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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 3
INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person
Cardinal Health, Inc.
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(Last) (First) (Middle)
5555 Glendon Court
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(Street)
Dublin, Ohio 43016
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(City) (State) (Zip)
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2. Date of Event Requiring Statement (Month/Day/Year)
10/08/98
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3. IRS Identification Number of Reporting Person (Voluntary)
31-0958666
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4. Issuer Name and Ticker or Trading Symbol
Allegiance Corporation, AEH
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5. Relationship of Reporting Person to Issuer
(Check all applicable)
[ ] Director [ X ] 10% Owner
[ ] Officer (give title below) [ ] Other (specify below)
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6. If Amendment, Date of Original (Month/Year)
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Table I -- Non-Derivative Securities Beneficially Owned
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<TABLE>
<CAPTION>
3. Ownership Form:
2. Amount of Securities Direct (D) or
1. Title of Security Beneficially Owned Indirect (I) 4. Nature of Indirect Beneficial Ownership
(Instr. 4) (Instr. 4) (Instr. 5) (Instr.4)
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<S> <C> <C> <C>
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</TABLE>
Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly.
(Print or Type Responses)
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FORM 3 (continued)
Table II -- Derivative Securities Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
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<TABLE>
<CAPTION>
5. Owner-
3. Title and Amount of Securities ship
Underlying Derivative Security Form of
2. Date Exercisable (Instr. 4) Derivative
and Expiration Date --------------------------------- 4. Conver- Security:
(Month/Day/Year) Amount sion or Direct 6. Nature of
---------------------- or Exercise (D) or Indirect
Date Expira- Number Price of Indirect Beneficial
1. Title of Derivative Exer- tion of Derivative (I) Ownership
Security (Instr. 4) cisable Date Title Shares Security (Instr.5) (Instr. 5)
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<S> <C> <C> <C> <C> <C> <C> <C>
Option to purchase (1) (1) Common Stock 22,284,538 (1) D
shares of Common Stock,
par value $1.00 per share.
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</TABLE>
Explanation of Responses:
(1) Pursuant to the Stock Option Agreement, dated as of October 8, 1998 (the
"Stock Option Agreement"), by and between Cardinal Health, Inc., an Ohio
corporation ("Cardinal"), and Allegiance Corporation, a Delaware
corporation ("Allegiance"), Allegiance granted Cardinal an option (the
"Option") to purchase from Allegiance, under certain circumstances and
subject to certain adjustments, up to 22,284,538 authorized and unissued
shares of Allegiance Common Stock at a price per share equal to the lower
of (x) $38.46 or (y) the Exchange Ratio under the Agreement and Plan of
Merger, dated as of October 8, 1998, by and among Cardinal, Boxes Merger
Corp., a Delaware corporation and a wholly owned subsidiary of Cardinal,
and Allegiance Corporation (the "Merger Agreement"), multiplied by the
average of the closing prices (or if such securities should not trade on
any trading day, the average of the bid and asked prices therefor on such
day) of such Cardinal common shares, without par value ("Cardinal Common
Shares") as reported on the New York Stock Exchange ("NYSE") Composite Tape
during the five consecutive trading days ending on (and including) the
trading day immediately prior to such date (or, if such Cardinal Common
Shares are not traded on the NYSE, on such other exchange or quotation
system on which such Cardinal Common Shares are then traded).
The Option is exercisable, in whole or in part, at any time or from time to
time if a Purchase Event (as defined in the Stock Option Agreement) has
occurred; provided, however, that, to the extent the Option shall not have
been exercised, it shall terminate and be of no further force and effect
upon the earliest to occur of: (i) the Effective Time of the Merger (as
defined in the Merger Agreement); (ii) if no Purchase Event has occurred
and the Merger Agreement is terminated in accordance with its terms
pursuant to Section 7.1(a), Section 7.1(b), Section 7.1(c) (if the
termination is by Allegiance because of a failure by Cardinal or an
affiliate of Cardinal to perform any material covenant or obligation under
the Merger Agreement, which failure has been the cause of, or resulted in,
the failure of the Merger to occur on or before May 15, 1999), Section
7.1(f), Section 7.1(i), Section 7.1(j), or Section 7.1(k) of the Merger
Agreement, then at the time of such termination; (iii) if a Purchase Event
has occurred pursuant to Section 3(b)(iv) of the Stock Option Agreement and
the Merger Agreement is terminated in accordance with its terms pursuant to
Section 7.1(e) thereof, then at 5:00 p.m. New York City time on the date
which is twelve months after such termination; or (iv) if a Purchase Event
occurs other than pursuant to Section 3(b)(iv) of the Stock Option
Agreement, then at 5:00 p.m. New York City time, on the date that is 135
days following the occurrence of the earliest Purchase Event; and provided,
further, that if the Option cannot be exercised before its date of
termination as a result of any injunction, order or similar restraint
issued by a court of competent jurisdiction, the Option shall expire on the
tenth business day after such injunction, order or restraint shall have
been dissolved or when such injunction, order or restraint shall have
become permanent and no longer subject to appeal, as the case may be, but
in no event later than twelve months after the occurrence of a Purchase
Event. As of the date hereof, the Option is not exercisable.
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** Intentional misstatements or omissions of facts constitute Federal Criminal
Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
October 19, 1998
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CARDINAL HEALTH, INC. Date
By: George H. Bennett, Jr.
Executive Vice President, General Counsel
and Secretary
