and accountability. I
am proud of our company and the important difference that we make in the lives
of people each and every day. I know in my heart that the overwhelming
majority of people adhere to the principles of honesty and integrity. Our
business is strong and as I have said on more than one occasion, our future is
bright.
Since I know a lot of you have questions about what's been going on, I thought
I'd take a few moments and address some of the most widely asked ones.
First of all, there's the question of what Syncor has disclosed to the Justice
Department and the SEC.
What we told the government is that a committee of outside directors, together
with outside counsel, is investigating certain payments made by some of our
overseas subsidiaries to customers in several foreign countries, including
Taiwan and China. So far, the investigation seems to indicate that some of the
payments made to both state-owned and private healthcare facilities may have
violated foreign and U.S. law, including the Foreign Corrupt Practices Act. We
also advised the government that the investigation will cover Syncor's other
operations.
Another widely asked question is how will all of this impact the company's
operations and financial results.
The answer is that, right now, based on what we've learned to date, we don't
currently believe that the amounts of the improper payments are material to
our financial results. That being said, we need to wait until the special
committee of directors finishes its investigation to know what the full impact
might be.
The fact that Monty Fu has agreed to suspend his participation as a company
director pending completion of the investigation had led some of you to wonder
who is in charge at the company.
There should be no doubt about this. In terms of running the company, just as
before, the buck stops with me as chief executive, and I continue to rely on
the same dedicated management team to keep things moving. In addition, the
Board of Directors has elected Bernard Puckett, a current director, as lead
director of the Board. Mr. Puckett is chairing the special committee of
outside directors conducting the investigation.
Now for the sixty-four thousand dollar question. How will what's happened
affect our proposed merger with Cardinal Health?
The quick answer is that based on what we now know, we don't think it should.
From the outset, we've been cooperating and consulting closely with Cardinal
Health, and we continue to believe that the combination of the two companies
would benefit both shareholders and the health-care providers we serve. For
its part, Cardinal Health has said that it is reviewing the matter and that it
had not yet concluded whether the conditions to the merger will be satisfied.
Given what we know right now, our view is that we don't currently think the
information learned in the investigation to date would result in our failing
to satisfy the conditions to the merger. We won't know definitively until the
special committee has completed its investigation.
On a slightly different subject, some of you want to know what happens now
with the Justice Department and the SEC.
All I can really say about this is that we are cooperating fully with them and
will continue to inform them of what we learn.
Let me close by reinforcing one important thought. We are moving forward and we
are not going to allow this apparent bad behavior by some people to define who
we are and what we stand for.
We have faced many challenges together over the years. In 1994 we were at risk
of losing the company as a result of severe market conditions that had us
losing money in the second half of the year. With your help we were able to
turn the company around, restore profitability, and then go on to six
consecutive years of profitable growth. We will successfully deal with this
new challenge as well. The officers and I are counting on you today and every
day going forward. We are counting on you to continue to demonstrate your
exceptional commitment to serving our customers.