1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 13, 2001
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CARDINAL HEALTH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 31-0958666
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
7000 CARDINAL PLACE, DUBLIN, OHIO 43017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
PAUL S. WILLIAMS
EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER AND SECRETARY
CARDINAL HEALTH, INC.
7000 CARDINAL PLACE
DUBLIN, OHIO 43017
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(614) 757-5000
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
IT IS RESPECTFULLY REQUESTED THAT THE COMMISSION SEND COPIES OF ALL NOTICES,
ORDERS AND COMMUNICATIONS TO:
DAVID A. KATZ, ESQ. AMY B. HAYNES, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ ASSISTANT GENERAL COUNSEL
51 WEST 52ND STREET CARDINAL HEALTH, INC.
NEW YORK, NEW YORK 10019-6150 7000 CARDINAL PLACE
(212) 403-1000 DUBLIN, OHIO 43017
(614) 757-7767
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration 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. [ ]
2
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. [ ]
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE REGISTRATION FEE
(1) (3) (1) (2)
Common Shares, without par value
Debt Securities
Total...................... $547,700,000 $547,700,000 $137,000
(1) There are being registered hereunder such presently indeterminate
number or principal amount of Cardinal Health, Inc. common shares and
debt securities as may from time to time be issued at indeterminate
prices.
(2) Pursuant to Rule 429 of the Securities Act of 1933, as amended, the
prospectus contained herein also relates to $452,300,000 of common
shares and debt securities of the registrant contained in the
registration statement on Form S-3 (File No. 333-46482) which amount
is being carried forward in this Registration Statement.
(3) 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 $1,000,000,000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
3
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS SUBJECT TO COMPLETION, DATED JUNE 13, 2001
[CARDINAL HEALTH, INC. LOGO]
COMMON SHARES AND DEBT SECURITIES
OFFERING PRICE: $1,000,000,000
We may offer, from time to time:
(i) common shares, and
(ii) unsecured debt securities.
For each type of securities listed above, the amount, price and terms
will be determined at or prior to the time of sale.
We will provide the specific terms of these securities in an accompanying
prospectus supplement or supplements. You should read this prospectus and the
accompanying prospectus supplement or supplements carefully before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This prospectus may not be used to consummate sales of any of these
securities unless accompanied by a prospectus supplement.
The date of this prospectus is June ____, 2001
4
TABLE OF CONTENTS
PAGE
----
About this Prospectus............................................................................... 3
Where you can find more information and incorporation of certain documents by reference............. 3
Cautionary statement regarding forward-looking statements........................................... 4
The Company......................................................................................... 6
Use of proceeds..................................................................................... 6
Ratio of earnings to fixed charges.................................................................. 6
Description of common shares........................................................................ 7
Description of debt securities...................................................................... 8
Legal opinions...................................................................................... 19
Experts............................................................................................. 19
Plan of distribution................................................................................ 20
2
5
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission ("SEC") using a "shelf" registration process.
Under this shelf process, we may sell any combination of our debt securities and
our common shares in one or more offerings up to a total dollar amount of
$1,000,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and the applicable prospectus supplement together with additional information
described under the heading "Where You Can Find More Information."
Unless otherwise indicated or unless the context otherwise requires, all
references in this prospectus to "we," "us," "our" or the "Company" mean
Cardinal Health, Inc. and its consolidated subsidiaries, and references to
"Cardinal" refer to Cardinal Health, Inc. excluding its consolidated
subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION AND
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document we
file at the SEC's public reference room at 450 Fifth Street N.W., Room 1024,
Washington, D.C. 20549, and in New York, New York, and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for more information on the public reference
rooms and their copy charges. You may also inspect our SEC reports and other
information at the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC, which includes exhibits and other information not included
in this prospectus. The SEC allows us to "incorporate by reference" into this
prospectus the information we file with it. This means that we are disclosing
important information to you by referring to other documents filed separately
with the SEC. The information incorporated by reference is an important part of
this prospectus and information that we file later with the SEC will
automatically update and supercede this information. We incorporate by reference
the documents listed below which we have previously filed with the SEC and any
future filings we make with the SEC pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended, after the date of this
prospectus until we sell all of the securities covered by this prospectus.
3
6
SEC FILINGS PERIOD/DATE
----------- -----------
-- Annual Report on Form 10-K................................... Fiscal Year ended June 30, 2000
-- Quarterly Reports on Form 10-Q............................... Quarters ended September 30, 2000;
December 31, 2000; and March 31, 2001
-- Current Reports on Form 8-K and 8-K/A........................ Filed February 2, 2001; February 8, 2001;
February 14, 2001; and June 7, 2001
-- Description of common shares
contained in Registration Statement
on Form 8-A................................................. Filed August 19, 1994
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
(614) 757-5222
Attention: Investor Relations
You should rely only on the information contained or incorporated by
reference in this prospectus and accompanying prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. The information in this prospectus is current only as of the date of
this prospectus. Our business, financial condition, results of operation and
prospects may have changed since that date.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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 and the documents incorporated by reference into this prospectus may
include a number of forward-looking statements with respect to our financial
condition, results of operations, plans, objectives, future performance and
business. These forward-looking statements involve various risks and
uncertainties. Actual results may differ materially from those contemplated,
projected or implied by these forward-looking statements due to, among others,
the following factors and events (the order of which does not necessarily
reflect their relative significance):
- uncertainties relating to general economic conditions;
- the loss of one or more key customer or supplier relationships, such
as pharmaceutical and medical-surgical manufacturers for which
alternative supplies may not be available;
- challenges associated with integrating our information systems with
those of our customers;
- potential liabilities associated with warranties of our information
systems, and the malfunction or failure of our information systems
or those of third parties with whom we do business, such as
malfunctions or failures associated with date-related issues and
disruption to internet-related operations;
- costs and difficulties related to the integration of acquired
businesses;
- changes to the presentation of financial results and position
resulting from adoption of new accounting principles or upon the
advice of our independent auditors or the staff of the SEC;
4
7
- changes in the distribution or outsourcing pattern for
pharmaceutical and medical-surgical products and services, including
an increase in direct distribution or a decrease in contract
packaging by pharmaceutical manufacturers;
- changes in government regulations or our failure to comply with
those regulations;
- the costs and other effects of legal, regulatory and administrative
proceedings;
- injury to person or property resulting from our manufacturing,
packaging, repackaging, drug delivery system development and
manufacturing, information systems, or pharmacy management services;
- competitive factors in our healthcare service businesses, including
pricing pressures;
- unforeseen changes in our existing agency and distribution
arrangements;
- the continued financial viability and success of our customers,
suppliers, and franchisees;
- changes in customer purchasing patterns;
- shifts in growth rates among segments driven by various factors;
- difficulties encountered by our competitors, whether or not we face
the same or similar issues;
- 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 and the impact of the Euro
currency;
- costs associated with protecting our trade secrets and enforcing our
patent, copyright and trademark rights, and successful challenges to
the validity of our patents, copyrights or trademarks;
- difficulties or delays in the development, production,
manufacturing, and marketing of new products and services;
- strikes or other labor disruptions;
- labor and employee benefit costs;
- pharmaceutical and medical-surgical manufacturers' pricing policies
and overall drug price inflation; and
- changes in hospital buying groups or hospital buying practices.
Other factors that could cause actual results or conditions to differ
from those anticipated by forward-looking statements include those more fully
described in those documents incorporated by reference from Cardinal's public
filings with the SEC. Because forward-looking statements are subject to risks
and uncertainties, actual results may differ materially from those expressed,
projected or implied by these forward-looking statements. You should not place
undue reliance on these statements, which speak only as of the date of this
prospectus or, in the case of documents incorporated by reference, the dates of
those documents. All subsequent written and oral forward-looking statements
attributable to us or any person acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to
5
8
in this section. We undertake no obligation to release publicly any revisions to
these forward-looking statements to reflect events or circumstances after the
date of this prospectus or to reflect the occurrence of unanticipated events,
except to the extent required by law.
THE COMPANY
We are one of the country's leading providers of products and services
supporting the health care industry. We provide innovative, cost-effective
pharmaceutical services that improve the medication use process for a broad base
of customers nationwide. These services include pharmaceutical distribution,
hospital pharmacy management, automated dispensing systems manufacturing, drug
delivery systems, pharmaceutical packaging, retail pharmacy franchising and
clinical information systems development. The Company also manufactures and
distributes medical, surgical and laboratory products through its wholly owned
subsidiary, Allegiance Corporation.
The mailing address of our executive offices is 7000 Cardinal Place,
Dublin, Ohio 43017, and our telephone number is (614) 757-5000.
The foregoing information concerning the Company does not purport to be
comprehensive. For additional information concerning our business and affairs,
including capital requirements and external financing plans, pending legal and
regulatory proceedings and descriptions of certain laws and regulations to which
we may be subject, please refer to the documents incorporated by reference into
this prospectus.
USE OF PROCEEDS
Except as we may describe otherwise in a prospectus supplement, we will
use the proceeds from the sale of the securities offered by this prospectus for
general corporate purposes, which may include working capital, capital
expenditures, repayment or refinancing of indebtedness, acquisitions, and
investments.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the fiscal years ended
June 30, 1996 through 2000 and for the nine months ended March 31, 2001 are as
follows:
FISCAL YEAR ENDED JUNE 30,
Nine Months Ended
1996 1997 1998 1999 2000 March 31, 2001
---- ---- ---- ---- ---- --------------
Ratio of Earnings to Fixed
Charges.......... (0.2) 5.1 6.3 6.4 7.3 6.8
The ratio of earnings to fixed charges is computed by dividing fixed
charges of Cardinal into earnings before income taxes plus fixed charges.
Fixed charges include interest expense, amortization of debt offering costs,
and the portion of rent expense which is deemed to be representative of the
interest factor.
6
9
DESCRIPTION OF COMMON SHARES
The following is a summary of certain rights of the holders of our common
shares. Reference is made to Cardinal's Amended and Restated Articles of
Incorporation, as amended (the "Articles"), and Cardinal's Restated Code of
Regulations, as amended (the "Regulations"), copies of which are filed as
exhibits to the Registration Statement of which this prospectus is a part and
are incorporated into this prospectus by reference. See "Where You Can Find More
Information" on page 3 of this prospectus for information on how to obtain a
copy of the Articles or Regulations.
Cardinal's Articles authorize us to issue up to 750,000,000 common
shares. On May 31, 2001, 447,199,704 common shares were issued and outstanding,
approximately 7,087,460 were held in treasury, approximately 77,000,000 were
reserved for issuance under stock based benefit plans. On June 13, 2001,
Cardinal filed a Form S-4 Registration Statement with the SEC to increase the
number of shares reserved for issuance under an equity shelf registration
statement to 15,000,000. The Articles also authorize us to issue up to 5,000,000
Class B common shares, none of which is outstanding, and 500,000 non-voting
preferred shares, none of which is outstanding or reserved for issuance.
From time to time, Cardinal may issue additional authorized but unissued
common shares for share dividends, stock splits, employee benefit programs,
financing and acquisition transactions, and other general purposes. Those common
shares will be available for issuance without action by Cardinal's shareholders,
unless such action by the Cardinal shareholders is required by applicable law or
the rules of the New York Stock Exchange or any other stock exchange on which
common shares may be listed in the future.
All of the outstanding common shares are fully paid and nonassessable.
Holders of the common shares do not have preemptive rights and have no rights to
convert their common shares into any other security. All common shares are
entitled to participate equally and ratably in dividends, when and as declared
by the board of directors. In the event of the liquidation of Cardinal, holders
of common shares are entitled to share ratably in 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 (if any are issued in the
future) 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. Under
certain circumstances, holders of Class B common shares have a separate class
vote. Under Ohio law, Cardinal shareholders are generally afforded the right to
vote their common shares cumulatively for the election of nominees to fill the
particular class of directors to be elected at each annual meeting, subject to
compliance with certain procedural requirements.
Cardinal's board of directors currently consists of thirteen members,
divided into two classes of four members each and a third class of five 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 may 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 shares having voting power with respect 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 will 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 Cardinal'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 held) the amount of time required for an acquiror to obtain
control of Cardinal by electing a majority of the board of directors and may
also make the removal of incumbent management more difficult and discourage or
render more difficult certain mergers, tender offers, proxy contests, or other
potential takeover proposals.
7
10
CERTAIN ANTI-TAKEOVER PROVISIONS OF OHIO LAW
Chapter 1704 of the Ohio Revised Code (the "Ohio Law") provides generally
that any person who acquires 10% or more of a corporation's voting stock
(thereby becoming an "interested shareholder") may not engage in a wide range of
"business combinations" with the corporation for a period of three years
following the date the person became an interested shareholder, unless the
directors of the corporation have approved the transactions or the interested
shareholder's acquisition of shares of the corporation prior to the date the
interested shareholder became a interested shareholder of the corporation.
These restrictions on interested shareholders do not apply under certain
circumstances, including, but not limited to, the following: (i) if the
corporation's original articles of incorporation contain a provision expressly
electing not to be governed by Chapter 1704 of the Ohio Law; (ii) if the
corporation, by action of its shareholders, adopts an amendment to its articles
of incorporation expressly electing not to be governed by such section; or (iii)
if, on the date the interested shareholder became a shareholder of the
corporation, the corporation did not have a class of voting shares registered or
traded on a national securities exchange. The Cardinal articles do not contain a
provision electing not to be governed by Chapter 1704.
Under Section 1701.831 of the Ohio Law, unless the articles of
incorporation or regulations of a corporation otherwise provide, any "control
share acquisition" of an "issuing public corporation" can be made only with the
prior approval of the corporation's shareholders. A "control share acquisition"
is defined as any acquisition of shares of a corporation that, when added to all
other shares of that corporation owned by the acquiring person, would enable
that person to exercise levels of voting power in any of the following ranges:
at least 20% but less than 33 1/3%, at least 33 1/3% but less than 50%, or 50%
or more. Cardinal falls within the definition of issuing public corporation, but
its regulations expressly provide that the provisions of Section 1701.831 of the
Ohio Law do not apply to us.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common shares is EquiServe Trust
Company, Jersey City, New Jersey.
DESCRIPTION OF DEBT SECURITIES
The debt securities offered by this prospectus will be unsecured
obligations of Cardinal and will be issued under an indenture dated as of April
18, 1997, between Cardinal and Bank One, N.A. (formerly known as, Bank One,
Columbus, N.A.), as trustee.
The following briefly summarizes the material provisions of the indenture
and the debt securities. You should read the more detailed provisions of the
indenture, including the defined terms, because they, and not this description,
define the rights of holders of debt securities. You should also read the
particular terms of the debt securities, which will be described in more detail
in the applicable prospectus supplement. See "Where You Can Find More
Information" for information on how to obtain copies of the indenture. The
indenture has been incorporated by reference as an exhibit to this registration
statement of which this prospectus is a part.
GENERAL
The indenture provides that the debt securities may be issued from time
to time in one or more series. The indenture does not limit the amount of debt
securities or any other debt we may incur except as provided below under
"Limitations on Subsidiary Debt." Unless otherwise specified in a prospectus
supplement, a default in our obligations with respect to any other indebtedness
will not constitute a default or an event of default 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 of our other unsecured and unsubordinated indebtedness.
8
11
We conduct nearly all of our operations through subsidiaries and we
expect that we will continue to do so. As a result, the right of Cardinal to
participate as a shareholder in any distribution of assets of any subsidiary
upon its liquidation or reorganization or otherwise and the ability of holders
of debt securities to benefit as creditors of Cardinal from any distribution are
subject to the prior claims of creditors of the subsidiary. As of March 31,
2001, Cardinal had outstanding approximately $1.1 billion of indebtedness for
borrowed money with which the debt securities would rank equally. In addition,
as of such date, Cardinal's subsidiaries had outstanding approximately $1.1
billion of indebtedness for borrowed money. On a consolidated basis, the Company
had approximately $5.1 billion of trade payables as of March 31, 2001, to which
the debt securities would be effectively subordinated.
The prospectus supplement relating to any series of debt securities will,
among other things, describe the following terms, where applicable:
- the designation, aggregate principal amount and purchase price;
- the date or dates on which principal is payable;
- the interest rate or the method of computing the interest rate;
- the interest payment date and any related record dates;
- any redemption, repayment or sinking fund provisions; and
- any other specific terms of the debt securities.
Unless otherwise specified in a 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. Interest
on any series of debt securities will be payable on the interest payment dates
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.
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 substantially below their stated
principal amount ("Original Issue Discount Securities"). The applicable
prospectus supplement may describe the Federal income tax consequences and other
special considerations applicable to any Original Issue Discount Securities.
DEFINITIONS
The definitions set forth below is a description of the terms that are
defined in the indenture and used in this prospectus. The complete definitions
are set forth in the indenture.
"Attributable Debt" means in connection with a sale and lease-back transaction
the lesser of:
- the fair value of the assets subject to the transaction; or
- 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 our obligations for rental payments during the
remaining term of all leases.
"Consolidated Net Tangible Assets" means the aggregate amount of assets after
deducting therefrom:
9
12
- all current liabilities (excluding any thereof constituting
Funded Indebtedness by reason of being renewable or
extendable); and
- all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, all as
set forth on our most recent balance sheet and computed in
accordance with generally accepted accounting principles.
"Consolidated Subsidiary" means any Subsidiary substantially all the property of
which is located, and substantially all the operations of which are conducted,
in the United States of America whose financial statements are consolidated with
those of Cardinal in accordance with generally accepted accounting principles
practiced in the United States of America.
"Exempted Debt" means the sum of the following as of the date of determination:
- our indebtedness incurred after the date of the indenture and
secured by liens not permitted by the limitation on liens
provisions of the indenture; and
- our Attributable Debt 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.
"Financing Subsidiary" means any Subsidiary, including its Subsidiaries, engaged
in one or more of the following activities:
- the business of making loans or advances, extending credit or
providing financial accommodations (including leasing new or
used products) to others;
- 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
- any other business as may be reasonably incidental to those
described herein, including the ownership and use of property
in connection with it.
"Funded Indebtedness" means all Indebtedness having a maturity of more than 12
months from the date as of which the amount of Indebtedness 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.
"Indebtedness" means all items classified as indebtedness on our most recently
available balance sheet in accordance with generally accepted accounting
principles.
"Original Issue Discount Security" means any Debt Security that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof following an event of default.
"Rate Hedging Obligations" means any and all obligations of anyone arising
under:
- 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
- any and all cancellations, buybacks, reversals, terminations or
assignments of the same.
10
13
"Restricted Subsidiary" means a "significant subsidiary" as defined in Article
1, Rule 1-02 of Regulation S-X, promulgated under the Securities Act and as
amended from time to time.
"Senior Funded Indebtedness" means any of our Funded Indebtedness that is not
subordinated in right of payment to any of our other Indebtedness.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having voting power (under ordinary circumstances) to elect a
majority of the board of directors of that corporation is at the time owned by
Cardinal or by Cardinal and one or more Subsidiaries or by one or more
Subsidiaries.
"Yield to Maturity" means the yield to maturity on a series of debt securities,
calculated at the time of issuance of such series, or, if applicable, at the
most recent redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
CERTAIN COVENANTS
The following is a summary of the material covenants contained in the
indenture.
Limitation on Liens.
So long as any of the debt securities remain outstanding, Cardinal will
not, and it will not permit any Consolidated Subsidiary to, create or assume any
Indebtedness for borrowed money which is secured by a mortgage, pledge, security
interest or lien ("liens") of or upon any assets, of Cardinal or any
Consolidated Subsidiary, whether now owned or hereafter acquired, without
equally and ratably securing the debt securities by a lien ranking ratably with
and equal to such secured Indebtedness. 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 it
becomes a Consolidated Subsidiary;
(c) liens on assets existing at the time we acquire them, or to
secure the payment of the purchase price for them, or to secure
Indebtedness incurred or guaranteed by Cardinal or a
Consolidated Subsidiary for the purpose of financing the
purchase price of assets or improvements to or construction of
them, which Indebtedness is incurred or guaranteed prior to, at
the time of, or within 360 days after the acquisition (or in
the case of real property, completion of such improvement or
construction or commencement of full operation of the property,
whichever is later);
(d) liens securing Indebtedness owing by any Consolidated
Subsidiary to Cardinal or another wholly owned domestic
Subsidiary;
(e) liens on any assets of a corporation existing at the time the
corporation is merged into or consolidated with Cardinal or a
Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an
entirety or substantially as an entirety by Cardinal or a
Subsidiary;
(f) liens on any assets of Cardinal or a Consolidated Subsidiary in
favor of the United States of 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 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);
11
14
(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),
inclusive;
(h) certain statutory liens or other similar liens arising in the
ordinary course of business 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 the conduct of our business, or
our ownership of our assets which were not incurred in
connection with the borrowing of money and which do not, in our
opinion, materially impair our use of such assets in our
operations or the value of the assets for its purposes; or
(l) liens on any assets of a Financing Subsidiary.
Notwithstanding the foregoing restrictions, we 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.
Limitations on Subsidiary Debt.
Cardinal 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 of Cardinal or
to another Subsidiary, provided that such Indebtedness will be
at all times held by either Cardinal or a Subsidiary, and
provided further that upon the transfer or disposition of such
Indebtedness to someone other than Cardinal 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 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;
12
15
(g) Indebtedness of a Restricted Subsidiary arising from agreements
or guarantees providing for or creating any obligations of
Cardinal 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 or arising in respect of a sale
and lease-back transaction permitted by the provisions
regarding such transactions 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 Cardinal;
(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 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 the Refinancing
Indebtedness does not exceed the principal
amount of the Indebtedness 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
foregoing restrictions in an aggregate principal amount which, together with the
aggregate principal amount of other Indebtedness (not including the Indebtedness
permitted above), does not, at the time such Indebtedness is incurred, exceed
20% of Consolidated Net Tangible Assets.
Limitation on Sale and Lease-Back Transactions.
Sale and lease-back transactions (except such transactions involving
leases for less than three years) by Cardinal or any Consolidated Subsidiary of
any assets are prohibited unless:
- Cardinal or the 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
13
16
- the proceeds of the sale of the assets to be leased are at
least equal to their fair value as determined by our board of
directors and the proceeds are applied to the purchase or
acquisition (or, in the 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 Cardinal or any
Consolidated Subsidiary enters into such sale and lease-back transaction,
immediately after giving effect thereto, Exempted Debt does not exceed 20% of
the Consolidated Net Tangible Assets.
Merger, Consolidation, Sale, Lease or Conveyance.
Cardinal will not merge or consolidate with any other corporation and
will not sell, lease or convey all or substantially all its assets to any
person, unless:
- Cardinal will be the continuing corporation; or
- the successor corporation or person that acquires all or
substantially all of Cardinal's assets is a corporation
organized under the laws of the United States or a State
thereof or the District of Columbia; and
- the successor corporation or person expressly assumes all of
Cardinal's obligations under the indenture and the debt
securities; and
- immediately after such merger, consolidation, sale, lease or
conveyance, the successor corporation or person is not in
default in the performance of the covenants and conditions of
the indenture to be performed or observed by Cardinal.
BOOK-ENTRY DEBT SECURITIES
The debt securities of a series may be represented by one or more global
securities that will be deposited with, or on behalf of, a depositary or its
nominee identified in the applicable prospectus supplement. The 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. 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 depositary and except in the
circumstances 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, we expect
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 will be registered in the name of the
depositary or its nominee;
- Upon the issuance and deposit of such global security with the
depositary, the depositary will credit on its book-entry
registration and transfer system the respective principal
amounts of the debt securities represented by the global
security to the accounts of institutions that have accounts
with the depositary or its nominee ("participants");
- If the debt securities are offered and sold directly by us, the
accounts to be credited will be designated by the underwriters
or agents of the debt securities or by us;
- Ownership of beneficial interests in the global security will
be limited to participants or persons that may hold interests
through participants;
14
17
- Ownership of beneficial interests by participants will be shown
on, and the transfer of that ownership interest will be
effected only through, records maintained by the depositary or
its nominee; and
- Ownership of beneficial interests 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. These
limitations and laws may impair the ability to transfer beneficial interests in
such global securities.
As long as the depositary or its nominee is the registered owner of a
global security, the depositary or its nominee will be considered the sole owner
or holder of the debt securities represented by the global security for all
purposes under the indenture. Unless otherwise specified in the applicable
prospectus supplement, owners of beneficial interests in global securities will
not be entitled to have debt securities registered in their names, will not
receive or be entitled to receive physical delivery of debt securities in
certificated form, and will not be considered the holders for any purposes under
the indenture. Accordingly, each person owning a beneficial interest in the
global security must rely on the procedures of the depositary and, if the person
is not a participant, on the procedures of the participant through which the
person owns its interest, to exercise any rights of a holder under the
indenture.
We understand that under existing industry practices, if we request any
action of holders or an owner of a beneficial interest desires to give any
notice or take any action a holder is entitled to give or take under the
indenture, the 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 as described in the applicable prospectus supplement.
MODIFICATION OF THE INDENTURE
Cardinal and the trustee cannot modify the indenture or any supplemental
indenture or the rights of the holders of the debt securities without the
consent of 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).
Cardinal and the trustee cannot modify the indenture without the consent of the
holder of each outstanding debt security of such series affected by such
modification to:
(1) extend the final maturity of any of the debt securities; or
(2) reduce the principal amount; or
(3) reduce the rate or extend the time of payment of interest; or
(4) reduce any amount payable on redemption; or
(5) reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an
acceleration of the maturity; or
(6) reduce the amount provable in bankruptcy; or
(7) impair or affect the right of any holder of the debt securities
to institute suit for payment.
15
18
In addition, the consent of all holders of debt securities is required to
reduce the percentage of consent required to effect any modification.
Cardinal and the trustee may modify the indenture or enter into
supplemental indentures without the consent of the holders of the debt
securities, in certain cases, including:
(1) to convey, transfer, assign, mortgage or pledge to the trustee
as security for the debt securities any property or assets;
(2) to evidence the succession of another corporation to Cardinal
and the assumption by the successor corporation of the
covenants, agreements and obligations of Cardinal;
(3) to add to Cardinal's covenants any further covenants,
restrictions, conditions or provisions considered to be for the
protection of the holders;
(4) 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 that will not
adversely affect the interests of the holders of the debt
securities in any material respect;
(5) to establish the form or terms of debt securities; and
(6) 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 that may be necessary to provide for or
facilitate the administration of the trusts created thereunder
by more than one trustee.
EVENTS OF DEFAULT
The following constitute events of default under debt securities of any
series:
(1) failure to pay principal of and premium, if any, on any debt
securities of such series when due;
(2) failure to pay interest on any debt securities of such series
when due for 30 days;
(3) failure to perform any other covenant or agreement of Cardinal
in the debt securities of such series or the indenture for 90
days after written notice to Cardinal specifying that such
notice is a "notice of default" under the indenture;
(4) failure to pay any sinking fund installment when due on any
debt securities of such series;
(5) certain events of bankruptcy, insolvency, or reorganization of
Cardinal; and
(6) any other event of default provided in the supplemental
indenture or resolutions of Cardinal's board of directors of
any debt securities of such series.
If an event of default occurs and is continuing due to the default in the
performance or breach in (1), (2), (3), or (4) above with respect to any series
of debt securities but not with respect to all outstanding debt securities
issued, either the trustee or the holders of not less than 25% in principal
amount of the outstanding debt securities of each affected series (each series
voting as a separate class) may declare the principal amount and interest
accrued of all such affected series of debt securities to be due and payable
immediately.
16
19
If an event of default occurs and is continuing due to a default in the
performance of any of the covenants or agreements in the indenture applicable to
all outstanding debt securities issued and then outstanding or due to certain
events of bankruptcy, insolvency or reorganization of Cardinal, either the
trustee or the holders of not less than 25% in principal amount of all debt
securities issued (treated as one class) may declare the principal amount and
interest accrued of all such debt securities to be due and payable immediately.
However, such declarations may be annulled and past defaults may be waived upon
the occurrence of certain conditions including deposit by Cardinal with the
trustee of a sum sufficient to pay all matured installments of interest and
principal and certain expenses of the trustee.
Unless otherwise specified in a prospectus supplement, a default by
Cardinal with respect to any Indebtedness other than the debt securities will
not constitute an event of default with respect to the debt securities.
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, or
in the payment of any sinking or purchase fund installment) if the trustee
considers it in the interest of such holders to do so.
Subject to the provisions for indemnity and certain other limitations
contained in the indenture, the holders of a majority in principal amount of
each series of debt securities then outstanding will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the trustee.
No holder of debt securities of a series may institute any action against
Cardinal under the indenture unless:
(1) that holder gives to the trustee advance written notice of
default and its continuance;
(2) the holders of not less than 25% in principal amount of debt
securities of such series then outstanding affected by that
event of default request the trustee to institute such action;
(3) that holder has offered the trustee reasonable indemnity;
(4) the trustee shall not have instituted such action within 60
days of such request; and
(5) 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 then
outstanding.
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 concerning such security.
Cardinal is required to deliver to the trustee each year a certificate as
to whether or not, to the knowledge of the officers signing such certificate,
Cardinal is in compliance with the conditions and covenants under the indenture.
SATISFACTION AND DISCHARGE
The indenture provides that Cardinal will be discharged from all
obligations of the indenture and the indenture will cease to be of further
effect when the trustee, on demand of and at the expense of Cardinal, executes
proper instruments acknowledging satisfaction and discharge of the indenture
upon compliance with certain enumerated conditions, including Cardinal having
paid all sums payable by Cardinal under the indenture, when:
(1) Cardinal has delivered to the trustee for cancellation all
authenticated debt securities; or
(2) all debt securities not 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.
17
20
THE TRUSTEE
The trustee under the indenture is Bank One, N.A. (formerly known as,
Bank One, Columbus, N.A.) The trustee is an affiliate of Bank One, Indiana, NA
(formerly known as, Bank One, Indianapolis, NA), the trustee under a separate
indenture for Cardinal's 6 1/2% Notes due 2004, Cardinal's 6% Notes due 2006 and
Cardinal's 6.75% Notes due 2011.
18
21
LEGAL OPINIONS
The validity of the offered securities will be passed upon for us by Amy
B. Haynes, Assistant General Counsel of Cardinal. Ms. Haynes is paid a salary by
our company and she participates in various employee benefits plans offered to
our employees generally. Ms. Haynes holds common shares of Cardinal, as well as
vested and unvested options to purchase common shares of Cardinal, and unvested
restricted common shares of Cardinal. Certain legal matters with respect to the
offered securities may be passed upon by counsel for any underwriters, dealers
or agents, each of whom will be named in the related prospectus supplement.
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedule of the Company as of and for the year ended June
30, 2000, have been incorporated in this prospectus by reference from Cardinal's
Current Report on Form 8-K/A, Amendment No. 1, filed with the SEC on June 7,
2001 ("Form 8-K/A"). Such consolidated financial statements and schedule of the
Company as of and for the fiscal year ended June 30, 2000, except for the
financial statements of Bindley Western Industries, Inc. ("Bindley") as of and
for the year ended December 31, 1999 which have been audited by
PricewaterhouseCoopers LLP and which are not separately presented in this
prospectus and whose report thereon is incorporated by reference from the Form
8-K/A, have been audited by Arthur Andersen LLP as stated in their report which
is incorporated in this prospectus by reference from the Form 8-K/A.
The consolidated financial statements and the related consolidated
financial statement schedule of the Company as of June 30, 1999 and for each of
the two years in the period ended June 30, 1999, prior to restatement for the
2001 pooling of interests with Bindley and except for the financial statements
of Bindley, Allegiance Corporation ("Allegiance") and R.P. Scherer Corporation
("Scherer") (each consolidated with those of the Company and not presented
separately herein), have been audited by Deloitte & Touche LLP as stated in
their report which is incorporated in this prospectus by reference from the Form
8-K/A. The separate financial statements of Bindley for the years ended December
31, 1998 and 1997, which are not presented herein, that have been included in
the June 30, 1999 and 1998 restated consolidated financial statements of the
Company were audited by PricewaterhouseCoopers LLP. The separate financial
statements of Allegiance and of Scherer as of June 30, 1999 and for each of the
two years in the period ended June 30, 1999, which are not presented herein,
have been audited by PricewaterhouseCoopers LLP and Arthur Andersen LLP,
respectively, as stated in their reports which are incorporated in this
prospectus by reference from the Form 8-K/A. Arthur Andersen LLP audited the
combination of the consolidated financial statements and schedule as of and for
each of the two years in the period ended June 30, 1999, after restatement for
the Bindley pooling of interests.
Such consolidated financial statements and supporting schedules of the
Company as described above are incorporated herein by reference in reliance upon
authority of the respective firms as experts in accounting and auditing in
respect to the entities and for the periods they have audited. All of the
foregoing firms are independent public auditors with respect to the entities and
for the periods they have audited.
19
22
PLAN OF DISTRIBUTION
We may sell the offered securities: (i) through the solicitation of
proposals of underwriters or dealers to purchase the offered securities, (ii)
through underwriters or dealers on a negotiated basis, (iii) directly to a
limited number of purchasers or to a single purchaser, or (iv) through agents.
The prospectus supplement with respect to any offered securities will set forth
the terms of the offering, including the name or names of any underwriters,
dealers or agents, the purchase price of the offered securities and the proceeds
to Cardinal from such sale, any underwriting discounts and commissions and other
items constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers and any
securities exchange on which such offered securities may be listed. Any initial
public offering price, discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
We may indemnify our agents, dealers and underwriters against certain
civil liabilities, including liabilities under the Securities Act, or contribute
to payments which such agents, dealers or underwriters may be required to make
in respect thereof. Agents, dealers and underwriters may be customers of, engage
in transactions with, or perform services for Cardinal in the ordinary course of
business.
The prospectus supplement will explain whether or not the offered
securities will be listed on a national securities exchange. We cannot assure
you that there will be a market for any of the offered securities.
20
23
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
AMOUNT
------
Filing fee-- Securities and Exchange Commission....................................................... $ 137,000
*Listing on New York Stock Exchange................................................................... 75,000
*Trustees expenses.................................................................................... 30,000
*Printing and engraving............................................................................... 100,000
*Services of counsel.................................................................................. 100,000
*Services of independent public accountants........................................................... 50,000
*Rating agency fees................................................................................... 500,000
*Blue Sky fees and expenses........................................................................... 5,000
*Miscellaneous........................................................................................ 50,000
------------
Total............................................................................................ $ 1,047,000
============
* 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 Cardinal's Regulations contains certain indemnification
provisions adopted pursuant to authority contained in Section 1701.13(E) of the
Ohio Law. Cardinal's Regulations provides 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 Cardinal or the shareholders of Cardinal or
otherwise as provided in Section 1701.13(E) of the Ohio Law, 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 Cardinal; (b) in any action, suit, or proceeding by or
in the right of Cardinal, they were not, and have not been adjudicated to have
been, negligent or guilty of misconduct in the performance of their duties to
Cardinal; and (c) with respect to any criminal action or proceeding, 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, such individual 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 Cardinal does not know of any such threatened
claims, actions, suits, or proceedings which may result in a request for such
indemnification.
Cardinal has entered into indemnification contracts with each of its
directors and executive officers. These contracts generally: (i) confirm the
existing indemnity provided to them under Cardinal's Regulations and assure that
this indemnity will continue to be provided; (ii) provide that if Cardinal does
not maintain directors' and officers' liability insurance, Cardinal will, in
effect, become a self-insurer of the coverage; (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 incurred by them in any action or proceeding on account of
their service as a director, officer, employee, or agent of Cardinal, or at the
request of Cardinal as a director, officer, employee, trustee, fiduciary,
manager, member or agent of another corporation, partnership, trust, limited
liability company, employee benefit plan or other enterprise; and (iv) provide
for the mandatory advancement of expenses to the executive officer or director
in connection with the defense of any proceedings, provided that the executive
officer or director agrees to reimburse Cardinal for that advancement if it is
ultimately determined that the executive officer or director is not entitled to
the indemnification for that proceeding under the agreement. 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 indemnification is not
lawful; or (C) in respect of any
II-1
24
suit in which judgment is rendered for violations of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or 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) on account of
conduct occurring prior to the time the executive officer or director became an
officer, director, employee or agent of Cardinal or its subsidiaries (but in no
event earlier than the time such entity became a subsidiary of Cardinal); or (F)
with respect to proceedings initiated or brought voluntarily by the executive
officer or director and not by way of defense, except for proceedings brought to
enforce rights under the indemnification contract. Cardinal maintains a
directors' and officers' insurance policy which insures the officers and
directors of Cardinal from any claim arising out of an alleged wrongful act by
such persons in their respective capacities as officers and directors of
Cardinal.
II-2
25
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1.1 Proposed form of Underwriting Agreement - Common Securities (1)
1.2 Proposed form of Underwriting Agreement - Debt Securities (1)
4.1 Indenture dated as of May 1, 1993 between the Registrant and Bank
One, Indianapolis, NA, Trustee, relating to the Registrant's 6
1/2% Notes Due 2004 and 6% Notes Due 2006 (2)
4.2 Indenture dated as of October 1, 1996 between Allegiance
Corporation and PNC Bank, Kentucky, Inc. ("PNC"), Trustee; and
First Supplemental Indenture dated as of February 3, 1999 by and
among Allegiance Corporation, the Registrant and Chase Manhattan
Trust Company National Association (as successor in interest to
PNC), Trustee (3)
4.3 Indenture dated January 1, 1994 between R.P. Scherer
International Corporation and Comerica Bank; First Supplemental
Indenture by and among R.P. Scherer International Corporation,
R.P. Scherer Corporation and Comerica Bank dated February 28,
1995; and Second Supplemental Indenture by and among R.P. Scherer
Corporation, the Registrant and Comerica Bank dated as of August
7, 1998 (4)
4.4 Indenture dated as of April 18, 1997 between Registrant and Bank
One, Columbus, N.A., Trustee, relating to the Registrant's 6 1/4%
Notes due 2008 and 6.75% Notes Due 2011. (5)
4.5 Amended and Restated Articles of Incorporation of the Registrant,
as amended (6) and (7)
4.7 Restated Code of Regulations of the Registrant, as amended (6)
4.8 Form of Debt Securities
4.9 Form of Common Shares
5 Opinion of Amy B. Haynes, as to validity of the offered
securities
12 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
23.4 Consent of PricewaterhouseCoopers LLP
23.5 Consent of PricewaterhouseCoopers LLP
23.6 Consent of Legal Counsel (included in Exhibit 5)
24 Powers of Attorney (included on signature page)
25 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of Bank One, Columbus, N.A.
II-3
26
----------------
(1) To be filed by amendment or as an exhibit to a document to be
incorporated or deemed to be incorporated by reference in the
Registration Statement.
(2) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1994 (File No. 0-12591) and
incorporated herein by reference.
(3) Included as an exhibit to the Registrant's Registration Statement on
Form S-4 (No. 333-74761) and incorporated herein by reference.
(4) Included as an exhibit to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1998 (File No. 0-12591) and
incorporated herein by reference.
(5) Included as an exhibit to the Registrant's Current Report on Form 8-K
filed April 21, 1997 (File No. 0-12591) and incorporated herein by
reference.
(6) Included as an exhibit to the Registrant's Current Report on Form 8-K
filed November 24, 1998 (File No. 0-12591) and incorporated herein by
reference.
(7) Included as an exhibit to the Registrant's Registration Statement on
Form S-4 (No. 333-53394) and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective 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 end
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 post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission 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-4
27
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective 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.
(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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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 registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Dublin, State of Ohio, on June 13, 2001.
CARDINAL HEALTH, INC.
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, Paul S. Williams, and Richard
J. Miller, and each of them, severally, as his/her attorney-in-fact and agent,
with full power of substitution and re-substitution, for him/her and in his/her
name, place, and stead, in any and all capacities, to sign and file Registration
Statement(s) and any and all pre- or post-effective amendments to such
Registration Statement(s), with all exhibits thereto and 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, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on June 13, 2001.
NAME TITLE
---- -----
/s/ Robert D. Walter Chairman, Chief Executive Officer and
------------------------------- Director (principal executive officer)
Robert D. Walter
/s/ Richard J. Miller Executive Vice President, Chief Financial
------------------------------- Officer (principal financial officer) and
Richard J. Miller Principal Accounting Officer
/s/ William E. Bindley Director
-------------------------------
William E. Bindley
/s/ Dave Bing Director
-------------------------------
Dave Bing
/s/ George H. Conrades Director
-------------------------------
George H. Conrades
/s/ John F. Finn Director
-------------------------------
John F. Finn
/s/ Robert L. Gerbig Director
-------------------------------
Robert L. Gerbig
II-6
29
/s/ John F. Havens Director
-------------------------------
John F. Havens
/s/ Regina E. Herzlinger Director
-------------------------------
Regina E. Herzlinger
/s/ J. Michael Losh Director
-------------------------------
J. Michael Losh
/s/ John B. Mccoy Director
-------------------------------
John B. McCoy
/s/ Richard C. Notebaert Director
-------------------------------
Richard C. Notebaert
/s/ Michael D. O'halleran Director
-------------------------------
Michael D. O'Halleran
/s/ Melburn G. Whitmire Director
-------------------------------
Melburn G. Whitmire
II-7
30
EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1.1 Proposed form of Underwriting Agreement - Common Securities (1)
1.2 Proposed form of Underwriting Agreement - Debt Securities (1)
4.1 Indenture dated as of May 1, 1993 between the Registrant and Bank
One, Indianapolis, NA, Trustee, relating to the Registrant's 6
1/2% Notes Due 2004 and 6% Notes Due 2006 (2)
4.2 Indenture dated as of October 1, 1996 between Allegiance
Corporation and PNC Bank, Kentucky, Inc. ("PNC"), Trustee; and
First Supplemental Indenture dated as of February 3, 1999 by and
among Allegiance Corporation, the Registrant and Chase Manhattan
Trust Company National Association (as successor in interest to
PNC), Trustee (3)
4.3 Indenture dated January 1, 1994 between R.P. Scherer
International Corporation and Comerica Bank; First Supplemental
Indenture by and among R.P. Scherer International Corporation,
R.P. Scherer Corporation and Comerica Bank dated February 28,
1995; and Second Supplemental Indenture by and among R.P. Scherer
Corporation, the Registrant and Comerica Bank dated as of August
7, 1998 (4)
4.4 Indenture dated as of April 18, 1997 between Registrant and Bank
One, Columbus, N.A., Trustee, relating to the Registrant's 6 1/4%
Notes due 2008 and 6.75% Notes Due 2011. (5)
4.5 Amended and Restated Articles of Incorporation of the Registrant,
as amended (6) and (7)
4.7 Restated Code of Regulations of the Registrant, as amended (6)
4.8 Form of Debt Securities
4.9 Form of Common Shares
5 Opinion of Amy B. Haynes, as to validity of the offered
securities
12 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
23.4 Consent of PricewaterhouseCoopers LLP
23.5 Consent of PricewaterhouseCoopers LLP
23.6 Consent of Legal Counsel (included in Exhibit 5)
24 Powers of Attorney (included on signature page)
25 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of Bank One, Columbus, N.A.
----------------
(1) To be filed by amendment or as an exhibit to a document to be
incorporated or deemed to be incorporated by reference in the
Registration Statement.
(2) Included as an exhibit to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1994 (File No. 0-12591) and
incorporated herein by reference.
(3) Included as an exhibit to the Registrant's Registration Statement on
Form S-4 (No. 333-74761) and incorporated herein by reference.
(4) Included as an exhibit to the Registrant's Annual Report on Form 10-K
for the fiscal year ended June 30, 1998 (File No. 0-12591) and
incorporated herein by reference.
(5) Included as an exhibit to the Registrant's Current Report on Form 8-K
filed April 21, 1997 (File No. 0-12591) and incorporated herein by
reference.
(6) Included as an exhibit to the Registrant's Current Report on Form 8-K
filed November 24, 1998 (File No. 0-12591) and incorporated herein by
reference.
(7) Included as an exhibit to the Registrant's Registration Statement on
Form S-4 (No. 333-53394) and incorporated herein by reference.