Cardinal Health 2009 Annual Report Download - page 135

to customary covenants, and obligations under the revolving credit facilities will be guaranteed by each of
CareFusion’s existing and future direct and indirect material domestic subsidiaries. Borrowings under the
revolving credit facilities will bear interest at a floating rate per annum based upon the London interbank offered
rate for dollars (“LIBOR”) or the alternate base rate (“ABR”), in each case plus an applicable margin. For the
three-year revolving credit facility, LIBOR varies from 2.1% to 3.375% based on CareFusion’s debt ratings and
in the case of ABR varies from 1.1% to 2.375% based on CareFusion’s debt ratings. For the 364-day revolving
facility, LIBOR varies from 2.2% to 3.5% based on CareFusion’s debt ratings and in the case of ABR varies
from 1.2% to 2.5% based on CareFusion’s debt ratings. Notwithstanding any of the foregoing, should any loans
remain outstanding under the bridge loan facility (see below), the applicable margin applicable to borrowings
under both revolving credit facilities will be increased by 1.0% after 90 days, by 2.0% after 180 days and by
3.0% after 270 days of closing. In connection with these revolving credit facilities, the Company paid $3.8
million in underwriting and other fees.
Stock Option Exchange Program
On May 6, 2009, the Company’s Board of Directors authorized, and on June 23, 2009, the Company’s
shareholders approved, a program that permitted certain current employees to exchange certain outstanding stock
options with exercise prices substantially above the current market price of Cardinal Health Common Shares for
a lesser number of stock options that have a fair value that is lower than the fair value of the “out of the money”
options. The program began on June 19, 2009 and was completed on July 17, 2009. The Company believes that
this program was necessary to more closely align employee and shareholder interests through equity
compensation programs. The program was designed to motivate and retain key employees and to reinforce the
alignment of the Company’s employees’ interests with those of its shareholders. As a result of this program
12.8 million outstanding eligible stock options were exchanged for 1.4 million new options at an exercise price
of $31.27.
Share Repurchase Program
On August 5, 2009, the Company cancelled the previously approved share repurchase program and
announced a new $500.0 million share repurchase program which expires on August 31, 2012. The Company
expects to use this repurchase program to offset equity plan issuances.
Item 9: Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A: Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company carried out an evaluation, as required by Rule 13a-15(e) under the Exchange Act, with the
participation of the Company’s principal executive officer and principal financial officer, of the effectiveness of
the Company’s disclosure controls and procedures as of June 30, 2009. Based on this evaluation, the Company’s
principal executive officer and principal financial officer have concluded that the Company’s disclosure controls
and procedures were effective as of June 30, 2009 to provide reasonable assurance that information required to
be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC rules and forms and to provide that such information is accumulated
and communicated to management to allow timely decisions regarding required disclosure.
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