UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2008
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-9810
Owens & Minor, Inc.
(Exact name of Registrant as specified in its charter)
Virginia | 54-1701843 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
9120 Lockwood Boulevard, Mechanicsville, Virginia | 23116 | |
(Address of principal executive offices) | (Zip Code) |
Post Office Box 27626, Richmond, Virginia | 23261-7626 | |
(Mailing address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code (804) 723-7000
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b.2 of the Exchange Act). Yes x No ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares of Owens & Minor, Inc.s common stock outstanding as of April 30, 2008, was 41,116,551 shares.
Owens & Minor, Inc. and Subsidiaries
Index
2
Item 1. | Financial Statements |
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(unaudited)
(in thousands, except per share data) |
Three Months Ended
March 31, |
|||||||
2008 | 2007 | |||||||
Revenue |
$ | 1,752,717 | $ | 1,686,199 | ||||
Cost of revenue |
1,565,625 | 1,511,538 | ||||||
Gross margin |
187,092 | 174,661 | ||||||
Selling, general and administrative expenses |
137,108 | 142,782 | ||||||
Depreciation and amortization |
7,805 | 8,178 | ||||||
Other operating income and expense, net |
(1,020 | ) | (1,082 | ) | ||||
Operating earnings |
43,199 | 24,783 | ||||||
Interest expense, net |
3,514 | 7,171 | ||||||
Income before income taxes |
39,685 | 17,612 | ||||||
Income tax provision |
15,477 | 6,797 | ||||||
Net income |
$ | 24,208 | $ | 10,815 | ||||
Net income per common share basic |
$ | 0.60 | $ | 0.27 | ||||
Net income per common share diluted |
$ | 0.59 | $ | 0.27 | ||||
Cash dividends per common share |
$ | 0.20 | $ | 0.17 | ||||
See accompanying notes to condensed consolidated financial statements.
3
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except per share data) |
March 31,
2008 |
December 31,
2007 |
||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 2,641 | $ | 2,129 | ||||
Accounts and notes receivable, net of allowances of $27,416 and $24,912 |
457,345 | 462,392 | ||||||
Merchandise inventories |
607,881 | 581,569 | ||||||
Other current assets |
41,146 | 43,767 | ||||||
Total current assets |
1,109,013 | 1,089,857 | ||||||
Property and equipment, net of accumulated depreciation of $70,951 and $67,867 |
74,500 | 76,122 | ||||||
Goodwill, net |
271,699 | 271,699 | ||||||
Intangible assets, net |
30,047 | 32,517 | ||||||
Other assets, net |
51,598 | 44,885 | ||||||
Total assets |
$ | 1,536,857 | $ | 1,515,080 | ||||
Liabilities and shareholders equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | 530,158 | $ | 469,102 | ||||
Accrued payroll and related liabilities |
17,683 | 18,763 | ||||||
Other accrued liabilities |
92,696 | 80,599 | ||||||
Total current liabilities |
640,537 | 568,464 | ||||||
Long-term debt |
211,962 | 283,845 | ||||||
Other liabilities |
49,004 | 48,412 | ||||||
Total liabilities |
901,503 | 900,721 | ||||||
Shareholders equity |
||||||||
Preferred stock, par value $100 per share; authorized - 10,000 shares Series A; Participating Cumulative Preferred Stock; none issued |
| | ||||||
Common stock, par value $2 per share; authorized - 200,000 shares; issued and outstanding - 41,074 shares and 40,874 shares |
82,149 | 81,748 | ||||||
Paid-in capital |
166,572 | 161,978 | ||||||
Retained earnings |
393,925 | 377,913 | ||||||
Accumulated other comprehensive loss |
(7,292 | ) | (7,280 | ) | ||||
Total shareholders equity |
635,354 | 614,359 | ||||||
Total liabilities and shareholders equity |
$ | 1,536,857 | $ | 1,515,080 | ||||
See accompanying notes to condensed consolidated financial statements.
4
Owens & Minor, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands) |
Three Months Ended
March 31, |
|||||||
2008 | 2007 | |||||||
Operating activities |
||||||||
Net income |
$ | 24,208 | $ | 10,815 | ||||
Adjustments to reconcile net income to cash provided by (used for) operating activities: |
||||||||
Depreciation and amortization |
7,805 | 8,178 | ||||||
Provision for losses on accounts and notes receivable |
5,818 | 6,282 | ||||||
Provision for LIFO reserve |
10,468 | 4,850 | ||||||
Amortization of direct-response advertising costs |
1,653 | 1,595 | ||||||
Deferred direct-response advertising costs |
(1,866 | ) | (2,374 | ) | ||||
Share-based compensation expense |
2,839 | 1,029 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts and notes receivable |
(771 | ) | (28,383 | ) | ||||
Merchandise inventories |
(36,779 | ) | 21,936 | |||||
Accounts payable |
81,756 | (29,487 | ) | |||||
Net change in other current assets and liabilities |
14,142 | 3,189 | ||||||
Other, net |
(831 | ) | (940 | ) | ||||
Cash provided by (used for) operating activities |
108,442 | (3,310 | ) | |||||
Investing activities |
||||||||
Additions to property and equipment |
(2,027 | ) | (5,421 | ) | ||||
Additions to computer software |
(2,762 | ) | (1,670 | ) | ||||
Acquisition of intangible assets |
| (58 | ) | |||||
Net cash paid for acquisitions of businesses |
| (1,286 | ) | |||||
Other, net |
6 | 275 | ||||||
Cash used for investing activities |
(4,783 | ) | (8,160 | ) | ||||
Financing activities |
||||||||
Cash dividends paid |
(8,197 | ) | (6,859 | ) | ||||
Net proceeds from (payments on) revolving credit facility |
(76,500 | ) | 25,300 | |||||
Proceeds from exercise of stock options |
1,825 | 1,203 | ||||||
Excess tax benefits related to share-based compensation |
1,085 | 518 | ||||||
Decrease in drafts payable |
(20,700 | ) | (8,300 | ) | ||||
Other, net |
(660 | ) | (546 | ) | ||||
Cash provided by (used for) financing activities |
(103,147 | ) | 11,316 | |||||
Net increase (decrease) in cash and cash equivalents |
512 | (154 | ) | |||||
Cash and cash equivalents at beginning of period |
2,129 | 5,090 | ||||||
Cash and cash equivalents at end of period |
$ | 2,641 | $ | 4,936 | ||||
See accompanying notes to condensed consolidated financial statements.
5
Owens & Minor, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. | Basis of Presentation |
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are comprised only of normal recurring accruals and the use of estimates) necessary to present fairly the consolidated financial position of Owens & Minor, Inc. and its wholly-owned subsidiaries (O&M or the company) as of March 31, 2008 and December 31, 2007, and the consolidated results of operations and cash flows for the three-month periods ended March 31, 2008 and 2007, in conformity with U.S. generally accepted accounting principles.
2. | Interim Results of Operations |
The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
3. | Direct-Response Advertising Costs |
The following table presents the activity in capitalized direct-response advertising costs for the three months ended March 31, 2008 and 2007:
(in thousands) | Three Months Ended | |||||||
2008 | 2007 | |||||||
Beginning, direct-response advertising costs, net |
$ | 10,469 | $ | 9,817 | ||||
Deferred direct-response advertising costs |
1,866 | 2,374 | ||||||
Amortization |
(1,653 | ) | (1,595 | ) | ||||
Ending, direct-response advertising costs, net |
$ | 10,682 | $ | 10,596 | ||||
Capitalized direct-response advertising costs are included in other assets, net, on the condensed consolidated balance sheets.
4. | Intangible Assets |
Intangible assets at March 31, 2008 and December 31, 2007, are as follows:
(in thousands) |
Customer
Relationships |
Other
Intangibles |
Total | |||||||||
At March 31, 2008: |
||||||||||||
Gross intangible assets |
$ | 49,281 | $ | 8,791 | $ | 58,072 | ||||||
Accumulated amortization |
(24,182 | ) | (3,843 | ) | (28,025 | ) | ||||||
Net intangible assets |
$ | 25,099 | $ | 4,948 | $ | 30,047 | ||||||
At December 31, 2007: |
||||||||||||
Gross intangible assets |
$ | 49,281 | $ | 8,791 | $ | 58,072 | ||||||
Accumulated amortization |
(22,119 | ) | (3,436 | ) | (25,555 | ) | ||||||
Net intangible assets |
$ | 27,162 | $ | 5,355 | $ | 32,517 | ||||||
Weighted average useful life |
8 years | 6 years | ||||||||||
6
Amortization expense for intangible assets was $2.5 million and $3.2 million for the three months ended March 31, 2008 and 2007.
Based on the current carrying value of intangible assets subject to amortization, estimated future amortization expense is as follows: Remainder of 2008 $6.6 million; 2009 $ 5.9 million; 2010 $ 3.6 million; 2011 $ 2.1 million; 2012 $ 1.5 million.
5. | Retirement Plans |
The components of net periodic pension cost of the companys retirement plans for the three months ended March 31, 2008 and 2007, are as follows:
(in thousands) |
Three Months Ended
March 31, |
|||||||
2008 | 2007 | |||||||
Service cost |
$ | 195 | $ | 227 | ||||
Interest cost |
848 | 797 | ||||||
Expected return on plan assets |
(490 | ) | (459 | ) | ||||
Amortization of prior service cost |
40 | 40 | ||||||
Recognized net actuarial loss |
186 | 192 | ||||||
Net periodic pension cost |
$ | 779 | $ | 797 | ||||
6. | Comprehensive Income |
The companys comprehensive income for the three months ended March 31, 2008 and 2007, is shown in the table below:
(in thousands) |
Three Months Ended
March 31, |
|||||||
2008 | 2007 | |||||||
Net income |
$ | 24,208 | $ | 10,815 | ||||
Other comprehensive income change in value of cash-flow hedge derivatives, net of tax |
(13 | ) | (13 | ) | ||||
Comprehensive income |
$ | 24,195 | $ | 10,802 | ||||
7. | Net Income per Common Share |
The following sets forth the computation of basic and diluted net income per common share:
7
8. | Direct-to-Consumer (DTC) Distribution |
For the quarters ended March 31, 2008 and 2007, the DTC distribution business contributed $25.4 million and $26.9 million of revenue, and $0.1 million of operating earnings and $1.0 million of operating losses to the company.
9. | Recently Adopted Accounting Pronouncements |
Statement of Financial Accounting Standards No. (SFAS) 159, The Fair Value Option for Financial Assets and Financial Liabilities , permits the company the irrevocable option to account for most financial assets and liabilities at fair value, rather than at historical cost, with changes in the fair value recognized in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The company adopted SFAS 159 beginning in the interim period ended March 31, 2008. The adoption had no impact on the companys financial statements, as the company did not elect this fair value option for financial assets and liabilities during this quarter.
SFAS 157, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement does not require any new fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In February 2008, the effective date of SFAS 157 was deferred to fiscal years beginning after November 15, 2008, for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. The company adopted SFAS 157 beginning in the interim period ended March 31, 2008 for financial assets and liabilities. The adoption had no impact on the companys financial statements for the period ended March 31, 2008.
The companys interest rate swap agreements are recorded at fair value using observable market inputs, as defined by and in accordance with the fair value hierarchy of SFAS 157. At March 31, 2008, the fair value of interest rate swap agreements was $9.9 million. The fair value of the swap agreements is recorded in other assets, net, on the condensed consolidated balance sheet.
8
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
The following discussion and analysis describes material changes in the financial condition of Owens & Minor, Inc. and its wholly-owned subsidiaries (O&M or the company) since December 31, 2007. Trends of a material nature are discussed to the extent known and considered relevant. This discussion should be read in conjunction with the condensed consolidated financial statements, related notes thereto and managements discussion and analysis of financial condition and results of operations included in the companys Annual Report on Form 10-K for the year ended December 31, 2007.
Results of Operations
First quarter of 2008 compared with first quarter of 2007
Overview. In the first quarter of 2008, the company earned net income of $24.2 million, improved from $10.8 million in the first quarter of 2007. Net income per diluted common share was $0.59 as compared with $0.27 in the first quarter of 2007. Operating earnings, which were $43.2 million in the first quarter of 2008, increased from $24.8 million in the same period of 2007. Operating earnings in the first quarter of 2007 were negatively affected by the cost of integrating the acquired acute-care distribution business of McKesson Medical-Surgical Inc. Included in operating earnings for the 2008 quarter is $0.1 million of earnings from the direct-to-consumer (DTC) distribution business. In the first quarter of 2007, the DTC business had operating losses of $1.0 million.
Revenue. Revenue in the first quarter of 2008 was $1.75 billion, a 3.9% increase, from $1.69 billion of revenue in the first quarter of 2007. In comparing quarter-to-quarter, there was a decrease of approximately $30 million of revenue from the acquired McKesson business. This decrease was offset by net new business; therefore, the net increase resulted primarily from greater sales volumes to existing customers.
The DTC business contributed $25.4 million of revenue in the first quarter of 2008, decreased from $26.9 million in the same period of 2007. The decrease was primarily due to lower Medicare reimbursement rates on respiratory supplies. There were approximately 183,000 DTC customers at the end of the first quarter 2008, as compared with 188,000 at December 31, 2007 and 177,000 at March 31, 2007. The company made no acquisitions of DTC distributors in 2007 or 2008, while it acquired five such businesses in 2006 and two in 2005.
Gross margin. Gross margin dollars in the first quarter of 2008 were $187.1 million, an increase of $12.4 million, over the first quarter 2007. As a percentage of revenue, gross margin was 10.67% in the first quarter of 2008, increased from 10.36% in the first quarter of 2007. The 31 basis point improvement was primarily the result of improved gross margin from the acquired McKesson business. Gross margins for this business improved as it transitioned to O&M systems and pricing files were brought to O&M standards. Gross margin was also positively affected by greater supplier incentives and cash discounts earned on inventory purchases in the first quarter of 2008 and by greater manufacturers price adjustments, partially offset by a greater reserve for last-in, first-out (LIFO) inventory valuation.
The company values inventory for its core distribution business under the LIFO method. Had inventory been valued under the first-in, first-out (FIFO) method, gross margin would have been greater by 0.6% and 0.3% of revenue in the first quarters of 2008 and 2007.
9
Selling, general and administrative (SG&A) expenses. SG&A expense dollars in the first quarter of 2008 were $137.1 million, as compared with $142.8 million in the first quarter of 2007. SG&A expenses were 7.82% as a percentage of revenue in the first quarter of 2008, decreased from 8.47% in the same period of 2007. Expenses in the first quarter of 2007 were greater due to costs associated with the integration of the acquired McKesson business, including the conversion of the acquired customers and their contracts to O&Ms systems, and $6.7 million of transition-related fees paid to McKesson. Expenses in the first quarter of 2007 also included greater allowances for doubtful accounts of approximately $0.7 million, as the company increased allowances, primarily as a result of the acquired McKesson business. SG&A expenses in the first quarter of 2008, as compared with 2007, were positively affected by decreased selling costs of approximately $1.7 million, as the company re-aligned its selling efforts during 2007. Offsetting lesser SG&A expenses in the first quarter of 2008 were approximately $1.0 million of greater fuel costs and $1.8 million of greater share-based compensation expense. The increase in share-based compensation expense is primarily due to the timing of certain awards.
Depreciation and amortization expense. Depreciation and amortization expense decreased $0.4 million to $7.8 million in the first quarter of 2008, from $8.2 million in the first quarter of 2007. Amortization of intangible assets was $0.7 million less in the first quarter of 2008, as compared with the same period of 2007, due to: (i) the adjustment to the McKesson acquired intangibles that occurred in the third quarter of 2007, as the accounting for the purchase transaction was finalized, and (ii) lower amortization expense for acquired intangibles in the DTC business, which are amortized at rates that decline during the amortization period. There were no acquisitions of intangible assets in the DTC business in 2007 or in the first quarter of 2008. This decrease in amortization was partially offset by greater depreciation from capital additions made to facilitate the growth in the healthcare provider business.
Interest expense, net. Net interest expense was $3.5 million in the first quarter of 2008, as compared with $7.2 million in the first quarter of 2007. Decreased interest expense in the first quarter of 2008 was primarily due to lower balances outstanding under the companys revolving credit agreement, as the company significantly reduced borrowings under this facility since the first quarter of 2007. Borrowings under this facility partially funded the purchase of the McKesson business and its related working capital needs. Interest expense quarter-over-quarter also benefited from lower interest rates.
Income taxes. The provision for income taxes was $15.5 million in the first quarter of 2008, as compared with $6.8 million in the same period of 2007, representing an effective rate of 39.0% for the first quarter of 2008, compared to 38.6% for the same quarter in 2007. The lower effective rate in 2007 was primarily due to adjustments to the companys liability for unrecognized tax benefits for resolution of outstanding tax issues.
Financial Condition, Liquidity and Capital Resources
Liquidity. In the first quarter of 2008, cash and cash equivalents increased by $0.5 million to $2.6 million at March 31, 2008. In the first quarter of 2008, the company generated $108.4 million of cash from operations, compared with the use of $3.3 million of cash from operations in the same period of 2007. Cash from operations in the first quarter of 2008 was positively affected by the timing of payments for inventory, while negatively affected by greater inventory levels. Cash from operations in the first quarter of 2007 was negatively affected by increases in accounts receivable and the timing of payments for inventory, while positively affected by inventory levels. Cash used for investing activities was $4.8 million in the first quarter of 2008 and $8.2 million in the first quarter of 2007. Capital
10
expenditures in the first quarter of 2007 were made to accommodate the acquired McKesson business. Financing activities used $103.1 million of cash in the first quarter of 2008, primarily to reduce the companys revolving credit facility by $76.5 million and drafts payable by $20.7 million. Financing activities provided $11.3 million in the first quarter of 2007, primarily from borrowings under the companys revolving credit facility to fund the working capital needs of the acquired McKesson business. Cash used to pay dividends was $8.2 million and $6.9 million in the first quarters ended March 31, 2008 and 2007, as the company paid a dividend per share of $0.20 in the first quarter of 2008, increased from $0.17 per share in the same quarter of 2007. Accounts receivable days sales outstanding (DSO) at March 31, 2008, were 23.7 days, decreased from 30.0 days at March 31, 2007, based on three months sales. Inventory turnover was 10.6 in the first quarter of 2008, increased from 9.2 in the first quarter of 2007. DSO and inventory turnover in the first quarter 2007 were negatively affected by the transition of the acquired McKesson business. As a result of these positive asset management trends, long-term debt at March 31, 2008, was $212.0 million, decreased from $283.8 million at December 31, 2007 and $458.0 million at March 31, 2007.
The company has a $350 million revolving credit facility. The interest rate on the facility is based on, at the companys discretion, the London Interbank Offered Rate (LIBOR), the Federal Funds Rate or the Prime Rate, plus an adjustment based on the companys leverage ratio. The company is charged a commitment fee of between 0.05% and 0.15% on the unused portion of the facility, which includes a 0.05% reduction in the fee based on the companys investment grade rating.
The company has $200 million of senior notes outstanding, which mature in 2016 and bear interest at 6.35%, payable semiannually. In conjunction with the senior notes, the company is a party to interest rate swap agreements, under which the company pays counterparties a variable rate based on LIBOR, and the counterparties pay the company a fixed interest rate of 6.35% on a notional amount of $100 million, effectively converting one-half of the notes to variable-rate debt. These swaps were designated as fair value hedges and were assumed to have no ineffectiveness under the provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities .
The company believes its available financing sources will be sufficient to fund working capital needs and long-term strategic growth, although this cannot be assured. At March 31, 2008, the company had $339.3 million of available credit under its revolving credit facility. Based on the companys leverage ratio at March 31, 2008, the companys interest rate under its revolving credit facility, which is subject to adjustment quarterly, will be LIBOR plus 50.0 basis points at the next adjustment date.
Forward-looking Statements
Certain statements in this discussion constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although O&M believes its expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, all forward-looking statements involve risks and uncertainties and, as a result, actual results could differ materially from those projected, anticipated or implied by these statements. Such forward-looking statements involve known and unknown risks, including, but not limited to:
|
general economic and business conditions; |
|
the ability of the company to implement its strategic initiatives; |
11
|
dependence on sales to certain customers; |
|
the ability of customers to meet financial commitments due to the company; |
|
the ability to retain existing customers and the success of marketing and other programs in attracting new customers; |
|
dependence on suppliers; |
|
the ability to adapt to changes in product pricing and other terms of purchase by suppliers of product; |
|
changes in manufacturer preferences between direct sales and wholesale distribution; |
|
competition; |
|
changing trends in customer profiles and ordering patterns; |
|
the ability of the company to meet customer demand for additional value-added services; |
|
the availability of supplier incentives; |
|
access to special inventory buying opportunities; |
|
the ability of business partners to perform their contractual responsibilities; |
|
the ability to manage operating expenses; |
|
the effect of higher fuel prices on delivery costs; |
|
the ability of the company to manage financing costs and interest rate risk; |
|
the risk that a decline in business volume or profitability could result in an impairment of goodwill; |
|
the ability to timely or adequately respond to technological advances in the medical supply industry; |
|
the ability to successfully identify, manage or integrate acquisitions; |
|
the costs associated with and outcome of outstanding and any future litigation, including product and professional liability claims; |
|
the outcome of outstanding tax contingencies; |
|
the ability to manage reimbursements from Medicare, Medicaid, private healthcare insurers and individual customers; |
12
|
changes in government regulations, including healthcare laws and regulations; and |
|
changes in reimbursement guidelines of Medicare and Medicaid and/or reimbursement practices of private healthcare insurers. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
O&M provides credit, in the normal course of business, to its customers. The company performs ongoing credit evaluations of its customers and maintains reserves for credit losses.
The company has $200 million of outstanding fixed-rate debt maturing in 2016. O&M uses interest rate swaps to modify the companys balance of fixed and variable rate financing, thus hedging its interest rate risk. The company is exposed to certain losses in the event of nonperformance by the counterparties to these swap agreements. However, O&M believes its exposure is not significant, and the event of nonperformance would not have a material effect on the company.
The company is exposed to market risk from changes in interest rates related to its interest rate swaps and its revolving credit facility. As of March 31, 2008, the company had $100 million of interest rate swaps under which the company pays counterparties a variable rate based on LIBOR and the counterparties pay the company a fixed interest rate of 6.35% on a notional amount of $100 million. A hypothetical increase in interest rates of 100 basis points would result in a potential reduction in future pre-tax earnings of approximately $1.0 million per year in connection with the swaps. The company had zero outstanding borrowings under its revolving credit facility at March 31, 2008. A hypothetical increase in interest rates of 100 basis points would result in a potential reduction in future pre-tax earnings of approximately $0.1 million per year for every $10 million of outstanding borrowings under the revolving credit facility.
Item 4. | Controls and Procedures |
The company carried out an evaluation, with the participation of the companys management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the companys disclosure controls and procedures (pursuant to Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the companys disclosure controls and procedures are effective in timely alerting them to material information relating to the company required to be included in the companys periodic SEC filings. There has been no change in the companys internal controls over financial reporting during the quarter ended March 31, 2008, that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting.
13
Item 1. | Legal Proceedings |
Certain legal proceedings pending against the company are described in the companys Annual Report on Form 10-K for the year ended December 31, 2007. Through March 31, 2008, there have been no material developments in any legal proceedings reported in such Annual Report.
Item 1A. | Certain Risk Factors |
Certain risk factors that the company believes could affect its business and prospects are described in the companys Annual Report on Form 10-K for the year ended December 31, 2007. Through March 31, 2008, there have been no material changes in any risk factors reported in such Annual Report.
Item 6. | Exhibits. |
(a) | Exhibits |
3.1 | Amendments to the Companys Amended and Restated Articles of Incorporation (incorporated herein by reference to Appendices B and C of the Companys definitive Proxy Statement filed pursuant to Section 14(a) of the Securities Exchange Act on March 14, 2008). | |
10.1 | Form of Owens & Minor, Inc. Performance Share Award Agreement Under 2005 Stock Incentive Plan. | |
10.2 | Form of Owens & Minor, Inc. Restricted Stock Agreement Under 2005 Stock Incentive Plan. | |
10.3 | Form of Owens & Minor, Inc. Director Restricted Stock Agreement Under 2005 Stock Incentive Plan. | |
10.4 | Resolutions of the Board of Directors of the Company amending the 2005 Stock Incentive Plan. | |
10.5 | Resolutions of the Board of Directors of the Company amending the 1998 Directors Compensation Plan. | |
10.6 | Resolutions of the Board of Directors of the Company amending the 2003 Directors Compensation Plan. | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
14
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 thereunto duly authorized.
Owens & Minor, Inc. | ||
(Registrant) | ||
Date May 8, 2008 |
/s/ CRAIG R. SMITH |
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Craig R. Smith | ||
President and Chief Executive Officer | ||
Date May 8, 2008 |
/s/ JAMES L. BIERMAN |
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James L. Bierman | ||
Senior Vice President & Chief Financial Officer | ||
Date May 8, 2008 |
/s/ OLWEN B. CAPE |
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Olwen B. Cape | ||
Vice President & Controller | ||
Chief Accounting Officer |
Exhibits Filed with SEC
Exhibit # |
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3.1 | Amendments to the Companys Amended and Restated Articles of Incorporation (incorporated herein by reference to Appendices B and C of the Companys definitive Proxy Statement filed pursuant to Section 14(a) of the Securities Exchange Act on March 14, 2008). | |
10.1 | Form of Owens & Minor, Inc. Performance Share Award Agreement Under 2005 Stock Incentive Plan. | |
10.2 | Form of Owens & Minor, Inc. Restricted Stock Agreement Under 2005 Stock Incentive Plan. | |
10.3 | Form of Owens & Minor, Inc. Director Restricted Stock Agreement Under 2005 Stock Incentive Plan. | |
10.4 | Resolutions of the Board of Directors of the Company amending the 2005 Stock Incentive Plan. | |
10.5 | Resolutions of the Board of Directors of the Company amending the 1998 Directors Compensation Plan. | |
10.6 | Resolutions of the Board of Directors of the Company amending the 2003 Directors Compensation Plan. | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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Exhibit 10.1
OWENS & MINOR, INC.
PERFORMANCE SHARE AWARD AGREEMENT
THIS PERFORMANCE SHARE AWARD AGREEMENT (Agreement) dated as of between Owens & Minor, Inc., a Virginia corporation (the Company), and (Participant) is made pursuant to and subject to the provisions of the Company's 2005 Stock Incentive Plan (the Plan). All terms used in this Agreement that are not otherwise defined shall have the same meanings given to them in the Plan.
1. Grant of Performance Share Award . In accordance with the Plan, on (the Date of Grant), the Company granted to the Participant, subject to the terms and conditions of the Plan and the terms and conditions set forth in this Agreement, Performance Shares, subject to adjustment as provided in Section 2 (the Performance Shares). The Participant will earn the Performance Shares to the extent that the requirements of Section 2 are satisfied. The Company will issue shares of Common Stock in accordance with Section 3 in settlement of the Performance Shares, if any, that the Participant earns in accordance with Section 2, which shares of Common Stock (the Restricted Stock) will be further subject to the vesting and forfeiture provisions described in Section 4 (except as otherwise specifically provided in Section 3(b)).
2. Earning Performance Shares . This Section 2 determines the number of Performance Shares that the Participant earns under this Agreement.
(a) Performance Criteria . The Participant will earn Performance Shares based on the Companys Operating Earnings (defined below) for calendar year 200 as follows:
200 Operating Earnings |
Performance Shares Earned | |||
$ |
(Threshold) |
_______ | ||
$ |
(Target) |
_______ | ||
$ |
(Maximum) |
_______ |
If the Companys Operating Earnings for calendar year 200 are greater than the Threshold but less than the Target, then the additional number of Performance Shares earned by the Participant in excess of Performance Shares will be determined based on a straight line interpolation of the Operating Earnings in excess of the Threshold. If the Companys Operating Earnings for calendar year 200 are greater than the Target but less than the Maximum, then the additional number of Performance Shares earned by the Participant in excess of Performance Shares will be determined based on a straight line interpolation of the Operating Earnings in excess of the Target. Operating Earnings shall be defined as the operating earnings presented in the Companys consolidated audited financial statements for the year ended December 31, 200 , which, for purposes of this Agreement, will be adjusted to exclude unusual and/or non-recurring items, including but not limited to, the effect of accounting and/or tax changes; tangible and intangible asset impairment charges; fees, expenses and charges associated with debt and/or equity financing transactions and merger and acquisition activity (including sale of a business unit or its assets); gains/losses from asset sales not made in the ordinary course of business; pension plan gains/losses; and
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material litigation or insurance settlements. Adjustments to Operating Earnings for purposes of determining the number of Performance Shares earned shall be taken into account only to the extent that they are separately identified or quantified in the Companys consolidated audited financial statements, the notes to the consolidated financial statements, Managements Discussion and Analysis in the annual report or in other Company filings with the Securities and Exchange Commission. In addition to and notwithstanding the foregoing, the Committee may make any adjustments in its discretion that would reduce Operating Earnings for purposes of determining the number of Performance shares earned, such as for example, the exclusion of operating earnings from acquisitions, mergers or divestitures.
(b) Effect of Termination During 200 or Prior to Issuance of Restricted Stock . Except as provided in subparagraphs (c) and (d), no Performance Shares will be earned if the Participants employment with, and service to, the Company and its Affiliates terminates or is terminated before January 1, 200 or the date on which Restricted Stock is issued as provided in Section 3(b).
(c) Death or Disability During 200 . This subparagraph (c) applies if the Participants employment with, and service to, the Company and its Affiliates terminates before January 1, 200 , on account of the Participants death or permanent and total disability (as defined in Section 22(e)(3) of the Code). In the event of the Participants death prior to January 1, 200 , the number of Performance Shares earned by the Participant shall equal the number determined in accordance with subparagraph (a). In the event the Participants employment terminates before January 1, 200 due to permanent and total disability, the number of Performance Shares earned by the Participant shall equal the number determined in accordance with subparagraph (a) multiplied by a fraction. The numerator of the fraction shall be the number of whole months that the Participant was employed by, or providing services to, the Company or an Affiliate during 200 (including any period that the Participant was absent from work for illness, injury or short term disability prior to termination of employment) and the denominator shall be 12.
(d) Change in Control . The Participant will earn the number of Performance Shares designated for Target Operating Earnings if there is a Change in Control before January 1, 200 .
3. Settlement of Performance Shares . The Performance Shares will be settled in accordance with this Section 3.
(a) Committee Certification . As soon as practicable after 200 (but no later than March 15, 200 ), the Committee will determine the number of Performance Shares that are earned under the provisions of Section 2. The Committees determination shall be set forth in writing, as part of the minutes of a meeting of the Committee, by unanimous consent or otherwise. Notwithstanding the preceding sentences, a written determination of the Committee shall not be required in the case of Performance Shares that are earned pursuant to the provisions of Section 2(d).
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(b) Issuance of Restricted Stock . As soon as practicable after the Committees certification under subparagraph (a) (but no later than March 15, 200 ), the Committee shall issue shares of Restricted Stock under the Plan in settlement of the Performance Shares earned by the Participant. The number of shares of Restricted Stock issued shall equal the number of Performance Shares earned by the Participant. Notwithstanding the preceding sentences, (i) if the Performance Shares are earned pursuant to the provisions of Section 2(c), such Performance Shares shall be settled in shares of Common Stock that are not subject to the restrictions set forth in Section 4 and (ii) if the Performance Shares are earned pursuant to the provisions of Section 2(d), the number of shares of Restricted Stock indicated in Section 2(d) shall be issued to the Participant on the Control Change Date, and such shares of Restricted Stock shall otherwise be treated as provided in Section 4(c)(vi).
(c) Registration, etc . Shares of Restricted Stock issued in settlement of the Performance Shares shall be registered in the name of the Participant on the stock transfer books of the Company but shall be held by the Company (or its transfer agent) during the Restricted Period (defined below). The Companys Secretary and its General Counsel shall serve as attorney-in-fact for Participant during the Restricted Period with full power and authority in Participants name to assign and convey to the Company any shares of Restricted Stock that Participant forfeits under Section 4(c). Each certificate representing shares of Restricted Stock may bear a legend referring to the risk of forfeiture of the shares and stating that such shares are nontransferable until all restrictions have been satisfied and the legend has been removed.
(d) Dividends . Upon issuance of shares of Restricted Stock in settlement of the Performance Shares earned by the Participant, the Company shall pay Participant in cash the amount of any dividends that would have been paid on the Performance Shares prior to settlement if the Performance Shares had been actual shares of Restricted Stock outstanding during 200_.
4. Terms of Restricted Stock . The shares of Restricted Stock issued in settlement of the Performance Shares are subject to the following terms and conditions:
(a) Restricted Period . Until (the Restricted Period) or the lapse of restrictions as provided in subparagraph (c) hereof, the Restricted Stock shall be subject to the following restrictions:
(i) Participant shall not be entitled to receive the certificate or certificates evidencing the Restricted Stock;
(ii) Shares of Restricted Stock may not be sold, transferred, assigned, pledged, conveyed, hypothecated or otherwise disposed of; and
(iii) Shares of Restricted Stock may be forfeited immediately as provided in subparagraph (c) hereof.
(b) Distribution of Restricted Stock . If Participant remains in the continuous employment of the Company or an Affiliate during the entire Restricted Period and otherwise does not forfeit such shares pursuant to subparagraph (c) hereof, all restrictions applicable to
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the shares of Restricted Stock shall lapse upon expiration of the Restricted Period and a certificate or certificates representing the shares of Common Stock that were granted to Participant in the form of shares of Restricted Stock shall be delivered to Participant.
(c) Lapse of Restrictions or Forfeiture .
(i) | Death . If Participants employment with the Company and its Affiliates is terminated before the expiration of the Restricted Period by reason of Participants death, all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the date of Participants death and the certificate or certificates representing the shares of Common Stock shall be delivered to Participants estate. |
(ii) | Disability . If Participants employment with the Company and its Affiliates is terminated before the expiration of the Restricted Period by reason of total and permanent disability (as such term is defined in Section 22(e)(3) of the Code), all restrictions on a pro rata number of shares of Restricted Stock shall lapse. The pro rata number shall be the number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of months (including a fractional month) of Participants employment after the Date of Grant and the denominator of which is 36. The certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
(iii) | Retirement . If Participants employment with the Company and its Affiliates is terminated before the expiration of the Restricted Period by reason of retirement (defined below), all shares of Restricted Stock shall be forfeited immediately and all rights of Participant to such shares shall terminate immediately without further obligation on the part of the Company. Notwithstanding the foregoing, if Participants service to the Company or an Affiliate continues from and after the date of retirement through (i) membership on the Board, (ii) a written consulting services arrangement with the Company or an Affiliate or (iii) at the Companys discretion, a written confidentiality and non-solicitation agreement with the Company (Post-Retirement Service), shares of Restricted Stock shall not be forfeited but shall continue to be held by the Company until the earlier of (i) the end of the Restricted Period at which time such shares shall be delivered to the Participant or (ii) the date Participant ceases to provide Post-Retirement Service at which time such shares shall be forfeited. For purposes of this subparagraph 4(c)(iii), retirement shall mean severance from the employment of the Company and its Affiliates (i) at or after the attainment of age 55 and after completing a number of years of service (the total years of service credited to Participant for purposes of determining vested or nontransferable interest in a defined benefit pension plan maintained by the Company or an Affiliate which satisfies the requirements of Section 401(a) of the Code) that, when added to Participants age at the time of severance from employment, equals at least 65 or (ii) at or after the attainment of age 65. |
(iv) | Termination of Employment by Company or Affiliate . |
(a) |
With Cause . If the Company or an Affiliate terminates Participants employment with the Company and its Affiliates with cause, all shares of Restricted Stock shall |
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be forfeited immediately and all rights of Participant to such shares shall terminate immediately without further obligation on the part of the Company. For purposes of this Agreement, cause means: (i) misappropriation, theft or embezzlement of funds or property from the Company or an Affiliate or securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of the Company or an Affiliate, (ii) conviction of, or entry of a plea of nolo contendere with respect to, a felony which, in the reasonable opinion of the Company, is likely to cause material harm to the Companys or an Affiliates business, customer or supplier relations, financial condition or prospects, (iii) violation of the Companys Code of Honor or any successor code of conduct; or (iv) failure to substantially perform (other than by reason of illness or temporary disability, regardless of whether such temporary disability is or becomes a total and permanent disability (as defined in subparagraph 4(c)(ii) above), or by reason of approved leave of absence) the duties of Participants job. |
(b) | Without Cause . If Participants employment with the Company and its Affiliates is terminated by the Company or an Affiliate without cause, all restrictions on a pro rata number of shares of Restricted Stock shall lapse. The pro rata number shall be the number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of months (including a fractional month) of Participants employment after the Date of Grant and the denominator of which is 36. The certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
(v) | Termination of Employment by Participant . If Participant resigns from employment with the Company and its Affiliates before the expiration of the Restricted Period, without regard to the reason for such resignation (other than death, disability or retirement as provided in subsections (i), (ii) and (iii) above), all of the shares of Restricted Stock shall be forfeited immediately and all rights of Participant to such shares shall terminate immediately without further obligation on the part of the Company. |
(vi) | Change in Control . |
(a) | If, upon a Change in Control, (i) the Restricted Stock is assumed by, or a substitute award granted by, the surviving entity (together with its Related Entities, the Surviving Entity) in the Change in Control (such assumed or substituted award to be of the same type of award as this Restricted Stock with a value as of the Control Change Date substantially equal to the value of this Restricted Stock) and (ii) within 24 months of the Control Change Date, Participants employment with the Surviving Entity is terminated by the Surviving Entity without Cause (defined below) or by Participant for Good Reason (defined below), all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the date of employment termination and the certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
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(b) | For purposes of this subsection 4(c)(vi), Cause shall mean (i) the willful and continued failure by Participant to substantially perform his or her duties with the Surviving Entity (other than any such failure resulting from Participants incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to Participant by the Surviving Entity, which demand specifically identifies the manner in which the Surviving Entity believes that Participant has not substantially performed his or her duties, or (ii) the willful engaging by Participant in conduct which is demonstrably and materially injurious to the Surviving Entity, monetarily or otherwise. For purposes of this paragraph, no act, or failure to act, on Participants part shall be deemed willful unless done, or omitted to be done, not in good faith and without reasonable belief that the action or omission was in the best interest of the Surviving Entity. |
(c) | For purposes of this subparagraph 4(c)(vi), Good Reason shall have the meaning given to such term in the Executive Severance Agreement between Participant and the Company effective January 1, 200_, as such agreement from time to time may be amended, modified, extended or replaced by a successor agreement or plan. |
(d) | If, upon a Change in Control, the Restricted Stock is not assumed by, or a substitute award granted by, the Surviving Entity in the Change in Control as provided in subparagraph 4(c)(vi)(a) above, all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the Control Change Date and the certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
5. Nontransferability. The Performance Shares are nontransferable except by will or by the laws of descent and distribution. Shares of Restricted Stock issued in settlement of the Performance Shares cannot be transferred before the Restricted Period lapses except by will or by the laws of descent and distribution.
6. Shareholder Rights. Except as otherwise specifically provided herein, the Participant shall not have any rights as a shareholder of the Company with respect to the Performance Shares. Upon the issuance of shares of Restricted Stock in settlement of the Performance Shares, the Participant shall have all of the rights of a shareholder of the Company with respect to those shares, including the right to vote the shares and to receive, free of all restrictions, ordinary cash dividends. Stock received as a dividend on, or in connection with a stock split of any shares of Restricted Stock issued in settlement of the Performance Shares shall be subject to the same vesting restrictions as the underlying shares of Restricted Stock. The Participants right to receive any extraordinary dividends or distributions with respect to shares of Restricted Stock issued in settlement of the Performance Shares shall be at the sole discretion of the Committee, but in the event of any such extraordinary event, the Committee shall take action appropriate to preserve the value of, and to prevent the unintended enhancement of value in such shares of Restricted Stock.
7. Withholding. The Participant shall pay the Company any amount of taxes as may be necessary in the opinion of the Company to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions. In lieu thereof, the Company shall have the right
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to retain, from the shares of Restricted Stock to be issued under Section 3, the number of shares of Restricted Stock with Fair Market Value equal to the minimum amount required to be withheld. In any event, the Company shall have the right to deduct from all amounts paid to a Participant in cash (whether under the Plan or otherwise) any taxes required to be withheld. The Participant shall promptly notify the Company of any election made pursuant of Section 83(b) of the Code.
8. No Right to Continued Employment. The award and settlement of the Performance Shares does not give Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate his or her employment at any time.
9. Change in Capital Structure. The number of Performance Shares and the performance criteria in Section 2 (or, after any settlement of the Performance Shares, the number of shares of Restricted Stock) shall be adjusted as the Committee determines is equitably required in the event the Company effects one or more stock dividends, stock split-ups subdivisions or consolidations of shares, other similar changes in capitalization or such other events as are described in the Plan.
10. Governing Law. These Terms and Conditions and the Grant Notice shall be governed by the laws of the Commonwealth of Virginia.
11. Conflicts. In the event of any conflict between the provisions of the Plan as in effect on the Date of Grant and the provisions of these Terms and Conditions or the Grant Notice, the provisions of the Plan shall govern. All references herein to the Plan shall mean the plan as in effect on the Date of Grant.
12. Participant Bound by Plan. Participant hereby acknowledges that a copy of the Plan has been made available to him or her and agrees to be bound by all the terms and provisions of the Plan.
13. Binding Effect. Subject to the limitations stated above and in the Plan, these Terms and Conditions and the Grant Notice shall be binding upon Participant and his or her successors in interest and the successors of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
OWENS & MINOR, INC. | ||
By: |
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Participant |
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Exhibit 10.2
OWENS & MINOR, INC.
Restricted Stock Agreement
THIS AGREEMENT, dated the day of , 200 , between OWENS & MINOR, INC., a Virginia corporation (the Company), and (Participant), is made pursuant and subject to the provisions of the Companys 2005 Stock Incentive Plan (the Plan). All capitalized terms used herein that are not otherwise defined shall have the same meaning given to them in the Plan.
W I T N E S S E T H:
1. Restricted Stock Grant . Pursuant to the provisions of the Plan, on , 200 (the Date of Grant), the Company granted to Participant, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, a Stock Award of shares of Common Stock (the Restricted Stock).
2. Terms and conditions . The shares of Restricted Stock evidenced hereby are subject to the following terms and conditions:
(a) Restricted Period . Until the third anniversary of the Date of Grant (the Restricted Period) or the lapse of restrictions as provided in subsection 2(d) hereof, the Restricted Stock shall be subject to the following restrictions:
(i) Participant shall not be entitled to receive the certificate or certificates evidencing the Restricted Stock;
(ii) Shares of Restricted Stock may not be sold, transferred, assigned, pledged, conveyed, hypothecated or otherwise disposed of; and
(iii) Shares of Restricted Stock may be forfeited immediately as provided in subsection 2(d) hereof.
Notwithstanding the foregoing, Participant shall be entitled to vote the shares of Restricted Stock and receive dividends thereon while the Restricted Stock is outstanding. Any stock dividends or other shares of Company stock or other property issued in respect of Restricted Stock, including without limitation, shares issued in connection with stock splits and recapitalizations, will be subject to the same restrictions applicable to the Restricted Stock.
(b) Custody of Shares of Restricted Stock . Certificates representing the shares of Restricted Stock shall be issued in Participants name but shall be held by the Company (or its transfer agent) during the Restricted Period. The Companys Secretary and its General Counsel shall serve as attorney-in-fact for Participant during the Restricted Period with full power and authority in Participants name to assign and convey to the Company any shares of Restricted Stock that Participant forfeits under subsection 2(d) hereof. Each certificate representing shares of Restricted Stock may bear a legend referring to the risk of forfeiture of the shares and stating that such shares are nontransferable until all restrictions have been satisfied and the legend has been removed.
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(c) Distribution of Restricted Stock . If Participant remains in the continuous employment of the Company or an Affiliate during the entire Restricted Period and otherwise does not forfeit such shares pursuant to subsection 2(d) hereof, all restrictions applicable to the shares of Restricted Stock shall lapse upon expiration of the Restricted Period and a certificate or certificates representing the shares of Common Stock that were granted to Participant in the form of shares of Restricted Stock shall be delivered to Participant.
(d) Lapse of Restrictions or Forfeiture .
(vii) | Death . If Participants employment with the Company and its Affiliates is terminated before the expiration of the Restricted Period by reason of Participants death, all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the date of Participants death and the certificate or certificates representing the shares of Common Stock shall be delivered to Participants estate. |
(viii) | Disability . If Participants employment with the Company and its Affiliates is terminated before the expiration of the Restricted Period by reason of total and permanent disability (as such term is defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the Code)), all restrictions on a pro rata number of shares of Restricted Stock shall lapse. The pro rata number shall be the number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of months (including a fractional month) of Participants employment after the Date of Grant and the denominator of which is 36. The certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
(ix) | Retirement . If Participants employment with the Company and its Affiliates is terminated before the expiration of the Restricted Period by reason of retirement (defined below), all shares of Restricted Stock shall be forfeited immediately and all rights of Participant to such shares shall terminate immediately without further obligation on the part of the Company. Notwithstanding the foregoing, if Participants service to the Company or an Affiliate continues from and after the date of retirement through (i) membership on the Board, (ii) a written consulting services arrangement with the Company or an Affiliate or (iii) at the discretion of the Company, a written confidentiality and non-solicitation agreement with the Company (Post-Retirement Service), shares of Restricted Stock shall not be forfeited but shall continue to be held by the Company until the earlier of (i) the end of the Restricted Period at which time such shares shall be delivered to the Participant or (ii) the date Participant ceases to provide Post-Retirement Service at which time such shares shall be forfeited. For purposes of this Section 2(d)(iii), retirement shall mean severance from the employment of the Company and its Affiliates (i) at or after the attainment of age 55 and after completing a number of years of service (the total years of service credited to Participant for purposes of determining vested or nontransferable interest in a defined benefit pension plan maintained by the Company or an Affiliate which satisfies the requirements of Section 401(a) of the Code) that, when added to Participants age at the time of severance from employment, equals at least 65 or (ii) at or after the attainment of age 65. |
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(x) | Termination of Employment by Company or Affiliate . |
(a) | With Cause . If the Company or an Affiliate terminates Participants employment with the Company and its Affiliates with cause, all shares of Restricted Stock shall be forfeited immediately and all rights of Participant to such shares shall terminate immediately without further obligation on the part of the Company. For purposes of this Agreement, cause means: (ii) misappropriation, theft or embezzlement of funds or property from the Company or an Affiliate or securing or attempting to secure personally any profit in connection with any transaction entered into on behalf of the Company or an Affiliate, (ii) conviction of, or entry of a plea of nolo contendere with respect to, a felony which, in the reasonable opinion of the Company, is likely to cause material harm to the Companys or an Affiliates business, customer or supplier relations, financial condition or prospects, (iii) violation of the Companys Code of Honor or any successor code of conduct; or (iv) failure to substantially perform (other than by reason of illness or temporary disability, regardless of whether such temporary disability is or becomes a total and permanent disability (as defined in paragraph 2(d)(ii) above), or by reason of approved leave of absence) the duties of Participants job. |
(b) | Without Cause . If Participants employment with the Company and its Affiliates is terminated by the Company or an Affiliate without cause, all restrictions on a pro rata number of shares of Restricted Stock shall lapse. The pro rata number shall be the number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of months (including a fractional month) of Participants employment after the Date of Grant and denominator of which is 36. The certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
(xi) | Termination of Employment by Participant . If Participant resigns from employment with the Company and its Affiliates before the expiration of the Restricted Period, without regard to the reason for such resignation (other than death, disability or retirement as provided in subsections (i), (ii) and (iii) above), all of the shares of Restricted Stock shall be forfeited immediately and all rights of Participant to such shares shall terminate immediately without further obligation on the part of the Company. |
(xii) | Change in Control . |
(a) |
If, upon a Change in Control, (i) the Restricted Stock is assumed by, or a substitute award granted by, the surviving entity (together with its Related Entities, the Surviving Entity) in the Change in Control (such assumed or substituted award to be of the same type of award as this Restricted Stock with a value as of the Control Change Date substantially equal to the value of this Restricted Stock) and (ii) within 24 months of the Control Change Date, Participants employment with the Surviving Entity is terminated by the Surviving Entity without Cause (defined below) or by Participant for Good Reason (defined below), all restrictions applicable to the shares |
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of Restricted Stock shall immediately lapse on the date of employment termination and the certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
(b) | For purposes of this subsection 2(d)(vi), Cause shall mean (i) the willful and continued failure by Participant to substantially perform his or her duties with the Surviving Entity (other than any such failure resulting from Participants incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to Participant by the Surviving Entity, which demand specifically identifies the manner in which the Surviving Entity believes that Participant has not substantially performed his or her duties, or (ii) the willful engaging by Participant in conduct which is demonstrably and materially injurious to the Surviving Entity, monetarily or otherwise. For purposes of this paragraph, no act, or failure to act, on Participants part shall be deemed willful unless done, or omitted to be done, not in good faith and without reasonable belief that the action or omission was in the best interest of the Surviving Entity. |
(c) | For purposes of this Section 2(d)(vi), Good Reason shall have the meaning given to such term in the Executive Severance Agreement between Participant and the Company effective January 1, 200_, as such agreement from time to time may be amended, modified, extended or replaced by a successor agreement or plan. |
(d) | If, upon a Change in Control, the Restricted Stock is not assumed by, or a substitute award granted by, the Surviving Entity in the Change in Control as provided in subsection 2(d)(vi)(a) above, all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the Control Change Date and the certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
3. Governing Law . This Agreement shall be governed by the laws of the Commonwealth of Virginia.
4. No Right to Continued Employment . The grant of Restricted Stock hereunder does not confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate his employment at any time.
5. Change in Capital Structure . The terms of this award shall be adjusted as the Committee determines is equitably required in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
6. Conflicts . In the event of any conflict between the provisions of the Plan as in effect on the date hereof and the provisions of this Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the date hereof.
7. Participant Bound by Plan . Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.
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8. Binding Effect . Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees and personal representatives of Participant and the successors of the Company.
IN WITNESS WHEREOF, OWENS & MINOR, INC. has caused this Agreement to be signed by a duly authorized officer and Participant has affixed his or her signature hereto.
OWENS & MINOR, INC. | ||||
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PARTICIPANT | ||||
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Exhibit 10.3
OWENS & MINOR, INC.
Director Restricted Stock Agreement
THIS AGREEMENT, dated the day of , 200 , between OWENS & MINOR, INC., a Virginia corporation (the Company), and (Participant), is made pursuant and subject to the provisions of the Companys 2005 Stock Incentive Plan (the Plan). All capitalized terms used herein that are not otherwise defined shall have the same meaning given to them in the Plan.
W I T N E S S E T H:
1. Restricted Stock Grant . Pursuant to the provisions of the Plan, on , 200 (the Date of Grant), the Company granted to Participant, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, a Stock Award of shares of Common Stock (the Restricted Stock).
2. Terms and conditions . The shares of Restricted Stock evidenced hereby are subject to the following terms and conditions:
(a) Restricted Period . Until the first anniversary of the Date of Grant (the Restricted Period) or the lapse of restrictions as provided in subsection 2(d) hereof, the Restricted Stock shall be subject to the following restrictions:
(i) Participant shall not be entitled to receive the certificate or certificates evidencing the Restricted Stock; and
(ii) Shares of Restricted Stock may not be sold, transferred, assigned, pledged, conveyed, hypothecated or otherwise disposed of; and
(iii) Shares of Restricted Stock may be forfeited as provided in subsection 2(d) hereof.
Notwithstanding the foregoing, Participant shall be entitled to vote the shares of Restricted Stock and receive dividends thereon while the Restricted Stock is outstanding. Any stock dividends or other shares of Company stock or other property issued in respect of Restricted Stock, including without limitation, shares issued in connection with stock splits and recapitalizations, will be subject to the same restrictions applicable to the Restricted Stock.
(b) Custody of Shares of Restricted Stock . Certificates representing the shares of Restricted Stock shall be issued in Participants name but shall be held by the Company (or its transfer agent) during the Restricted Period. The Companys Secretary and its General Counsel shall serve as attorney-in-fact for Participant during the Restricted Period with full power and authority in Participants name to assign and convey to the Company any shares of Restricted Stock that Participant forfeits under subsection 2(d) hereof. Each certificate representing shares of Restricted Stock may bear a legend referring to the risk of forfeiture of the shares and stating that such shares are nontransferable until all restrictions have been satisfied and the legend has been removed.
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(c) Distribution of Restricted Stock . If Participant remains a member of the Board of Directors of the Company during the entire Restricted Period and otherwise does not forfeit such shares pursuant to subsection 2(d) hereof, all restrictions applicable to the shares of Restricted Stock shall lapse upon expiration of the Restricted Period and a certificate or certificates representing the shares of Common Stock that were granted to Participant in the form of shares of Restricted Stock shall be delivered to Participant.
(d) Lapse of Restrictions .
(xiii) | Death . If Participants membership on the Board of Directors of the Company is terminated before the expiration of the Restricted Period by reason of Participants death, all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the date of Participants death and the certificate or certificates representing the shares of Common Stock shall be transferred in accordance with a beneficiary designation form provided by the Company and signed by the Participant and filed with the Company or, in the absence of such a beneficiary designation form, delivered to Participants estate. |
(xiv) | Termination of Membership on the Board of Directors of the Company . Except as provided in subsection 2(d)(i) above, if Participant resigns or otherwise ceases to be a member of the Board of Directors of the Company (whether voluntary or involuntary) before the expiration of the Restricted Period, all restrictions on a pro rata number of shares of Restricted Stock shall lapse and any remaining shares shall be forfeited. The pro rata number shall be the number of shares of Restricted Stock multiplied by a fraction, the numerator of which is the number of months (including a fractional month) of Participants service as a member of the Board of Directors after the Date of Grant and the denominator of which is 12. The certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
(xv) | Change in Control . |
(a) | If, upon a Change in Control, (i) the Restricted Stock is assumed by, or a substitute award granted by, the surviving entity (together with its Related Entities, the Surviving Entity) in the Change in Control (such assumed or substituted award to be of the same type of award as this Restricted Stock with a value as of the Control Change Date substantially equal to the value of this Restricted Stock) and (ii) Participant is not elected a member of the Surviving Entitys board of directors as of the Control Change Date (or does not continue to serve as a member of the Surviving Entitys board of directors for at least 12 consecutive months), all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the Control Change Date (or the date Participant ceases to serve on the Surviving Entitys board of directors if less than 12 consecutive months) and the certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
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(b) | If, upon a Change in Control, the Restricted Stock is not assumed by, or a substitute award granted by, the Surviving Entity in the Change in Control as provided in subsection 2(d)(iii)(a) above, all restrictions applicable to the shares of Restricted Stock shall immediately lapse on the Control Change Date and the certificate or certificates representing the shares of Common Stock upon which the restrictions have lapsed shall be delivered to Participant. |
3. Governing Law . This Agreement shall be governed by the laws of the Commonwealth of Virginia.
4. Change in Capital Structure . The terms of this award shall be adjusted as the Committee determines is equitably required in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
5. Conflicts . In the event of any conflict between the provisions of the Plan as in effect on the date hereof and the provisions of this Agreement, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the date hereof.
6. Participant Bound by Plan . Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.
7. Binding Effect . Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees and personal representatives of Participant and the successors of the Company.
IN WITNESS WHEREOF, OWENS & MINOR, INC. has caused this Agreement to be signed by a duly authorized officer and Participant has affixed his or her signature hereto.
OWENS & MINOR, INC. | PARTICIPANT | |||||||
By: |
|
By: |
|
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Exhibit 10.4
AMENDMENT OF THE 2005 STOCK INCENTIVE PLAN
TO ALLOW BENEFICIARY DESIGNATION
RESOLVED , that upon the recommendation of the Compensation & Benefits Committee and approval by the Board of Directors, the Owens & Minor, Inc. 2005 Stock Incentive Plan is amended by substituting the following sentence for the first sentence in Section 6.04:
Any Options or SARs granted under this Plan shall be nontransferable except by will, by the laws of descent and distribution or in accordance with a beneficiary designation form provided by the Company and signed by the Participant and filed with the Company.
AND FURTHER RESOLVED , that the appropriate officers of the Company are hereby authorized and directed to take such actions and to execute such documents as may be necessary or desirable to implement the foregoing resolution, all without the necessity of further action by this Board.
AMENDMENT OF SECTION 7.02 OF THE 2005 STOCK INCENTIVE PLAN
WHEREAS, Article VIII of the 2005 Stock Incentive Plan (the Plan) provides for the award of performance shares which will entitle the participant to receive cash or a stock award or a combination thereof upon satisfaction of the performance requirements as certified by the Compensation & Benefits Committee; and
WHEREAS, in connection with the award of performance shares under the Plan that would, if earned, be settled in whole or in part, by a grant of restricted stock, the Compensation & Benefits Committee recommends amending Section 7.02 of the Plan to clarify that the minimum vesting rules do not apply to stock issued in settlement of performance shares; and
WHEREAS, the proposed amendment to Section 7.02 of the Plan does not require shareholder approval and Article XIV of the Plan authorizes the Board to approve the proposed amendment;
NOW THERFORE BE IT RESOLVED, that upon the recommendation of the Compensation & Benefits Committee, the Board of Directors approves the following amendment (in bold face type) to Section 7.02 of the Plan to clarify the minimum vesting requirements for stock granted in settlement of earned performance shares:
7.02 Vesting.
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The Administrator, on the date of the award, may prescribe that a Participants rights in the Stock Award shall be forfeitable or otherwise restricted for a period of time or subject to such conditions as may be set forth in the Agreement. By way of example and not of limitation, the restrictions may postpone transferability, vesting or both of the shares until the attainment of performance objectives prescribed by the Committee or may provide that the shares will be forfeited if the Participant separates from the service of the Company and its Related Entities before the expiration of a stated term. If a Stock Award is not nonforfeitable and transferable upon its grant or is not issued in settlement of a performance share award, the period of restriction until full vesting shall be at least three years, provided that the minimum period of restriction shall be at least one year in the case of a Stock Award to a Nonemployee Director or a Stock Award that will become transferable and nonforfeitable on account of the satisfaction of performance objectives prescribed by the Administrator.
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Exhibit 10.5
AMENDMENT OF THE 1998 DIRECTORS COMPENSATION PLAN TO
ALLOW BENEFICIARY DESIGNATION
RESOLVED , that upon recommendation of the Governance & Nominating Committee and approval by the Board of Directors, the Owens & Minor, Inc. 1998 Directors Compensation Plan is amended by substituting the following sentence for the first sentence in Section 10.03:
Except as provided in Section 3.07, a Participant may not transfer or assign any rights that he or she has under the Plan other than by will or the laws of descent and distribution; provided, however, that a Participants interest in an Option or the Deferred Fee Program also may be transferred in accordance with a beneficiary designation form provided by the Company and signed by the Participant and filed with the Company.
AND FURTHER RESOLVED , that the appropriate officers of the Company be authorized and directed to take such actions and to execute such documents as may be necessary or desirable to implement the foregoing resolutions, all without the necessity of further action by the Board of Directors.
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Exhibit 10.6
AMENDMENT OF THE 2003 DIRECTORS COMPENSATION PLAN TO ALLOW
BENEFICIARY DESIGNATION
RESOLVED, that upon the recommendation of the Governance & Nominating Committee and approval by the Board of Directors, the Owens & Minor, Inc. 2003 Directors Compensation Plan is amended by substituting the following sentence for the first sentence in Section 10.03:
Except as provided in Section 3.07, a Participant may not transfer or assign any rights that he or she has under the Plan other than by will or the laws of descent and distribution; provided, however, that a Participants interest in an Option or the Deferred Fee Program also may be transferred in accordance with a beneficiary designation form provided by the Company and signed by the Participant and filed with the Company.
AND FURTHER RESOLVED, that the appropriate officers of the Company be authorized and directed to take such actions and to execute such documents as may be necessary or desirable to implement the foregoing resolutions, all without the necessity of further action by the Board of Directors.
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Exhibit 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Craig R. Smith, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 of Owens & Minor, Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting;
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
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b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 8, 2008
/s/ CRAIG R. SMITH |
Craig R. Smith |
Chief Executive Officer |
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Exhibit 31.2
CERTIFICATION PURSUANT TO
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James L. Bierman, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 of Owens & Minor, Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting;
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
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b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 8, 2008
/s/ JAMES L. BIERMAN |
James L. Bierman |
Chief Financial Officer |
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Owens & Minor, Inc. (the Company) on Form 10-Q for the period ended March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Craig R. Smith, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fully presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ CRAIG R. SMITH |
Craig R. Smith |
Chief Executive Officer |
Owens & Minor, Inc. |
May 8, 2008 |
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Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Owens & Minor, Inc. (the Company) on Form 10-Q for the period ended March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James L. Bierman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(3) | The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and |
(4) | The information contained in the Report fully presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ JAMES L. BIERMAN |
James L. Bierman |
Chief Financial Officer |
Owens & Minor, Inc. |
May 8, 2008 |
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