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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1994APRIL 3, 1997
REGISTRATION NO. 33-55093
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CARDINAL HEALTH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 31-0958666
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION) NO.)
655 METRO PLACE SOUTH, SUITE
925
DUBLIN, OHIO 43017
(614) 761-8700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------(Exact name of Registrant as specified in its charter)
OHIO
(State or other jurisdiction of incorporation)
31-0958666
(I.R.S. Employer Identification No.)
5555 GLENDON COURT
DUBLIN, OHIO 43016
(614) 717-5000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
ROBERT D. WALTER, CHAIRMAN
655 METRO PLACE SOUTH, SUITE 9255555 GLENDON COURT
DUBLIN, OHIO 4301743016
(614) 761-8700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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Copies to:717-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
R. STEVEN KESTNER DANIEL A. NEFFJOHN M. GHERLEIN, ESQ. JOHN J. MCCARTHY, JR.ESQ.
BAKER & HOSTETLER WACHTELL, LIPTON, ROSEN & KATZLLP DAVIS POLK & WARDWELL
3200 NATIONAL CITY CENTER 51 WEST 52ND STREET 450 LEXINGTON AVENUE
CLEVELAND, OHIO 44114 NEW YORK, NEW YORK 100191900 EAST NINTH STREET NEW YORK, NEW YORK 10017
(216) 621-0200CLEVELAND, OHIO 44114 (212) 403-1000 (212) 450-4000
(216) 621-0200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicableFrom time to
time after the effective date of this Registration Statement becomes effective.
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CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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Common Shares, without par value... 8,050,000 shares $39.125 $311,182,812 $107,306
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(1) Includes 1,050,000 Common Shares being registered in connection with an
overallotment option granted to the U.S. Underwriters.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to rule 457(c).
(3) Of this amount, $80,154 was paid with the filing of the original
Registration Statement on August 17, 1994 for the registration of 6,037,500
Common Shares based on a proposed maximum offering price of $38.50.
------------------------Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /[ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
------------------------[X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The Registrantregistrant hereby amends this Registration Statementregistration statement on such date or dates
as may be necessary to delay its effective date until the Registrantregistrant shall file
a further amendment which specifically states that this Registration
Statementregistration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statementregistration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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Debt Securities $350,000,000(2) 100% $350,000,000 $106,061
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(1) Estimated solely for the purpose of computing the registration fee.
(2) Plus such additional amount as may be necessary that, if any Debt Securities
are issued with an original issue discount, the aggregate initial offering
price will equal $350,000,000.
IN ACCORDANCE WITH RULE 429, THE PROSPECTUS CONTAINED IN THIS REGISTRATION
STATEMENT ALSO RELATES TO THE COMPANY'S REGISTRATION STATEMENT ON FORM S-3 (NO.
33-57223), AS AMENDED, FIRST FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON JANUARY 10, 1995.
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EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: one to be
used in connection with an offering in the United States and Canada (the "U.S.
Prospectus") and one to be used in connection with a concurrent international
offering outside the United States and Canada (the "International Prospectus").
The U.S. Prospectus and the International Prospectus are identical except for
the front and back cover pages. The U.S. Prospectus is included herein and is
followed by the alternate front and back cover pages to be used in the
International Prospectus. Each of the pages for the International Prospectus
included herein is labelled "Alternate Page for International Prospectus."
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Information contained herein is subject to completion or amendment.INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such State.REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 1994
PROSPECTUS
7,000,000 SHARES
[LOGO]
COMMON SHARES
------------------
Of the 7,000,000 Common Shares offered hereby, 1,600,000 are being sold byAPRIL 3, 1997
[CARDINAL HEALTH, INC. LOGO]
$400,000,000
DEBT SECURITIES
Cardinal Health, Inc. ("Cardinal"(the "Company" or "Cardinal") may offer and issue
from time to time unsecured debt securities in one or more series (the "Debt
Securities") up to an aggregate initial offering price not to exceed
$400,000,000 (or the "Company")equivalent in foreign-denominated currency or currency
units based on or relating to foreign currencies, including European Currency
Units). The Debt Securities will rank equally with all other current and 5,400,000 are being sold
by certain shareholdersfuture
unsecured indebtedness of the Company (the "Selling Shareholders"). See
"Selling Shareholders."and prior to subordinated indebtedness, if
any. The Debt Securities may be sold for U.S. dollars, foreign-denominated
currency or currency units; principal of and interest on the Debt Securities may
likewise be payable in U.S. dollars, foreign-denominated currency or currency
units, in each case as the Company specifically designates. The Company does not
currently intend to issue Debt Securities based on or relating to foreign
currencies or foreign currency units.
The Debt Securities will not receive anybe offered in amounts, at prices, with maturities
and on terms to be determined in light of market conditions at the time of the
proceeds fromoffering and set forth in one or more accompanying prospectus supplements (the
"Prospectus Supplement"). The Prospectus Supplement will set forth the salespecific
designation, aggregate principal amount, authorized denominations and currency
or currency unit in which the Debt Securities may be purchased and in which the
principal and any interest is payable; purchase price, maturity, rate of Common Shares byor
manner of calculating interest, if any; time of payment of interest, if any;
terms, if any, for redemption at the Selling Shareholders. Of the 7,000,000 Common
Shares offered hereby, 5,600,000 are being offered hereby in the United States
and Canada (the "U.S. Offering") by the U.S. Underwriters (as defined herein)
and 1,400,000 are being offered in a concurrent international offering (the
"International Offering" and, together with the U.S. Offering, the "Combined
Offering") outsideoption of the United StatesCompany or the holder; terms
for sinking fund payments, if any; terms for any mandatory redemption; listing
on any securities exchange or over-the-counter market system; whether the Debt
Securities will be issuable as global securities and Canada by the Managers (as defined
herein). See "Underwriting."
The Common Shares are listed onidentity of the
New York Stock Exchange underdepositary for any global securities; and any other specific terms relating to
any series of the symbol "CAH." On September 16, 1994, the last reported sale price for the
Company's Common Shares on the New York Stock Exchange was $39.125 per share.
------------------Debt Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) SHAREHOLDERS
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Per Share $ $ $ $
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Total(3) $ $ $ $
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(1)The Debt Securities may be offered through dealers, underwriters or agents
designated from time to time, as set forth in the Prospectus Supplement. Net
proceeds to the Company will be the purchase price in the case of a dealer, the
public offering price less discount in the case of an underwriter or the
purchase price less commission in the case of an agent; in each case, less other
attributable expenses of issuance and distribution. The Company andmay also sell
Debt Securities directly to investors on its own behalf. In the Selling Shareholders have agreed to indemnify the U.S.
Underwriters against certain liabilities, including certain liabilities
under the Securities Actcase of 1933, as amended. See "Underwriting."
(2) Before deducting expenses of the Combined Offering payablesales
made directly by the Company, estimated at $400,000.
(3) The Company and certain of the Selling Shareholders have granted the U.S.
Underwriters an option, exercisable within 30 days after the date hereof, to
purchase up to 1,050,000 additional Common Shares on the same terms per
share solely for the purpose of covering overallotments, if any. If the U.S.
Underwriters exercise such option in full, the Price to Public, Underwriting
Discounts and Commissions, Proceeds to Company and Proceeds to Selling
Shareholdersno commission will be $payable. See "Plan of
Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
The date of this Prospectus is , $ , $ , and $ ,
respectively. See "Underwriting."
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The Common Shares are offered by the several U.S. Underwriters when, as and
if delivered to and accepted by them and subject to their right to reject orders
in whole or in part. It is expected that the Common Shares will be available for
delivery at the offices of Smith Barney Inc., 388 Greenwich Street, New York,
New York 10013 or through the facilities of The Depository Trust Company, on or
about September , 1994.
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SMITH BARNEY INC.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
WILLIAM BLAIR &1997
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR AN APPLICABLE PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY September , 1994
4OR ANY UNDERWRITER,
DEALER OR AGENT. THIS PROSPECTUS AND ANY APPLICABLE PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). These reports and other information (including
proxy and information statements) filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at its
principal office at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and at the following Regional Offices of the Commission: New York Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 1000710048 and Chicago Regional
Office, 500 West Madison, 14th Floor, Chicago, Illinois 60661-2511. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a web site at http://www.sec.gov containing reports,
proxy and information statements and other information regarding registrants,
including the Company, that file electronically with the Commission. These
reports and other information (including proxy and information statements) can
also be inspected at the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
This Prospectus constitutes a part of atwo Registration Statement on Form S-3Statements filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all of the information
set forth in the Registration Statement,Statements, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Reference is hereby
made to the Registration StatementStatements and related exhibits for further information
with respect to the Company and the Common SharesDebt Securities offered hereby. Statements
contained herein concerning the provisions of any document are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration StatementStatements or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are hereby incorporated by reference in this Prospectus: (1)
Annual Report on Form 10-K for the fiscal year ended June 30, 1994,1996 (the "1996
Cardinal Form 10-K"), (2) Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1996, and (2)December 31, 1996, and (3) Current ReportReports on Form 8-K
dated September 12, 1994.October 11, 1996, March 3, 1997, and March 18, 1997.
All reports and other documents filed withby the CommissionCompany pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the Combined Offeringthis offering shall be deemed to be incorporated
by reference herein and to be a part hereof from the respective dates of filing
of said reports and other documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
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The Company hereby undertakes to provide without charge to each person to
whom this Prospectus has been delivered, upon the written or oral request of
such person, a copy of any and all documents incorporated herein by reference
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should be
submitted in writing to Cardinal Health, Inc., 655 Metro Place
South, Suite 925, Dublin, Ohio 43017, Attn:Attn.: David Bearman, Executive
Vice President and Chief Financial Officer, 5555 Glendon Court, Dublin, Ohio
(614) 761-8700.
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IN CONNECTION WITH THE COMBINED OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
SHARES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2717-5000.
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a
"safe harbor" for "forward-looking statements" (as defined in the Act). This
Prospectus, any Prospectus Supplement, any documents incorporated by reference
herein, or any other written or oral statements made by or on behalf of the
Company may include forward-looking statements which reflect the Company's
current view (as of the date such forward-looking statement is made) with
respect to future events and financial performance. These forward-looking
statements are subject to certain uncertainties and other factors that could
cause actual results to differ materially from those made in such statements.
These uncertainties and other factors include, but are not limited to,
uncertainties relating to general economic conditions; the loss of one or more
key customer or supplier relationships, including pharmaceutical manufacturers
for which alternative supplies may not be available; the malfunction or failure
of the Company's information systems; the costs and difficulties related to the
integration of recently acquired businesses; changes in the distribution or
outsourcing pattern for pharmaceutical products, including any increase in
direct distribution or decrease in contract packaging by pharmaceutical
manufacturers; changes in, or failure to comply with, government regulations;
the costs and other effects of legal and administrative proceedings; injury to
person or property resulting from the Company's repackaging or pharmacy
management services; competitive factors in the Company's health care service
businesses, including pricing pressures; the continued financial viability and
success of the Company's customers, suppliers, and franchisees; technological
developments and products offered by competitors; failure to retain or continue
to attract senior management or key personnel; risks associated with
international operations, including fluctuations in currency exchange ratios;
successful challenges to the validity of the Company's patents, copyrights
and/or trademarks; difficulties or delays in the development, production and
marketing of new products and services; strikes or other labor disruptions;
labor and employee benefit costs; pharmaceutical manufacturers' pricing policies
and overall drug price inflation; changes in hospital buying groups or hospital
buying practices; and other factors referenced in this Prospectus, the
Prospectus Supplement or documents incorporated by reference herein or other
filings or written or oral statements made by or on behalf of the Company. The
words "believe", "expect", "anticipate", "project", and similar expressions
identify "forward-looking statements", which speak only as of the date the
statement was made. The Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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THE COMPANY
Cardinal, a holding company operating through a number of separate
operating subsidiaries, is a leading health care service provider, offering an
array of value-added pharmaceutical distribution services to a broad base of
customers. It is one of the nation's largest wholesale distributors of
pharmaceutical and related health care products. The Company's customer base
includes hospitalsproducts to independent and managed care facilities (50%), independent retailchain drug
stores, (21%), chain drug storeshospitals, alternate care centers and the pharmacy departments of
supermarkets and mass merchandisers (23%located throughout the continental United
States. Through its subsidiary, Pyxis Corporation ("Pyxis"), as well as customers for specialty products, including
physiciansCardinal develops
and clinics (6%).manufactures unique point-of-use systems which automate the distribution,
management and control of medications and supplies in hospitals and alternate
care facilities. Cardinal operates approximately 40 distribution
facilities nationwide.
Wholesale Drug Industry
The wholesale drug industryis the largest franchisor of independent retail
pharmacies in the United States has experienced rapid
growth. As reported by the National Wholesale Druggists' Association (the
"NWDA"through its subsidiary, Medicine Shoppe
International, Inc. ("Medicine Shoppe"). In addition, through its subsidiaries,
Owen Healthcare, Inc. ("Owen"), industry sales grew from $11.9 billion in 1983 to $47.5 billion in
1993. An aging population, new product introductions, and a higher concentration
of distribution through wholesalers are all factors which have contributed to
this growth. Drug wholesaling is also a competitive industry, undergoing
significant change and consolidation. Reflecting this consolidation, the number
of NWDA wholesalers has declined from 139 in 1980 to fewer than 70 in 1993.
In response to cost containment pressure from private and governmental
payors and the current focus on health care reform in the United States,
customers are consolidating into super-regional and national affiliations while
manufacturers are under increased pressure to slow the rate of drug price
inflation and to seek more cost-effective methods of marketing and distributing
their products. In this regard, drug wholesalers will be challenged to service
customers over a wider geographic base, offer manufacturers innovative marketing
and distribution services, and provide both manufacturers and customers with
standardized distribution and information systems and reporting links necessary
to streamline the efficient flow of product and information among distribution
partners.
Cardinal's Strategy
Cardinal's strategy is to grow by expanding its existing wholesale and
specialty distribution businesses and to make selective complementary
acquisitions. Cardinal's internal sales growth has occurred primarily as a
result of market share gains, geographic expansion, an increased reliance on
drug wholesaling by both customers and pharmaceutical manufacturers, and new
pharmaceutical products and price increases. Complementing this internal growth,Allied Healthcare Service, Inc. ("Allied"),
Cardinal has acquired or merged with ten drug distribution companies and a
specialty distributor of oncology products over the past ten years. As a result
of its strategy, Cardinal's net sales have increased from $2.1 billion in fiscal
1990 to $5.8 billion in fiscal 1994, a compound annual growth rate of 28%.
Cardinal believes it is well-positioned to continue its growth and maintain
operating margins by: (a) providing superior distributionprovides pharmacy management services to its
customers, including inventory management systems and logistical support
functions; (b) developing advanced information systems that improve internal and
customer operations; (c) providing merchandising and marketing programs for
manufacturers and customers; (d) further expanding its specialty wholesaling
businesses and leveraging these activities over larger volume; and (e)
supplementing the above strategies through selective acquisitions.
Cardinal has achieved earnings growth due in parthospitals. PCI Services, Inc.
("PCI"), another one of Cardinal's subsidiaries, is a leading international
provider of integrated packaging services to its successful
management of the Company's changing business equation. This equation has
changed over the last several years due to: (a) a greater mix of higher volume
customers, where the lower cost of distribution and better asset management and
cash flow enable Cardinal to offer lower pricing to the customer; (b) reduced
inventory gains associated with lower drug price inflation, which are partially
offset by corresponding decreases in last-in, first-out (LIFO) earnings charges
and inventory carrying costs; (c) increased merchandising funding from
manufacturers, particularly related to the growth in generic pharmaceuticals;
(d) improved selling, general and administrative cost absorption due to
significant productivity investments and the operating leverage associated with
sales growth and acquisitions; and (e) increased sales and earnings from
specialty distribution services.
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Cardinal's Businesspharmaceutical manufacturers.
As a full-service wholesale distributor, Cardinal complements its
distribution activities by offering a broad range of value-added support
services to assist Cardinal's customers and suppliers in maintaining and
improving their market positions and to strengthen Cardinal's role in the
channel of distribution. These support services include computerized order entry
and order confirmation systems, customized invoicing, generic sourcing programs,
product movement and management reports, consultation on store operation and
merchandising, and customer training. Most customers transmit merchandise orders directly to Cardinal's data
processing system through computerized order entry devices. Cardinal's proprietary software systems
feature customized databases specially designed to help its customers order more
efficiently, contain costs, and monitor their purchases which are covered by
group contract purchasing arrangements.
Upon
receipt of the customer's order at a distribution center, Cardinal's warehouse
management system processes the order and provides customized price information
to facilitate the customer's pricing of items. Customer orders are routinely
processed for next-day delivery, enabling the Company's customers to minimize
the size and carrying cost of their own inventories. In addition, Cardinal's
AccuNet,(R) Otis(R) and Network(TM) proprietary software systems facilitate
primary supply relationships between Cardinal and its customers and enable
Cardinal's customers to reduce their costs. These systems provide a variety of
information which assist the customer to identify the best price available under
group purchasing contracts with pharmaceutical manufacturers, maintain formulary
compliance, and better manage their own inventories. Over 2,800 of these systems
have been placed with hospital, managed care, and chain drug customers located
throughout the United States.
In addition to its core drug wholesaling activities, Cardinal operates several specialty health care businesses which offer
value-added services to itsCardinal's customers and suppliers while providing
Cardinal with additional opportunities for growth and profitability. For
example, Cardinal's National PharmPak subsidiaryCardinal operates a pharmaceutical repackaging program for both
independent and chain customers.
In January 1992, Cardinal formed National Specialty Services, Inc., which
distributesdrugstore customers and serves as a distributor of
therapeutic plasma products and other specialty pharmaceuticals to hospitals,
clinics and other managed care facilities on a nationwide basis through the
utilization of telemarketing and direct mail programs. Cardinal
recently expanded its specialty wholesaling business through a merger with PRN
Services, Inc., a distributor of oncology and other specialty products to
clinics and physician groups across the United States. These specialty
distribution activities are part of Cardinal's overall strategy of developing
diversified products and services to enhance the profitability of its business
and the businessesthat of its customers and suppliers.
Whitmire Merger
In February 1994, Cardinal completed its largest transaction when it merged with Whitmire Distribution Corporation
("Whitmire"), a Folsom, California based
drug wholesaler with sales of approximately $2.9 billion for calendar 1993 (the
"Whitmire Merger").California-based pharmaceutical wholesaler. The majority
of Whitmire's sales were concentrated in the western and central United States,
complementing Cardinal'sthe Company's former concentration of sales in the eastern United
States and positioning the combined company to service both customers and
manufacturerssuppliers on a national basis. As a result of the Whitmire Merger, Cardinalmerger, the Company
now maintains a network of
approximately 40 distribution centers enabling it to routinely serve
the entire population of the continental United StatesU.S. on a next-day basis.
In addition, a
majority of Whitmire'sCardinal has completed several additional business was with hospital, managed care and large retail
chain customers, complementing Cardinal's rapidly expanding presence in these
customer categories and Cardinal's well-developed programs and services for
independent retail pharmacies.
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Recent Transactionscombinations since the
Whitmire merger. On July 1, 1994, Cardinal acquired Humiston-Keeling, Inc., a
Calumet City, Illinois basedIllinois-based drug wholesaler with annualized sales of approximately $330
million, serving customers located primarily
in the upper midwest region of the United States. On July 18, 1994, Cardinal
completed a mergermerged with Behrens Inc., a Waco, Texas basedTexas-based drug wholesaler with annualized sales of approximately $185
million, serving customers
located primarily in Texas and adjoining states. Summary
WhileOn November 13, 1995, Cardinal
merged with Medicine Shoppe, a St. Louis, Missouri-based franchisor of
independent apothecary-style pharmacies in the wholesale drug industry continues to undergo rapid changeUnited States and consolidation,abroad. On May
7, 1996, Cardinal believes thatmerged with Pyxis, a San Diego, California-based designer,
manufacturer, marketer and servicer of unique point-of-use systems which
automate the trenddistribution, management and control of medications and supplies in
hospitals and other health care distribution is
toward selection by both customersfacilities. On October 11, 1996, Cardinal
completed a merger with PCI, a Philadelphia, Pennsylvania-based provider of
integrated packaging services to pharmaceutical manufacturers. Finally, on March
18, 1997, Cardinal completed a merger with Owen, a Houston, Texas-based provider
of fully integrated pharmacy management and manufacturers of fewer, more efficient
wholesalers that can cover a broader geographic territory or customer group. In
this regard, Cardinal believes that, dueinformation services to its internal growth and recent
mergers and acquisitions, it provides capabilities increasingly valued in the
marketplace, including: (a) single-supplier distribution capability for
customers who are themselves becoming more national or super-regional in scope;
(b) innovative marketing and merchandising support for manufacturers and
customers; (c) advanced information systems support for both customers and
manufacturers on a consistent basis; and (d) benefits of scale and leverage with
respect to investments in new technology, systems and services.hospitals.
4
6
Cardinal's principal executive offices are located at 655 Metro Place
South, Suite 925,5555 Glendon Court,
Dublin, Ohio 43017,43016, and its telephone number is (614) 761-8700.
5
8
USE717-5000.
RATIO OF PROCEEDS
The net proceeds to the Company from its sale of 1,600,000 Common Shares
offered hereby are estimated to be approximately $59,740,000 (assuming a public
offering price of $38.75 per share and no exercise of the U.S. Underwriters'
overallotment option). The net proceeds will be used to finance working capital
growth and for other general corporate purposes, including, to the extent
required, acquisitions. Although the Company continually evaluates possible
candidates for acquisition and intends to continue to seek opportunities to
expand its health care distribution operations, no acquisition has been agreed
upon or become the subject of a letter of intent or agreement in principle.
Pending application of the net proceeds as described above, the proceeds will be
used to reduce short-term notes payable-banks, if any, and to invest in
short-term, interest bearing securities.
The Company will not receive any of the proceeds from the sale of Common
Shares by the Selling Shareholders and, if any, proceeds from the U.S.
Underwriters' exercise of the portion of the overallotment option allocated to
certain Selling Shareholders.
MARKET PRICE AND DIVIDEND DATA
Since September 7, 1994, the Common Shares have been listed on the New York
Stock Exchange under the symbol "CAH." Prior to that date, the Common Shares
were quoted on the Nasdaq National Market under the symbol "CDIC." The following
table reflects, for the periods indicated, the range of the reported high and
low last sale prices of Common Shares as reported on the Nasdaq National Market
through September 6, 1994 and on the New York Stock Exchange since September 7,
1994, and the per share dividends declared thereon. The information in the table
has been adjusted to reflect retroactively all stock splits and stock dividends
and also to reflect the Company's decision, as of March 1, 1994, to change its
fiscal year end from March 31 to June 30.EARNINGS TO FIXED CHARGES
HIGH LOW DIVIDENDS
------ ------ ---------
FISCAL 1993
Quarter Ended
June 30, 1992................................................. $24.00 $19.80 $.016
September 30, 1992............................................ 25.80 21.60 .016
December 31, 1992............................................. 24.20 20.20 .020
March 31, 1993................................................ 23.80 19.60 .020
Three Months Ended June 30, 1993................................ 23.70 20.60 .020
FISCAL 1994
Quarter Ended
September 30, 1993............................................ 30.00 21.80 .020
December 31, 1993............................................. 38.40 28.80 .024
March 31, 1994................................................ 40.60 33.30 .024
June 30, 1994................................................. 40.80 34.40 .030
FISCAL 1995
Through September 16, 1994.................................... 41.25 36.625 .030
On August 8, 1994, there were approximately 1,150 holders of record of the
Common Shares. The last reported sales price of the Common Shares on the New
York Stock Exchange on September 16, 1994 was $39.125.
The Company anticipates that it will continue to pay quarterly cash
dividends in the future. The timing and amount of any future dividends, however,
remain within the discretion of the Company's board of directors and will depend
upon the Company's future earnings, financial condition, capital requirements
and other factors.
6
9
CAPITALIZATION
The following table sets forth the short-term obligations and total
capitalization of the Company at June 30, 1994, and as adjusted to reflect the
issuance and sale by the Company of 1,600,000 Common Shares offered hereby and
the application of the net proceeds therefrom (assuming a public offering price
of $38.75 per share and no exercise of the U.S. Underwriters' overallotment
option, see "Underwriting") to in part reduce notes payable-banks. See "Use of
Proceeds."
JUNE 30, 1994
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
Short-term obligations:
Notes payable-banks................................................. $ 25,000 $ 0
Current portion of long-term obligations............................ 2,929 2,929
-------- -----------
Total short-term obligations................................ $ 27,929 $ 2,929
======== =========
Long-term obligations:
Other long-term obligations including capital leases................ $ 10,086 $ 10,086
8% Notes due 1997................................................... 100,000 100,000
6 1/2% Notes due 2004............................................... 100,000 100,000
-------- -----------
Total long-term obligations................................. 210,086 210,086
-------- -----------
Shareholders' equity:
Common Shares, without par value, authorized 60,000,000 shares;
issued 35,042,713 shares; as adjusted 39,027,713 shares; Class B
Common Shares, without par value, authorized 5,000,000 shares;
issued 2,971,375 shares; as adjusted 586,375 shares(1)........... $255,458 $ 315,198
Retained earnings................................................... 120,399 120,399
Common Shares in treasury, at cost 179,878 shares................... (3,390) (3,390)
Unamortized restricted stock awards................................. (3,973) (3,973)
-------- -----------
Total shareholders' equity.................................. 368,494 428,234
-------- -----------
Total capitalization.................................................. $578,580 $ 638,320
======== =========
- ---------------
(1) The number of outstanding Common Shares and Class B Common Shares has been
adjusted to reflect the conversion of Class B Common Shares into Common
Shares for sale in this Combined Offering by Chemical Equity Associates, the
only holder of Class B Common Shares. Under the Company's Amended and
Restated Articles of Incorporation, as amended, holders of Class B Common
Shares have the right to convert such shares into Common Shares, subject to
certain conditions, if (i) such holder reasonably believes that the
converted shares will be transferred within fifteen (15) days pursuant to
certain Conversion Events (which term is defined in the Company's Amended
and Restated Articles of Incorporation, as amended, and includes any public
offering or sale of the Company's securities); (ii) such holder has agreed
not to vote any such Common Shares prior to a Conversion Event; and (iii)
such holder undertakes to promptly convert such shares back into Class B
Common Shares if such shares are not transferred pursuant to a Conversion
Event. See "Description of Capital Stock." Chemical Equity Associates has
informed the Company that, immediately prior to the consummation of the
Combined Offering, it intends to convert 2,385,000 Class B Common Shares
into Common Shares to be sold in the Combined Offering, assuming no exercise
by the U.S. Underwriters of the overallotment option.
7
10
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial data concerning Cardinal has
been prepared giving retroactive effect to the business combination of Cardinal
and Whitmire on February 7, 1994, which has been accounted for as a
pooling-of-interests transaction. On March 1, 1994, the Company made the
decision to change its fiscal year end from March 31 to June 30. As such, for
the fiscal year ended March 31, 1993 and prior years, the information presented
is derived from consolidated financial statements which combine data from
Cardinal for the fiscal years ended March 31, 1990, March 31, 1991, March 31,
1992, and March 31, 1993, with data from Whitmire for the fiscal years ended
June 30, 1990, June 29, 1991, June 27, 1992 and July 3, 1993, respectively. For
the twelve months ended June 30, 1993 and the fiscal year ended June 30, 1994,
the information presented is derived from consolidated financial statements
which combine data from Cardinal for the twelve months ended June 30, 1993 and
the fiscal year ended June 30, 1994 with data from Whitmire for the fiscal years
ended July 3, 1993 and June 30, 1994. Due to the different fiscal year ends of
the merged companies, Whitmire's results of operations for the three months
ended July 3, 1993 have been included in both the fiscal year ended March 31,
1993 and the twelve months ended June 30, 1993. The selected consolidated
financial data below should be read in conjunction with the consolidated
financial statements and related notes incorporated herein by reference. See
"Incorporation of Certain Documents by Reference." All share and per share data
have been adjusted to give retroactive effect to stock splits and stock
dividends.
|| TWELVE FISCAL
|| MONTHS YEAR
FISCAL YEAR ENDED || ENDED ENDED
------------------------------------------------- || ---------- ----------
MARCH 31, MARCH 31, MARCH 31, MARCH 31, || JUNE 30, JUNE 30,
1990 1991 1992 1993 || 1993 1994
---------- ---------- ---------- ---------- || ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA) ||
||
EARNINGS STATEMENT DATA(1)(2): ||
Net sales...................................... $2,137,896 $2,803,111 $3,680,678 $4,633,375 || $4,709,085 $5,790,411
Gross margin................................... 170,529 206,197 256,833 297,293 || 300,245 355,172
Selling, general and administrative expenses... (128,864) (152,769) (184,523) (203,740) || (205,161) (233,305)
Unusual items ||
Merger costs................................. -- -- -- -- || -- (35,880)
Termination fee.............................. -- -- -- 13,466 || 13,466 --
Nonrecurring charges......................... -- -- (1,973) (18,904) || (18,904) --
---------- ---------- ---------- ---------- || ---------- ----------
Operating earnings............................. 41,665 53,428 70,337 88,115 || 89,646 85,987
Interest expense and other, net................ (20,579) (22,616) (22,684) (21,858) || (21,127) (15,227)
---------- ---------- ---------- ---------- || ---------- ----------
Earnings before income taxes and cumulative ||
effect of change in accounting principle..... 21,086 30,812 47,653 66,257 || 68,519 70,760
Income taxes................................... (8,176) (11,123) (19,291) (25,710) || (26,345) (35,624)
---------- ---------- ---------- ---------- || ---------- ----------
Earnings before cumulative effect of change in ||
accounting principle......................... 12,910 19,689 28,362 40,547 || 42,174 35,136
Preferred dividends declared/accretion......... (2,840) (2,840) (2,840) (2,876) || (2,876) (1,205)
---------- ---------- ---------- ---------- || ---------- ----------
Earnings available for Common Shares before ||
cumulative effect of change in accounting ||
principle.................................... 10,070 16,849 25,522 37,671 || 39,298 33,931
Cumulative effect of change in accounting ||
principle.................................... -- -- -- (10,000) || -- --
---------- ---------- ---------- ---------- || ---------- ----------
Net earnings available for Common Shares....... $ 10,070 $ 16,849 $ 25,522 $ 27,671 || $ 39,298 $ 33,931
========== ========== ========== ========== || ========== ==========
Earnings per Common Share: ||
Primary: ||
Earnings before cumulative effect of change ||
in accounting principle.................. $ 0.34 $ 0.53 $ 0.74 $ 1.10 || $ 1.14 $ 0.86
Cumulative effect of change in accounting ||
principle................................ -- -- -- (0.29) || -- --
---------- ---------- ---------- ---------- || ---------- ----------
Net earnings............................... $ 0.34 $ 0.53 $ 0.74 $ 0.81 || $ 1.14 $ 0.86
========== ========== ========== ========== || ========== ==========
8
11
| | TWELVE FISCAL
| | MONTHS YEAR
FISCAL YEAR ENDED | | ENDED ENDED
------------------------------------------------- | | ---------- ----------
MARCH 31, MARCH 31, MARCH 31, MARCH 31, | | JUNE 30, JUNE 30,
1990 1991 1992 1993 | | 1993 1994
---------- ---------- ---------- ---------- | | ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA) | |
| |
Fully diluted: | |
Earnings before cumulative effect of change | |
in accounting principle.................. $ 0.34 $ 0.53 $ 0.74 $ 1.06 | | $ 1.10 $ 0.86
Cumulative effect of change in accounting | |
principle................................ -- -- -- (0.26)| | -- --
---------- ---------- ---------- ---------- | | ---------- ----------
Net earnings............................... $ 0.34 $ 0.53 $ 0.74 $ 0.80 | | $ 1.10 $ 0.86
========= ========= ========= ========= | | ========= =========
Cash dividends declared per Common Share....... $ 0.04 $ 0.05 $ 0.06 $ 0.07 | | $ 0.08 $ 0.10
========= ========= ========= ========= | | ========= =========
Weighted average number of shares outstanding: | |
Primary...................................... 29,904 31,581 34,291 34,311 | | 34,349 39,392
Fully diluted................................ 31,213 34,691 38,571 38,616 | | 38,653 39,477
| |
| |
| |
| |
MARCH 31, MARCH 31, MARCH 31, MARCH 31, | | JUNE 30, JUNE 30,
1990 1991 1992 1993 | | 1993 1994
--------- --------- --------- ---------- | | ---------- ----------
(IN THOUSANDS) | |
| |
BALANCE SHEET DATA(1)(2): | |
Current assets................................... $454,482 $711,825 $845,877 $ 995,832 | | $1,032,902 $1,287,124
Property and equipment-net....................... 29,188 48,572 57,548 59,313 | | 61,595 60,029
Other assets..................................... 29,772 39,816 43,656 44,705 | | 55,926 48,449
--------- --------- --------- ----------- | | ---------- ----------
Total assets............................. $513,442 $800,213 $947,081 $1,099,850 | | $1,150,423 $1,395,602
========= ========= ========= ========== | | ========= =========
Current liabilities.............................. $265,302 $381,087 $408,874 $ 555,094 | | $ 594,188 $ 816,042
Long-term obligations............................ 111,721 213,986 304,943 275,789 | | 274,908 210,086
Other liabilities................................ 816 822 1,266 705 | | 3,010 980
Redeemable preferred stock....................... 17,480 18,320 19,560 20,400 | | 20,400 --
Shareholders' equity............................. 118,123 185,998 212,438 247,862 | | 257,917 368,494
--------- --------- --------- ----------- | | ---------- ----------
Total liabilities and shareholders' | |
equity................................. $513,442 $800,213 $947,081 $1,099,850 | | $1,150,423 $1,395,602
========= ========= ========= ========== | | ========== ==========
- ---------------
(1) Amounts reflect business combinations in fiscal 1991, 1992, the twelve
months ended June 30, 1993, and fiscal 1994.
(2) The consolidated financial information includes the impact of the following
unusual items: (a) an equity transaction expense of approximately $2.0
million recorded by Whitmire in fiscal 1992, (b) a termination fee of
approximately $13.5 million received by Cardinal in fiscal 1993, resulting
from the termination by Durr-Fillauer Medical, Inc. of its agreement to
merge with Cardinal, (c) certain nonrecurring charges of approximately $9.9
million and $3.8 million recorded by Cardinal and Whitmire, respectively in
fiscal 1993, (d) a stock option compensation charge of approximately $5.2
million recorded by Whitmire in fiscal 1993, and (e) a nonrecurring charge
to reflect the estimated Whitmire Merger costs of approximately $35.9
million ($28.2 million net of tax) recorded by Cardinal in fiscal 1994.
The following supplemental information summarizes the results of operations
of the Company, adjusted on a pro forma basis to reflect: (a) the
elimination of the effect of the unusual items discussed above; and (b) the
redemption of Whitmire's preferred stock pursuant to the terms of the
Agreement and Plan of Reorganization between Cardinal and Whitmire. Solely
for purposes of the summary presented below, such redemption is assumed to
have been funded from the liquidation of investments in tax-exempt
marketable securities.
TWELVE
FISCAL YEAR ENDEDSIX
MONTHS
FISCAL YEAR --------------------ENDED(1) ENDED
ENDED-------------------------------------------------------------- --------
MARCH 31, MARCH 31, JUNE 30, JUNE 30, JUNE 30, DEC. 31,
1992 1993 1993 1994 1995 1996 1996
--------- --------- ----------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Operating earnings.............................................. $72,310 $93,553 $ 95,084 $ 121,867
Earnings before cumulative effect of change in accounting
principle..................................................... $29,252 $42,865 $ 44,510 $ 63,044
Earnings per common share before cumulative effect of change in
accounting principle:
Primary....................................................... $0.85 $1.25 $1.30 $1.60
Fully diluted................................................. 0.84 1.19 1.24 1.60
9
12
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of each of the Selling Shareholders of the Company's Common
Shares as of August 8, 1994, and as adjusted to reflect the sale of the shares
offered hereby. The following table assumes the conversion of all 2,971,375
outstanding Class B Common Shares into Common Shares both prior to and after the
Combined Offering.
COMMON COMMON
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE OWNED AFTER THE
COMBINED OFFERING COMMON COMBINED OFFERING
NAME OF --------------------- SHARES ------------------------
SELLING SHAREHOLDER(1) NUMBER PERCENT BEING NUMBER PERCENT(2)
- ---------------------------------- --------- ------- OFFERED(2) --------- ----------
----------------- -------- -------- --------
Apollo Investment Fund,
L.P.(3)(4)...................... 3,333,921 8.50% 2,385,000 948,921 2.32%
Chemical Equity Associates(3)..... 3,261,803(5) 8.32 2,385,000 876,803(5) 2.15
Melburn G. Whitmire(3)(6)......... 1,205,134 3.03 375,000 830,134 2.01
Gary E. Close(6).................. 271,985 * 100,000 171,985 *
James E. Clare(6)................. 114,812 * 45,000 69,812 *
Philip Solomons, Sr.(7)........... 145,637 * 5,000 140,637 *
Philip Solomons, Jr.(7)........... 633,293 1.61 4,000 629,293 1.54
Ralph S. Solomons(7).............. 81,540 * 500 81,040 *
Richard M. Solomons(7)............ 78,009 * 500 77,509 *
William L. Clifton, Jr.(8)........ 306,934 * 25,685 281,249 *
James R. Clifton(8)............... 304,939 * 23,690 281,249 *
The Mary Lacy Clifton Separate
Property Trust(8)............... 331,874 * 50,625 281,249 *
Ratio of earnings to fixed
charges........................ 2.8 4.0 6.8 10.5 7.2 8.5
- ---------------
* Less than 1%
(1) On March 1, 1994, the Company changed its fiscal year from March 31 to June
30.
The ratio of earnings to fixed charges is computed by dividing fixed
charges of the Company and entities 50% or more owned by the Company into
earnings before income taxes plus fixed charges. Fixed charges include interest
expense, amortization of debt offering costs, preferred stock dividend
requirements of subsidiaries, and the portion of rental expense which is deemed
to be representative of the interest factor.
USE OF PROCEEDS
The Company does not currently have any specific plans for the net proceeds
from the sale of Debt Securities. Except as otherwise notedspecified in the
Prospectus Supplement, the net proceeds from the sale of the Debt Securities
will be used by the Company for general corporate purposes, which may include
working capital, capital expenditures, repayment or refinancing of indebtedness,
acquisitions, and investments.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture dated as of
, 1997 (hereinafter referred to as the "Indenture"), between the
Company and Bank One, Columbus, N.A., as Trustee (hereinafter referred to as the
"Trustee"). The Indenture does not limit the amount of Debt Securities or any
other debt which may be incurred by the Company or its subsidiaries, except as
provided below under "Limitations on Subsidiary Debt." Unless otherwise
specified in a Prospectus Supplement, a default in the persons named above have sole voting
and investment powerCompany's obligations
with respect to any other indebtedness will not constitute a default or an Event
of Default (as defined in the Indenture) with respect to the Debt Securities.
The Indenture does not contain any covenants or provisions that afford holders
of Debt Securities protection in the event of a highly leveraged transaction.
The Debt Securities will be unsecured and will rank on a parity with all shares shown as being beneficially
owned by them.
(2) Excludes any Common Shares issuable upon exercise by the U.S. Underwritersother
unsecured and unsubordinated indebtedness of the overallotment option granted by certainCompany. Currently, the Company
conducts nearly all of its operations through subsidiaries and expects that it
will continue to do so. As a result, the right of the Selling ShareholdersCompany to purchase Common Shares. See "Underwriting" forparticipate as
a shareholder in any distribution of assets of any subsidiary upon its
liquidation or reorganization or otherwise and the allocationability of holders of Debt
Securities to benefit as creditors of the overallotment option amongCompany from any such distribution are
subject to the prior claims of creditors of such subsidiary. As of February 28,
1997, the Company had outstanding approximately $436 million of indebtedness for
borrowed money with which the Debt Securities would rank equally. In addition,
as of such date, the Company's subsidiaries had outstanding approximately $60
million of indebtedness for borrowed money and approximately $1.042 billion of
trade payables to which the Debt Securities would be effectively subordinated.
The following statements are subject to the detailed provisions of the
Indenture, which is incorporated by reference as an exhibit to the Registration
Statements of which this Prospectus is a part and which is also available for
inspection at the office of the Trustee. Section references are to the
Indenture. Wherever particular provisions of the Indenture are referred to, such
provisions are incorporated by reference as a part of the statements made and
the statements are qualified in their entirety by such reference.
5
7
GENERAL
The Indenture provides that the Debt Securities may be issued from time to
time in one or more series. The Prospectus Supplement which accompanies this
Prospectus will set forth the following terms of and information relating to the
Debt Securities offered thereby: (i) the designation, aggregate principal amount
and purchase price of the Debt Securities; (ii) the date or dates on which
principal of the Debt Securities is payable; (iii) the rate or rates per annum
at which the Debt Securities will bear interest, if any, or the method by which
such rate or rates will be determined; (iv) the dates on which interest will be
payable and the related record dates; (v) any redemption, repayment or sinking
fund provisions; and (vi) any other specific terms of the Debt Securities.
Unless otherwise specified in the accompanying Prospectus Supplement,
principal and premium, if any, will be payable, and the Debt Securities will be
transferable and exchangeable without service charge, at the office of the
Trustee set forth in the Indenture. Interest on any series of Debt Securities
will be payable on the interest payment dates set forth in the accompanying
Prospectus Supplement to the persons in whose names the Debt Securities are
registered at the close of business on the related record dates, and, unless
other arrangements are made, will be paid by checks mailed to such persons.
(Sections 2.7 and 3.1.)
Debt Securities may be issued as discounted debt securities (bearing no
interest or interest at a rate which at the time of issuance is below market
rates) and sold at a discount (which may be substantial) below their stated
principal amount ("Original Issue Discount Securities"). Federal income tax
consequences and other special considerations applicable to any such Original
Issue Discount Securities will be described in the Prospectus Supplement
relating thereto.
CERTAIN COVENANTS
Definitions. The term "Attributable Debt" means in connection with a sale
and lease-back transaction the lesser of (a) the fair value of the assets
subject to such transaction or (b) the aggregate of present values (discounted
at a rate per annum equal to the weighted average Yield to Maturity of the Debt
Securities of all series then outstanding and compounded semiannually) of the
obligations of the Company and certainits Consolidated Subsidiaries for rental payments
during the remaining term of all leases.
The term "Consolidated Net Tangible Assets" means the aggregate amount of
assets after deducting therefrom (a) all current liabilities (excluding any
thereof constituting Funded Indebtedness by reason of being renewable or
extendable) and (b) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, all as set forth on the
most recent balance sheet of the Selling
Shareholders. ToCompany and its Consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles.
The term "Consolidated Subsidiary" means any Subsidiary substantially all
the extent thatproperty of which is located, and substantially all the overallotment option is exercised,operations of which
are conducted, in the Common Shares beneficially ownedUnited States of America whose financial statements are
consolidated with those of the Company in accordance with generally accepted
accounting principles.
The term "Exempted Debt" means the sum of the following as of the date of
determination: (a) indebtedness of the Company and its Consolidated Subsidiaries
incurred after the Combined Offering would be
reduced accordingly.
(3) Cardinal hasdate of the Indenture and secured by liens not permitted by
the limitation on liens provisions of the Indenture (Section 3.9), and (b)
Attributable Debt of the Company and its Consolidated Subsidiaries in respect of
every sale and lease-back transaction entered into after the date of the
Indenture, other than leases permitted by the limitation on sale and lease-back
provisions of the Indenture. (Section 3.10)
The term "Financing Subsidiary" means any Subsidiary, including its
Subsidiaries, engaged in one or more of the following activities: (a) the
business of making loans or advances, extending credit or providing financial
accommodations (including leasing new or used products) to others; (b) the
business of purchasing notes, accounts receivable (whether or not payable in
installments), conditional sale contracts or other obligations of others
originating in sales at wholesale or retail; or (c) any other business as may be
reasonably
6
8
incidental to those described in (a) and (b) above, including the ownership and
use of property in connection therewith.
The term "Funded Indebtedness" means all Indebtedness having a Registration Rights Agreement, datedmaturity of
more than 12 months from the date as of October 11, 1993,which the amount thereof is to be
determined or having a maturity of less than 12 months but by its terms being
renewable or extendable beyond 12 months from such date at the option of the
borrower.
The term "Indebtedness" means all items classified as amended, with Apollo Investment Fund, L.P., Chemical
Equity Associates and Mr. Whitmire whereby each such shareholder has certain
rights to requireindebtedness on the
most recently available balance sheet of the Company and its Consolidated
Subsidiaries, in accordance with generally accepted accounting principles.
The term "Original Issue Discount Security" means any Debt Security that
provides for an amount less than the principal amount thereof to registerbe due and
payable upon a declaration of acceleration thereof following an Event of
Default.
The term "Rate Hedging Obligations" means any and all obligations of anyone
arising under: (a) any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of interest
rates, exchange rates or forward rates applicable to such party's assets,
liabilities or exchange transactions; and (b) any and all cancellations,
buybacks, reversals, terminations or assignments of any of the items in (a)
above.
The term "Restricted Subsidiary" means a "significant subsidiary" as
defined in Article 1, Rule 1-02 of Regulation S-X, promulgated under the
Securities Act Common
Shares owned by them through the period ending April 25, 1999, subjectand as amended from time to extensions under certain circumstances. See "Selling Shareholders --
Whitmire Registration Rights."
(4) As a result of the Company's merger with Whitmire on February 7, 1994 (the
"Whitmire Merger"), Apollo Investment Fund, L.P. has the right to designate
two nominees for election as directorstime.
The term "Senior Funded Indebtedness" means any Funded Indebtedness of the
Company for so long as (A)
Apollo Investment Fund, L.P., including anythat is not subordinated in right of its affiliates and any of its
accounts under common management and control (the "Apollo Group"), and (B)
any former shareholder of Whitmire (exclusive of Apollo Advisors, L.P. and
any such shareholders who were current or former employees of Whitmire as of
October 11, 1993 or any family members of such employees or trusts for their
benefit ("Management Shareholders")) each continuepayment to have a pecuniary
interest in 1,250,000 or more Common Shares and Class B Common Shares issued
to such person in the Whitmire Merger (the "Threshold Amount"). Further,
Apollo Advisors, L.P. has the right to designate one individual for so long
as only one of the Apollo Group or any former shareholder of Whitmire
(exclusive of Apollo Advisors, L.P. or Management Shareholders) shall
continue to have a pecuniary interest in the Common Shares and Class B
Common Shares which equal or exceed the Threshold Amount. In connection with
the Whitmire Merger, Apollo Investment Fund, L.P. has designated as
directors of Cardinal Michael S. Gross, Vice President of Apollo Capital
Management, Inc., and Mitchell J. Blutt, M.D., Executive Partner of Chemical
Venture Partners. Upon completion of the Combined Offering, neither the
Apollo Group nor any other former shareholder of Whitmire will have a
pecuniary interest in the Common Shares or the Class B Common Shares which
equals or exceeds the Threshold Amount.
In addition, until the Apollo Group no longer has a pecuniary interest in
the Common Shares equal to or exceeding the Threshold Amount, Cardinal must
include as a member of the audit committee of its board of directors one
individual on the board of directors of Cardinal designated by the Apollo
Group and, if Mr. Whitmire ceases to be a
10
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member of the executive committee of the board of directors of Cardinal,
Cardinal is required to include as a member of the executive committee of
the board of directors one individual on the board of directors of Cardinal
designated by the Apollo Group.
(5) Chemical Equity Associates owns all of the 2,971,375 outstanding Class B
Common Shares. The share ownership amounts are calculated assuming the
conversion of all such outstanding Class B Common Shares into Common Shares
immediately prior to this Combined Offering. See "Description of Capital
Stock." Prior to the conversion of such Class B Common Shares, Chemical
Equity Associates owns of record 290,428 Common Shares and 2,971,375 Class B
Common Shares. Chemical Equity Associates has informed the Company that,
immediately prior to the consummation of the Combined Offering, it intends
to convert 2,385,000 Class B Common Shares into Common Shares to be sold in
the Combined Offering assuming no exercise by the U.S. Underwriters of the
overallotment option.
(6) In connection with the Whitmire Merger in February 1994, Mr. Whitmire
entered into a three-year employment agreement with the Company and serves
as a director and Vice ChairmanIndebtedness
of the Company.
Gary E. Close and James E.
Clare also entered into three-year employment agreements with the Company
and serve as its Executive Vice President -- Western Region and Executive
Vice President -- Southern Region, respectively. The shares shown above as
being beneficially owned by Mr. Whitmire include 532,333 Common Shares which
he has the right to acquire pursuant to options currently exercisable and
4,801 Common Shares which he holds as custodian for a minor child. The
shares shown above as being beneficially owned by Mr. Close include 146,125
Common Shares which he has the right to acquire pursuant to options which
are currently exercisable. The shares shown as being beneficially owned by
Mr. Clare include 52,187 Common Shares which he has the right to acquire
pursuant to options which are currently exercisable.
(7) In connection with the merger of Solomons Company, a Savannah, Georgia based
drug wholesaler, with Cardinal on May 4, 1993 (the "Solomons Merger"),
Philip Solomons, Sr. entered into a seven-year consulting agreement with and
serves as the Senior Chairman of Solomons Company, a wholly-owned subsidiary
of the Company. Philip Solomons, Jr., Ralph Solomons and Richard Solomons
(sons of Philip Solomons, Sr.) each entered into five-year employment
agreements with Solomons Company in connection with the Solomons Merger.
Philip Solomons, Jr. serves as the President of Solomons Company. The shares
shown above as being beneficially owned by Philip Solomons, Sr. include
51,441 Common Shares owned by Mr. Solomons' wife. The shares shown above as
being beneficially owned by Philip Solomons, Jr. include 17,948 Common
Shares held in his individual retirement account, 250,756 Common Shares held
in a trust established by Philip Solomons, Sr., as to which Philip Solomons,
Jr. acts as sole trustee and 264,793 Common Shares held in a trust
established by Shirley Solomons (the wife of Philip Solomons, Sr.), as to
which Philip Solomons, Jr. acts as sole trustee. The shares shown above as
being beneficially owned by Ralph Solomons include 6,290 Common Shares held
in his individual retirement account. The shares shown above as being
beneficially owned by Richard Solomons include 3,911 Common Shares held in
his individual retirement account.
(8) In connection with the merger of Behrens Inc., a Waco, Texas based drug
wholesaler, with Cardinal on July 18, 1994 (the "Behrens Merger"), William
L. Clifton, Jr. and James R. Clifton each entered into two-year employment
agreements with Behrens Inc., a wholly-owned subsidiary of the Company.
William L. Clifton, Jr. serves as the President of Behrens Inc., and James
R. Clifton serves as the Vice President -- Operations of Behrens Inc. The
shares shown above as being beneficially owned by James R. Clifton, include
74,974 held by James R. Clifton and his wife, Barbara Clifton, as community
property, and all of the shares being sold in the Combined Offering are held
as community property. The shares shown above as being beneficially owned by
William L. Clifton, Jr. do not include 331,874 Common Shares held by The
Mary Lacy Clifton Separate Property Trust,term "Subsidiary" means any corporation of which Mr. Clifton is the Co-
Trustee.
WHITMIRE REGISTRATION RIGHTS
In connection with the Whitmire Merger, Cardinal granted to Apollo
Investment Fund, L.P., Chemical Equity Associates ("CEA") and Mr. Whitmire
(collectively, the "Whitmire Stockholders") certain rights to require Cardinal
to register under the Securities Act Common Shares held by them (including
Common Shares issuable to CEA upon conversion of Class B Common Shares). These
rights include "demand" and "piggyback" registration rights and are contained in
the Registration Rights Agreement dated as of October 11, 1993 (the
"Registration Rights Agreement"), as amended, among Cardinal, the Whitmire
Stockholders and Robert D. Walter, Chairman of Cardinal. Under the Registration
Rights Agreement, the Whitmire Stockholders are entitled to require Cardinal to
file a registration statement under the Securities Act
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with the Commission covering the sale of their shares (a "Required
Registration") up to seven times in the five-year period ending April 25, 1999,
unless earlier terminated or extended as provided below. The Whitmire
Stockholders may only request up to four Required Registrations during the
three-year period ending April 25, 1997. Cardinal will pay all expenses incurred
in connection with up to four Required Registrations, exclusive of the fees and
expenses of counsel for selling stockholders. In addition, the selling Whitmire
Stockholders will be responsible for any underwriters' discounts and commissions
attributable to the sale of their shares.
Cardinal is not required to effect the first Required Registration under
the Registration Rights Agreement unless Whitmire Stockholders (together with
certain permitted transferees) making the request hold at least 1,250,000 Common
Shares and Class B Common Shares, and Cardinal is not required to effect
subsequent Required Registrations unless such persons hold (i) at least 937,500
Common Shares and Class B Common Shares acquired in the Whitmire Merger, or (ii)
Common Shares and Class B Common Shares acquired in the Whitmire Merger with a
fair market value of at least $25 million. The Whitmire Stockholders may not
make a request for a Required Registration until 180 days have elapsed since the
completion of a prior Required Registration. In addition, Cardinal has the right
to delay for up to 90 days the filing of a registration statement with respect
to a Required Registration if Cardinal's Board of Directors determines such
action is in the best interests of Cardinal's shareholders, but Cardinal may not
invoke a delay if at least 12 months have not elapsed from the end of any
previous delay period. These delays and certain other events will extend on a
day-for-day basis the five- and three-year periods referred to in the preceding
and following paragraphs.
The Registration Rights Agreement also provides that the Whitmire
Stockholders have the right to include their Common Shares in registration
statements filed by Cardinal in connection with primary or secondary offerings
for cash (with certain exceptions). These "piggyback" registration rights also
terminate on April 25, 1999 unless earlier terminated or extended.
The demand and piggyback registration rights granted to (i) CEA, its
affiliates and successors (the "Chemical Holders"), and (ii) Apollo Investment
Fund, L.P., its affiliates and successors (the "Apollo Holders"), terminate
prior to April 25, 1999, if the Chemical Holders or the Apollo Holders, as the
case may be, either (i) shall beneficially own fewer than 312,500 Common Shares
and Class B Common Shares or (ii) shall acquire more than an additional 625,000
Common Shares and Class B Common Shares without the Company's consent. The
Registration Rights Agreement also limits the grant by Cardinal of additional
registration rights.
SOLOMONS REGISTRATION RIGHTS
Cardinal has granted to the former shareholders of Solomons Company
("Solomons Stockholders") the right until May 4, 1995 (exercisable by holders
representing a majority of
all Common Shares issued to Solomons Stockholders in
the Solomons Merger) to include Common Shares received in the Solomons Merger in
registration statements filed by Cardinal in connection with offerings of Common
Shares. This participation by Solomons Stockholders is limited to 10% of the
number of Common Shares offered in such registration statement.
BEHRENS REGISTRATION RIGHTS
Cardinal has granted to the former shareholders of Behrens Inc. ("Behrens
Stockholders") the right until July 18, 1996 (exercisable by holders
representing a majority of all Common Shares issued to Behrens Stockholders in
the Behrens Merger) to include up to an aggregate of 187,500 Common Shares
received in the Behrens Merger in registration statements filed by Cardinal in
connection with offerings of Common Shares. The Common Shares to be included in
a registration statement at the request of Behrens Stockholders, when combined
with Common Shares included in such a registration statement at the request of
Solomons Stockholders, shall not exceed 10% of the number of Common Shares
offered in such a registration statement. Upon completion of the Combined
Offering and assuming no exercise by the U.S. Underwriters of the overallotment
option, 87,500 Common Shares will remain subject to the registration rights of
Behrens Stockholders.
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SHARES ELIGIBLE FOR FUTURE SALE
Pursuant to the Registration Rights Agreement described above, Cardinal has
granted to certain of the Whitmire Stockholders the right, exercisable during
the five-year period ending April 25, 1999, to register 7,800,858 Common Shares
(which number reflects all stock splits and stock dividends and assumes
conversion of all 2,971,375 Class B Common Shares and the exercise of options to
purchase all 532,333 Common Shares held by Mr. Whitmire) issued or issuable to
the Whitmire Stockholders as a result of the Whitmire Merger. Assuming the sale
of 5,145,000 Common Shares hereunder and no exercise by the U.S. Underwriters of
the overallotment option, the Whitmire Stockholders will continue to have
2,655,858 Common Shares available for future sale.
In connection with the Solomons Merger, Solomons Stockholders received, in
a private placement, 1,062,000 Common Shares (which number reflects all stock
splits and stock dividends). Assuming the sale of 10,000 Common Shares
hereunder, Solomons Stockholders will continue to have 1,052,000 Common Shares
available for future sale, which shares are restricted under the Securities Act.
Solomons Stockholders will be able to sell such Common Shares under Rule 144 of
the Securities Act beginning May 4, 1995, and they have certain registration
rights described above until such date.
In connection with the Behrens Merger, Behrens Stockholders received, in a
private placement, 943,747 Common Shares (which number reflects all stock splits
and stock dividends). Assuming the sale of 100,000 Common Shares hereunder, and
no exercise by the U.S. Underwriters of the overallotment option, Behrens
Stockholders will continue to have 843,747 Common Shares available for future
sale, which shares are restricted under the Securities Act. The Behrens
Stockholders will be able to sell such Common Shares under Rule 144 of the
Securities Act beginning July 18, 1996, and they have certain registration
rights described above until such date.
The Company and the Selling Shareholders (who will beneficially own after
the Combined Offering 4,669,881 Common Shares, assuming no exercise by the U. S.
Underwriters of the overallotment option, and the conversion of all Class B
Common Shares into Common Shares) have agreed that, for a period of 90 days from
the date of this Prospectus, they will not, without the prior written consent of
Smith Barney Inc., sell, contract to sell, or otherwise dispose of, any Common
Shares, or any securities convertible into, or exercisable or exchangeable for,
Common Shares, except under certain circumstances set forth in the U.S.
Underwriting Agreement and the International Underwriting Agreement.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital shares consist of: (a) 60,000,000 Common
Shares, without par value, of which at August 8, 1994, 36,247,148 were
outstanding, 3,930,000 were reserved for issuance under stock incentive plans
(including approximately 1,020,000 Common Shares reserved for issuance under
stock option agreements entered into between the Company and former holders of
options to purchase shares of common stock of Whitmire), and 2,971,375 were
reserved for issuance upon conversion of the Company's outstanding Class B
Common Shares (as defined below); (b) 5,000,000 Class B common shares, without
par value (the "Class B Common Shares"), of which, at August 8, 1994, 2,971,375
were outstanding; and (c) 500,000 non-voting preferred shares, without par value
(the "Preferred Shares"), none of which has been issued. The Class B Common
Shares were authorized in February 1994 in connection with the Whitmire Merger
because Chemical Equity Associates ("CEA"), one of the former Whitmire
Stockholders, is regulated under the Bank Holding Company Act and is thus
prohibited from holding voting stock of Cardinal in excess of certain
limitations. All of the outstanding Class B Common Shares are held by CEA.
All of the outstanding Common Shares and Class B Common Shares are fully
paid and nonassessable. Holders of the Common Shares and Class B Common Shares
do not have preemptive rights. All holders of the Common Shares and the Class B
Common Shares share equally in dividends, when and as declared by the Board of
Directors. Generally, holders of Common Shares have no rights to convert their
shares into any other security; except, however, any Regulated Shareholder (a
defined term in the Company's Amended and Restated Articles of Incorporation, as
amended (the "Articles")), is entitled to convert at any time any or all
13
16
of its Common Shares into the same number of Class B Common Shares. Holders of
Class B Common Shares may convert such shares into Common Shares only if the
holder reasonably believes that the converted shares will be transferred within
15 days pursuant to a Conversion Event (a defined term in the Articles which
generally involves a disposition of the Class B Common Shares), such holder
agrees not to vote any such Common Shares prior to such Conversion Event and
such holder undertakes to promptly convert such shares into Class B Common
Shares if the Common Shares are not transferred pursuant to that Conversion
Event. In the event of liquidation of the Company, holders of the Common Shares
and the Class B Common Shares are entitled to share ratably in any assets
remaining after payment of all liabilities, subject to prior distribution rights
of any Preferred Shares then outstanding. Holders of the Common Shares are
entitled to one vote per share for the election of directors and upon all
matters on which shareholders are entitled to vote. Holders of Class B Common
Shares are entitled to one-fifth of one vote per share in the election of
directors and upon all matters on which shareholders are entitled to vote.
Holders of Common Shares and Class B Common Shares are entitled to vote their
shares cumulatively for the election of directors subject to compliance with
provisions of applicable law.
Pursuant to the Company's Restated Code of Regulations (the "Regulations"),
the Company's board of directors consists of fourteen members, divided into two
classes of five members each and a third class of four members. The Regulations
provide that the number of directors may be increased or decreased by action of
the board of directors upon the majority vote of the board, but in no case shall
the number of directors be fewer than nine or more than fourteen without an
amendment approved by the affirmative vote of the holders of not less than 75%
of the sharesstock having voting power with respect(under ordinary circumstances) to
that proposed amendment. The
Regulations require that any proposal to either remove a director during his
term of office or to further amend the Regulations relating to the
classification or removal of directors be approved by the affirmative vote of
the holders of not less than 75% of the shares having voting power with respect
to such proposal. The board of directors may fill any vacancy with a person who
shall serve until the shareholders hold an election to fill the vacancy. The
purpose of these provisions is to prevent directors from being removed from
office prior to the expiration of their respective terms, thus protecting the
safeguards inherent in the classified board structure unless dissatisfaction
with the performance of one or more directors is widely shared by the Company's
shareholders. These provisions could also have the effect of increasing from one
year to two or three years (depending upon the number of Common Shares and Class
B Common Shares held) the amount of time required for an acquiror to obtain
control of the Company by electingelect a majority of the board of directors of said corporation is at the time
owned by the Company or by the Company and may
also makeone or more Subsidiaries or by one or
more Subsidiaries.
The term "Yield to Maturity" means the removalyield to maturity on a series of
incumbent management more difficultDebt Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
discouragecalculated in accordance with accepted financial practice.
Limitation on Liens. The Indenture provides that, so long as any of the
Debt Securities remain outstanding, the Company will not, nor will it permit any
Consolidated Subsidiary to, create or render more difficult certain mergers, tender offers, proxy contests,assume any Indebtedness for borrowed money
which is secured by a mortgage, pledge, security interest or lien ("liens") of
or upon any assets, whether now owned or hereafter acquired, of the Company or
any such Consolidated Subsidiary without equally and ratably securing the Debt
Securities by a lien ranking ratably with and equal to such secured
Indebtedness, except that the foregoing restriction does not apply to (a) liens
existing on the date of the Indenture; (b) liens on assets of any corporation
existing at the time such corporation becomes a Consolidated Subsidiary; (c)
liens on assets existing at the time of acquisition thereof, or to secure the
payment of the purchase price of such assets, or to secure Indebtedness incurred
or guaranteed by the Company or a Consolidated Subsidiary for the purpose of
financing the purchase price of such assets or improvements or construction
thereof, which Indebtedness is incurred or guaranteed prior to, at the time of,
or within 360 days after such acquisition (or in the case of real property,
completion of such improvement or construction or commencement of full operation
of such property, whichever is later); (d) liens securing Indebtedness owing by
any Consolidated Subsidiary to the Company or another wholly owned domestic
Subsidiary; (e) liens on any assets of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Subsidiary or
at the time of a purchase, lease or other potential takeover proposals.
The foregoing descriptionsacquisition of the Common Shares, Class B Common Shares and
Preferred Shares and the provisions relating to the Articles and Regulations are
not complete and are qualified in theirassets of a
corporation or firm as an entirety or substantially as an entirety by reference to the
Articles
and the Regulations, which are incorporated by reference into the Registration
Statement of which this Prospectus isCompany or a part. See "Available Information."
TRANSFER AGENT AND REGISTRAR
The Company's transfer agent and registrar for the Common Shares is Bank
One, Indianapolis, NA, Indianapolis, Indiana.
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UNDERWRITING
Upon the terms and subject to the conditions contained in the U.S.
Underwriting Agreement dated the date hereof, eachSubsidiary; (f) liens on any assets of the underwritersCompany or a
Consolidated Subsidiary in favor of the United States and Canadian offering of Common Shares named below (the "U.S.
Underwriters")America or any State
thereof, or in favor of any other country, or political subdivision thereof, to
secure certain payments pursuant to any contract or statute or to secure any
Indebtedness incurred or guaranteed for the
7
9
purpose of financing all or any part of the purchase price (or, in the case of
real property, the cost of construction) of the assets subject to such liens
(including, but not limited to, liens incurred in connection with pollution
control, industrial revenue or similar financings); (g) any extension, renewal
or replacements (or successive extensions, renewals or replacements) in whole or
in part, of any lien referred to in the foregoing clauses (a) to (f), for whom Smith Barney Inc., Goldman, Sachs & Co., Bear, Stearns
& Co. Inc., and William Blair & Company are acting as Representatives (the
"Representatives"), has severally agreed to purchase, andinclusive;
(h) certain statutory liens or other similar liens arising in the ordinary
course of business by the Company has agreedor a Consolidated Subsidiary, or certain liens
arising out of governmental contracts; (i) certain pledges, deposits or liens
made or arising under workers' compensation or similar legislation or in certain
other circumstances; (j) liens created by or resulting from certain legal
proceedings, including certain liens arising out of judgments or awards; (k)
liens for certain taxes or assessments, landlord's liens and liens and charges
incidental to sell to each U.S. Underwriter, the numberconduct of Common Shares set forth opposite
the namebusiness, or the ownership of the assets of the
Company or of a Consolidated Subsidiary, which were not incurred in connection
with the borrowing of money and which do not, in the opinion of the Company,
materially impair the use of such U.S. Underwriter.
U.S. UNDERWRITER NUMBER OF COMMON SHARES
------------------------------------------------------------- -----------------------
Smith Barney Inc.............................................
Goldman, Sachs & Co..........................................
Bear, Stearns & Co. Inc......................................
William Blair & Company......................................
------------
Total.............................................. 5,600,000
====================
Underassets in the termsoperation of the business of the
Company or such Consolidated Subsidiary or the value of such assets for the
purposes thereof; or (l) liens on any assets of a Financing Subsidiary.
Notwithstanding the foregoing restrictions, the Company or any Consolidated
Subsidiary may create or assume any Indebtedness which is secured by a lien,
without securing the Debt Securities, provided that at the time of such creation
or assumption, and immediately after giving effect thereto, the Exempted Debt
then outstanding at such time does not exceed 20% of Consolidated Net Tangible
Assets. (Section 3.9)
Limitations on Subsidiary Debt. The Indenture provides that the Company
will not permit any Restricted Subsidiary directly or indirectly to incur any
Indebtedness for money borrowed, except that the foregoing restrictions will not
apply to the incurrence of (a) Indebtedness outstanding on the date of the
Indenture; (b) Indebtedness of a Restricted Subsidiary that represents its
assumption of Indebtedness of another Subsidiary, and Indebtedness owed by any
Restricted Subsidiary to the Company or to another Subsidiary, provided that
such Indebtedness will be at all times held by either the Company or a
Subsidiary, and provided further that upon the transfer or disposition of such
Indebtedness to someone other than the Company or another Subsidiary, the
incurrence of such Indebtedness will be deemed to be an incurrence that is not
permitted; (c) Indebtedness arising from (i) the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; or (ii) the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business, provided that such overdraft is extinguished within five
Business Days (as defined in the Indenture) of incurrence; (d) Indebtedness
arising from guarantees of loans and advances by third parties to employees and
officers of a Restricted Subsidiary in the ordinary course of business for bona
fide business purposes, provided that the aggregate amount of such guarantees by
all Restricted Subsidiaries does not exceed $1,000,000; (e) Indebtedness
incurred by a foreign Restricted Subsidiary in the ordinary course of business;
(f) Indebtedness of any corporation existing at the time such corporation
becomes a Restricted Subsidiary or is merged into a Restricted Subsidiary or at
the time of a purchase, lease or other acquisition by a Restricted Subsidiary of
all or substantially all of the assets of such corporation; (g) Indebtedness of
a Restricted Subsidiary arising from agreements or guarantees providing for or
creating any obligations of the Company or any of its Subsidiaries incurred in
connection with the disposition of any business, property or Subsidiary,
excluding guarantees or similar credit support by a Restricted Subsidiary of
Indebtedness incurred by the acquirer of such business, property or Subsidiary
for the purpose of financing such acquisition; (h) Indebtedness of a Restricted
Subsidiary with respect to bonds, bankers' acceptances or letters of credit
provided by such Subsidiary in the ordinary course of business; (i) Indebtedness
secured by a lien permitted by the provisions regarding limitations on liens
(Section 3.9) or arising in respect of a sale and lease-back transaction
permitted by the provisions regarding such transactions (Section 3.10) or any
Indebtedness incurred to finance the purchase price or cost of construction of
improvements with respect to property or assets acquired after the date of the
Indenture; (j) Indebtedness that is issued, assumed or guaranteed in connection
with compliance by a Restricted Subsidiary with the requirements of any program,
applicable to such Restricted Subsidiary, adopted by any governmental authority
that provides for financial or tax benefits which are not available directly to
the Company; (k) Indebtedness arising from Rate Hedging Obligations incurred to
limit risks of currency or interest rate fluctuations to which a Subsidiary is
otherwise subject by virtue of the operations of its business, and not for
8
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speculative purposes; (l) Indebtedness incurred by any Financing Subsidiary; and
(m) Indebtedness incurred in connection with refinancing of any Indebtedness
described in (a), (b), (f), (g) and (i) above ("Refinancing Indebtedness"),
provided that (i) the principal amount of such Refinancing Indebtedness does not
exceed the principal amount of the Indebtedness so refinanced (plus the premiums
paid and expenses incurred in connection therewith), (ii) the Refinancing
Indebtedness has a weighted average life to maturity equal to or greater than
the weighted average life to maturity of the Indebtedness being refinanced, and
(iii) the Refinancing Indebtedness ranks no more senior, and is at least as
subordinated, as the Indebtedness being refinanced. Notwithstanding the
foregoing restrictions, Restricted Subsidiaries may incur any Indebtedness for
money borrowed that would otherwise be subject to the conditions containedforegoing restrictions in
an aggregate principal amount which, together with the International
Underwriting Agreement datedaggregate principal
amount of other Indebtedness (not including the date hereof, eachIndebtedness permitted above),
does not, at the time such Indebtedness is incurred, exceed 20% of Consolidated
Net Tangible Assets. (Section 3.11)
Limitation on Sale and Lease-Back Transactions. Sale and lease-back
transactions (except such transactions involving leases for less than three
years) by the Company or any Consolidated Subsidiary of any assets are
prohibited unless (a) the Company or such Consolidated Subsidiary would be
entitled to incur Indebtedness secured by a lien on the assets to be leased in
an amount at least equal to the Attributable Debt in respect to such transaction
without equally and ratably securing the Debt Securities, or (b) the proceeds of
the managerssale of the concurrent international offering of Common Shares named below (the "Managers"),
for whom Smith Barney Inc., Goldman Sachs International, Bear, Stearns
International Limited, and William Blair & Companyassets to be leased are actingat least equal to their fair value as
lead managers
(the "Lead Managers"), has severally agreed to purchase, and the Company has
agreed to sell to each Manager, the number of Common Shares set forth opposite
the name of such Manager.
MANAGER NUMBER OF COMMON SHARES
------------------------------------------------------------- -----------------------
Smith Barney Inc.............................................
Goldman Sachs International..................................
Bear, Stearns International Limited..........................
William Blair & Company......................................
------------
Total.............................................. 1,400,000
====================
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The obligations of the several U.S. Underwriters and Managers to pay for
and accept delivery of the Common Shares are subject to approval of certain
legal matters by counsel and to certain other conditions. The U.S. Underwriters
and Managers are obligated to take and pay for all Common Shares offered hereby
(other than those covereddetermined by the overallotment option described below) if any
such Common Shares are taken.
The Representatives and Lead Managers have advised the Company that the
U.S. Underwriters and Managers propose to offer partBoard of the Common Shares
directly to the public at the public offering price set forth in the cover pageDirectors of this Prospectus and part of the Common Shares to certain dealers at a price
which represents a concession not in excess of $ per Common Share under
the public offering price. Any U.S. Underwriter or Manager may allow, and such
dealers may reallow, a concession not in excess of $ per Common Share
to any other U.S. Underwriter or Manager, respectively, or to certain other
dealers.
The Company and certain of the Selling Shareholders have granted to the
U.S. Underwriters an option, exercisable for 30 days from the date of this
Prospectus, to purchase up to 1,050,000 additional Common Shares at the price to
the public set forth on the cover page of this Prospectus minus the underwriting
discounts and commissions. The overallotment option will be allocated among the Company and the following Selling Shareholdersproceeds are applied
to the purchase or acquisition (or, in the amount set forth opposite
their names: Cardinal -- 266,949 Common Shares; Apollo Investment Fund, L.P. --
383,184 Common Shares; Chemical Equity Associates -- 383,184 Common Shares;
William L. Clifton, Jr. -- 4,285 Common Shares; James R. Clifton -- 3,952 Common
Shares;case of real property, the
construction) of assets or to the retirement of Senior Funded Indebtedness. The
foregoing limitation will not apply, if at the time the Company or any
Consolidated Subsidiary enters into such sale and lease-back transaction and,
immediately after giving effect thereto, Exempted Debt does not exceed 20% of
the Consolidated Net Tangible Assets. (Section 3.10)
Merger, Consolidation, Sale, Lease or Conveyance. The Mary Lacy Clifton Separate Property Trust -- 8,446 Common
Shares. To the extentIndenture provides
that the overallotment option is exercised for less than
1,050,000 Common Shares, the optionCompany will be exercised pro rata among the Company
and the foregoing Selling Shareholders. The U.S. Underwriters may exercise such
option solely for the purpose of covering overallotments, ifnot merge or consolidate with any made in
connection with the sales of the Common Shares offered hereby. To the extent
such option is exercised, each U.S. Underwriter will be obligated, subject to
certain conditions, to purchase approximately the same percentage of such
additional Common Shares as the number of Common Shares set forth opposite each
U.S. Underwriter's name in the preceding table bears to the total number of
Common Shares listed in such table.
Any offer of Common Shares in Canada will be made only pursuant to an
exemption from the requirement to file a prospectus in the relevant province of
Canada in which such offer is made.
Each Manager has represented and agreed that (i) it has not offered or soldother corporation and
will not offersell, lease or sell in the United Kingdom, by means of any document, any
Common Shares other than to persons whose ordinary business is to buyconvey all or sell
shares or debentures, whether as principal or agent (except under circumstances
that do not constitute an offer to the public within the meaning of the
Companies Act 1985), (ii) it has complied and will comply withsubstantially all applicable
provisions of the Financial Services Act 1986 with respect to anything done by
it in relation to the Common Shares in, from, or otherwise involving, the United
Kingdom, and (iii) it has only issued or passed on or will only issue or pass onits assets to any
person, inunless the United Kingdom any investment document (withinCompany shall be the meaningcontinuing corporation, or the successor
corporation or person that acquires all or substantially all the assets of the
Financial Services Act 1986) relating to the Common Shares if that person
is of the kind described in Article 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1988.
No action has been or willCompany shall be taken in any jurisdiction by the Company, any
Selling Shareholder, or the Managers that would permit an offering to the
general public of the Common Shares offered hereby in any jurisdiction other
than the United States.
Purchasers of the Common Shares offered hereby may be required to pay stamp
taxes and other charges in accordance with the laws and practices of the country
of the purchase in addition to the offering price set forth on the cover page of
this Prospectus.
The Company and the Selling Shareholders (who will beneficially own after
the Combined Offering 4,669,881 Common Shares, assuming no exercise by the U. S.
Underwriters of the overallotment option and the conversion of all Class B
Common Shares to Common Shares) have agreed that, for a period of 90 days from
the date of this Prospectus, they will not, without the prior written consent of
Smith Barney Inc., sell,
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19
contract to sell, or otherwise dispose of, any Common Shares, or any securities
convertible into, or exercisable or exchangeable for, Common Shares, except
Common Shares issued (i) pursuant to outstanding options and employee benefit
plans, (ii) in any acquisitions or (iii) upon conversion of Class B Common
Shares of the Company.
The Company, the U.S. Underwriters and the Managers have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act.
The U.S. Underwriters and the Managers have entered into an Agreement
between U.S. Underwriters and Managers pursuant to which each U.S. Underwriter
has agreed that, as part of the distribution of 5,600,000 Common Shares offered
in the U.S. Offering (i) it is not purchasing any such Common Shares for the
account of anyone other than a U.S. or Canadian Person and (ii) it has not
offered or sold, and will not offer, sell, resell or deliver, directly or
indirectly, any of such Common Shares or distribute any prospectus relating to
the U.S. Offering outside the United States or Canada or to anyone other than a
U.S. or Canadian Person. In addition, each Manager has agreed that as part of
the distribution of the 1,400,000 Common Shares offered in the International
Offering (i) it is not purchasing any such Common Shares for the account of any
U.S. or Canadian Person and (ii) it has not offered or sold, and will not offer,
sell, resell or deliver, directly or indirectly, any of such Common Shares or
distribute any prospectus relating to the International Offering in the United
States or Canada or to any U.S. or Canadian Person. Each U.S. Underwriter and
Manager has also agreed that it will offer to sell Common Shares only in
compliance with all relevant requirements of any applicable laws.
The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the U.S. Underwriting Agreement, the
International Underwriting Agreement and the Agreement between U.S. Underwriters
and Managers including, (i) certain purchases and sales between the U.S.
Underwriters and the Managers, (ii) certain offers, sales, resales, deliveries
or distributions to or through investment advisors or other persons exercising
investment discretion, (iii) purchases, offers or sales by a U.S. Underwriter
who is also acting as a U.S. Underwriter, and (iv) other transactions
specifically approved by the Representatives and the Lead Managers. As used
herein, "U.S. or Canadian Person" means any resident or national of the United
States or Canada, any corporation partnership or other entity created or
organized in or under the laws of the United States or
Canadaa State thereof or the District of Columbia and shall expressly assume all
obligations of the Company under the Indenture and the Debt Securities issued
thereunder, and immediately after such merger, consolidation, sale, lease or
conveyance, the Company, such person or such successor corporation shall not be
in default in the performance of the covenants and conditions of the Indenture
to be performed or observed by the Company. (Section 8.1)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (each a "Global Security") that will be
deposited with, or on behalf of, a depositary ("Global Security Depositary") or
its nominee identified in the applicable Prospectus Supplement. In such a case,
one or more Global Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in registered form, a Global Security may not be registered for
transfer or exchange except as a whole by the Global Security Depositary for
such Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any estatenominee to a successor Depositary or trusta nominee of such
successor Depositary and except in the incomecircumstances described in the applicable
Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. However, the Company
expects that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Global Security Depositary will be
9
11
represented by a Global Security registered in the name of the Global Security
Depositary or its nominee. Upon the issuance of such Global Security, and the
deposit of such Global Security with or on behalf of the Global Security
Depositary for such Global Security, such Depositary will credit on its
book-entry registration and transfer system the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Security will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by the
Global Security Depositary or its nominee for such Global Security. Ownership of
beneficial interests in such Global Security by persons that hold through
participants will be shown on, and the transfer of that ownership interest
within such participant will be effected only through, records maintained by
such participant. The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of such securities in certificated form.
The foregoing limitations and such laws may impair the ability to transfer
beneficial interests in such Global Securities.
So long as the Global Security Depositary for a Global Security, or its
nominee, is the registered owner of such Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Global Security for all purposes under
the Indenture. Unless otherwise specified in the applicable Prospectus
Supplement, owners of beneficial interests in such Global Security will not be
entitled to have Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in certificated form, and
will not be considered the holders thereof for any purposes under the Indenture.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Global Security Depositary and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder under the
Indenture. The Company understands that under existing industry practices, if
the Company requests any action of holders or an owner of a beneficial interest
in such Global Security desires to give any notice or take any action a holder
is entitled to give or take under the Indenture, the Global Security Depositary
would authorize the participants to give such notice or take such action, and
participants would authorize beneficial owners owning through such participants
to give such notice or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in principal amount of
the Debt Securities at the time outstanding of all series affected (voting as
one class), to modify the Indenture or any supplemental indenture or the rights
of the holders of the Debt Securities except that no such modification may (i)
extend the final maturity of any of the Debt Securities or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof, or reduce the
amount of the principal of an Original Issue Discount Security that would be due
and payable upon an acceleration of the maturity thereof pursuant to Section 4.1
of the Indenture or the amount thereof provable in bankruptcy pursuant to
Section 4.2 of the Indenture, or impair or affect the right of any holder of the
Debt Securities to institute suit for the payment thereof without the consent of
the holder of each of the Debt Securities so affected, or (ii) reduce the
aforesaid percentage of Debt Securities, the consent of the holders of which is
required for any such modification, without the consent of the holders of all
Debt Securities then outstanding. (Section 7.2)
The Indenture also provides that the Company and the Trustee may, without
the consent of the holders of the Debt Securities, modify the Indenture or enter
into supplemental indentures (a) to convey, transfer, assign, mortgage or pledge
to the Trustee as security for the Debt Securities of one or more series any
property
10
12
or assets, (b) to evidence the succession of another corporation to the Company
and the assumption by the successor corporation of the covenants, agreements and
obligations of the Company, (c) to add to the covenants of the Company such
further covenants, restrictions, conditions or provisions as the Board of
Directors of the Company and the Trustee shall consider to be for the protection
of the holders of the Debt Securities and to make the occurrence or the
occurrence and continuance of a default in any such additional covenants,
restrictions, conditions or provisions an Event of Default; provided, however,
that in respect of any such additional covenant, restriction, condition or
provision, such supplemental indenture may provide for a particular period of
grace after default or may provide for an immediate enforcement upon such Event
of Default or may limit the remedies available to the Trustee upon such an Event
of Default or may limit the right of the holders of a majority in aggregate
principal amount of the Debt Securities of such series to waive such an Event of
Default, (d) to cure any ambiguity or to correct or supplement any provision
contained in the Indenture which may be defective or inconsistent with any other
provision contained in the Indenture or to make such other provisions in regard
to matters or questions arising under the Indenture as the Board of Directors of
the Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of the Debt Securities in any material respect, (e)
to establish the form or terms of Debt Securities, and (f) to evidence or
provide for the acceptance of appointment by a successor trustee and to add to
or change any of the provisions of the Indenture as may be necessary to provide
for or facilitate the administration of the trusts created thereunder by more
than one trustee. (Section 7.1)
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series issued
under the Indenture is defined in the Indenture as being: default for 30 days in
payment of any interest upon any Debt Securities of such series; default in any
payment of principal or premium, if any, upon any Debt Securities of such
series; default in the payment of any sinking fund installment payable by the
terms of the Debt Securities of such series; default by the Company in
performance of any other of the covenants or agreements in respect of the Debt
Securities of such series or the Indenture which shall not have been remedied
for a period of 90 days after written notice specifying that such notice is a
"Notice of Default" under the Indenture; certain events involving bankruptcy,
insolvency or reorganization of the Company; and any other event of default
provided in the supplemental indenture or resolution of the Company's Board of
Directors under which the series of Debt Securities are issued or in the form of
the Debt Security for such series. (Section 4.1) Unless otherwise specified in a
Prospectus Supplement, a default by the Company with respect to any Indebtedness
other than the Debt Securities will not constitute an Event of Default with
respect to the Debt Securities. The Indenture will provide that the Trustee may
withhold notice to the holders of any series of the Debt Securities of any
default (except in payment of principal of, or interest on, such series of Debt
Securities or in the payment of any sinking or purchase fund installment with
respect to such series of Debt Securities) if the Trustee considers it in the
interest of the holders of such series of Debt Securities to do so. (Section
4.11)
The Indenture provides that (a) if an Event of Default due to the default
in payment of principal or, premium, if any, or interest on, or any sinking fund
installment with respect to, any series of Debt Securities issued under such
Indenture or due to the default in the performance or breach of any other
covenant or warranty of the Company applicable to the Debt Securities of such
series but not applicable to all outstanding Debt Securities issued under such
Indenture shall have occurred and be continuing, either the Trustee or the
holders of not less than 25% in principal amount of the Debt Securities of each
affected series issued under such Indenture and then outstanding (each such
series voting as a separate class) may then declare the principal of all Debt
Securities of such affected series and interest accrued thereon to be due and
payable immediately; and (b) if an Event of Default due to a default in the
performance of any other of the covenants or agreements in such Indenture
applicable to all outstanding Debt Securities issued thereunder and then
outstanding or due to certain events of bankruptcy, insolvency and
reorganization of the Company shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of all Debt
Securities issued under such Indenture and then outstanding (treated as one
class) may declare the principal of all such Debt Securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
(which include the deposit by the Company with the Trustee of a sum sufficient
to pay all matured installments of interest and principal and certain expenses
of the Trustee and the curing, waiving or
11
13
remedying of all Events of Default other than nonpayment or principal) such
declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal of (or premium, if any) or interest
on such Debt Securities) by the holders of a majority in principal amount of the
Debt Securities of all such affected series then outstanding. (Sections 4.1 and
4.10)
The holders of a majority in principal amount of the Debt Securities of
each series then outstanding and affected (with each series voting as a separate
class) shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee with respect to the Debt
Securities of such series under the Indenture, subject to United Statescertain limitations
specified in the Indenture, provided that the holders of such Debt Securities
shall have offered to the Trustee reasonable indemnity against expenses and
liabilities. (Sections 4.9 and 4.2(d))
The Indenture provides that no holder of Debt Securities may institute any
action against the Company under the Indenture (except actions for payment of
overdue principal or Canadian income
taxation regardlessinterest) unless such holder previously shall have given to
the Trustee written notice of default and continuance thereof and unless the
holders of not less than 25% in principal amount of the sourceDebt Securities of each
affected series (with each series voting as a separate class) issued under the
Indenture and then outstanding shall have requested the Trustee to institute
such action and shall have offered the Trustee reasonable indemnity, the Trustee
shall not have instituted such action within 60 days of such request and the
Trustee shall not have received direction inconsistent with such written request
by the holders of a majority in principal amount of the Debt Securities of each
affected series (with each series voting as a separate class) issued under such
Indenture and then outstanding. (Sections 4.6, 4.7 and 4.9) At any time prior to
the evidencing to the Trustee of the taking of any action by the holders of the
percentage in aggregate principal amount of the Debt Securities of any or all
series specified in the Indenture in connection with such action, any holder of
a Debt Security may, by filing written notice with the Trustee, revoke such
action so far as concerns such security. (Section 6.5)
The Indenture will require the annual filing by the Company with the
Trustee of a written statement as to compliance with the principal covenants
contained in the Indenture. (Section 3.5)
SATISFACTION AND DISCHARGE
The Indenture will cease to be of further effect and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of the Indenture upon compliance with
certain enumerated conditions, including the Company having paid all sums
payable by the Company under the Indenture, when either (a) the Company shall
have delivered to the Trustee for cancellation all Debt Securities theretofore
authenticated or (b) all Debt Securities not theretofore delivered to the
Trustee for cancellation shall have become due and payable or are by their terms
to become due and payable within one year. (Section 9.1)
THE TRUSTEE
The Trustee under the Indenture is Bank One, Columbus, N.A. The Trustee is
an affiliate of Bank One, Indianapolis, N.A., the trustee under a separate
indenture for the Company's 6 1/2% Notes due 2004 and the Company's 6% Notes due
2006.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby in any of
four ways: (i) through underwriters, (ii) through dealers, (iii) through agents,
or (iv) directly to purchasers. The Prospectus Supplement will set forth the
terms of any offering of a particular series of Debt Securities and will
include, without limitation, (i) the name or names of any underwriters, dealers
or agents with which the Company has entered into arrangements with respect to
the sale of such Debt Securities; (ii) the initial public offering or purchase
price of such Debt Securities; (iii) the principal amounts of the Debt
Securities to be purchased by any such underwriters, dealers or agents; (iv) any
underwriting discounts, commissions and other items constituting underwriters'
compensation and any other discounts, concessions or commissions allowed or
12
14
reallowed or paid by any underwriters to other dealers; (v) any commissions paid
to any agents; (vi) the net proceeds to the Company from the sale of such Debt
Securities; and (vii) the securities exchanges, if any, on which such Debt
Securities will be listed.
If underwriters are used in the offering of Debt Securities, the Debt
Securities being sold will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of such resale. Unless otherwise set forth in an
applicable Prospectus Supplement, the obligations of the underwriters to
purchase such Debt Securities will be subject to certain conditions precedent
and each of the underwriters with respect to such Debt Securities will be
obligated to purchase all of the Debt Securities allocated to it if any such
Debt Securities are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If dealers are utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to such dealers, as principals. The dealers may then resell such Debt Securities
to the public at varying prices to be determined by such dealers at the time of
resale.
Offers to purchase Debt Securities may be solicited by agents designated by
the Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of the Debt Securities in respect to which this Prospectus is delivered
will be named, and any commission payable by the Company to such agent set
forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best-efforts basis for
the period of its income (other thanappointment.
Offers to purchase Debt Securities may be solicited, and sales thereof may
be made directly by the foreign branchCompany to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to resales thereof.
Underwriters, dealers and agents participating in the distribution of Debt
Securities may be deemed to be "underwriters," as that term is defined under the
Securities Act, and any U.S.discounts and commissions received by them and any
profit realized by them on the resale thereof may be deemed to be underwriting
discounts and commissions, under the Securities Act. Underwriters, dealers and
agents participating in the distribution of Debt Securities may be entitled
under agreements entered into with the Company to indemnification by the Company
against certain civil liabilities, including liabilities under the Securities
Act. Such underwriters, dealers and agents may be customers of, engage in
transactions with, or Canadian Person), and includes any United States or Canadian
branchperform services for the Company in the ordinary course of
a person other than a U.S. or Canadian Person.business.
LEGAL MATTERS
CertainUnless otherwise indicated in the Prospectus Supplement relating to the
Debt Securities, certain legal matters in connection with the offering of the Common SharesDebt Securities
will be passed upon for the Company by Baker & Hostetler Columbus, Ohio.
Michael E. Moritz, a director of the Company, is a partner of Baker & HostetlerLLP, Cleveland, Ohio,
and is the beneficial owner of 551,233 Common Shares. Certain legal matters in
connection with the Common Shares offered hereby will be passed upon for the Underwritersunderwriters, if any, by Davis Polk & Wardwell. Certain legal matters in connection with
the Common Shares offered hereby will be passed upon for certain of the Selling
Shareholders by Wachtell, Lipton, Rosen & Katz.
17
20Wardwell, New York, New York.
EXPERTS
The consolidated financial statements of the CompanyCardinal and its consolidated
subsidiaries as of June 30, 19941996 and 1995, and for the year then ended and the
consolidated financial statementseach of the Company and its consolidated
subsidiaries, except Whitmire Distribution Corporation, as of March 31, 1993 and
1992 and forthree years in
the years thenperiod ended June 30, 1996, have been incorporated in this Prospectus by
reference from the Company's Annual Report on1996 Cardinal Form 10-K for the year ended June 30, 199410-K. Such consolidated financial
statements of Cardinal and its subsidiaries, except Pyxis, have been audited by
Deloitte & Touche LLP as stated in their report which is incorporated herein by
reference (which report expresses an unqualified opinion
and includes an explanatory paragraph referring tofrom the change in the method of
accounting for income taxes).1996 Cardinal Form 10-K. The financial statements of Whitmire Distribution
CorporationPyxis
(consolidated with those of the CompanyCardinal in the consolidated financial statements for the years ended March 31, 1993 and 1992)statements)
have been audited by Arthur AndersenErnst & Young LLP, as stated in itstheir report which is
incorporated herein by reference from the Company's Annual Report on1996 Cardinal Form 10-K for the year
ended June 30, 1994.10-K.
Such consolidated financial statements of the CompanyCardinal and its consolidated
subsidiaries are incorporated by reference herein in reliance upon the respective
reports of such firms given upon their authority as experts in accounting and
auditing. Both of the foregoing firms are independent auditors.
1813
21
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- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------------
TABLE OF CONTENTS
PAGE
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Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 3
Use of Proceeds...................... 6
Market Price and Dividend Data....... 6
Capitalization....................... 7
Selected Consolidated Financial
Information........................ 8
Selling Shareholders................. 10
Description of Capital Stock......... 13
Underwriting......................... 15
Legal Matters........................ 17
Experts.............................. 18
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- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
7,000,000 SHARES
[Logo]
COMMON SHARES
----------------------------------
PROSPECTUS
SEPTEMBER , 1994
----------------------------------
SMITH BARNEY INC.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
WILLIAM BLAIR & COMPANY
- ------------------------------------------------------
- ------------------------------------------------------
22
[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 1994
PROSPECTUS
7,000,000 SHARES
[LOGO]
COMMON SHARES
------------------
Of the 7,000,000 Common Shares offered hereby, 1,600,000 are being sold by
Cardinal Health, Inc. ("Cardinal" or the "Company") and 5,400,000 are being sold
by certain shareholders of the Company (the "Selling Shareholders"). See
"Selling Shareholders." The Company will not receive any of the proceeds from
the sale of Common Shares by the Selling Shareholders. Of the 7,000,000 Common
Shares being offered, 1,400,000 are being offered hereby in an international
offering outside of the United States and Canada (the "International Offering")
by the Managers (as defined herein) and 5,600,000 Common Shares are being
offered in a concurrent offering in the United States and Canada (the "U.S.
Offering" and, together with the International Offering, the "Combined
Offering") by the U.S. Underwriters (as defined herein). See "Underwriting."
The Common Shares are listed on the New York Stock Exchange under the
symbol "CAH." On September 16, 1994, the last reported sale price for the
Company's Common Shares on the New York Stock Exchange was $39.125 per share.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------
Per Share $ $ $ $
- ---------------------------------------------------------------------------------------------------------
Total $ $ $ $
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
(1) The Company and the Selling Shareholders have agreed to indemnify the
Managers against certain liabilities, including certain liabilities under
the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses of the Combined Offering payable by the Company,
estimated at $400,000.
(3) The Company and certain of the Selling Shareholders have granted the U.S.
Underwriters an option, exercisable within 30 days after the date hereof, to
purchase up to 1,050,000 additional Common Shares for sale in the U.S.
Offering only on the same terms per share solely for the purpose of covering
overallotments, if any. If the U.S. Underwriters exercise such option in
full, the Price to Public, Underwriting Discounts and Commissions, Proceeds
to Company and Proceeds to Selling Shareholders will be $ ,
$ , $ , and $ , respectively. See "Underwriting."
------------------
The Common Shares are offered by the several Managers when, as and if
delivered to and accepted by them and subject to their right to reject orders in
whole or in part. It is expected that the Common Shares will be available for
delivery at the offices of Smith Barney Inc., 388 Greenwich Street, New York,
New York 10013 or through the facilities of the Depository Trust Company, on or
about September , 1994.
------------------
SMITH BARNEY INC.
GOLDMAN SACHS INTERNATIONAL
BEAR, STEARNS INTERNATIONAL LIMITED
WILLIAM BLAIR & COMPANY
September , 1994
23
[ALTERNATIVE PAGE FOR INTERNATIONAL PROSPECTUS]
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- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------------
TABLE OF CONTENTS
PAGE
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Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 3
Use of Proceeds...................... 6
Market Price and Dividend Data....... 6
Capitalization....................... 7
Selected Consolidated Financial
Information........................ 8
Selling Shareholders................. 10
Description of Capital Stock......... 13
Underwriting......................... 15
Legal Matters........................ 17
Experts.............................. 18
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
7,000,000 SHARES
[Logo]
COMMON SHARES
---------------------------------
PROSPECTUS
SEPTEMBER , 1994
---------------------------------
SMITH BARNEY INC.
GOLDMAN SACHS
INTERNATIONAL
BEAR, STEARNS
INTERNATIONAL LIMITED
WILLIAM BLAIR & COMPANY
- ------------------------------------------------------
- ------------------------------------------------------
24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The fees and expenses in connection with the issuance and distribution of the
securities being registered are as follows:
Registration Fee -- Securities and Exchange Commission.......................... $107,306
NASD Fee........................................................................ 23,744Commission............ $106,061
Trustee's Fees and Expenses*...................................... 6,500
Accounting Fees and Expenses*................................................... 50,000..................................... 20,000
Blue Sky Fees and Expenses (including related fees and expenses of
counsel)*.... 15,000....................................................... 5,000
Legal Fees and Expenses*........................................................ 70,000.......................................... 65,000
Printing Expenses*.............................................................. 120,000................................................ 40,000
Rating Agency Fees*............................................... 250,000
Miscellaneous Expenses*......................................................... 13,950........................................... 7,439
--------
TOTAL................................................................. $400,000TOTAL................................................... $500,000
========
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1701.13(E) of the Ohio Revised Code sets forth conditions and
limitations governing the indemnification of officers, directors, and other
persons.
Article 6 of theCardinal's Code of Regulations contains certain
indemnification provisions adopted pursuant to authority contained in Section
1701.13(E) of the Ohio Revised Code. TheCardinal's Code of Regulations provideprovides for
the indemnification of its officers, directors, employees, and agents against
all expenses with respect to any judgments, fines, and amounts paid in
settlement, or with respect to any threatened, pending, or completed action,
suit, or proceeding to which they were or are parties or are threatened to be
made parties by reason of acting in such capacities, provided that it is
determined, either by a majority vote of a quorum of disinterested directors of
the CompanyCardinal or the shareholders of the
CompanyCardinal or otherwise as provided in Section
1701.13(E) of the Ohio Revised Code, that (a) they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interest of
the Company;Cardinal; (b) in any action, suit, or proceeding by or in the right of the Company,Cardinal,
they were not, and have not been adjudicated to have been, negligent or guilty
of misconduct in the performance of their duties to the Company;Cardinal; and (c) with
respect to any criminal action or proceeding, that they had no reasonable cause
to believe that their conduct was unlawful. Section 1701.13(E) provides that to
the extent a director, officer, employee, or agent has been successful on the
merits or otherwise in defense of any such action, suit, or proceeding, he shall
be indemnified against expenses reasonably incurred in connection therewith. At
present there are no material claims, actions, suits, or proceedings pending
where indemnification would be required under these provisions, and the CompanyCardinal
does not know of any such threatened material claims, actions, suits, or
proceedings which may result in a request for such indemnification.
The CompanyCardinal has entered into indemnification contracts with eachcertain of its
directors and executive officers. These contracts generally: (i) confirm the
existing indemnity provided to them under theCardinal's Code of Regulations and
assure that this indemnity will continue to be provided; (ii) provide that if
the CompanyCardinal does not maintain directors' and officers' liability insurance,
the CompanyCardinal will, in effect, become a self-insurer of the coverage; and (iii)
provide that, in addition, the directors and officers shall be indemnified to
the fullest extent permitted by law against all expenses (including legal fees),
judgments, fines, and settlement amounts paid or incurred by them in any action
or proceeding, including any action by or in the right of the Company,Cardinal, on account
of their service as a director, officer, employee, or agent of the Company or at the
request of the Company as a director, officer, employee, or agent of another
corporation or enterprise. Coverage under the contracts is excluded: (A) on
account of conduct which is finally adjudged to be knowingly fraudulent,
deliberately dishonest, or willful misconduct; or (B) if a final court of
adjudication shall determine that such
indemnifica-
II-1
25
tion16
indemnification is not lawful; or (C) in respect of any suit in which judgment
is rendered for violations of Section 16(b) of the Securities and Exchange Act
of 1934, as amended, or similar provisions of any federal, state, or local
statutory law; or (D) on account of any remuneration paid which is finally
adjudged to have been in violation of law; or (E) as to officers who are not
directors, with respect to any act or omission which is finally adjudged to have
been a violation, other than in good faith, of Cardinal's Standards of Business
Conduct of which the officer then most recently has received written notice. The
indemnification agreements are applicable to claims asserted after their
effective date, whether arising from acts or omissions occurring before or after
their effective date, and associated legal expenses.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------------------------------------------------------------------------------- --------------------------------------------------------------------------
1.1 Form1 Proposed form of U.S. Underwriting Agreement
1.2 Form of International Underwriting Agreement
4.1 * AmendedIndenture between the registrant and Restated Articles of Incorporation, as amended, of the Company
4.2 * Restated Code of Regulations of the Company
4.3 ** Registration Rights AgreementBank One, Columbus, N.A., dated as of
October 11, 1993, as amended, among
Cardinal, the Whitmire Stockholders and Robert D. Walter, 1997
4.2 Form of Debt Securities
5 Opinion of Baker & Hostetler LLP
12 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Arthur AndersenErnst & Young LLP
23.3 Consent of Baker & Hostetler (containedLLP (included in Exhibit 5)
24 *** Powers of Attorney (included on signature pages)
25 Form T-1 Statement of AttorneyEligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One, Columbus, N.A.
- ---------------
* Incorporated by reference from Exhibits 3.01 and 3.02, respectively, of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1994, filed with the Commission on May 11, 1994.
** Incorporated by reference from Exhibit 4.04 of the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1994, filed with the
Commission on September 2, 1994.
*** Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrantregistrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a posteffective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a posteffective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement;
II-2
17
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Securities Act"), each filing of the
Registrant'sregistrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 as
amended, that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrantregistrant pursuant to the foregoing provisions, or otherwise, the Registrantregistrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrantregistrant of expenses incurred
or paid by a director, officer or controlling person of the Registrantregistrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person of the Registrantregistrant in connection with
the securities being registered, the Registrantregistrant will, unless in the opinion of
its counsel the matter has been settled
II-2
26 by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such indemnification
by it is against the public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
2718
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbus,Dublin, State of Ohio, on September 19, 1994.April 3, 1997.
CARDINAL HEALTH, INC.
By:BY: /s/ ROBERT D. WALTER
------------------------------------
Robert D. Walter, Chairman and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert D. Walter, George H. Bennett, Jr.
------------------------------------
George H. Bennett, Jr.
Title: Executive Vice President, and
Paul S. Williams, and each of them, severally, as his/her attorney-in-fact and
agent, with full power of substitution and resubstitution, for him/her and in
his/her name, place, and stead, in any and all capacities, to sign any and all
pre- or post-effective amendments to this Registration Statement, and to file
the same with all exhibits hereto, and other documents with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, and each of
them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he/she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on September 19, 1994.April 3, 1997.
SIGNATURE TITLE
- ----------------------------------------------------------------------------------------- --------------------------------------------
*/s/ ROBERT D. WALTER Chairman and Chief Executive Officer
- ----------------------------------------------------------------------------------------- (principal executive officer)
Robert D. Walter
*/s/ DAVID BEARMAN Executive Vice President and Chief Financial
- ----------------------------------------------------------------------------------------- Officer (principal financial officer andofficer)
David Bearman
principal accounting officer)
*/s/ RICHARD J. MILLER Vice President, Controller and Principal
- -------------------------------------------- Accounting Officer
Richard J. Miller
/s/ JOHN F. FINN Director
- ---------------------------------------------
Mitchell J. Blutt, M.D.
* Director
- -----------------------------------------------------------------------------------------
John F. Finn
*/s/ ROBERT L. GERBIG Director
- -----------------------------------------------------------------------------------------
Robert L. Gerbig
*/s/ JOHN F. HAVENS Director
- ---------------------------------------------
Michael S. Gross
* Director
- -----------------------------------------------------------------------------------------
John F. Havens
*/s/ REGINA E. HERZLINGER Director
- ---------------------------------------------
James L. Heskett
* Director
- ---------------------------------------------
John C. Kane
* Director
- ---------------------------------------------
George R. Manser
* Director
- ---------------------------------------------
John B. McCoy
* Director
- ---------------------------------------------
Michael--------------------------------------------
Regina E. MoritzHerzlinger
II-4
2819
SIGNATURE TITLE
- ----------------------------------------------------------------------------------------- --------------------------------------------
*/s/ JOHN C. KANE Director
- -----------------------------------------------------------------------------------------
John C. Kane
/s/ J. MICHAEL LOSH Director
- --------------------------------------------
J. Michael Losh
/s/ GEORGE R. MANSER Director
- --------------------------------------------
George R. Manser
/s/ JOHN B. MCCOY Director
- --------------------------------------------
John B. McCoy
/s/ JERRY E. ROBERTSON Director
- --------------------------------------------
Jerry E. Robertson
*/s/ L. JACK VAN FOSSEN Director
- -----------------------------------------------------------------------------------------
L. Jack Van Fossen
*/s/ MELBURN G. WHITMIRE Director
- -----------------------------------------------------------------------------------------
Melburn G. Whitmire
* George H. Bennett, Jr. by signing his name hereto does sign this Amendment to
the Registration Statement on behalf of the persons indicated above pursuant
to the powers of attorney duly executed by such persons and filed as part of
the Registration Statement.
By: /s/ George H. Bennett, Jr.
----------------------------------------------------------
George H. Bennett, Jr., Attorney-in-Fact
II-5
2920
EXHIBIT INDEX
EXHIBIT EXHIBIT
NUMBER DESCRIPTION
- ------
------- ---------------------------------------------------------------
1.1 Form1 Proposed form of U.S. Underwriting Agreement
1.2 Form of International Underwriting AgreementAgreement........................
4.1 * AmendedIndenture between the registrant and Restated Articles of Incorporation, as amended, of the Company
4.2 * Restated Code of Regulations of the Company
4.3 ** Registration Rights AgreementBank One, Columbus, N.A.,
dated as of October 11, 1993, as amended, among
Cardinal, the Whitmire Stockholders and Robert D. Walter, 1997...................................
4.2 Form of Debt Securities........................................
5 Opinion of Baker & Hostetler LLP...............................
12 Computation of Ratio of Earnings to Fixed Charges..............
23.1 Consent of Deloitte & Touche LLPLLP...............................
23.2 Consent of Arthur Andersen LLPErnst & Young LLP...................................
23.3 Consent of Baker & Hostetler (containedLLP (included in Exhibit 5)
24 *** Powers of Attorney (included on signature pages)...............
25 Form T-1 Statement of AttorneyEligibility and Qualification under the
Trust Indenture Act of 1939 of Bank One, Columbus, N.A. .......
- ---------------
* Incorporated by reference from Exhibits 3.01 and 3.02, respectively, of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1994, filed with the Commission on May 11, 1994.
** Incorporated by reference from Exhibit 4.04 of the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 1994 filed with the
Commission on September 2, 1994.
*** Previously filed.
II-6
30
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.