Exhibit 10.01
CARDINAL DISTRIBUTION, INC
STOCK INCENTIVE PLAN
SECTION 1. PURPOSES OF PLAN.
The purposes of the Stock Incentive Plan (the "Plan") of Cardinal
Distribution, Inc. (the "Company") are to advance the interests of the Company
and its shareholders by providing a means of attracting and retaining key
employees for the Company and its subsidiaries, providing key employees with a
proprietary interest in the Company, and stimulating the interest of key
employees in the development and financial success of the Company.
SECTION 2. ADMINISTRATION OF PLAN.
The Plan shall be administered by the Company's Compensation Committee
(the "Committee") which shall consist of not less than three directors of the
Company appointed by the Company's Board of Directors (the "Board"). The members
of the Committee shall serve at the pleasure of the Board, which may remove
members from the Committee or appoint new members to the Committee from time to
time, and members of the Committee may resign by written notice to the Chairman
of the Board or the Secretary of the Company. Each member of the Committee shall
be a "disinterested person" within the meaning of Rule 16b-3 under the
Securities and Exchange Act of 1934. The Committee may adopt any rules it
considers appropriate for the conduct of its business or the administration of
the Plan, make interpretations of the Plan which it deems consistent with the
Plan's provisions, take any other actions it considers appropriate in connection
with the Plan, and shall have such additional authority as the Board may
determine to be desirable from time to time.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any award under the
Plan. The members of the Committee and other members of the Board shall be
indemnified by the Company against all costs and expenses reasonably incurred by
them in connection with any action, suit, or proceeding to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any award granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by legal counsel selected by the Company) or paid by them in satisfaction of a
judgment in any such action, suit, or proceeding, except a judgment based upon a
finding of bad faith. Upon the institution of any such action, suit, or
proceeding, the Board or Committee member shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof at
its expense. The provisions of this paragraph with respect to the liability and
indemnification of members of the Board and the Committee are in addition to,
and not in limitation of, the provisions with respect to the liability and
indemnification of members of the Board and the Committee (a) contained in the
Articles of Incorporation or Code of Regulations of the Company, (b) contained
in any indemnification agreements between Directors and the Company, or (c)
provided by law.
SECTION 3. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Common Shares, without par value, of the
Company (the "Shares") with respect to which awards may be made under the Plan
shall be 300,000 Shares. Such Shares may be authorized but unissued Shares or
issued Shares reacquired by the Company and held as treasury Shares. If any
Shares awarded under the Plan are forfeited or an option for Shares granted
under the Plan expires or terminates such forfeited Shares and the Shares
subject to such expired or terminated
option shall again be available to be awarded under the Plan. The aggregate
number of Shares shall be subject to adjustment under Section 6.
SECTION 4. PARTICIPANTS IN PLAN.
The persons eligible to receive awards under the Plan ("Eligible Persons")
shall include officers and other key employees of the Company or its subsidiary
corporations and in the case of Nonqualified Options and Restricted Shares,
directors of subsidiaries of the Company who, in the opinion of the Committee,
have responsibilities affecting the management, development, or financial
success of the Company or one or more of its subsidiary corporations.
SECTION 5. AWARDS.
(a) GENERAL TERMS AND CONDITIONS OF AWARDS. The Committee shall have the
authority to make awards of the following: (i) options for Shares intended to
qualify as incentive stock options under Section 422A of the Internal Revenue
Code of 1986 (the "Code"), as provided in Section 5(b) ("Incentive Options")
(ii) options for Shares not intended to qualify as incentive stock options under
Section 422A of the Code as provided in Section 5(c) ("Nonqualified Options")
(Incentive Options and Nonqualified Options collectively, "Options"), and (iii)
contingent awards of Shares as provided in Section 5(d) ("Restricted Shares").
The Committee shall designate from time to time, in its discretion, the Eligible
Persons to whom awards shall be granted (such persons, "Grantees") under the
Plan, the number of Shares which shall be subject of each award under the Plan
and the terms and conditions under which an award is made under the Plan. All
actions of the Committee under this section shall be conclusive, and no Eligible
Person shall have a right to any award unless, and except to the extent, so
designated by the Committee.
(b) INCENTIVE OPTIONS. Only officers and other key employees of the
Company or its subsidiary corporations shall be eligible for awards of Incentive
Options. The aggregate fair market value (determined at the time of the grant of
the Option) of the Shares with respect to which Incentive Options are
exercisable for the first time by any Eligible Person during any calendar year
(under all incentive stock option plans of his employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. All Incentive
Options granted under the Plan shall be granted within 10 years from the date
the Plan is adopted or the date the Plan is approved by the shareholders of the
Company, whichever is earlier. The Committee may, as a condition of granting any
Option, require that a Grantee agree to surrender for cancellation one or more
Options previously granted to such Grantee. Each Incentive Option granted
pursuant to the Plan shall be authorized by the Committee and shall be evidenced
by a written Incentive Option Agreement, in form approved by the Committee,
which shall be dated as of the date on which the Option is granted, signed by an
officer of the Company authorized by the Committee, and signed by the Grantee.
The date on which the Committee approves the granting of the Incentive Option
shall be deemed the date on which the Incentive Option is granted. The Incentive
Option Agreement shall be consistent with the Plan, and shall include, without
limitation, the following provisions:
(i) TERM. An Incentive Option, by its terms, shall not be
exercisable after the expiration of 10 years from the date an Incentive
Option is granted. If the Grantee, at the time the Option is granted, owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the employer corporation or its parent or subsidiary
corporation, the Option shall not be exercisable after the expiration of
five years from the date the Option is granted.
(ii) PURCHASE PRICE. The option price of Shares subject to an
Incentive Option shall be not less than the fair market value of the
Shares at the time the Incentive Option is granted. If
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the Grantee, at the time the Incentive Option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes
of stock of the employer corporation or its parent or a subsidiary
corporation, the option price shall be at least 110% of the fair market
value of the Shares subject to the Incentive Option. For purposes of this
Section 5(b)(ii), the fair market value of the Shares subject to the
Incentive Option shall be the last sale price of the Shares as reported on
the National Association of Securities Dealers Automated Quotation System,
National Market Issues, or, if the Shares are listed or admitted for
trading on any national securities exchange, the last sale price, or the
closing bid price if no sale occurred, on the date the Incentive Option is
awarded.
(iii) TRANSFERABILITY. The Incentive Option, by its terms, shall not
be transferable by the Grantee other than by will or the laws of descent
and distribution. During the lifetime of the Grantee, the Incentive
Option, by its terms, shall be exercisable (subject to any other
applicable restrictions on exercise) only by the Grantee for his own
account. Upon the death of the Grantee, the Incentive Option shall be
exercisable (subject to any other applicable restrictions on exercise)
only by the executor or administrator of the Grantee's estate.
(iv) METHOD OF EXERCISE. To the extent that the right to exercise
the Incentive Option has accrued under the restrictions, if any, in the
Incentive Option Agreement, the Incentive Option shall be exercisable from
time to time by written notice to the Company stating the number of Shares
with respect to which the Incentive Option is being exercised and the time
during normal business hours for delivery of those Shares, which shall be
more than 15 and less than 30 days after exercise of the Incentive Option.
At the specified time, the Company shall deliver a certificate for such
Shares to the Grantee, at the principal office of the Company, upon
receipt of payment of the full purchase price for such Shares: (a) by
certified or bank cashier's check, or (b) in the discretion of the
Committee, by delivery of Shares with a fair market value equal to the
total option price at the time of exercise, or (c) in the discretion of
the Committee, by a combination of the preceding two methods.
(v) TERMINATION OF EMPLOYMENT. Except as otherwise provided in
Section 9, if the Grantee ceases to be an employee of Company or any of
its subsidiary corporations by reason of his death, disability,
retirement, resignation, replacement or any other reason, then the
Incentive Option or any unexercised portion of the Incentive Option which
otherwise is exercisable shall terminate unless it is exercised within
three months after the date the Grantee ceases to be such an employee (but
in no event after expiration of the original term of the Option); provided
that if the Grantee ceases to be such an employee by reason of the
Grantee's death, the three-month period shall instead be a one-year
period.
(vi) RESTRICTIONS. At the time the Incentive Option is granted, the
Committee may determine that the Shares subject to the Incentive Option
shall, upon issuance, be restricted as to transferability or be subject to
repurchase by the Company upon occurrence of certain events determined by
the Committee, in its discretion, and specified in the Incentive Option
Agreement.
(vii) DESIGNATION AS INCENTIVE STOCK OPTION. A provision identifying
the Incentive Option as a stock option intended to qualify as an incentive
stock option under 422A of the Code.
(c) NONQUALIFIED OPTIONS. Each Nonqualified Option granted pursuant to the
Plan shall be authorized by the Committee and shall be evidenced by a written
Nonqualified Option Agreement, in form approved by the Committee, which shall be
dated as of the date on which the Nonqualified Option is granted, signed by an
officer of the Company authorized by the Committee, and signed by the Grantee.
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The date on which the Committee approves the granting of a Nonqualified Option
shall be deemed the date on which the Nonqualified Option is granted. The
Committee may, as a condition of granting any Option, require that a Grantee
agree to surrender for cancellation one or more Options previously granted to
such Grantee. The Nonqualified Option Agreement shall be consistent with the
Plan, and shall include, without limitation, the following provisions:
(i) TERM. The Nonqualified Option shall not be exercisable after the
expiration of 11 years from the date the Nonqualified Option is granted.
(ii) PURCHASE PRICE. The option price shall be any price so
determined by the Committee.
(iii) TRANSFERABILITY. The Nonqualified Option shall not be
transferable by the Grantee other than by will or the laws of descent and
distribution. During the lifetime of the Grantee, the Nonqualified Option
shall be exercisable (subject to any other applicable restrictions on
exercise) only by the Grantee for his own account. Upon the death of the
Grantee, the Nonqualified Option shall be exercisable (subject to any
other applicable restrictions on exercise) only by the executor or
administrator of the Grantee's estate.
(iv) METHOD OF EXERCISE. To the extent that the right to exercise
the Nonqualified Option has accrued under the restrictions, if any, in the
Nonqualified Option Agreement, the Nonqualified Option shall be
exercisable from time to time by written notice to the Company stating the
number of Shares with respect to which the Nonqualified Option is being
exercised and the time during normal business hours for delivery of those
Shares, which shall be more than 15 and less than 30 days after exercise
of the Nonqualified Option. At the specified time, the Company shall
deliver a certificate for such Shares to the Grantee, at the principal
office of the Company, upon receipt of payment of the full purchase price
for such Shares: (a) by certified or bank cashier's check, or (b) in the
discretion of the Committee, by delivery of Shares with a fair market
value equal to the total option price at the time of exercise, or (c) in
the discretion of the Committee, by a combination of the preceding two
methods.
(v) TERMINATION OF RELATIONSHIP. Except as provided in Section 9, if
the Grantee ceases to be an officer or employee of the Company or any of
its subsidiary corporations or a director of a subsidiary corporation of
the Company by reason of his death, disability, retirement, resignation,
replacement, or any other reason, then the Nonqualified Option or any
unexercised portion of the Nonqualified Option which otherwise is
exercisable shall terminate unless it is exercised within three months
after the date the Grantee ceases to be such an officer, employee or
director (but in no event after expiration of the original term of the
Nonqualified Option); provided that if the Grantee ceases to be such
an officer, employee or director by reason of the Grantee's death, the
three-month period shall instead be a one-year period.
(vi) RESTRICTED STOCK. At the time the Nonqualified Option is
granted, the Committee may determine that the Shares subject to the Option
shall, upon issuance, be restricted as to transferability or be subject
to repurchase by the Company upon occurrence of certain events determined
by the Committee, in its discretion, and specified in the Nonqualified
Option Agreement.
(vii) DESIGNATION AS NONQUALIFIED STOCK OPTION. A provision
identifying the Nonqualified Option as a stock option not intended to
qualify as an incentive stock option under Section 422A of the Code.
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(d) RESTRICTED SHARES. Restricted Shares granted pursuant to the Plan
shall be authorized by the Committee and shall be evidenced by a written
Restricted Shares Agreement, in form approved by the Committee, which shall be
dated as of the date on which the Restricted Shares are granted, signed by an
officer of the Company authorized by the Committee, and signed by the Grantee.
The date on which the Committee approves the granting of Restricted Shares shall
be deemed the date on which the Restricted Shares are granted. At the time of an
award of Restricted Shares, the Committee shall establish a period of time with
respect to such Restricted Shares (the "Restricted Period") during which or at
the expiration of which such Restricted Shares shall vest in the Grantee. The
Restricted Shares Agreement shall be consistent with the Plan and shall include,
without limitation, the following provisions:
(i) PURCHASE PRICE. The purchase price, if any, of the Restricted
Shares shall be any price so determined by the Committee.
(ii) SHAREHOLDER RIGHTS. Grantees of Restricted Shares under the
Plan shall generally have all rights of shareholders with respect to such
Shares from the date of their award including, without limitation, the
right to receive dividends with respect to such Shares and the right to
vote such Shares but subject, however, to those restrictions placed on
such Shares pursuant to this Plan and as specified by the Committee in the
Restricted Shares Agreement. If the Grantee's Continuous Service (as
hereinafter defined) terminates prior to the date the Restricted Shares
(or any portion thereof) vest, then those unvested Restricted Shares shall
be forfeited and returned to the Company, subject to the provisions of
Section 5(d)(iii) or Section 14, below.
(iii) TRANSFERABILITY. During any applicable Restricted Period, the
Restricted Shares shall not be transferable by the Grantee other than by
will or the laws of descent and distribution. If a Grantee ceases to
maintain Continuous Service (as hereinafter defined) by reason of the
Grantee's death or total or partial disability, then the restrictions with
respect to a ratable portion of the Restricted Shares shall lapse and such
Shares shall be free of restrictions and shall not be forfeited unless the
Committee has specified to the contrary in the Restricted Shares
Agreement. Such ratable portion shall be determined with respect to each
separate award of Restricted Shares and shall be equal to (i) the number
of Restricted Shares awarded to the Grantee multiplied by the portion of
the Restricted Period that had expired at the date of the Grantee's death
or total or partial disability, reduced by (ii) the number of Restricted
Shares awarded with respect to which the restrictions had lapsed as of the
date of the death or total or partial disability of the Grantee. For
purposes of the Plan, "Continuous Service" shall mean the absence of any
interruption or termination of service as an employee of the Company or a
subsidiary of the Company or as a director of a subsidiary of the Company.
At the time the Restricted Shares are awarded, the Committee may determine
that such Shares shall, after vesting, be further restricted as to
transferability or be subject to repurchase by the Company upon occurrence
of certain events determined by the Committee, in its discretion, and
specified in the Restricted Shares Agreement.
SECTION 6. CHANGE IN CAPITAL STRUCTURE.
In the event the Company changes its outstanding Shares by reason of stock
splits, stock dividends, or any other increase or reduction of the number of
outstanding Shares without receiving consideration in the form of money,
services, or property, the aggregate number of Shares subject to the Plan shall
be proportionately adjusted and the number of Restricted Shares awarded and the
number of Shares and the option price for each Share subject to the unexercised
portion of any then-outstanding Option shall be proportionately adjusted with
the objective that the Grantee's proportionate interest in the Company shall
remain the same as before the change and, with respect to outstanding Options,
without any change in the total option price applicable to the unexercised
portion of such Options.
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In the event of any other recapitalization or any merger, consolidation,
or other reorganization of the Company, the Committee shall make such
adjustment, if any, as it may deem appropriate to accurately reflect the number
and kind of Shares deliverable, and the option prices payable, upon subsequent
exercise of any then-outstanding Options.
The Committee's determination of the adjustments appropriate to be made
under this Section 6 shall be conclusive upon all Grantees and other
participants under the Plan. Notwithstanding anything in this Section 6 to the
contrary, any adjustment made under this Section 6 with respect to Incentive
Options shall be made in a manner that will not constitute a "modification"
within the meaning defined in Section 425 of the Code.
SECTION 7. DELIVERY AND REGISTRATION OF STOCK.
The Company's obligation to deliver Shares with respect to an award shall,
if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Grantee to whom such Shares
are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of the Securities Act of
1933 or any other applicable federal or state securities legislation. It may be
provided that any representation requirement shall become inoperative upon a
registration of the Shares or other action eliminating the necessity of such
representation under such Securities Act or other securities legislation. The
Company shall not be required to deliver any Shares under the Plan prior to (i)
the admission of such Shares to listing on any stock exchange or system on which
Shares may then be listed, and (ii) the completion of such registration or other
qualification of such Shares under any state or federal law, rule or regulation,
as the Committee shall determine to be necessary or advisable. Each certificate
for Shares issued pursuant to the Plan shall be registered in the name of the
Grantee, shall bear appropriate legend(s) with respect to the restrictions upon
such Shares and shall, with respect to Restricted Shares, be deposited by the
Grantee together with a stock power endorsed in blank with the Company until
such time as all of such Restricted Shares have vested in the Grantee thereof.
SECTION 8. EFFECT OF CHANGE IN CONTROL.
If the Continuous Service of a Grantee is involuntarily terminated, for
whatever reason, at any time within 18 months after a Change in Control (as
hereinafter defined) then, unless with respect to a Grantee the Committee shall
have otherwise provided in the agreement pursuant to which an award under the
Plan was made to such Grantee, all Shares awarded as Restricted Shares shall
thereupon become fully vested in such Grantee to whom such Shares were awarded.
If a tender offer or exchange offer for Shares (other than such an offer by the
Company or approved by the Company's Board of Directors) is commenced, or if the
event specified in clause (iii) of the definition of a Change in Control shall
occur and shall not have been approved by the Company's Board of Directors,
unless with respect to a Grantee the Committee shall have otherwise provided in
the agreement evidencing the grant of an Option to such Grantee, all Options
theretofore granted and not fully exercisable shall (except as otherwise
provided in Section 5(b)) thereupon become exercisable in full upon the
happening of such event and shall remain so exercisable in accordance with their
terms; provided, however, that no Option shall be exercisable by an officer of
the Company within six months of the date of grant of such Option and no Option
which has previously been exercised or otherwise terminated shall become
exercisable. "Change in Control" means each of the events specified in the
following clauses (i) through (iii): (i) any third person, including a "group"
as defined in Section 13(d)(3) of the Securities Exchange Act of 1934 shall,
after the date of the adoption of the Plan by the Board, first become the
beneficial owner of shares of the Company with respect to which 25% or more of
the total number of votes for the election of the Board may be cast, (ii) as a
result of, or in connection with, any cash tender offer, exchange offer, merger
or other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who shall
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cease to constitute a majority of the Board of Directors of the Company or (iii)
the stockholders of the Company shall approve an agreement providing either for
a transaction in which the Company will cease to be an independent publicly
owned entity or for a sale or other disposition of all or substantially all the
assets of the Company; provided, however, that the occurrence of any of such
events shall not be deemed a Change in Control if, prior to such occurrence, a
resolution specifically approving such occurrence shall have been adopted by the
Company's Board of Directors.
SECTION 9. TERMINATION FOR CAUSE.
Notwithstanding any provision to the contrary in the Plan or in any
agreement in respect of an award under the Plan, upon the discharge for cause of
any Grantee, all unexercised Options awarded to such Grantee shall lapse.
SECTION 10. WITHHOLDING TAX.
The Company shall have the right to require the Grantee of Restricted
Shares or other person receiving such Shares to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares
or, in lieu thereof, to retain, or sell without notice, a sufficient number of
such Shares held by it to cover the amount required to be withheld. The Company
shall have the right to deduct from all dividends paid with respect to
Restricted Shares the amount of any taxes which the Company is required to
withhold with respect to such dividend payments.
The Company shall also have the right to require a Grantee who is entitled
to receive Shares pursuant to the exercise of an Option to pay to the Company
the amount of any taxes which the Company is required to withhold with respect
to such Shares, or, in lieu thereof, to retain, or sell without notice, a number
of such Shares sufficient to cover the amount required to be withheld.
SECTION 11. LOANS.
(a) The Company may make loans to a Grantee in connection with Restricted
Shares, or in connection with the exercise of Options, subject to the following
terms and conditions and such other terms and conditions not inconsistent with
the Plan, including the rate of interest, if any, as the Committee shall impose
from time to time.
(b) No loan made under the Plan shall exceed:
(1) With respect to Options, the sum of (i) the aggregate option
price payable upon exercise of the Option with respect to which the loan
is made, plus (ii) the amount of the reasonably estimated income taxes
payable by the Grantee.
(2) With respect to Restricted Shares, the amount of the reasonably
estimated income taxes payable by the Grantee.
In no event may any such loan exceed the market value of the Shares in respect
of which the loan is made at the time of the loan. Loans under the Plan may be
satisfied by the Grantee, as determined by the Committee, in cash or, with the
consent of the Committee, in whole or in part in Shares.
SECTION 12. NO ENLARGEMENT OF EMPLOYMENT RIGHTS.
The award of Shares under the Plan to an employee of the Company or any of
its subsidiaries shall not confer any right to the employee to continue in the
employ of the Company or any such
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subsidiary and shall not restrict or interfere in any way with the right of his
employer to terminate his employment, with or without cause, at any time. The
award of Shares under the Plan to a director of a subsidiary of the Company
shall not confer any right to such director to continue as a director of a
subsidiary of the Company and shall not restrict or interfere in any way with
the right of the shareholder of such Company to terminate such directorship,
with or without cause, at any time.
SECTION 13. RIGHTS AS SHAREHOLDER.
No Grantee or his executor or administrator shall have any rights of a
shareholder in the Company with respect to the Shares covered by an Option
unless and until a certificate representing such Shares has been duly issued and
delivered to him under the Plan.
SECTION 14. ACCELERATION OF RIGHTS.
The Committee shall have the authority, in its discretion, to accelerate
the time at which an Option shall be exercisable and to accelerate the time at
which any or all of the restrictions shall lapse with respect to any Restricted
Shares or to remove any or all of such restrictions, whenever it may determine
that such action is appropriate by reason of changes in applicable tax or other
laws or other changes in circumstances occurring after the award of such Options
or of Restricted Shares.
SECTION 15. DEFINITION OF SUBSIDIARY.
The term "subsidiary corporation" when used in the Plan or any stock
option agreement made pursuant to the Plan means a subsidiary corporation as
defined in Section 425 of the Code.
SECTION 16. AMENDMENT OR TERMINATION OF PLAN.
The Board may amend or terminate the Plan at any time, but: (a) no such
amendment or termination shall affect the rights of a Grantee with respect to a
prior award under the Plan without the consent of the Grantee, and (b) no such
amendment shall be made without the approval of the shareholders of the Company
whenever such approval would be required with respect to Incentive Options to
preserve the status of the Plan as an incentive stock option plan And the
qualification of any Options as incentive stock options under Section 422A of
the Code, including (i) an increase in the maximum number of shares that may be
subject to Incentive Options (unless necessary to effect the adjustments
required under Section 6), (ii) an increase in the benefits to any Grantee under
the Plan or (iii) a modification in the requirements for eligibility under the
Plan.
SECTION 17. GOVERNMENT REGULATIONS.
Notwithstanding any provisions of the Plan or any agreement made pursuant
to the Plan, the Company's obligations under the Plan and such agreement shall
be subject to all applicable laws, rules and regulations and to such approvals
as may be required by any governmental or regulatory agencies.
SECTION 18. GOVERNING LAW.
The Plan shall be construed and governed by the laws of the State of Ohio.
With respect to Incentive Options, the intention of the Plan is to qualify such
Incentive Options as issued pursuant to an incentive stock option plan under
Section 422A of the Code, and the Plan and any Incentive Option Agreements shall
be construed consistently with that intention to the extent possible.
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SECTION 19. GENDERS AND NUMBERS.
When permitted by the context, each pronoun used in the Plan includes the
same pronoun in other genders and numbers.
SECTION 20. CAPTIONS.
The captions of the various sections of the Plan are not part of the
context of the Plan, but are only labels to assist in locating those sections,
and shall be ignored in construing the Plan.
SECTION 21. EFFECTIVE DATE.
The Plan shall be effective July 10, 1987. The Plan shall be submitted to
the shareholders of the Company for approval and ratification as soon as
practicable but in any event not later than 12 months after the Plan has been
adopted. If the Plan is not approved and ratified by the shareholders of the
Company within 12 months after the Plan has been adopted, the Plan and all
Incentive Options granted under the Plan shall become null and void and have no
further force or effect.
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FIRST AMENDMENT TO CARDINAL DISTRIBUTION, INC.
STOCK INCENTIVE PLAN
The Cardinal Distribution, Inc. Stock Incentive Plan (the "Plan") is
hereby amended by deleting in its entirety Section 3 of the Plan and
substituting in its place a new Section 3 as follows:
SECTION 3. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Common Shares, without par value, of the
Company (the "Shares") with respect to which awards may be made under the Plan
shall be 750,000 Shares. Such Shares may be authorized but unissued Shares or
issued Shares reacquired by the Company and held as treasury Shares. If any
Shares awarded under the Plan are forfeited or an option for Shares granted
under the Plan expires or terminates such forfeited Shares and the Shares
subject to such expired or terminated option shall again be available to be
awarded under the Plan. The aggregate number of Shares shall be subject to
adjustment under Section 6.
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SECOND AMENDMENT TO CARDINAL DISTRIBUTION, INC.
STOCK INCENTIVE PLAN
The Cardinal Distribution, Inc. Stock Incentive Plan (the "Plan") is
hereby amended effective as of May 19, 1993 by deleting in its entirety Section
3 of the Plan and substituting in its place a new Section 3 as follows:
SECTION 3. SHARES SUBJECT TO PLAN.
The maximum aggregate number of Common Shares, without par value, of the
Company (the "Shares") with respect to which awards may be made under the plan
shall be 2,500,000 Shares. Such Shares may be authorized but unissued Shares or
issued Shares reacquired by the Company and held as treasury Shares. If any
Shares awarded under the Plan are forfeited or an option for Shares granted
under the Plan expires or terminates such forfeited Shares and the Shares
subject to such expired or terminated option shall again be available to be
awarded under the Plan. The aggregate number of Shares shall be subject to
adjustment under Section 6.
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THIRD AMENDMENT TO
CARDINAL DISTRIBUTION, INC.
STOCK INCENTIVE PLAN, AS AMENDED
This Third Amendment (this "Amendment") to the Cardinal Distribution, Inc.
Stock Incentive Plan, as amended (the "Plan"), is made as of December 8, 2004
pursuant to resolutions of the Board of Directors of Cardinal Health, Inc., an
Ohio corporation, adopted during a meeting held on December 8, 2004. This
Amendment shall be applicable to all awards granted under the Plan prior to the
date of this Amendment.
1. Section 5(b)(iv) of the Plan is hereby deleted in its entirety and in
replacement thereof shall be the following:
(iv) METHOD OF EXERCISE. Incentive Options may be exercised in whole
or in part by giving notice, in the form and manner prescribed by the
Committee, of exercise to the Company, specifying the number of Shares to
be purchased. Payment for exercise of an Incentive Option may be made (i)
in cash, (ii) by delivery of Shares already owned by the Grantee having a
total fair market value on the date of such delivery equal to the option
exercise price, (iii) by attestation of ownership of such already-owned
Shares, (iv) by delivery of cash on the extension of credit by a
broker-dealer to whom the Grantee has submitted a notice of exercise or an
irrevocable election to effect such extension of credit, or (v) by any
combination of the foregoing. No Shares shall be transferred until full
payment therefor has been made.
2. Section 5(c)(iv) of the Plan is hereby deleted in its entirety and in
replacement thereof shall be the following:
(iv) METHOD OF EXERCISE. Nonqualified Options may be exercised in
whole or in part by giving notice, in the form and manner prescribed by
the Committee, of exercise to the Company, specifying the number of Shares
to be purchased. Payment for exercise of a Nonqualified Option may be made
(i) in cash, (ii) by delivery of Shares already owned by the Grantee
having a total fair market value on the date of such delivery equal to the
option exercise price, (iii) by attestation of ownership of such
already-owned Shares, (iv) by delivery of cash on the extension of credit
by a broker-dealer to whom the Grantee has submitted a notice of exercise
or an irrevocable election to effect such extension of credit, or (v) by
any combination of the foregoing. No Shares shall be transferred until
full payment therefor has been made.
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