FIRST AMENDMENT
to
RIGHTS AGREEMENT
--------------------------------
FIRST AMENDMENT dated as of October 8, 1998 (this "Amendment")
between Allegiance Corporation, a Delaware corporation (the "Company") and
First Chicago Trust Company of New York, a New York corporation (the "Rights
Agent").
WHEREAS, the above-mentioned parties have previously entered
into that certain Rights Agreement dated as of September 30, 1996, as amended
(the "Agreement");
WHEREAS, the Company will be entering into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of October 8, 1998, among
the Company, Cardinal Health, Inc., an Ohio corporation ("Cardinal") and Boxes
Merger Corp., a Delaware corporation and a direct, wholly owned subsidiary of
Cardinal ("Merger Subsidiary"), whereby Merger Subsidiary will merge with and
into the Company (the "Merger") upon the terms and subject to the conditions
set forth in the Merger Agreement;
WHEREAS, as a condition to Cardinal's entering into the Merger
Agreement, the Company has agreed to enter into the Stock Option Agreement,
dated as of October 8, 1998, between the Company and Cardinal;
WHEREAS, the Board of Directors deems it desirable and in the
best interests of its shareholders that the transactions contemplated by the
Merger Agreement be consummated;
WHEREAS, Section 4.23 of the Merger Agreement provides that,
the Company shall amend the Agreement to affirmatively provide that no "Stock
Acquisition Date", "Distribution Date" or "Triggering Event" shall occur and
neither Cardinal nor Merger Subsidiary shall become an "Acquiring Person" by
reason or as a result of the consummation of the Merger or any other
transactions contemplated by the Merger Agreement and that the Agreement will
terminate immediately prior to the consummation of the Merger;
WHEREAS, such parties wish to amend the Agreement in the manner
set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used herein, unless otherwise
defined herein, shall have the meanings given them in the Agreement, and
each reference in the Agreement to "this Agreement," "hereof," "herein,"
"hereunder" or "hereby" and each other similar reference shall be deemed to
refer to the Agreement as amended hereby. All references to the Agreement
in any other agreement between or among any of the parties hereto relating
to the transactions contemplated by the Agreement shall be deemed to refer
to the Agreement as amended hereby.
2. The definition of "Acquiring Person" in Section 1 is
hereby amended by replacing it in its entirety with the following:
"(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company,
or any Person organized, appointed or established by the Company for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of any acquisition of
shares of Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned
by such Person to 15% or more of the shares of Common Stock then outstanding;
PROVIDED, HOWEVER, that if a Person shall become the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares of Common Stock, then
such Person shall be deemed to be an "Acquiring Person"; PROVIDED FURTHER that
neither Cardinal nor Merger Subsidiary nor any of Cardinal's affiliates shall
become an Acquiring Person by reason or as a result of the Merger or any other
transactions contemplated by either the Merger Agreement or the Stock Option
Agreement. Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a person who would otherwise be an
"Acquiring Person" (as defined pursuant to the foregoing provisions of this
paragraph (a)) has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that
such person would no longer be an "Acquiring Person" (as defined pursuant to
the foregoing provisions of this paragraph (a)), then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement."
3. The definition of "Stock Acquisition Date" in Section 1
is hereby amended by replacing it in its entirety with the following:
"(l) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such; PROVIDED THAT no Stock Acquisition Date shall occur by reason
or as a result of the Merger or any other transactions contemplated by either
the Merger Agreement or the Stock Option Agreement."
4. The definition of "Triggering Event" in Section 1 is
hereby amended by replacing it in its entirety with the following:
"(n) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event; PROVIDED HOWEVER no Triggering Event shall occur by
reason or as a result of the Merger or any other transactions contemplated by
the Merger Agreement or the Stock Option Agreement."
5. The following definitions are hereby added to Section 1:
""Merger" means the merger of Merger Subsidiary with and into
the Company upon the terms and subject to the conditions set forth in the
Merger Agreement."
""Merger Agreement" means the Agreement and Plan of Merger,
dated as of October 8, 1998, among the Company, Merger Subsidiary and Cardinal
as the same may be amended pursuant to its terms."
""Merger Subsidiary" means Boxes Merger Corp., a Delaware
corporation and a direct, wholly owned subsidiary of Cardinal."
""Cardinal" means Cardinal Health, Inc., an Ohio corporation."
"Stock Option Agreement" means the Stock Option Agreement,
dated as of October 8, 1998, between the Company and Cardinal.
6. Section 3(a) is hereby amended by replacing it in its
entirety with the following:
"(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after the
Stock Acquisition Date occurs before the Record Date, the close of business on
the Record Date), or (ii) the close of business on the tenth business day (or
such later date as may be determined by action of the Board of Directors of
the Company prior to such time as any Person becomes an Acquiring Person)
after the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person organized,
appointed or established by the Company for or pursuant to the terms of any
such plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding (the earlier of (i) and (ii)
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Stock registered in the names of the holders
of the Common Stock (which certificates for Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company);
PROVIDED HOWEVER no Distribution Date shall occur by reason or as a result of
the Merger or any other transactions contemplated by the Merger Agreement or
the Stock Option Agreement. As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the records of
the Company, one or more Rights certificates, in substantially the form of
Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(p) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates."
7. A new Section 35 is hereby added reading in its entirety
as follows:
"This Agreement and the Rights established hereby will
terminate in all respects immediately prior to the consummation of the
Merger."
8. This Amendment shall be shall be governed by and
construed in accordance with the laws of Delaware.
9. This Amendment may be signed in any number of
counterparts, each of which shall be deemed an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
10. Except as expressly amended hereby, the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
respective authorized officers of the parties hereto, in each case as of the
day and year first above written.
ALLEGIANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
