Item 8.01. Other Events.
In June 2019, Melissa Cohen, a purported shareholder of Cardinal Health, Inc.
(the "Company"), filed an action on behalf of the Company in the U.S. District
Court for the Southern District of Ohio against certain current and former
members of the Company's Board of Directors alleging that the defendants
breached their fiduciary duties by failing to effectively monitor the Company's
distribution of controlled substances and approving certain payments of
executive compensation. In December 2019 and January 2020, similar complaints
were filed in the U.S. District Court for the Southern District of Ohio by
purported shareholders, Stanley M. Malone and Michael Splaine, respectively. In
January 2020, the court consolidated these cases under the caption In re
Cardinal Health, Inc. Derivative Litigation (the "Derivative Action"). In
February 2021, the court dismissed the claim with respect to executive
compensation but declined to dismiss the failure to monitor claim.
In December 2021, the parties reached an agreement in principle to resolve the
Derivative Action ("Settlement") and in July 2022, the court granted preliminary
approval of the Settlement. Subject to final approval by the court, as part of
the Settlement, the Company's director and officer's liability insurance
carriers, on behalf of the defendants, will pay the Company $124 million, less
any attorneys' fees and expenses awarded by the court to plaintiffs' counsel.
The Settlement does not include any admission of liability.
The Company today provided notice to its stockholders of the Settlement in the
form of a press release as well as this Current Report on Form 8-K, as required
by the terms of the Settlement. The terms and conditions of the Settlement are
set forth in the Stipulation and Agreement of Compromise, Settlement, and
Release ("Stipulation") and the Notice to Cardinal Health, Inc. Stockholders of
Proposed Settlement of Stockholder Derivative Action, Settlement Hearing, and
Right to Appear ("Notice").
Copies of the Stipulation and Notice are attached hereto as Exhibits 99.1 and
99.2 and are incorporated by reference herein. A copy of the news release issued
by the Company is attached hereto as Exhibit 99.3.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
99.1 Stipulation and Agreement of Compromise, Settlement, and Release
99.2 Notice to Cardinal Health, Inc. Stockholders of Proposed Settlement of
Stockholder Derivative Action, Settlement Hearing, and Right to Appear
99.3 News release issued by Cardinal Health, Inc. on July 22, 2022
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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 hereunto duly authorized.
Cardinal Health, Inc.
(Registrant)
Date: July 22, 2022 By: /s/ JESSICA L. MAYER
Jessica L. Mayer
Chief Legal and Compliance Officer
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