-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L3MNg/a+xt8Q2UIS9Wnh0F1ihxJ4mPr0hKTabHZ9FV6Se//eTfqbYes+XWNA0wBw wrJhcHiCzWk5vygF9iDTlg== 0000950152-97-000675.txt : 19970225 0000950152-97-000675.hdr.sgml : 19970225 ACCESSION NUMBER: 0000950152-97-000675 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970206 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARDINAL HEALTH INC CENTRAL INDEX KEY: 0000721371 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 310958666 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11373 FILM NUMBER: 97519385 BUSINESS ADDRESS: STREET 1: 5555 GLENDON COURT CITY: DUBLIN STATE: OH ZIP: 43016 BUSINESS PHONE: 6147618700 MAIL ADDRESS: STREET 1: 5555 GLEDNON COURT CITY: DUBLIN STATE: OH ZIP: 43016 FORMER COMPANY: FORMER CONFORMED NAME: CARDINAL DISTRIBUTION INC DATE OF NAME CHANGE: 19920703 10-Q 1 CARDINAL HEALTH, INC. / 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended December 31, 1996 Commission File Number 0-12591 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.) 5555 GLENDON COURT, DUBLIN, OHIO 43016 (Address of principal executive offices and zip code) (614) 717-5000 Registrant's telephone number, including area code Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------- The number of Registrant's Common Shares outstanding at the close of business on January 31, 1997 was as follows: Common Shares, without par value: 100,446,324. 2 CARDINAL HEALTH, INC. AND SUBSIDIARIES Index *
Page No. Part I. Financial Information: -------- --------------------- Item 1. Financial Statements: Consolidated Statements of Earnings for the Fiscal Quarter and Six Months Ended December 31, 1996 and 1995............................................ 3 Consolidated Balance Sheets at December 31, 1996 and June 30, 1996...................................................................... 4 Consolidated Statements of Cash Flows for the Six Months Ended December 31, 1996 and 1995......................................................... 5 Notes to Consolidated Financial Statements......................................... 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition............................................................ 8 Part II. Other Information: ------------------ Item 1. Legal Proceedings.................................................................. 10 Item 2. Change in Securities............................................................... 10 Item 4. Submission of Matters to a Vote of Security Holders................................ 10 Item 6. Exhibits and Reports on Form 8-K................................................... 11 * Items deleted are inapplicable.
Page 2 3
PART I. FINANCIAL INFORMATION CARDINAL HEALTH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands, except per share amounts) Fiscal Quarter Ended Six Months Ended --------------------------- ---------------------------- December 31, December 31, December 31, December 31, 1996 1995 1996 1995 ------------ ------------ ----------- ------------ Net revenues $ 2,688,771 $ 2,188,619 $ 5,116,996 $ 4,285,464 Cost of products sold 2,483,533 2,013,952 4,729,495 3,946,751 ----------- ----------- ----------- ----------- Gross margin 205,238 174,667 387,501 338,713 Selling, general and administrative expenses 114,158 107,103 225,802 214,461 Unusual items, merger costs (17,359) (17,552) (17,359) (17,552) ----------- ----------- ----------- ----------- Operating earnings 73,721 50,012 144,340 106,700 Other income (expense): Interest expense (7,374) (4,801) (13,933) (9,424) Other, net-- primarily interest income 1,475 3,101 4,062 5,521 ----------- ----------- ----------- ----------- Earnings before income taxes 67,822 48,312 134,469 102,797 Provision for income taxes 29,368 21,770 56,218 44,339 ----------- ----------- ----------- ----------- Net earnings $ 38,454 $ 26,542 $ 78,251 $ 58,458 =========== =========== =========== =========== Net earnings per Common Share: Primary $ 0.38 $ 0.27 $ 0.79 $ 0.60 Fully diluted $ 0.38 $ 0.27 $ 0.79 $ 0.60 Weighted average number of Common Shares outstanding: Primary 101,285 96,913 99,570 96,876 Fully diluted 101,346 96,923 99,682 96,942 See notes to consolidated financial statements.
Page 3 4
CARDINAL HEALTH, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) December 31, June 30, 1996 1996 ----------- ---------- ASSETS Current assets: Cash and equivalents $ 73,332 $ 287,802 Marketable securities available-for-sale 37,185 54,335 Trade receivables 679,317 564,881 Current portion of net investment in sales-type leases 38,096 37,953 Merchandise inventories 1,691,209 1,238,238 Prepaid expenses and other 76,936 56,568 ----------- ----------- Total current assets 2,596,075 2,239,777 ----------- ----------- Property and equipment, at cost 413,821 265,584 Accumulated depreciation and amortization (163,915) (112,122) ----------- ----------- Property and equipment, net 249,906 153,462 Other assets: Net investment in sales-type leases, less current portion 110,472 111,604 Goodwill and other intangibles 109,976 92,428 Other 84,408 83,824 ----------- ----------- Total $ 3,150,837 $ 2,681,095 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable, banks $ 3,138 $ -- Current portion of long-term obligations 109,422 106,007 Accounts payable 1,367,998 1,126,065 Other accrued liabilities 153,690 153,585 ----------- ----------- Total current liabilities 1,634,248 1,385,657 ----------- ----------- Long-term obligations, less current portion 297,909 265,144 Deferred income taxes and other liabilities 121,091 99,584 Shareholders' equity: Common Shares, without par value 549,186 484,446 Retained earnings 559,192 455,690 Common Shares in treasury, at cost (5,846) (5,426) Other (4,943) (4,000) ----------- ----------- Total shareholders' equity 1,097,589 930,710 ----------- ----------- Total $ 3,150,837 $ 2,681,095 =========== =========== See notes to consolidated financial statements.
Page 4 5
CARDINAL HEALTH, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Six Months Ended ---------------------------- December 31, December 31, 1996 1995 ------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 78,251 $ 58,458 Adjustments to reconcile net earnings to net cash from operations: Depreciation and amortization 20,566 14,830 Provision for bad debts 4,023 4,145 Change in operating assets and liabilities, net of effects from acquisitions: Increase in trade receivables (98,870) (91,282) Increase in merchandise inventories (441,875) (125,305) Decrease (increase) in net investment in sales-type leases 989 (18,038) Increase in accounts payable 233,572 119,485 Other operating items, net (802) 21,098 --------- --------- Net cash used in operating activities (204,146) (16,609) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of subsidiary, net of cash acquired -- (26,982) Proceeds from sale of property and equipment 1,740 613 Additions to property and equipment (30,974) (36,452) Purchase of marketable securities available-for-sale (3,400) (38,434) Proceeds from sale of marketable securities available-for-sale 20,550 78,405 --------- --------- Net cash used in investing activities (12,084) (22,850) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net short-term borrowing activity 2,272 22,000 Reduction of long-term obligations (27,732) (2,179) Proceeds from long-term obligations -- 237 Proceeds from issuance of Common Shares 24,872 3,511 Tax benefit of stock options 6,650 6,855 Dividends paid on Common Shares and cash paid in lieu of fractional shares (3,882) (4,715) Purchase of treasury shares (420) (164) --------- --------- Net cash provided by financing activities 1,760 25,545 --------- --------- NET DECREASE IN CASH AND EQUIVALENTS (214,470) (13,914) CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 287,802 64,589 --------- --------- CASH AND EQUIVALENTS AT END OF PERIOD $ 73,332 $ 50,675 ========= ========= See notes to consolidated financial statements.
Page 5 6 CARDINAL HEALTH, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited) Note 1. The consolidated financial statements of the Company include the accounts of all majority-owned subsidiaries and all significant intercompany amounts have been eliminated. The consolidated financial statements contained herein have been restated to give retroactive effect to the mergers with Medicine Shoppe International, Inc. ("Medicine Shoppe") on November 13, 1995 and Pyxis Corporation ("Pyxis") on May 7, 1996. Such business combinations were accounted for under the pooling-of-interests method (see Note 3). These consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by generally accepted accounting principles for interim reporting. In the opinion of management, all adjustments necessary for a fair presentation have been included. All such adjustments are of a normal and recurring nature. The consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company's annual report on Form 10-K for the fiscal year ended June 30, 1996. Note 2. Net earnings per Common Share are based on the weighted average number of Common Shares outstanding during each period and the dilutive effect of stock options from the date of grant, computed using the treasury stock method. Note 3. On October 11, 1996, the Company completed a merger with PCI Services, Inc. ("PCI"). The merger was accounted for as a pooling-of-interests. In the merger, the Company issued approximately 3,138,000 Common Shares to PCI shareholders and PCI's outstanding stock options were converted into options to purchase approximately 230,000 Common Shares. The historical cost of PCI assets combined was approximately $148.4 million and the total liabilities assumed (including total debt of approximately $62.0 million) were approximately $87.8 million. The impact of the PCI merger, on a historical basis, is not significant. Accordingly, prior period financial statements have not been restated for the PCI merger. During the three month period ended December 31, 1996, the Company recorded costs totaling approximately $17.4 million ($12.7 million, net of tax) related to the merger with PCI. These costs included approximately $5.3 million for investment advisor, legal, accounting, and other transaction fees associated with the merger; $5.8 million related to employee retention, employee severance, and other personnel costs; and $1.6 million for other cost associated with the merger. Certain of these amounts are based upon estimates, and actual amounts paid may ultimately differ from these estimates. As of December 31, 1996, the Company had paid approximately $4.5 million related to these charges. If additional costs are incurred, such items will be expensed in subsequent periods. As a result of the mergers with Medicine Shoppe and Pyxis in fiscal 1996, the Company recorded costs totaling approximately $67.3 million ($47.8 million, net of tax). During the six months ended December 31, 1996, the Company paid approximately $11.8 million related to these costs. The Company's current estimates of the merger costs ultimately to be incurred are not materially different from the amounts originally recorded. Page 6 7 The following supplemental information, which is presented for purposes of facilitating meaningful comparisons to ongoing operations and to other companies, summarizes the results of operations of the Company, adjusted on a pro forma basis to reflect the elimination of the effect of the merger costs discussed above.
Fiscal Quarter Ended ------------------------------------------------------------------- December 31, Percentage December 31, Percentage 1996 of Net Sales 1995 of Net Sales ------------------ -------------- ------------------ -------------- Operating earnings $ 91,080 3.39% $ 67,564 3.09% Net earnings $ 51,109 1.90% $ 39,037 1.78% Net earnings per Common Share: Primary $ 0.50 $ 0.40 Fully diluted $ 0.50 $ 0.40 ====================================================================================================================== Six Months Ended ------------------------------------------------------------------- December 31, Percentage December 31, Percentage 1996 of Net Sales 1995 of Net Sales ------------------ -------------- ------------------ -------------- Operating earnings $ 161,699 3.16% $ 124,252 2.90% Net earnings $ 90,906 1.78% $ 70,953 1.66% Net earnings per Common Share: Primary $ 0.91 $ 0.73 Fully diluted $ 0.91 $ 0.73
The differences between the above results and those reported in the Consolidated Statements of Earnings are due solely to the assumed elimination of the one-time expenses of approximately $17.4 million ($12.7 million, net of tax) in the period ended December 31, 1996 and approximately $17.6 million ($12.5 million, net of tax) in the period ended December 31, 1995 incurred primarily in connection with the merger with PCI and Medicine Shoppe, respectively. Note 4. On October 29, 1996, the Board of Directors of the Company declared a three-for-two stock split which was effected as a stock dividend and distributed on December 16, 1996 to shareholders of record on December 2, 1996. All share and per share information has been retroactively restated for the stock split. Note 5. On November 27, 1996, the Company announced that it had entered into a definitive merger agreement with Owen Healthcare, Inc. ("Owen") pursuant to which Owen will become a wholly-owned subsidiary of the Company in a stock-for-stock merger intended to be tax-free and accounted for as a pooling-of-interests for financial reporting purposes. In connection with the Owen merger, the Company estimates that it will issue between 8.25 million and 9.1 million Cardinal Common Shares. Under the terms of the agreement, shareholders of Owen will receive $27.25 in the form of Cardinal Common Shares for each share of Owen they own, subject to adjustment under specified circumstances. In addition, options for Owen common stock will be converted into equivalent options for Cardinal Common Shares, based upon the exchange ratio. In connection with the merger, Owen has granted Cardinal an option to purchase approximately 3.4 million shares of Owen common stock, exercisable upon the occurrence of certain events. The merger is expected to be completed during fiscal 1997, subject to approval by Owen shareholders and the receipt of requisite regulatory approvals. Page 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Management's discussion and analysis presented below has been prepared to give retroactive effect to the pooling-of-interests business combinations with Medicine Shoppe on November 13, 1995 and Pyxis on May 7, 1996 (see Notes 1 and 3 of "Notes to Consolidated Financial Statements"). On October 11, 1996, the Company completed a merger with PCI, which was also accounted for as a pooling-of-interests. The impact of the PCI merger, on a historical basis, is not significant. Accordingly, prior period financial statements have not been restated for the PCI merger (see Note 3 of "Notes to Consolidated Financial Statements"). This discussion and analysis is concerned with material changes in financial condition and results of operations for the Company's consolidated balance sheets as of December 31, 1996 and June 30, 1996, and for the consolidated statements of earnings for the three and six month periods ended December 31, 1996 and 1995. Portions of management's discussion and analysis presented below include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to materially differ from those projected or implied. The most significant of such risks, uncertainties and other factors are described in Exhibit 99.01 to this Form 10-Q, which is incorporated herein by reference. RESULTS OF OPERATIONS Net Revenues. Net revenues increased 23% for the second quarter of fiscal 1996 and 19% for the six month period ended December 31, 1996, as compared to the prior year. The increase in the second quarter and the six month period is primarily due to internal revenue growth from pharmaceutical distribution activities, including the addition of new customers, increased sales to existing customers and price increases. Additional revenues were also provided in the second quarter by the PCI operations. Continued development of the Company's relationship with Kmart Corporation ("Kmart") and additional opportunities created by the deterioration of the financial condition of a major competitor also contributed to the increases during the second quarter and six months ended December 31, 1996. Gross Margin. As a percentage of net revenues, gross margin for the second quarter decreased to 7.63% from 7.98% in the prior year. For the six month period, gross margin decreased to 7.57% from 7.90% in the prior year. The decrease in gross margin is primarily due to the shift in net revenue mix caused by significant increases in the relatively lower margin pharmaceutical distribution activities (see "Net Revenues" above). The impact of this shift was partially offset by the impact of increased merchandising and marketing programs with customers and suppliers and the additional gross margin contributed in the second quarter by the PCI operations. The gross margin continues to be affected by the combination of a highly competitive environment and a greater mix of high volume customers, where a lower cost of distribution and better asset management enable the Company to offer lower selling margins and still achieve higher operating margins. Selling, General and Administration Expenses. Selling, general and administrative expenses as a percentage of net revenues improved to 4.25% in the second quarter of fiscal 1997 compared to 4.89% in the prior year and 4.41% for the six month period ended December 31, 1996 compared to 5.00% in the prior year. The improvements in the second quarter and the six month period reflect the economies associated with the Company's revenue growth from pharmaceutical distribution activities, as well as significant productivity gains resulting from continued cost control efforts and the consolidation and selective automation of distribution facilities. Unusual Items - Merger Costs. The Company recorded certain nonrecurring charges to reflect the estimated PCI and Medicine Shoppe merger costs in the second quarter of fiscal 1997 and 1996, respectively. See further discussion in Note 3 of "Notes to Consolidated Financial Statements." Interest Expense. The increase in interest expense of $2.6 million in the second quarter of fiscal 1997 compared to the prior year and $4.5 million for the six month period ended December 31, 1996 compared to the prior year is primarily due to the Company's issuance of $150 million, 6% Notes due 2006, in a public offering in January 1996. Provision for Income Taxes. The Company's provision for income taxes relative to pretax earnings remained consistent in both the second quarter and first six month period of fiscal 1997 compared to the prior year. Page 8 9 LIQUIDITY AND CAPITAL RESOURCES Working capital increased to $961.8 million at December 31, 1996 from $854.1 million at June 30, 1996. This increase included additional investments in merchandise inventories and trade receivables of $453.0 million and $114.4 million, respectively. Offsetting the increases in working capital were decreases in cash and equivalents, and marketable securities available-for-sale of $214.5 million and $17.2 million, respectively, and an increase in accounts payable of $241.9 million. Increases in merchandise inventories and accounts payable reflect the seasonal increase of inventories and higher level of business volume in pharmaceutical distribution activities, including higher inventories required by the new pharmaceutical services agreement with Kmart. The increase in trade receivables is consistent with the Company's revenue growth (see "Net Revenues" above). The change in cash and equivalents, and marketable securities available-for-sale is due to the timing of inventory purchases and related payments. Property and equipment, at cost, increased by $148.2 million from June 30, 1996. Of this amount, $111.5 million was attributable to the merger with PCI. The additional increase in property and equipment acquired included increased investments in management information systems and customer support systems, as well as upgrades to distribution facilities. Shareholders' equity increased to $1,097.6 million at December 31, 1996 from $930.7 million at June 30, 1996, primarily due to net earnings of $78.3 million, equity of PCI on the merger date of $60.6 million and issuances of Common Shares resulting from stock option exercises and related tax benefits in the amount of $31.5 million. OTHER On November 27, 1996, the Company announced that it had entered into a definitive agreement with Owen Healthcare, Inc. ("Owen") pursuant to which Owen will become a wholly-owned subsidiary of the Company in a stock-for-stock merger intended to be tax-free and accounted for as a pooling-of-interests for financial reporting purposes. In connection with the Owen merger, the Company estimates that it will issue between 8.25 million and 9.1 million Cardinal Common Shares. Under the terms of the agreement, shareholders of Owen will receive $27.25 in the form of Cardinal Common Shares for each share of Owen they own, subject to adjustment under specified circumstances. In addition, options for Owen common stock will be converted into equivalent options for Cardinal Common Shares, based upon the exchange ratio. In connection with the merger, Owen has granted Cardinal an option to purchase approximately 3.4 million shares of Owen common stock, exercisable upon the occurrence of certain events. The merger is expected to be completed by the end of fiscal 1997, subject to approval by Owen shareholders and the receipt of requisite regulatory approvals. The Company expects to record a one-time charge to reflect transaction and other costs incurred as a result of the Owen merger in the quarter in which the merger is consummated (see Note 5 of "Notes to Consolidated Financial Statements"). Page 9 10 PART II. OTHER INFORMATION Item 1: Legal Proceedings In November 1993, the Company and Whitmire Distribution Corporation ("Whitmire"), as well as other pharmaceutical wholesalers, were each named as defendants in a series of purported class action antitrust lawsuits which were later consolidated and transferred by the Judicial Panel for Multi-District Litigation to the United States District Court for the Northern District of Illinois (the "Brand Name Prescription Drug Litigation"). Subsequent to the consolidation, a new consolidated complaint was filed which included allegations that the wholesaler defendants, including the Company and Whitmire, conspired with manufacturers to inflate prices by using a chargeback pricing system. In addition to the Federal court cases described above, the Company and Whitmire have also been named as defendants in a series of state court cases alleging similar claims under various state laws regarding the sale of brand name prescription drugs. These lawsuits are described in "Item 1 - Legal Proceedings" of Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, which was filed with the Securities and Exchange Commission and is incorporated herein by reference. On November 9, 1995, the Company, along with the other wholesaler defendants, filed a motion for summary judgment in the Brand Name Prescription Drug Litigation. On April 4, 1996, summary judgment was granted in favor of the Company and the other wholesaler defendants. The plaintiffs have appealed this decision. The Company believes that the allegations against the Company and Whitmire in such litigation are without merit, and it intends to contest such allegations vigorously. The Company does not believe that the outcome of these lawsuits will have a material adverse effect on the Company's financial condition or results of operations. The Company becomes involved from time to time in litigation incidental to its business, none of which is expected to have a material adverse effect on the Company's financial condition or results of operations. Item 2: Change in Securities On October 29, 1996, the shareholders of the Company adopted an amendment to Article FOURTH of the Company's Amended and Restated Articles of Incorporation, as amended, which increased the number of authorized Common Shares, without par value, from 100 million to 150 million. Item 4: Submission of Matters to a Vote of Security Holders (a) Registrant's 1996 Annual Meeting of Shareholders was held on October 29, 1996. (b) Proxies were solicited by Registrant's management pursuant to Regulation 14 under the Securities Exchange Act of 1934; there was no solicitation in opposition to management's nominees as listed in the proxy statement; and all director nominees were elected to the class indicated in the proxy statement pursuant to the vote of the Registrant's shareholders. (c) Matters voted upon at the Annual Meeting were as follows: (1) Election of Regina E. Herzlinger, J. Michael Losh, John C. Kane, and John B. McCoy as directors of the Company. The results of the shareholder vote were as follows: Mrs. Herzlinger 54,996,669 for, 0 against, 1,000,599 withheld, and 0 broker non-votes; Mr. Losh 54,996,877 for, 0 against, 1,000,391 withheld, and 0 broker non-votes; Mr. Kane 54,725,313 for, 0 against, 1,271,954 withheld, and 0 broker non-votes; Mr. McCoy 55,013,666 for, 0 against, 983,601 withheld, and 0 broker non-votes. (2) Amendment to the Registrant's Amended and Restated Articles of Incorporation to increase the common shares, without par value, authorized (see Item 2). The results of the shareholder vote were as follows: 53,313,661 for, 2,595,381 against, 88,225 withheld, and 0 broker non-votes. (3) Approval of the material terms of the performance goals under the Cardinal Health, Inc. Performance-Based Incentive Compensation Plan. The results of the shareholder vote were as follows: 55,455,400 for, 429,659 against, 112,208 withheld, and 0 broker non-votes. Page 10 11 Item 6: Exhibits and Reports on Form 8-K: (a) Listing of Exhibits: Exhibit 2.01 Agreement and Plan of Merger dated as of November 27, 1996, by and among Owen Healthcare, Inc., Owl Merger Corp., and Registrant. (1) Exhibit 3.01 Amended and Restated Articles of Incorporation of the Registrant, as amended. Exhibit 11.01 Computation of Per Share Earnings. Exhibit 27.01 Financial Data Schedule. Exhibit 99.01 Statement Regarding Forward-Looking Information. (2) -------------------- (1) Filed as Exhibit 2.1 to the Current Report on Form 8-K of Owen Healthcare Inc. dated November 27, 1996, and incorporated herein by reference. (2) Filed as Exhibit 99.01 to the Quarterly Report on Form 10-Q of the Registrant for the quarter ended September 30, 1996, and incorporated herein by reference. (b) Reports on Form 8-K: On October 18, 1996, the Company filed a Current Report on Form 8-K under Item 5 which reported that it had completed its merger of a wholly-owned subsidiary with and into PCI Services, Inc. on October 11, 1996. Page 11 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CARDINAL HEALTH, INC. Date: February 6, 1997 By: /s/ Robert D. Walter ---------------------------------------- Robert D. Walter Chairman and Chief Executive Officer By: /s/ David Bearman ---------------------------------------- David Bearman Executive Vice President and Chief Financial Officer (Principal Financial Officer) Page 12 EX-3.01 2 EXHIBIT 3.01 1 Exhibit 3.01 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CARDINAL DISTRIBUTION, INC. These constitute the amended and restated articles of incorporation of Cardinal Distribution, Inc., a corporation for profit formed under the Ohio General Corporation Law, which amended and restated articles of incorporation supersede the previously existing articles of incorporation of the corporation, as heretofore amended: FIRST: The name of the corporation shall be "Cardinal Dis- tribution, Inc." SECOND: The place in Ohio where the principal office of the corporation is to be located is the City of Columbus, Franklin County. THIRD: The purpose or purposes for which the corporation is formed are to engage in any lawful act or activity for which corpora- tions may be formed under Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code and any amendments heretofore or hereafter made thereto. FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 10,500,000, consisting of 10,000,000 common shares without par value and 500,000 nonvoting preferred shares without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the dividend rate, -1- 2 (c) the dates of payment of dividends and the dates from which they are cumulative, (d) liquidation price, (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. Each common share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. Subject to the preferences of any outstanding preferred shares, each common share shall be entitled to participate equally in such dividends as may be declared by the board of directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. FIFTH: The amount of stated capital with which the corporation will begin business shall be not less than five hundred dollars ($500). SIXTH: The board of directors may fix and determine, and vary, the amount of working capital of the corporation; determine whether any (and, if any, what part) of the surplus, however created or arising, shall be used or disposed of or declared in dividends or paid to share- holders; and, without action by the shareholders, use and apply such surplus, or any part thereof, or such part of the stated capital of the corporation as is permitted under the laws of the State of Ohio, at any time or from time to time, in the purchase or acquisition of shares of any class, voting-trust certificates for shares, bonds, deben- tures, notes, scrip, warrants, obligations, evidence of indebtedness of the corporation, or other securities of the corporation, to such extent or amount and in such manner and upon such terms as the board of directors shall deem expedient and without regard to any provisions which may hereafter be contained in the corporation's articles of incor- poration with respect to the redemption of shares of any class at the option of the corporation. SEVENTH: Every statute of the State of Ohio hereafter enacted, whereby rights or privileges of the shareholders of a corporation organ- -2- 3 ized under the Ohio General Corporation Law are increased, diminished, or in any way affected, or whereby effect is given to any action author- ized, ratified, or approved by less than all the shareholders of any such corporation, shall apply to the corporation and shall bind every shareholder to the same extent as if such statute had been in force at the date of the filing of these articles of incorporation. EIGHTH: A director or officer of the corporation shall not be disqualified by his office from dealing or contracting with the corporation as a vendor, purchaser, employee, agent, or otherwise. No transaction or contract or act of the corporation shall be void or voidable or in any way affected or invalidated by reason of the fact that any director or officer, or any firm of which any director or officer is a shareholder, director, or trustee, or any trust of which any director or officer is a trustee or beneficiary, is in any way interested in such transaction or contract or act. No director or officer shall be accountable or responsible to the corporation for or in respect to any transaction or contract or act of the corporation or for any gains or profits directly or indirectly realized by him by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, director, or trustee, or any trust of which he is a trustee or beneficiary, is interested in such transaction or contract or act; provided the fact that such director or officer or such firm or corporation or such trust is so interested shall have been disclosed or shall have been known to the board of directors or such members thereof as shall be present at any meeting of the board of directors at which action upon such contract or transaction or act shall have been taken. Any director may be counted in determining the existence of a quorum at any meeting of the board of directors which shall authorize or take action in respect to any such contract or transaction or act, and may vote thereat to authorize, ratify, or approve any such contract or transaction or act, and any officer of the corporation may take any action within the scope of his authority respecting such contract or transaction or act with like force and effect as if he or any firm of which he is a member, or any corporation of which he is a shareholder, director, or trustee, or any trust of which he is a trustee or beneficiary, were not interested in such transaction or contract or act. Without limiting or qualifying the foregoing, if in any judicial or other inquiry, suit, cause, or proceeding, the question of whether a director or officer of the corpora- tion has acted in good faith is material, then notwithstanding any statute or rule of law or of equity to the contrary (if any there be), his good faith shall be presumed, in the absence of proof to the contrary by clear and convincing evidence. NINTH: No holder of shares of any class of the corporation shall be entitled as such, as a matter of right, to subscribe for or purchase shares of any class, now or hereafter authorized, or to purchase or to subscribe for securities convertible into or exchangeable for shares of the corporation, or to which shall appertain or be attached -3- 4 any warrants or rights entitling the holder thereto to subscribe for or purchase shares, except such rights of subscription or purchase, if any, at such price or prices, and upon such terms and conditions as the board of directors in its discretion may from time to time deter- mine. TENTH: Except as otherwise provided in these Articles of Incorporation or the Code of Regulations of the corporation, notwithstand- ing any provision of any statute of the State of Ohio, now or hereafter in force, requiring for any purpose the vote, consent, waiver, or release of the holders of shares entitling them to exercise two-thirds or any other proportion of the voting power of the corporation or of any class or classes of shares thereof, any action may be taken by the vote of the holders of shares entitling them to exercise a majority of the voting power of the corporation, or of such class or classes, unless the proportion designated by such statute cannot be altered by these articles. -4- 5 CERTIFICATE OF AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CARDINAL DISTRIBUTION, INC. Robert D. Walter and Michael E. Moritz hereby certify that they are the duly elected and acting chairman and secretary, respectively, of Cardinal Distribution, Inc., an Ohio corporation (the "Company"), and further certify that the following is a true copy of a resolution amending the Company's Amended and Restated Articles of Incorporation duly adopted by the affirmative vote of the holders of shares of the Company entitling them to exercise a majority of the voting power of the Company at the annual meeting of shareholders duly held on August 30, 1989: RESOLVED, That the Amended and Restated Articles of Incorporation of the Company be amended by deleting ARTICLE FOURTH thereof in its entirety and by substituting in lieu thereof the following ARTICLE FOURTH: FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 20,500,000, consisting of 20,000,000 common shares without par value and 500,000 nonvoting preferred shares without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the dividend rate, (c) the dates of payment of dividends and the dates from which they are cumulative, (d) liquidation price, -5- 6 (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. Each common share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. Subject to the preferences of any outstanding preferred shares, each common share shall be entitled to participate equally in such dividends as may be declared by the board of directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. August 30, 1989 CARDINAL DISTRIBUTION, INC. By /s/ Robert D. Walter ------------------------------ Robert D. Walter, Chairman By /s/ Michael E. Moritz ------------------------------ Michael E. Moritz, Secretary -6- 7 CERTIFICATE OF AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF CARDINAL DISTRIBUTION, INC. Robert D. Walter and George H. Bennett, Jr. hereby certify that they are the duly elected and acting chairman and assistant secretary, respectively, of Cardinal Distribution, Inc., an Ohio corporation (the "Company"), and further certify that the following is a true copy of a resolution amending the Company's Amended and Restated Articles of Incorporation duly adopted by the affirmative vote of the holders of shares of the Company entitling them to exercise a majority of the voting power of the Company at the annual meeting of shareholders duly held on August 15, 1991: REVOLVED, that Article FOURTH of the Company's Amended and Restated Articles of Incorporation be, and the same hereby is, deleted in its entirety and there is substituting the following: FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 40,500,000 consisting of 40,000,000 common shares without par value and 500,000 nonvoting preferred shares without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any other series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the divided rate, (c) the dates of payment of dividends and the dates from which they are cumulative, -7- 8 (d) liquidation price, (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. Each common share shall entitle the holder thereof to one vote, in person or by proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. Subject to the preferences of any outstanding preferred shares, each common share shall be entitled to participate equally in such dividends as may be declared by the board of directors out of funds legally available therefor, and to participate equally in all distributions of assets upon liquidation. August 15, 1991 CARDINAL DISTRIBUTION, INC. By /s/ Robert D. Walter --------------------------- Robert D. Walter, Chairman By /s/ George H. Bennett, Jr. --------------------------- George H. Bennett, Jr., Assistant Secretary -8- 9 EXHIBIT A TO CERTIFICATE OF AMENDMENT TO AMENDED AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED OF CARDINAL DISTRIBUTION, INC. Resolved, that Article FIRST, of the Amended and Restated Articles of Incorporation, as amended, of Cardinal Distribution, Inc. be, and the same hereby is, deleted in its entirety and there is substituted therefor the following: FIRST: The name of the corporation shall be "Cardinal Health, Inc." Resolved, that Article FOURTH of the Amended and Restated Articles of Incorporation, as amended, of Cardinal Distribution, Inc. be, and the same hereby is, deleted in its entirety and there is substituted therefor the following: FOURTH: Section 1. AUTHORIZED SHARES. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 65,500,000, consisting of 60,000,000 common shares, without par value ("Class A Common Shares"), 5,000,000 Class B common shares, without par value ("Class B Common Shares") (the Class A Common Shares and the Class B Common Shares are sometimes referred to herein collectively as the "Common Shares"), and 500,000 nonvoting preferred shares, without par value. Section 2. ISSUANCE OF PREFERRED SHARES. The board of directors is authorized at any time, and from time to time, to provide for the issuance of nonvoting preferred shares in one or more series, and to determine to the extent permitted by law the designations, preferences, limitations, and relative or other rights of the nonvoting preferred shares or any series thereof. For each series, the board of directors shall determine, by resolution or resolutions adopted prior to the issuance of any shares thereof, the designations, preferences, limitations, and relative or other rights thereof, including but not limited to the following relative rights and preferences, as to which there may be variations among different series: (a) the division of such shares into series and the designation and authorized number of shares of each series, (b) the dividend rate, (c) the dates of payment of dividends and the dates from which they are cumulative, (d) liquidation price, (e) redemption rights and price, (f) sinking fund requirements, (g) conversion rights, and (h) restrictions on the issuance of such shares. Prior to the issuance of any shares of a series, but after adoption by the board of directors of the resolution establishing such series, the appropriate officers of the corporation shall file such documents with the State of Ohio as may be required by law including, without limitation, an amendment to these Articles of Incorporation. Section 3. COMMON SHARES. All common shares shall be identical and will entitle the holders thereof to the same rights and privileges, except as otherwise provided herein. A. VOTING RIGHTS. 1. CLASS A COMMON SHARES. Except as set forth herein or as otherwise required by law, each outstanding Class A Common Share shall entitle the holder thereof to one vote, in person or by -9- 10 proxy, at any and all meetings of the shareholders of the corporation, on all propositions before such meetings. 2. CLASS B COMMON STOCK. Except as set forth herein or as otherwise required by law, each outstanding Class B Common Share shall entitle the holder thereof to one-fifth (1/5) of one vote, in person or by proxy, at any and all meetings of shareholders of the corporation, on all propositions before such meetings. Notwithstanding the foregoing, holders of the Class B Common Shares shall be entitled to vote as a separate class on any amendment to this paragraph 2 of this Section A, on the issuance in the aggregate by the corporation of additional Class B Common Shares in excess of the number of Class B Common Shares held by Chemical Equity Associates and its Affiliates or issuable pursuant to Section 3(c) hereof and on any amendment, repeal or modification of any provision of these Articles that adversely affects the powers, preferences or special rights of the holders of the Class B Common Shares. B. DIVIDENDS; LIQUIDATION. Subject to the preferences of any preferred shares, each Common Share shall be entitled to participate equally in such dividends as may be declared by its board of directors out of funds legally available therefor or to participate equally in all distributions of assets upon liquidation; provided, that in the case of dividends payable in Common Shares of the Corporation, or options, warrants or rights to acquire such Common Shares, or securities convertible into or exchangeable for such Common Shares, the shares, options, warrants, rights or securities so payable shall be payable in shares of, or options, warrants or rights to acquire, or securities convertible into or exchangeable for, Common Shares of the same class upon which the dividend or distribution is being paid. C. CONVERSION. 1. CONVERSION OF CLASS A COMMON SHARES. Any Regulated Shareholder (defined below) shall be entitled to convert, at any time and from time to time, any or all of the Class A Common Shares held by such shareholder into the same number of Class B Common Shares. 2. CONVERSION OF CLASS B COMMON SHARES. Each holder of Class B Common Shares may convert such shares into Class A Common Shares if such holder reasonably believes that such converted shares will be transferred within fifteen (15) days pursuant to a Conversion Event (defined below) and such holder agrees not to vote any such Class A Common Shares prior to such Conversion Event and undertakes to promptly convert such shares back into Class B Common Shares if such shares are not transferred pursuant to a Conversion Event. Each Regulated Shareholder may provide for further restrictions or limitations upon the conversion of any Class B Common Shares by providing the corporation with signed, written instructions specifying such additional restrictions and legending such shares as to the existence of such restrictions. 3. CONVERSION PROCEDURE. Each conversion of Common Shares of the corporation into shares of another class of Common Shares of the Corporation shall be effected by the surrender of the certificate or certificates representing the shares to be converted (the "Converting Shares") at the principal office of the corporation (or such other office or agency of the corporation as the corporation may designate by written notice to the holders of common shares) at any time during its usual business hours, together with written notice by the holder of such Converting Shares, stating that such holder desires to convert the Converting Shares, or a stated number of the shares represented by such certificate or certificates, into an equal number of shares of the class into which such shares may be converted (the "Converted Shares"). Such notice shall also state the name or names (with addresses) and denominations in which the certificate or certificates for Converted Shares are to be issued and shall include instructions for the delivery thereof. Promptly after such surrender and the receipt of such written notice, the corporation will issue and deliver in accordance with the surrendering holder's intructions the certificate or certificates evidencing the Converted Shares issuable upon such conversion, and the corporation will deliver to the converting holder a certificate representing any shares which were represented by the certificate or certificates that were delivered to the corporation with such conversion, but which were not converted. -10- 11 Such conversion shall be deemed to have been effected as of the close of business on the date on which such certificate or certificates shall have been surrendered and such notice shall have been received by the corporation, and at such time the rights of the holder of the Converting Shares as such holder shall cease and the person or persons in whose name or names the certificate or certificates for the Converted Shares are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the Converted Shares. Upon issuance of shares in accordance with this Section C, such Converted Shares shall be deemed to be duly authorized, validly issued, fully paid and non-assessable. Each holder of Class B Common Shares shall be entitled to convert Class B Common Shares in connection with any Conversion Event if such holder reasonably believes that such Conversion Event will be consummated, and a written request for conversion from any holder of Class B Common Shares to the corporation stating such holder's reasonable belief that a Conversion Event shall occur shall be conclusive and shall obligate the corporation to effect such conversion in a timely manner so as to enable each such holder to participate in such Conversion Event. The corporation will not cancel the Class B Common Shares so converted before the 15th day following such Conversion Event and will reserve such shares until such 15th day for reissuance in compliance with the next sentence. If any Class B Common Shares are converted into Class A Common Shares in connection with a Conversion Event and such Class A Common Shares are not actually distributed, disposed of or sold pursuant to such Conversion Event, such Class A Common Shares shall be promptly converted back into the same number of Class B Common Shares. 4. STOCK SPLITS; ADJUSTMENTS. If the Corporation shall in any manner subdivide (by stock split, stock dividend or otherwise) or combine (by reverse stock split or otherwise) the outstanding Class A Common Shares or the Class B Common Shares, then the outstanding shares of each other class of common shares shall be subdivided or combined, as the case may be, to the same extent, share and share alike, and effective provision shall be made for the protection of the conversion rights hereunder. In the case of any reorganization, reclassification or change of shares of the Class A Common Shares or Class B Common Shares (other than a change in par value or from par to no par value as a result of a subdivision or combination), or in case of any consolidation of the corporation with one or more corporations or a merger of the corporation with another corporation (other than a consolidation or merger in which the corporation is the resulting or surviving corporation and which does not result in any reclassification or change of outstanding Class A Common Shares or Class B Common Shares), each holder of Class A Common Shares or Class B Common Shares shall have the right at any time thereafter, so long as the conversion right hereunder with respect to such share would exist had such event not occurred, to convert such share into the kind and amount of shares of stock and other securities and properties (including cash) receivable upon such reorganization, reclassification, change, consolidation or merger by a holder of the number of Class A Common Shares or Class B Common Shares into which such Class A Common Shares or Class B Common Shares, as the case may be, might have been converted immediately prior to such reorganization, reclassification, change, consolidation or merger. In the event of any such reorganization, reclassification, change, consolidation or merger which will have the effect of causing any Regulated Shareholder's direct or indirect ownership of shares of capital stock of the resulting or surviving corporation immediately following such transaction to equal or exceed 5% of the voting power thereof (calculated as if all such Regulated Shareholder's Class B Common Shares were converted to Class A Common Shares immediately prior to consummation of such transaction) then provision shall be made in the certificate of incorporation of the resulting or surviving corporation for the protection of the conversion rights of Class A Common Shares and Class B Common Shares that shall be applicable, as nearly as reasonably may be, to any such other shares of stock and other securities and property deliverable upon conversion of such Class A Common Shares or Class B Common Shares into which such Class A Common Shares or Class B Common Shares might have been converted prior to such event. -11- 12 5. RESERVATION OF SHARES. The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Shares and Class B Common Shares or its treasury shares, for the purpose of issuance upon the conversion of Class A Common Shares and Class B Common Shares, such number of shares of such class as are then issuable upon the conversion of all outstanding shares of Class A Common Shares and Class B Common Shares which may be converted. 6. NO CHARGE. The issuance of certificates for shares of any class of common shares upon conversion of shares of any other class of common shares shall be made without charge to the holders of such shares for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such conversion and the related issuance of common shares; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the holder of the common shares converted. D. As used herein, the following terms shall have the meanings shown below: 1. "AFFILIATES" shall mean with respect to any Person, any other person, directly or indirectly controlling, controlled by or under common control with such Person. For the purpose of the above definition, the term "control" (including with correlative meaning, the terms "controlling", "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. 2. "CONVERSION EVENT" shall mean (a) any public offering or public sale of securities of the Corporation (including a public offering registered under the Securities Act of 1933 and a public sale pursuant to Rule 144 of the Securities and Exchange Commission or any similar rule then in force), (b) any sale of securities of the corporation to a person or group of persons (withing the meaning of the Securities Exchange Act of 1934, as amended (the "1934 Act")) if, after such sale, such person or group of persons in the aggregate would own or control securities which possess in the aggregate the ordinary voting power to elect a majority of the corporation's directors (provided that such sale has been approved by the corporation's Board of Directors or a committee thereof), (c) any sale of securities of the corporation to a person or group of persons (within the meaning of the 1934 Act) if, after such sale, such person or group of persons in the aggregate would own or control securities of the corporation (excluding any Class B Common Shares being converted and disposed of in connection with such Conversion Event) which possess in the aggregate the ordinary voting power to elect a majority of the corporation's directors, (d) any sale of securities of the corporation to a person or group of persons (within the meaning of the 1934 Act) if, after such sale, such person or group of persons would not, in the aggregate, own, control or have the right to acquire more than two percent (2%) of the outstanding securities or any class of voting securities of the corporation (for purposes of this clause, treating Class A Common Stock and Class B Common Stock as a single class), and (e) a merger, consolidation or similar transaction involving the corporation if, after such transaction, a person or group of persons (within the meaning of the 1934 Act) in the aggregate would own or control securities which possess in the aggregate the ordinary voting power to elect a majority of the surviving corporation's directors (provided that the transaction has been approved by the corporation's Board of Directors or a committee thereof). 3. "PERSON" or "PERSON" shall mean an individual, a partnership, a corporation, a trust, a joint venture, an unincorporated organization or a government or any department or agency thereof. 4. "REGULATED SHAREHOLDER" shall mean Chemical Equity Associates and its Affiliates. -12- 13 CERTIFICATE OF AMENDMENT TO AMENDED AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED, OF CARDINAL HEALTH, INC. Robert D. Walter, Chairman, and George H. Bennett, Jr., Secretary, of Cardinal Health, Inc., an Ohio corporation (the "Company"), do hereby certify that a meeting of the shareholders of the Company was duly called and held on November 14, 1995, at which meeting a quorum of the shareholders was present in person or by proxy, and by the affirmative vote of holders of shares entitling them to exercise a majority of the voting power of the Company on a proposal to amend the Company's Amended and Restated Articles of Incorporation, as amended, the following resolution was duly adopted: Resolved, that Section 1 of Article FOURTH of the Amended and Restated Articles of Incorporation, as amended, of Cardinal Health, Inc. be, and the same hereby is, deleted in its entirety and there is substituted therefor the following: FOURTH: Section 1. Authorized Shares. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 105,500,000, consisting of 100,000,000 common shares, without par value ("Class A Common Shares"), 5,000,000 Class B common shares, without par value ("Class B Common Shares") (the Class A Common Shares and the Class B Common Shares are sometimes referred to herein collectively as the "Common Shares"), and 500,000 nonvoting preferred shares, without par value. IN WITNESS WHEREOF, Robert D. Walter, Chairman, and George H. Bennett, Jr., Secretary, of Cardinal Health, Inc., acting for and on its behalf, do hereunto subscribe their names this 14th day of November, 1995. /s/ Robert D. Walter ------------------------------ Robert D. Walter, Chairman /s/ George H. Bennett, Jr. ------------------------------ George H. Bennett, Jr. -13- 14 CERTIFICATE OF AMENDMENT TO AMENDED AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED, OF CARDINAL HEALTH, INC. Robert D. Walter, Chairman, and George H. Bennett, Jr., Secretary, of Cardinal Health, Inc., an Ohio corporation (the "Company"), do hereby certify that a meeting of the shareholders of the Company was duly called and held on October 29, 1996, at which meeting a quorum of the shareholders was present in person or by proxy, and by the affirmative vote of holders of shares entitling them to exercise a majority of the voting power of the Company on a proposal to amend the Company's Amended and Restated Articles of Incorporation, as amended, the following resolution was duly adopted; Resolved, that Section 1 of Article FOURTH of the Amended and Restated Articles of Incorporation, as amended, of Cardinal Health, Inc. be, and the same hereby is, deleted in its entirety and there is substituted therefor the following: FOURTH: Section 1. Authorized Shares. The maximum aggregate number of shares which the corporation is authorized to have outstanding is 155,500,000, consisting of 150,000,000 common shares, without par value ("Class A Common Shares"), 5,000,000 Class B common shares, without par value ("Class B Common Shares") (the Class A Common Shares and the Class B Common Shares are sometimes referred to herein collectively as the "Common Shares"), and 500,000 nonvoting preferred shares, without par value. IN WITNESS WHEREOF, Robert D. Walter, Chairman, and George H. Bennett, Jr., Secretary, of Cardinal Health, Inc., acting for and on its behalf, do hereunto subscribe their names this 29th day of October, 1996. /s/ Robert D. Walter ----------------------------------- Robert D. Walter, Chairman /s/ George H. Bennett, Jr. ------------------------------------- George H. Bennett, Jr., Secretary -14- EX-11.01 3 EXHIBIT 11.01 1
Exhibit 11.01 CARDINAL HEALTH, INC. COMPUTATION OF PER SHARE EARNINGS (In thousands, except per share amounts) Fiscal Quarter Ended Six Months Ended ------------------------------- -------------------------------- December 31, December 31, December 31, December 31, 1996 1995 1996 1995 --------------- --------------- --------------- --------------- PRIMARY: Net earnings $ 38,454 $ 26,542 $ 78,251 $ 58,458 =============== =============== =============== =============== Average shares outstanding 99,860 95,171 98,214 94,911 Dilutive effect of stock options 1,425 1,742 1,356 1,965 --------------- --------------- --------------- --------------- Weighted average number of Common Shares outstanding 101,285 96,913 99,570 96,876 =============== =============== =============== =============== Primary earnings per Common Share $ 0.38 $ 0.27 $ 0.79 $ 0.60 =============== =============== =============== =============== FULLY DILUTED: Net earnings $ 38,454 $ 26,542 $ 78,251 $ 58,458 =============== =============== =============== =============== Average shares outstanding 99,860 95,171 98,214 94,911 Dilutive effect of stock options 1,486 1,752 1,468 2,031 --------------- --------------- --------------- --------------- Weighted average number of Common Shares outstanding 101,346 96,923 99,682 96,942 =============== =============== =============== =============== Fully diluted earnings per Common Share $ 0.38 $ 0.27 $ 0.79 $ 0.60 =============== =============== =============== ===============
Page 13 EX-27 4 EXHIBIT 27
5 1,000 6-MOS JUN-30-1997 JUL-1-1996 DEC-31-1996 73,332 37,185 713,649 (34,332) 1,691,209 2,596,075 413,821 (163,915) 3,150,837 1,634,248 297,909 549,186 0 0 548,403 3,150,837 5,116,996 5,116,996 4,729,495 4,729,495 225,802 0 (13,933) 134,469 56,218 78,251 0 0 0 78,251 .79 .79
-----END PRIVACY-ENHANCED MESSAGE-----