Summary
This Form 8-K filing from Cardinal Health, Inc. (CAH) on March 4, 2005, details two significant events primarily concerning CEO Robert D. Walter. First, the company has addressed a contractual obligation to Mr. Walter regarding stock options. Due to internal equity plan limitations, a portion of his awarded stock options for the fiscal year ending June 30, 2005, was granted as a deferred payment stock appreciation right (SAR) instead of direct stock options. This SAR, covering 142,483 shares at an exercise price of $44.15, will have its payment deferred until August 23, 2014, with interest, to comply with new IRS regulations. Second, Mr. Walter has initiated a prearranged sales plan, compliant with Rule 10b5-1, to sell up to 400,000 of his company shares throughout calendar year 2005. These sales will occur in monthly installments and are described as part of his personal asset diversification and liquidity strategy. Investors should note that these planned sales will be publicly disclosed as they are executed.
Key Highlights
- 1Cardinal Health has issued a deferred payment stock appreciation right (SAR) to CEO Robert D. Walter for 142,483 shares.
- 2The SAR was granted to fulfill a contractual obligation for fiscal year ending June 30, 2005, due to limitations in the company's equity incentive plan.
- 3The exercise price for the SAR is $44.15 per share.
- 4Payment for the SAR will be deferred until August 23, 2014, and will accrue interest at the Prime Rate, in compliance with Section 409A of the Internal Revenue Code.
- 5CEO Robert D. Walter has established a Rule 10b5-1 compliant sales plan to sell up to 400,000 company shares during calendar year 2005.
- 6The sales will be conducted in monthly installments for asset diversification and liquidity purposes.
- 7Sales under the plan are expected to commence in March 2005 and conclude by December 30, 2005.