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EXHIBIT 4(b)
AMENDMENT NO. 1 TO
CARDINAL HEALTH, INC.
INCENTIVE DEFERRED COMPENSATION PLAN
(as amended and restated effective July 1, 1997)
Effective as of November 3, 1999, the Cardinal Health, Inc. Incentive
Deferred Compensation Plan, as amended and restated effective July 1, 1997, (the
"Original Plan"), is hereby amended by this Amendment No. 1 as follows:
1. Article II is hereby deleted and replaced in its entirety by the following:
All persons subject to Section 16 of the Securities
Exchange Act of 1934, as amended (each a "Reporting Person"), except
for those Reporting Persons who are not participating in this Plan as
of the date of this Amendment No. 1 and who are parties to an
employment agreement that does not specifically provide for
participation in this Plan, shall automatically be eligible to
participate in the Plan. In addition, the Chairman of Cardinal Health,
Inc. may select, within his sole discretion, other employees eligible
to participate in the Plan. Only high income or key management
employees are eligible for selection by the Chairman. If you are an
eligible Reporting Person or you are chosen by the Chairman to
participate in the Plan, you will sign an Incentive Deferred
Compensation Agreement which details the requirements you must satisfy
to be eligible to receive this supplemental retirement benefit from the
Company. The Chairman will review and determine his selections each
year. Thus, selection in one year does not automatically confer a right
to participant in succeeding years, provided, however, that all
Reporting Persons described above shall at all times during which they
are a Reporting Person be eligible to participate in the Plan. If you
were a participant one year but are not eligible in a succeeding year,
you will still be a participant, but will be treated as "inactive."
2. The first paragraph under Article III is hereby deleted and replaced in its
entirety by the following:
The Plan is considered to be an "unfunded"
arrangement as amounts generally will not be set aside or held by the
Company in a trust, escrow, or similar account or fiduciary
relationship on your behalf. Each participant's rights to benefits
under the Plan are equivalent to the rights of any unsecured general
creditor of the Company. However, the Company may open accounts with
one or more investment companies selected by the Chairman, in his
discretion, and may invest funds subject to this Plan in those
investment companies. The Company also may establish a deferred
compensation trust (rabbi or otherwise) in connection with the Plan.
Each participant may be permitted to direct how the portion of the
Company's funds allocable to him or her is invested from among the
available alternatives, if such investment accounts are established.
The Company currently expects any such alternatives to be similar to
those available under the Qualified Plan, but is not obligated to make
these or any other particular investment options available. If a
participant is permitted to direct how the portion of the Company's
funds allocable to him or her is invested among the available
alternatives, the participant may be permitted to change such direction
from time to time; provided, however, that in no event shall a
participant be permitted to change any investment in a Cardinal Stock
Account (defined below) to any other investment alternative, except as
to future funds allocable to him or her as provided below under the
heading "Election to Defer into Common Shares". All investments shall
at all times continue to be a part of the Company's general assets.
3. The paragraph describing "Deferral Value" in Article III is hereby deleted in
its entirety and replaced by the following:
Second, to encourage each participant to invest in
his or her own future, you may also elect to defer your compensation
from the Company. You may elect (within 30 days of when you first
become eligible to participate in the Plan for your initial year of
participation or, for subsequent years, not later than the December 31
prior to each such year) to defer payment of a portion of your
compensation
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to be earned during the balance of the current or next calendar year,
as applicable, as a credit to your Accumulations. Except as set forth
below, the minimum amount you may defer is 1% and the maximum is 20% of
your compensation. Under special circumstances, the Chairman may also
determine, in his discretion, that any participant who is not a
Reporting Person may be periodically eligible to make a special
election after the beginning of the year to defer any compensation for
the remainder of the year which is not yet payable to such participant.
Notwithstanding the foregoing, the Chairman may defer up to a maximum
of 100% of his compensation into the Plan. These voluntary deferrals by
all participants, adjusted for earnings or losses as described below,
are known as the "Deferral Value." The Company may, in its discretion,
establish and change from time to time a maximum limitation on deferral
contributions for participants who are not Reporting Persons.
4. Three new paragraphs are hereby added to the end of Article III which provide
as follows:
ELECTION TO DEFER INTO COMMON SHARES: Subject
to the provisions of this Article III, whenever you make a deferral
election pursuant to the terms of this Plan, you may also elect to have
all or a portion of the Accumulations to be deemed invested in common
shares, without par value ("Common Shares"), of the Company (such
deferred Accumulations, the "Share Election Accumulations"). On the
date when your Share Election Accumulations would otherwise be payable
to you (if you had not elected to defer such payment) (the "Payment
Date"), the Company will credit to a separate account (your "Cardinal
Stock Account") a number of hypothetical Common Shares (and fractions
thereof) having a Value equal to the Share Election Accumulations. For
purposes of this Plan, the "Value" of a Common Share on a particular
day shall mean the closing trading price of a Common Share on the New
York Stock Exchange on that day (or, if there is no trading of the
Common Shares on that day, on the most recent previous date on which
trading occurred). Any election made pursuant to this paragraph shall
be irrevocable for all Accumulations earned during the calendar year
for which the election is made. Any election made pursuant to this
paragraph shall remain in effect for Accumulations earned in subsequent
calendar years unless you deliver a written notice to the Secretary of
the Company setting forth a different deferral election, which shall be
applied to future calendar years until further written notice is
received by the Secretary of the Company pursuant to this section.
Notwithstanding the foregoing, if any deferral election into Common
Shares would make a transaction between the Company and any other
entity ineligible for pooling-of-interests accounting under APB No. 16
that but for the nature of such deferral would otherwise be eligible
for such accounting treatment, such deferral election shall be treated
as a deferral election into the other available funds pro-rata.
If any recapitalization, reorganization,
reclassification, consolidation, merger of Cardinal Health, Inc.
("Cardinal") or the Company or any sale of all or substantially all of
Cardinal's or the Company's assets to another person or entity or other
transaction which is effected in such a way that holders of Common
Shares are entitled to receive (either directly or upon subsequent
liquidation) stock, securities, or assets with respect to or in
exchange for Common Shares (each an "Organic Change") shall occur, then
your Cardinal Stock Account (if any) shall be adjusted so as to contain
such shares of stock, securities or assets (including cash) as would
have been issued or payable with respect to or in exchange for the
number of Common Shares credited thereto immediately before such
Organic Change, if such Common Shares had been outstanding. If the
assets held in your Cardinal Stock Account immediately after such
adjustment are not equity securities, then you shall be permitted to
re-direct the investment thereof into the other investment choices then
available under this Plan.
In the case of your Cardinal Stock Account (if
any), the earnings (or losses) credited to such account shall consist
solely of dividend equivalent credits pursuant to this paragraph.
Whenever a dividend or other distribution is made with respect to the
Common Shares, then your Cardinal Stock Account shall be credited, on
the payment date for such dividend or other distribution (the "Dividend
Payment Date"), with a number of additional Common Shares having a
Value, as of the Dividend Payment Date, based upon the number of Common
Shares deemed to be held in your Cardinal Stock Account as of the
record date for such dividend or other distribution (the "Dividend
Record Date"), if such Common Shares were outstanding. If such dividend
or other distribution is in the form of cash, the number of Common
Shares so credited shall be a number of Common Shares (and fractions
thereof) having a Value,
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as of the Dividend Payment Date, equal to the amount of cash that would
have been distributed with respect to the Common Shares deemed to be
held in your Cardinal Stock Account as of the Dividend Record Date, if
such Common Shares were outstanding. If such dividend or other
distribution is in the form of Common Shares, the number of Common
Shares so credited shall equal the number of such Common Shares (and
fractions thereof) that would have been distributed with respect to the
Common Shares deemed to be held in your Cardinal Stock Account as of
the Dividend Record Date, if such Common Shares were outstanding. If
such dividend or other distribution is in the form of property other
than cash or Common Shares, the number of Common Shares so credited
shall be a number of Common Shares (and fractions thereof) having a
Value, as of the Dividend Payment Date, equal to the value of the
property that would have been distributed with respect to the Common
Shares deemed to be held in your Cardinal Stock Account as of the
Dividend Record Date, if such Common Shares were outstanding. The value
of such property shall be its fair market value as of the Dividend
Payment Date, determined by the Cardinal Board of Directors (the
"Board") based upon market trading if available and otherwise based
upon such factors as the Board deems appropriate.
5. A new sentence is hereby added to the end of Article IV, subparagraph C.5
which provides as follows:
Payments of amounts credited to your Cardinal Stock Account, if any,
shall be in the form of Common Shares plus cash in lieu of any
fractional shares.
6. A new paragraph E is hereby added to Article V entitled "General
Restrictions" which provides as follows:
E. GENERAL RESTRICTIONS
Notwithstanding any other provision of this Plan
or any Directors Deferred Compensation Agreement, the Company shall not
be required to issue or deliver any certificate or certificates for
Common Shares under this Plan prior to fulfillment of all of the
following conditions:
(i) Listing or approval for listing upon official notice of issuance of
such shares on the New York Stock Exchange, Inc., or such other
securities exchange as may at the time be a market for the Common
Shares;
(ii) Any registration or other qualification of such shares under any
state or federal law or regulation, or the maintaining in effect of any
such registration or other qualification which the Chairman shall, in
his absolute discretion upon the advice of counsel, deem necessary or
advisable; and
(iii) Obtaining any other consent, approval, or permit from any state
or federal governmental agency which the Chairman shall, in his
absolute discretion after receiving the advise of counsel, determine to
be necessary or advisable.
Nothing contained in this Plan shall prevent the Company from adopting
other or additional compensation arrangements for the participants.
7. A new paragraph F is hereby added to Article V entitled "Common Shares
Available" which provides as follows:
F. COMMON SHARES AVAILABLE
The maximum aggregate number of Common Shares which
may be credited to Cardinal Stock Accounts pursuant to this Plan is
1,500,000. Common Shares issuable under the Plan may be taken from
authorized but unissued shares, treasury shares, shares held in a trust
for purposes of the Plan, or purchased on the open market. No single
participant may acquire under the Plan more than 750,000 Common Shares.
In the event of any stock dividend, stock split,
share combination, corporate separation or division (including, but not
limited to, split-up, spin-off, split-off or distribution to Cardinal's
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shareholders other than a normal cash dividend), or partial or complete
liquidation, or any other corporate transaction or event having any
effect similar to any of the foregoing, then the aggregate number of
Common Shares reserved for issuance under the Plan shall be
appropriately substituted for new shares or adjusted, as determined by
Cardinal's Compensation and Personnel Subcommittee in its sole
discretion.
8. Except to the extent otherwise set forth herein, the terms, conditions and
provisions of the Original Plan are unchanged and remain in full force and
effect.
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