OWENS & MINOR INC/VA/ (Form: 10-Q, Received: 11/06/2008 16:32:47)

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 September 30, 2008

¨	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 October 31, 2008, was 41,376,591 shares.

Owens & Minor, Inc. and Subsidiaries

Index


			Page
Part I. Financial Information

	Item 1.	Financial Statements

		Condensed Consolidated Statements of Income – Three Months and Nine Months Ended September 30, 2008 and 2007	3

		Condensed Consolidated Balance Sheets – September 30, 2008 and December 31, 2007	4

		Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2008 and 2007	5

		Notes to Condensed Consolidated Financial Statements	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

	Item 4.	Controls and Procedures	24

Part II. Other Information

	Item 1.	Legal Proceedings	24

	Item 1A.	Certain Risk Factors	24

	Item 6.	Exhibits	25

Part I. Financial Information

Item 1.

Financial Statements

Owens & Minor, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(unaudited)


*(in thousands, except per share data)*	Three Months Ended September 30,						Nine Months Ended September 30,
*(in thousands, except per share data)*	2008			2007			2008			2007
Revenue	$	1,810,468		$	1,686,744		$	5,358,100		$	5,051,987
Cost of revenue		1,616,752			1,508,487			4,787,104			4,522,206

Gross margin		193,716			178,257			570,996			529,781
Selling, general and administrative expenses		140,983			131,365			419,637			407,603
Depreciation and amortization		7,774			7,654			23,370			23,920
Other operating income and expense, net		(1,243	)		(1,704	)		(3,210	)		(4,174	)

Operating earnings		46,202			40,942			131,199			102,432
Interest expense, net		6,268			5,418			12,607			19,202

Income before income taxes		39,934			35,524			118,592			83,230
Income tax provision		14,650			14,348			45,468			32,973

Net income	$	25,284		$	21,176		$	73,124		$	50,257

Net income per common share – basic	$	0.62		$	0.53		$	1.79		$	1.25

Net income per common share – diluted	$	0.61		$	0.52		$	1.76		$	1.23

Cash dividends per common share	$	0.20		$	0.17		$	0.60		$	0.51

See accompanying notes to condensed consolidated financial statements.

Owens & Minor, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)


*(in thousands, except per share data)*	September 30, 2008			December 31, 2007
Assets
Current assets
Cash and cash equivalents	$	25,741		$	10,395
Accounts and notes receivable, net of allowances of $31,480 and $24,912		468,304			462,392
Merchandise inventories		609,327			581,569
Other current assets		49,746			43,767

Total current assets		1,153,118			1,098,123
Property and equipment, net of accumulated depreciation of $75,656 and $67,868		78,064			76,122
Goodwill, net		271,699			271,699
Intangible assets, net		25,473			32,517
Other assets, net		43,677			44,885

Total assets	$	1,572,031		$	1,523,346


Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	521,428		$	477,368
Accrued payroll and related liabilities		32,766			18,763
Other accrued liabilities		81,884			80,599

Total current liabilities		636,078			576,730
Long-term debt, excluding current portion		208,832			283,845
Other liabilities		47,708			48,412

Total liabilities		892,618			908,987

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 – 41,404 shares and 40,874 shares		82,808			81,748
Paid-in capital		177,192			161,978
Retained earnings		426,305			377,913
Accumulated other comprehensive loss		(6,892	)		(7,280	)

Total shareholders’ equity		679,413			614,359

Total liabilities and shareholders’ equity	$	1,572,031		$	1,523,346

See accompanying notes to condensed consolidated financial statements.

Owens & Minor, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)


*(in thousands)*	Nine Months Ended September 30,
*(in thousands)*	2008			2007
Operating activities
Net income	$	73,124		$	50,257
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		23,370			23,920
Provision for losses on accounts and notes receivable		16,407			14,497
Provision for LIFO reserve		10,468			7,500
Amortization of direct-response advertising		5,333			5,198
Deferred direct-response advertising costs		(7,927	)		(6,402	)
Share-based compensation expense		6,369			5,167
Loss on interest rate swaps		3,141			—
Changes in operating assets and liabilities:
Accounts and notes receivable		(22,319	)		15,935
Merchandise inventories		(38,226	)		61,315
Accounts payable		43,426			9,630
Net change in other current assets and liabilities		9,106			16,705
Other, net		1,291			(1,679	)

Cash provided by operating activities		123,563			202,043


Investing activities
Additions to property and equipment		(12,766	)		(13,535	)
Additions to computer software		(7,439	)		(6,875	)
Acquisition of intangible assets		—			18
Net cash received related to acquisitions of businesses		—			14,133
Other, net		8			395

Cash used for investing activities		(20,197	)		(5,864	)


Financing activities
Cash dividends paid		(24,733	)		(20,690	)
Net payments on revolving credit facility		(76,908	)		(200,800	)
Proceeds from exercise of stock options		8,140			7,379
Excess tax benefits related to share-based compensation		2,963			2,892
Increase in drafts payable		634			17,662
Proceeds from termination of interest rate swaps		3,795			—
Other, net		(1,911	)		(1,750	)

Cash used for financing activities		(88,020	)		(195,307	)


Net increase in cash and cash equivalents		15,346			872
Cash and cash equivalents at beginning of period		10,395			7,990

Cash and cash equivalents at end of period	$	25,741		$	8,862


Supplemental disclosure of cash flow information
Income taxes paid, net	$	53,583		$	12,066
Interest paid	$	7,119		$	16,647

See accompanying notes to condensed consolidated financial statements.

Owens & Minor, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

(in thousands, unless otherwise indicated)

1.	Basis of Presentation and Use of Estimates

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 September 30, 2008, and December 31, 2007, and the consolidated results of operations for the three- and nine-month periods and cash flows for the nine-month periods ended September 30, 2008 and 2007, in conformity with U.S. generally accepted accounting principles (GAAP). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

During the third quarter of 2008, the company identified errors in its previously filed condensed consolidated balance sheets as of December 31, 2007 and 2006 and condensed consolidated statement of cash flows for the nine months ended September 30, 2007. The errors were considered immaterial; however, the company has revised the balance sheet as of December 31, 2007, and the statement of cash flows for the nine months ended September 30, 2007, included in this filing. The errors were the result of the company incorrectly classifying bank overdrafts of $8.3 million and $2.9 million as of December 31, 2007 and 2006, respectively, in cash and cash equivalents rather than in accounts payable, and the company incorrectly classifying an increase in bank overdrafts of $2.3 million for the nine months ended September 30, 2007, as a change in cash and cash equivalents rather than as a change in drafts payable in cash used for financing activities. The correction of these errors did not impact previously reported net income, shareholders’ equity, net income per share or cash flows provided by operating activities for any of the periods presented.

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 and nine months ended September 30, 2008 and 2007:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Beginning, direct-response advertising costs, net	$	11,829		$	10,707		$	10,469		$	9,817
Deferred direct-response advertising costs		3,157			2,011			7,927			6,402
Amortization		(1,923	)		(1,697	)		(5,333	)		(5,198	)

Ending, direct-response advertising costs, net	$	13,063		$	11,021		$	13,063		$	11,021

4.	Intangible Assets

Intangible assets at September 30, 2008 and December 31, 2007, are as follows:


	Customer Relationships			Other Intangibles			Total
At September 30, 2008:
Gross intangible assets	$	49,281		$	8,791		$	58,072
Accumulated amortization		(27,944	)		(4,655	)		(32,599	)

Net intangible assets	$	21,337		$	4,136		$	25,473


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

Amortization expense for intangible assets was $2.2 million and $2.6 million for the three months ended September 30, 2008 and 2007, and $7.0 million and $8.9 million for the nine months ended September 30, 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 – $2.0 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 company’s retirement plans for the three and nine months ended September 30, 2008 and 2007, are as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Service cost	$	308		$	211		$	925		$	635
Interest cost		853			788			2,562			2,361
Expected return on plan assets		(490	)		(440	)		(1,470	)		(1,321	)
Amortization of prior service cost		40			39			118			118
Recognized net actuarial loss		193			189			578			569

Net periodic pension cost	$	904		$	787		$	2,713		$	2,362

Debt

The company had a $350 million revolving credit facility as of September 30, 2008 and December 31, 2007. In July 2008, this facility was amended to change certain restrictions and to release certain guarantors. On October 1, 2008, Lehman Brothers, Inc. defaulted on its commitment under the revolving credit facility, thereby decreasing the company’s total borrowing capacity to $306 million.

7.	Derivative Financial Instruments

During the three- and nine-month periods ended September 2008 and 2007, the company held interest rate swaps related to a portion of the company’s $200 million fixed-rate debt (Senior Notes).

The swaps were designated as a fair value hedge of the Senior Notes. Accordingly, no net gains or losses were recorded on the statement of income related to the company’s underlying debt and interest rate swap agreements. The fair value of the swaps was determined using observable market inputs (Level 2), as defined by, and in accordance with, the fair value hierarchy of Statement of Financial Accounting Standards No. (SFAS) 157, Fair Value Measurements .

During the third quarter of 2008, Lehman Brothers Holdings Inc., guarantor of one of the swaps, declared bankruptcy. The company determined at that date that the swaps were no longer expected to be effective in offsetting interest rate risk. The company discontinued accounting for the swaps as a fair value hedge as of that date. The company terminated the swaps in September 2008 and received proceeds of $3.8 million, plus accrued interest of $0.9 million. The company realized a loss of $3.1 million, included in interest expense, net, in the third quarter of 2008. This loss represents the difference between the fair value of the swaps as of the date that hedge accounting was discontinued and the proceeds received on the termination of the swaps. The fair value adjustment of $6.9 million to the carrying value of the related debt, recorded prior to the discontinuance of hedge accounting, is being recognized as an offset to interest expense using the interest method over the remaining life of the debt.

8.	Comprehensive Income

The company’s comprehensive income for the three and nine months ended September 30, 2008 and 2007, is shown in the table below:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Net income	$	25,284		$	21,176		$	73,124		$	50,257
Other comprehensive income – adjustments related to retirement benefit plans, net of tax		376			72			424			72
Reclassification of gain on cash-flow hedge derivatives, net of tax		(13	)		(12	)		(38	)		(37	)

Comprehensive income	$	25,647		$	21,236		$	73,510		$	50,292

9.	Net Income per Common Share

The following sets forth the computation of basic and diluted net income per common share:


*(in thousands, except per share data)*	Three Months Ended September 30,				Nine Months Ended September 30,
*(in thousands, except per share data)*	2008		2007		2008		2007
Numerator:
Numerator for basic and diluted net income per common share – net income	$	25,284	$	21,176	$	73,124	$	50,257
Denominator:
Denominator for basic net income per common share – weighted average shares		40,860		40,318		40,744		40,180
Effect of dilutive securities – stock options and restricted stock		684		636		692		690

Denominator for diluted net income per common share – adjusted weighted average shares		41,544		40,954		41,436		40,870

Net income per common share – basic	$	0.62	$	0.53	$	1.79	$	1.25
Net income per common share – diluted	$	0.61	$	0.52	$	1.76	$	1.23

10.

Direct-to-Consumer (DTC) Distribution Business

The following sets forth the amounts contributed by the DTC distribution business for the three and nine months ended September 30, 2008 and 2007:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2008			2007		2008			2007
Revenue	$	23,610		$	26,588	$	72,710		$	81,474
Operating (losses) earnings	$	(338	)	$	1,200	$	(1,767	)	$	2,477
Intercompany expense included in operating (losses) earnings	$	284		$	399	$	818		$	1,222

11.

Condensed Consolidating Financial Information

The following tables present condensed consolidating financial information for: Owens & Minor, Inc., on a combined basis; the guarantors of Owens & Minor, Inc.’s Senior Notes; and the non-guarantor subsidiaries of the Senior Notes. Separate financial statements of the guarantor subsidiaries are not presented because the guarantors are jointly, severally and unconditionally liable under the guarantees and the company believes the condensed consolidating financial information is more meaningful in understanding the financial position, results of operations and cash flows of the guarantor subsidiaries.

Condensed Consolidating Financial Information


For the three months ended September 30, 2008	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations		Consolidated
Statements of Operations
Revenue	$	—		$	1,786,858		$	23,610		$	—	$	1,810,468
Cost of revenue		—			1,608,110			8,642			—		1,616,752

Gross margin		—			178,748			14,968			—		193,716
Selling, general and administrative expenses		32			127,751			13,200			—		140,983
Depreciation and amortization		—			5,668			2,106			—		7,774
Other operating income and expense, net		—			(1,243	)		—			—		(1,243	)

Operating earnings (loss)		(32	)		46,572			(338	)		—		46,202
Interest expense, net		2,069			3,595			604			—		6,268

Income (loss) before income taxes		(2,101	)		42,977			(942	)		—		39,934
Income tax provision (benefit)		(814	)		15,801			(337	)		—		14,650

Net income (loss)	$	(1,287	)	$	27,176		$	(605	)	$	—	$	25,284

Condensed Consolidating Financial Information


For the three months ended September 30, 2007	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations		Consolidated
Statements of Operations
Revenue	$	—		$	1,660,156		$	26,588	$	—	$	1,686,744
Cost of revenue		—			1,499,142			9,345		—		1,508,487

Gross margin		—			161,014			17,243		—		178,257
Selling, general and administrative expenses		(6	)		118,016			13,355		—		131,365
Depreciation and amortization		—			4,966			2,688		—		7,654
Other operating income and expense, net		—			(1,704	)		—		—		(1,704	)

Operating earnings		6			39,736			1,200		—		40,942
Interest (income) expense, net		(39	)		4,903			554		—		5,418

Income before income taxes		45			34,833			646		—		35,524
Income tax provision		17			14,078			253		—		14,348

Net income	$	28		$	20,755		$	393	$	—	$	21,176

Condensed Consolidating Financial Information


For the nine months ended September 30, 2008	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations		Consolidated
Statements of Operations
Revenue	$	—		$	5,285,390		$	72,710		$	—	$	5,358,100
Cost of revenue		—			4,761,085			26,019			—		4,787,104

Gross margin		—			524,305			46,691			—		570,996
Selling, general and administrative expenses		535			377,668			41,434			—		419,637
Depreciation and amortization		—			16,343			7,027			—		23,370
Other operating income and expense, net		—			(3,207	)		(3	)		—		(3,210	)

Operating earnings (loss)		(535	)		133,501			(1,767	)		—		131,199
Interest expense, net		536			10,395			1,676			—		12,607

Income (loss) before income taxes		(1,071	)		123,106			(3,443	)		—		118,592
Income tax provision (benefit)		(410	)		47,198			(1,320	)		—		45,468

Net income (loss)	$	(661	)	$	75,908		$	(2,123	)	$	—	$	73,124

Condensed Consolidating Financial Information


For the nine months ended September 30, 2007	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations		Consolidated
Statements of Operations
Revenue	$	—		$	4,970,513		$	81,474	$	—	$	5,051,987
Cost of revenue		—			4,490,697			31,509		—		4,522,206

Gross margin		—			479,816			49,965		—		529,781
Selling, general and administrative expenses		386			368,138			39,079		—		407,603
Depreciation and amortization		—			15,625			8,295		—		23,920
Other operating income and expense, net		—			(4,288	)		114		—		(4,174	)

Operating earnings (loss)		(386	)		100,341			2,477		—		102,432
Interest (income) expense, net		(49	)		17,528			1,723		—		19,202

Income (loss) before income taxes		(337	)		82,813			754		—		83,230
Income tax provision (benefit)		(132	)		32,810			295		—		32,973

Net income (loss)	$	(205	)	$	50,003		$	459	$	—	$	50,257

Condensed Consolidating Financial Information


September 30, 2008	Owens & Minor, Inc.		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	13,172	$	7,106		$	5,463		$	—		$	25,741
Accounts and notes receivable, net		—		449,974			18,330			—			468,304
Merchandise inventories		—		605,708			3,619			—			609,327
Intercompany advances, net		9,794		(9,794	)		—			—			—
Other current assets		192		48,610			944			—			49,746

Total current assets		23,158		1,101,604			28,356			—			1,153,118
Property and equipment, net		—		75,163			2,901			—			78,064
Goodwill, net		—		232,846			38,853			—			271,699
Intangible assets, net		—		17,569			7,904			—			25,473
Intercompany receivables		33,549		—			—			(33,549	)		—
Intercompany investments		445,228		—			—			(445,228	)		—
Other assets, net		1,863		24,612			17,202			—			43,677

Total assets	$	503,798	$	1,451,794		$	95,216		$	(478,777	)	$	1,572,031

Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	—	$	517,948		$	3,480		$	—		$	521,428
Accrued payroll and related liabilities		—		31,113			1,653			—			32,766
Other accrued liabilities		8,398		71,849			1,637			—			81,884

Total current liabilities		8,398		620,910			6,770			—			636,078
Long-term debt, excluding current portion		206,806		2,026			—			—			208,832
Intercompany long-term debt		—		138,890			33,549			(172,439	)		—
Other liabilities		—		47,708			—			—			47,708

Total liabilities		215,204		809,534			40,319			(172,439	)		892,618

Shareholders’ equity
Common stock		82,808		—			1,500			(1,500	)		82,808
Paid-in capital		177,192		242,024			62,814			(304,838	)		177,192
Retained earnings (deficit)		28,218		407,504			(9,417	)		—			426,305
Accumulated other comprehensive income (loss)		376		(7,268	)		—			—			(6,892	)

Total shareholders’ equity		288,594		642,260			54,897			(306,338	)		679,413

Total liabilities and shareholders’ equity	$	503,798	$	1,451,794		$	95,216		$	(478,777	)	$	1,572,031

Condensed Consolidating Financial Information


December 31, 2007	Owens & Minor, Inc.		Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	708	$	9,316		$	371		$	—		$	10,395
Accounts and notes receivable, net		—		441,402			20,990			—			462,392
Merchandise inventories		—		577,916			3,653			—			581,569
Intercompany advances, net		25,552		(25,552	)		—			—			—
Other current assets		20		42,679			1,068			—			43,767

Total current assets		26,280		1,045,761			26,082			—			1,098,123
Property and equipment, net		—		72,299			3,823			—			76,122
Goodwill, net		—		232,846			38,853			—			271,699
Intangible assets, net		—		19,040			13,477			—			32,517
Intercompany receivable		29,180		—			—			(29,180	)		—
Intercompany investments		445,228		—			—			(445,228	)		—
Other assets, net		6,516		25,348			13,021			—			44,885

Total assets	$	507,204	$	1,395,294		$	95,256			(474,408	)	$	1,523,346

Liabilities and shareholders’ equity
Current liabilities
Accounts payable	$	—	$	471,076		$	6,292		$	—		$	477,368
Accrued payroll and related liabilities		—		17,064			1,699			—			18,763
Other accrued liabilities		4,549		74,987			1,063			—			80,599

Total current liabilities		4,549		563,127			9,054			—			576,730
Long-term debt, excluding current portion		204,905		78,940			—			—			283,845
Intercompany long-term debt		—		138,890			29,180			(168,070	)		—
Other liabilities		—		48,412			—			—			48,412

Total liabilities		209,454		829,369			38,234			(168,070	)		908,987

Shareholders’ equity
Common stock		81,748		—			1,500			(1,500	)		81,748
Paid-in capital		161,978		242,023			62,815			(304,838	)		161,978
Retained earnings (deficit)		53,611		331,595			(7,293	)		—			377,913
Accumulated other comprehensive income (loss)		413		(7,693	)		—			—			(7,280	)

Total shareholders’ equity		297,750		565,925			57,022			(306,338	)		614,359

Total liabilities and shareholders’ equity	$	507,204	$	1,395,294		$	95,256		$	(474,408	)	$	1,523,346

Condensed Consolidating Financial Information


For the nine months ended September 30, 2008	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations		Consolidated
Statements of Cash Flows
Operating activities
Net income (loss)	$	(661	)	$	75,908		$	(2,123	)	$	—	$	73,124
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		—			16,343			7,027			—		23,370
Provision for losses on accounts and notes receivable		—			2,367			14,040			—		16,407
Provision for LIFO reserve					10,468			—			—		10,468
Amortization of direct-response advertising		—			—			5,333			—		5,333
Deferred direct-response advertising costs		—			—			(7,927	)		—		(7,927	)
Share-based compensation expense		—			6,369			—			—		6,369
Loss on interest rate swaps		3,141			—			—			—		3,141
Changes in operating assets and liabilities:
Accounts and notes receivable		—			(10,939	)		(11,380	)		—		(22,319	)
Merchandise inventories		—			(38,259	)		33			—		(38,226	)
Accounts payable		—			46,238			(2,812	)		—		43,426
Net change in other current assets and liabilities		3,187			5,264			655			—		9,106
Other, net		(1,126	)		2,415			2			—		1,291

Cash provided by operating activities		4,541			116,174			2,848			—		123,563

Investing activities
Additions to property and equipment		—			(12,583	)		(183	)		—		(12,766	)
Additions to computer software		—			(5,497	)		(1,942	)		—		(7,439	)
Other, net		—			8			—			—		8

Cash used for investing activities		—			(18,072	)		(2,125	)		—		(20,197	)

Financing activities
Change in intercompany advances		17,758			(22,127	)		4,369			—		—
Cash dividends paid		(24,733	)		—			—			—		(24,733	)
Net payments on revolving credit facility		—			(76,908	)		—			—		(76,908	)
Proceeds from exercise of stock options		8,140			—			—			—		8,140
Excess tax benefits related to share-based compensation		2,963			—			—			—		2,963
Increase in drafts payable		—			634			—			—		634
Proceeds from termination of interest rate swaps		3,795			—			—			—		3,795
Other, net		—			(1,911	)		—			—		(1,911	)

Cash provided by (used for) financing activities		7,923			(100,312	)		4,369			—		(88,020	)

Net increase (decrease) in cash and cash equivalents		12,464			(2,210	)		5,092			—		15,346
Cash and cash equivalents at beginning of period		708			9,316			371			—		10,395

Cash and cash equivalents at end of period	$	13,172		$	7,106		$	5,463		$	—	$	25,741

Condensed Consolidating Financial Information


For the nine months ended September 30, 2007	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Cash Flows
Operating activities
Net income (loss)	$	(205	)	$	50,003		$	459		$	—		$	50,257
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		—			15,625			8,295			—			23,920
Provision for losses on accounts and notes receivable		—			4,502			9,995			—			14,497
Provision for LIFO reserve		—			7,500			—			—			7,500
Amortization of direct-response advertising		—			—			5,198			—			5,198
Deferred direct-response advertising costs		—			—			(6,402	)		—			(6,402	)
Share-based compensation expense		—			5,167			—			—			5,167
Changes in operating assets and liabilities:
Accounts and notes receivable		—			30,955			(15,020	)		—			15,935
Merchandise inventories		—			61,514			(199	)		—			61,315
Accounts payable		—			10,595			(965	)		—			9,630
Net change in other current assets and liabilities		3,649			13,917			(861	)		—			16,705
Other, net		(547	)		(701	)		(431	)		—			(1,679	)

Cash provided by operating activities		2,897			199,077			69			—			202,043

Investing activities
Additions to property and equipment		—			(12,219	)		(1,316	)		—			(13,535	)
Additions to computer software		—			(6,801	)		(74	)		—			(6,875	)
Acquisition of intangible assets		—			—			18			—			18
Increase in intercompany investments		(71	)		—			—			71			—
Net cash paid for acquisitions of business		—			14,133			—			—			14,133
Other, net		—			395			—			—			395

Cash provided by (used for) investing activities		(71	)		(4,492	)		(1,372	)		71			(5,864	)

Financing activities
Change in intercompany advances		7,610			(7,751	)		141			—			—
Increase intercompany investment, net		—			—			71			(71	)		—
Cash dividends paid		(20,690	)		—			—			—			(20,690	)
Net payments on revolving credit facility		—			(200,800	)		—			—			(200,800	)
Proceeds from exercise of stock options		7,379			—			—			—			7,379
Excess tax benefits related to share-based compensation		2,892			—			—			—			2,892
Increase in drafts payable		—			17,662			—			—			17,662
Other, net		—			(1,750	)		—			—			(1,750	)

Cash provided by (used for) financing activities		(2,809	)		(192,639	)		212			(71	)		(195,307	)

Net increase (decrease) in cash and cash equivalents		17			1,946			(1,091	)		—			872
Cash and cash equivalents at beginning of period		850			4,079			3,061			—			7,990

Cash and cash equivalents at end of period	$	867		$	6,025		$	1,970		$	—		$	8,862

12.

Recent Accounting Pronouncements

SFAS 157 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. 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 company’s financial statements for the periods presented herein. The company is evaluating the impact of adoption of SFAS 157 for nonfinancial assets and nonfinancial liabilities on the company’s financial position and results of operations.

In October 2008, FASB Staff Position (FSP) FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active , was issued. This FSP clarifies the application of SFAS 157 in a market that is not active. The company has considered the guidance provided by FSP FAS 157-3 in its determination of estimated fair values as of September 30, 2008, and there was no impact on the company’s financial position or results of operations for either of the three- or nine-month periods ended September 30, 2008.

The company adopted SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities , as of January 1, 2008. This statement permits the company the irrevocable option to account for most financial assets and financial liabilities at fair value, rather than at historical cost, with changes in the fair value recognized in earnings. The adoption had no impact on the company’s consolidated financial statements for the three and nine months ended September 30, 2008, as the company has not elected the fair value option for any of its financial assets or financial liabilities.

The company adopted Emerging Issues Task Force Issue No. (EITF) 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards , as of January 1, 2008, on a prospective basis. EITF 06-11 requires income tax benefits from dividends or dividend equivalents that are charged to retained earnings and are paid to employees for equity-classified nonvested equity shares, nonvested equity share units, and outstanding equity share options to be recognized as an increase to additional paid-in capital. The impact of the adoption of EITF 06-11 on the three and nine months ended September 30, 2008 was not material.

In March 2008, SFAS 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133 , was issued. This statement requires enhanced disclosures about an entity’s derivative and hedging activities. SFAS 161 will be effective for the company in the first quarter of 2009, and the impact to the company’s consolidated financial statements will be limited to changes in disclosures.

In April 2008, FSP FAS 142-3, Determination of the Useful Life of Intangible Assets , was issued. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142, Goodwill and Other Intangible Assets . This FSP is effective for fiscal years beginning after December 15, 2008, with prospective application to intangible assets acquired after the effective date. The adoption of FSP FAS 142-3 is not expected to have a material impact on the company’s consolidated financial statements.

In May 2008, SFAS 162, The Hierarchy of Generally Accepted Accounting Principles , was issued. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States (the GAAP hierarchy). SFAS 162 makes the GAAP hierarchy explicitly and directly applicable to preparers of financial statements, a step that recognizes preparers’ responsibilities for selecting the accounting principles for their financial statements, and sets the stage for making the framework of FASB Concept Statements fully authoritative. SFAS 162 is effective in the fourth quarter of 2008. The adoption of SFAS 162 is not expected to have an impact on the company’s consolidated financial statements.

In June 2008, FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities , was issued. This FSP addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method described in SFAS 128, Earnings per Share . FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. The company is evaluating the impact of this pronouncement on the consolidated financial statements.

13.

Subsequent Event

On October 1, 2008, the company acquired certain assets and liabilities of The Burrows Company, a Chicago-based, privately-held distributor of medical and surgical supplies to the acute care market. The purchase price was $23.7 million of cash, plus $56.1 million of assumed debt, which was paid off on the acquisition date. The company borrowed approximately $80 million under its revolving credit facility to fund this acquisition and the related payment of assumed debt. In conjunction with this acquisition, the company also entered into an agreement to purchase certain real estate used in the operation of this business. The purchase is expected to be completed by year-end 2008 for a purchase price in the range of $20 million.

Item 2.

Management’s 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 management’s discussion and analysis of financial condition and results of operations included in the company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Results of Operations

Third quarter and first nine months of 2008 compared with 2007

Overview. In the third quarter and first nine months of 2008, the company earned net income of $25.3 million and $73.1 million, improved from $21.2 million and $50.3 million in the comparable periods of 2007. Net income per diluted common share was $0.61 for the third quarter and $1.76 for the first nine months of 2008, increased from $0.52 and $1.23 in the comparable periods of 2007. Operating earnings, which were $46.2 million, or 2.55% of revenue, in the third quarter of 2008, increased from $40.9 million, or 2.43% of revenue, in the third quarter of 2007. In the first nine months of 2008, operating earnings were $131.2 million, or 2.45% of revenue, also increased from operating earnings in the first nine months of 2007, which were $102.4 million, or 2.03% of revenue. Operating earnings in the first nine months 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 third quarter and first nine months of 2008 are $0.3 million and $1.8 million of operating losses from the direct-to-consumer (DTC) distribution business, including corporate charges of $0.3 million and $0.8 million. In the comparable periods of 2007, the DTC distribution business had operating earnings of $1.2 million and $2.5 million, including corporate charges of $0.4 million and $1.2 million.

On October 1, 2008, the company acquired certain assets and liabilities of The Burrows Company, a privately-held distributor of medical and surgical supplies to the acute care market. The Burrows Company reported sales of $603 million for the year ended December 31, 2007. The purchase price was $23.7 million of cash, plus $56.1 million of assumed debt, which was paid off on the acquisition date. In conjunction with this acquisition, the company also entered into an agreement to purchase certain real estate used in the operation of this business. The purchase is expected to be completed by year-end 2008 for a purchase price in the range of $20 million.

Revenue. Revenue increased 7.3%, or $123.7 million, to $1.81 billion in the third quarter of 2008, from $1.69 billion in the third quarter of 2007. For the first nine months of 2008, revenue increased 6.1%, or $306.1 million, from the comparable period in 2007. In comparing the third quarter and first nine months of 2008 to the comparable periods of 2007, the increases resulted primarily from greater sales to existing customers as well as sales to new customers, partially offset by decreases in revenue from the acquired McKesson business.

The DTC distribution business contributed $23.6 million and $72.7 million of revenue in the third quarter and first nine months of 2008, as compared with $26.6 million and $81.5 million in the comparable periods of 2007. The decline in revenue of the DTC distribution business is primarily due to lower Medicare reimbursements for certain respiratory products, higher contractual allowances,

which were adjusted for 2008 based on historical payment trends, and a slightly lower patient count. There were approximately 182,000 DTC customers at September 30, 2008, as compared with 187,000 at September 30, 2007. The Medicare Improvements for Patients and Providers Act of 2008, enacted on July 15, 2008, will reduce reimbursement rates for certain items included in Medicare’s competitive bidding program that are offered by the DTC distribution business. For these products, reimbursement rates will be reduced by 9.5% nationwide beginning January 1, 2009. This Act also delayed the competitive bidding program for at least 18 months from the enactment date and cancelled all contracts previously awarded. Therefore, when this program restarts, new contracts will be necessary.

Gross margin. Gross margin dollars were $193.7 million and $571.0 million in the third quarter and first nine months of 2008. For the same periods of 2007, gross margin dollars were $178.3 million and $529.8 million. As a percentage of revenue, gross margin was 10.70% and 10.66% for the third quarter and first nine months of 2008, as compared with 10.57% and 10.49% for the same periods of 2007. In comparing quarter-to-quarter, the 13 basis point gross margin improvement was primarily due to greater manufacturers’ price increases and additional sales of value-added programs and services, including an approximate 30% increase in revenue from higher margin MediChoice ^® products, the company’s private-label brand of select medical/surgical products. In comparing the first nine months of 2008 to the same period of 2007, gross margin as a percent of revenue increased 17 basis points. This increase resulted from: (i) improved gross margin from the acquired McKesson business as this business transitioned to O&M systems; (ii) additional sales of programs and services; (iii) greater supplier incentives; and (iv) greater manufacturers’ price increases, which were partially offset by an increase in the reserve for last-in, first-out (LIFO) inventory valuation.

The company values inventory for its healthcare provider distribution business under the LIFO method. Had inventory been valued under the first-in, first-out (FIFO) method, gross margin would have been 20 basis points greater in the first nine months of 2008 and 15 basis points greater in the first nine months of 2007.

Selling, general and administrative (SG&A) expenses. SG&A expenses were $141.0 million and $419.6 million for the third quarter and first nine months of 2008, as compared with $131.4 million and $407.6 million in the comparable periods of 2007. As a percentage of revenue, SG&A expense was 7.79% in the third quarter and 7.83% in the first nine months of 2008, consistent with 7.79% in the third quarter of 2007 and improved from 8.07% in the first nine months of 2007. In comparing the third quarter of 2008 to the same period of 2007, SG&A expense increased as a result of increases in fuel costs of $1.1 million, information technology outsourcing fees of $1.0 million, distribution center personnel expenses of $1.4 million, and incentive compensation expense, including equity-based compensation, of $5.5 million.

In comparing the first nine months of 2008 to the same period of 2007, SG&A expense as a percentage of revenue improved as a result of the company leveraging its infrastructure over greater sales. Also, costs associated with the integration of the acquired McKesson business and service fees paid to McKesson for operational support during the transition period of $6.7 million were incurred in 2007 but did not recur in 2008. For the first nine months of 2008 as compared with the same period of 2007, increases in expense included: (i) incentive compensation expense, including equity-based compensation, of $13.8 million; (ii) fuel costs of $3.4 million; (iii) the provision for losses on receivables from DTC distribution business customers of $2.8 million; (iv) employee benefit expense of $2.4 million; (v) workers compensation expense of $1.8 million; and (vi) information technology outsourcing fees of $1.8 million. The increase in incentive compensation expense reflects improved achievement against certain performance-based measures, as well as the impact of an increase in the price of the company’s common stock. These expense increases were offset by a decrease in selling costs of $2.3 million in the first nine months of 2008 compared to the same period of 2007.

Depreciation and amortization expense for the third quarter and first nine months of 2008 was $7.8 million and $23.4 million, a slight increase from $7.7 million in the third quarter of 2007 and a slight decrease from $23.9 million in the first nine months of 2007. Amortization of intangible assets was $0.4 million and $1.8 million less for the third quarter and first nine months of 2008 than for the same periods of 2007, due to the accounting for the McKesson purchase transaction being finalized, and lower amortization expense for acquired intangibles in the DTC distribution business, which are amortized at rates that decline during the amortization period. This decrease in amortization was partially offset by greater depreciation from capital additions made to facilitate the growth in the healthcare provider business. There were no acquisitions of intangible assets in the DTC distribution business in 2007 or in the first nine months of 2008.

Interest expense, net. Net interest expense was $6.3 million for the third quarter and $12.6 million for the first nine months of 2008, an increase from $5.4 million for the third quarter of 2007 and a decrease from $19.2 million for the first nine months of 2007. Decreased interest expense in the first nine months of 2008 was primarily due to lower balances outstanding under the company’s revolving credit agreement, as the company has significantly reduced borrowings under this facility since the second quarter of 2007. Interest expense also decreased in the 2008 periods due to a more favorable interest rate environment. This decrease was partially offset by interest expense recognized during the third quarter of 2008 on the interest rate swaps hedging the company’s $200 million fixed-rate debt. These swaps were designated as a fair value hedge until Lehman Brothers Holdings Inc., guarantor of one of the swaps, declared bankruptcy. The company determined at that date that the swaps were no longer expected to be effective in offsetting interest rate risk. The company discontinued accounting for the swaps as a fair value hedge as of that date and realized a loss of $3.1 million in the third quarter of 2008, representing the difference between the fair value of the swaps as of the date that hedge accounting was discontinued and the proceeds received on termination of the swaps of $3.8 million. The fair value adjustment of $6.9 million to the carrying value of the related debt is being recognized as an offset to interest expense using the interest method over the remaining life of the debt.

In the first nine months of 2008, the company’s effective interest rate was 6.3%, excluding interest expense recognized related to the interest rate swaps, on average borrowings of $206.8 million, compared to 6.8% on average borrowings of $384.2 million in the first nine months of 2007.

Income taxes. The provision for income taxes was $14.7 million and $45.5 million in the third quarter and first nine months of 2008, compared to $14.3 million and $33.0 million in the same periods of 2007. The effective tax rate was 36.7% and 38.3% for the third quarter and first nine months of 2008, compared to 40.4% and 39.6% in the same periods of 2007. The lower effective rates in 2008 were due to a decrease in tax accruals related to potential tax liabilities as a result of the resolution of outstanding tax issues.

Financial Condition, Liquidity and Capital Resources

Liquidity. In the first nine months of 2008, cash and cash equivalents increased by $10.4 million to $25.7 million at September 30, 2008. In the first nine months of 2008, the company generated $123.6 million of cash from operations, compared to $202.0 million in the first nine months of 2007. Cash from operations in the first nine months of 2008 was negatively affected by increases in accounts receivable and inventories, while the first nine months of 2007 were positively affected by decreases in both of these items. Cash flows in the first nine months of 2008 and 2007 were positively affected by the timing of payments for inventory.

Cash used for investing activities increased to $20.2 million in the first nine months of 2008 from $5.9 million in the same period of 2007, primarily due to cash received in 2007 related to the acquisition of the McKesson business, partially offset by capital expenditures in 2007 to accommodate the acquired McKesson business. Capital expenditures were $20.2 million in the first nine months of 2008, compared to $20.4 million in the same period of 2007. Capital expenditures in the third quarter of 2008 included the purchase of land for future expansion of the company’s headquarters for approximately $5.4 million.

Financing activities used $88.0 million of cash in the first nine months of 2008, and $195.3 million in the first nine months of 2007. In both periods, cash was used primarily to reduce the company’s revolving credit facility and to pay dividends. Cash used to pay dividends was $24.7 million in the first nine months of 2008, increased from $20.7 million in the same period of 2007, as the company paid a dividend per share of $0.60 in the first nine months of 2008 as compared with $0.51 per share in the first nine months of 2007.

Accounts receivable days sales outstanding (DSO) at September 30, 2008, were 23.8 days, representing a decline from 24.3 days at December 31, 2007, and 27.7 days at September 30, 2007, based on three month’s sales. Inventory turnover was 10.3 in the third quarter of 2008, 10.6 in the fourth quarter of 2007 and 9.8 in the third quarter of 2007.

The company has $200 million of senior notes outstanding, which mature in 2016 and bear interest at 6.35%, payable semiannually. During the third quarter of 2008, the company terminated its interest rate swap agreements, under which the company paid counterparties variable rates based on LIBOR, and the counterparties paid 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. The company received cash proceeds on termination of the swap agreements totaling $4.7 million, of which $3.8 million related to the fair value of the swaps is included in cash used for financing and $0.9 million related to accrued interest is included in cash provided by operating activities.

The company has a $350 million revolving credit facility. In July 2008, the credit agreement was amended to improve the company’s flexibility by changing certain restrictions and by releasing certain guarantors. The interest rate on the facility is based on, at the company’s discretion, LIBOR, the Federal Funds Rate or the Prime Rate, plus an adjustment based on the company’s leverage ratio, as defined by the credit agreement. 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 company’s investment grade rating. At September 30, 2008, approximately $339 million was available for borrowing. On October 1, 2008, Lehman Brothers, Inc. defaulted on its commitment under the revolving credit facility, thereby decreasing the company’s total borrowing capacity to $306 million.

On October 1, 2008, the company acquired certain assets and liabilities of The Burrows Company, in exchange for cash consideration of $23.7 million, plus $56.1 million of assumed debt, which was paid off on the acquisition date. The company borrowed approximately $80 million under its revolving credit facility to fund this acquisition and the related payment of assumed debt. In conjunction with this acquisition, the company also entered into an agreement to purchase certain real estate used in the operation of this business. The purchase is expected to be completed by year-end 2008 for a purchase price in the range of $20 million.

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. Based on the company’s leverage ratio at September 30, 2008, the company’s interest rate under its revolving credit facility, which is subject to adjustment quarterly, will remain unchanged at LIBOR plus 50 basis points at the next adjustment date.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see note 12 in the Notes to Condensed Consolidated Financial Statements.

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;

•

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 and financial institutions to perform their contractual responsibilities;

•

the ability to manage operating expenses;

•

the effect of price volatility in the commodities markets, including fuel price fluctuations, on company operating costs and supplier product prices;

•

the ability of the company to continue to obtain financing at reasonable rates and 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;

•

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. During the first nine months of 2008, O&M used interest rate swaps to modify the company’s balance of fixed and variable rate financing, thus hedging its interest rate risk. The company was exposed to certain losses in the event of nonperformance by the counterparties to these swap agreements and to market risk from changes in interest rates related to these swap agreements. The company terminated these swap agreements during the third quarter of 2008.

The company is exposed to market risk from changes in interest rates related to its revolving credit facility. The company had no outstanding borrowings and $10.7 million in letters of credit under its revolving credit facility at September 30, 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 company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the company’s 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, as of the end of such period, the company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the company required to be included in the company’s periodic SEC filings. There has been no change in the company’s internal controls over financial reporting during the quarter ended September 30, 2008, that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

Part II. Other Information

Item 1.

Legal Proceedings

Certain legal proceedings pending against the company are described in the company’s Annual Report on Form 10-K for the year ended December 31, 2007. Through September 30, 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 company’s Annual Report on Form 10-K for the year ended December 31, 2007. Through September 30, 2008, there have been no material changes in any risk factors reported in such Annual Report.

Item 6.

Exhibits.

(a)

Exhibits


2.1		Form of Asset Purchase Agreement dated as of August 19, 2008 by and among Owens & Minor Distribution, Inc., The Burrows Company and George J. Burrows (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.1, dated August 22, 2008).

2.2		Form of First Amendment to Asset Purchase Agreement dated as of September 30, 2008 by and among Owens & Minor Distribution, Inc., The Burrows Company and George J. Burrows (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.1, dated October 6, 2008).

3.1		Owens & Minor, Inc. Amended and Restated Articles of Incorporation (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 3.1, dated July 29, 2008).

4.1		Form of Third Amendment and Consent to Amended and Restated Credit Agreement dated as of July 14, 2008 by and among Owens & Minor Medical, Inc., Owens & Minor Distribution, Inc. the Company, certain subsidiaries of the Company, the banks identified on the signature pages thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.1, dated July 18, 2008).

10.1		Owens & Minor, Inc. Supplemental Executive Retirement Plan

10.2		Third Amendment to the Owens & Minor, Inc. Pension Plan

10.3		Owens & Minor, Inc. Directors’ Deferred Compensation Plan

31.1		Certification of Chief Executive Officer 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.

31.2		Certification of Chief Financial Officer 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.

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.

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	November 6, 2008	/s/ CRAIG R. SMITH
		Craig R. Smith
		President and Chief Executive Officer

Date	November 6, 2008	/s/ JAMES L. BIERMAN
		James L. Bierman
		Senior Vice President & Chief Financial Officer

Date	November 6, 2008	/s/ OLWEN B. CAPE
		Olwen B. Cape
		Vice President & Controller Chief Accounting Officer

Exhibits Filed with SEC


Exhibit #
2.1		Form of Asset Purchase Agreement dated as of August 19, 2008 by and among Owens & Minor Distribution, Inc., The Burrows Company and George J. Burrows (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.1, dated August 22, 2008).

2.2		Form of First Amendment to Asset Purchase Agreement dated as of September 30, 2008 by and among Owens & Minor Distribution, Inc., The Burrows Company and George J. Burrows (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 2.1, dated October 6, 2008).

3.1		Owens & Minor, Inc. Amended and Restated Articles of Incorporation (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 3.1, dated July 29, 2008).

4.1		Form of Third Amendment and Consent to Amended and Restated Credit Agreement dated as of July 14, 2008 by and among Owens & Minor Medical, Inc., Owens & Minor Distribution, Inc. the Company, certain subsidiaries of the Company, the banks identified on the signature pages thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to the Company’s Current Report on Form 8-K, Exhibit 4.1, dated July 18, 2008).

10.1		Owens & Minor, Inc. Supplemental Executive Retirement Plan

10.2		Third Amendment to the Owens & Minor, Inc. Pension Plan

10.3		Owens & Minor, Inc. Directors’ Deferred Compensation Plan

31.1		Certification of Chief Executive Officer 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.

31.2		Certification of Chief Financial Officer 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.

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.

Exhibit 10.1

OWENS & MINOR, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

INTRODUCTION

The Board of Directors of Owens & Minor, Inc. determined that the adoption of the Owens & Minor, Inc. Supplemental Executive Retirement Plan (the Plan) should assist it in attracting and retaining those employees whose judgment, abilities and experience will contribute to its continued progress and success. The Board of Directors also determined that the Plan should further those objectives by providing retirement and related benefits that supplement the amounts payable under the tax-qualified plans maintained by Owens & Minor, Inc.

The Plan is effective July 1, 1991. Prior to that date Owens & Minor, Inc. agreed to pay certain supplemental retirement and related benefits to selected executive and management employees in accordance with the terms of individual Executive Salary Continuation Agreements. The Plan supersedes each of the Executive Salary Continuation Agreements in effect on July 1, 1991, except in the case of such agreements for which benefit payments became due before July 1, 1991. The Plan was subsequently amended and restated twice, effective July 1, 2000 and April 1, 2004, respectively. Individuals who were eligible to participate in the Plan prior to July 1, 2000, but who are not eligible to participate in the Plan, as amended and restated effective July 1, 2000 and April 1, 2004, are listed on Exhibit I and are subject to the Plan in the form attached as Exhibit II .

The Plan is further amended and restated, effective as of January 1, 2005, to comply with requirements applicable to certain nonqualified deferred compensation plans under section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any Treasury Regulations promulgated thereto. Vested benefits under the Plan as of December 31, 2004 generally are not subject to the provisions of Section 409A of the Code or any Treasury Regulations promulgated thereto. Such Plan benefits may be paid to Participants pursuant to the terms of the Plan in effect on October 3, 2004 and without regard to the limitations of Section 409A of the Code or any Treasury Regulations promulgated thereto.

The Plan is intended to provide an unfunded supplemental retirement benefit to a select group of management and highly compensated employees as such terms are used in Sections 201, 301, and 501 of the Employee Retirement Income Security Act of 1974, as amended. The Plan must be interpreted and administered in a manner that is consistent with that intent.

ARTICLE I

DEFINITIONS

1.01.

401(k) Plan Benefit

401(k) Plan Benefit means the monthly benefit that would be payable to the Participant if the portion of the Participant’s account balance in the Savings & Protection Plan for Teammates of Owens & Minor, Inc. attributable to nondiscretionary employer contributions were converted to an annuity (i) payable for the lifetime of the Participant, with no survivor benefits, (ii) using as


		1		Revised January 1, 2005

factors to effect the conversion the “applicable mortality table” and “applicable interest rate” as defined in Section 417(e)(3)(A)(ii) of the Code, and (iii) commencing as of the Participant’s Early Retirement Date (in the case of the payment of an Early Retirement Allowance) or as of the Participant’s Normal Retirement Date (in the case of the payment of a Normal Retirement Allowance) or as of the date of the Participant’s termination of employment under Section 3.04 (in the case of a payment of a Change in Control Allowance) or as of December 31, 2004 (in the case of the calculation of the Participant’s Grandfathered Benefit). The 401(k) Plan Benefit shall be taken into account in determining the amount payable to the Participant under this Plan regardless of the benefit the Participant actually receives under the Savings & Protection Plan for Teammates of Owens & Minor, Inc.

1.02.

409A Benefit

409A Benefit means the benefit payable under the Plan determined under clause (a) or (b), as applicable.

(a) For a Participant who, on December 31, 2004, has neither (i) attained age 65 nor (ii) attained age 55 and completed a number of Years of Service that, when added to the Participant’s age on December 31, 2004, equals at least 70, the 409A Benefit shall be the retirement allowance payable to such Participant under the applicable provisions of the Plan.

(b) For a Participant who, on December 31, 2004, has (i) attained age 65 or (ii) attained age 55 and completed a number of Years of Service that, when added to the Participant’s age on December 31, 2004, equals at least 70, the 409A Benefit shall be the portion of the Normal Retirement Allowance or Early Retirement Allowance payable to such Participant under Section 3.01 or 3.02, as applicable, that exceeds the Participant’s Grandfathered Benefit as of the date such benefits commence.

1.03	Affiliate

Affiliate means any “subsidiary corporation” or “parent corporation” (within the meaning of Section 425 of the Code) of the Company.

1.04.

Applicable Percentage

Applicable Percentage means the percentage set forth in clause (a), (b) or (c) as applicable:

(a) for a Participant who reached his Normal Retirement Date, his Early Retirement Date or otherwise became entitled to receive a benefit under Article III of the Plan prior to April 1, 2004: 65% with respect to the Early Retirement Allowance and Normal Retirement Allowance and Change in Control Allowance of a Senior Officer; 55% with respect to the Early Retirement Allowance and Normal Retirement Allowance and Change in Control Allowance of a Holding Company Vice President; and 45% with respect to the Early Retirement Allowance and Normal Retirement Allowance and Change in Control Allowance of a Regional Vice President;

(b) for a Participant who reached his Normal Retirement Date, his Early Retirement Date or otherwise became entitled to receive a benefit under Article III of the Plan on or after April 1,


		2		Revised January 1, 2005

2004; 60% with respect to the Early Retirement Allowance and Normal Retirement Allowance and Change in Control Allowance of a Senior Officer; 50% with respect to the Early Retirement Allowance and Normal Retirement Allowance and Change in Control Allowance of a Holding Company Vice President; and 35% with respect to the Early Retirement Allowance and Normal Retirement Allowance and Change in Control Allowance of an individual holding any other titled position at the Company or an Affiliate; provided, however, that notwithstanding the foregoing provisions in this clause (b), the Applicable Percentage shall remain at 65% for determining benefits payable under Article III to Gil Minor, Craig Smith and Henry Berling and at 60% for determining benefits payable under Article III to Dick Bozard and Hugh Gouldthorpe; and

(c) for any benefit that becomes payable on behalf of a Participant under Section 4.01 of the Plan, 25% with respect to payments on behalf of a Senior Officer and 15% with respect to payments on behalf of a Holding Company Vice President, a Regional Vice President or any individual holding any other titled position at the Company or any Affiliate.

1.05.

Beneficiary

Beneficiary means a Participant’s Spouse or one or more Lineal Descendants designated on a Beneficiary Designation Form by a Participant in accordance with procedures established by the Committee. If the Participant makes a valid designation of more than one Beneficiary then the Beneficiaries who survive the Participant shall receive a percentage interest in the benefit payable under the Plan in accordance with the Participant’s instruction or, absent such instruction, shall receive equal interests. If there is no valid Beneficiary designation by the Participant, or the designated Beneficiary does not survive the Participant, the Participant’s Beneficiary is the first of the following: the Participant’s surviving Spouse and the Participant’s Lineal Descendants per stirpes who survive the Participant.

1.06.

Beneficiary Designation Form

Beneficiary Designation Form means a form acceptable to the Committee used by a Participant according to this Plan to name the Beneficiary or Beneficiaries who will receive all benefits under this Plan if he or she dies.

1.07.

Board

Board means the Board of Directors of the Company.

1.08.

Cause

Cause means a Participant’s conviction of a felony involving dishonestly directed against the Company or an Affiliate or a Participant’s conviction of a crime of moral turpitude that is injurious to the business reputation of the Company or an Affiliate.

1.09.

Change in Control

Change in Control means that

(i)

any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any Company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities; provided, however, that Company securities acquired directly from the Company shall be disregarded for this purpose;


		3		Revised January 1, 2005

(ii)

during any period of two consecutive years (not including any period prior to July 1, 2000), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (ii) or (iv) of this Section) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of a majority of the directors then still in office who either (x) were directors at the beginning of such period or (y) were so elected or nominated with such approval, cease for any reason to constitute at least a majority of the Board;

(iii)

the stockholders of the Company approve a merger or consolidation of the Company with any other Company, other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no “person” (as hereinabove defined) acquires more than 20% of the combined voting power of the Company’s then outstanding securities; or

(iv)

the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

1.10.

Change in Control Allowance

Change in Control Allowance means the benefit described in Section 3.04.

1.11.

Code

Code means the Internal Revenue Code of 1986, as amended.


		4		Revised January 1, 2005

1.12.

Committee

Committee means the Compensation and Benefits Committee of the Board.

1.13.

Company

Company means Owens & Minor, Inc.

1.14.

Early Retirement Allowance

Early Retirement Allowance means the benefit described in Section 3.02.

1.15.

Early Retirement Date

Early Retirement Date means the first day of a month coincident with or following a Participant’s Retirement at or after attaining age 55 and after completing a number of Years of Service that, when added to the Participant’s age at the time of the Participant’s Retirement, equals at least 70.

1.16.

Final Average Pay

Final Average Pay means the amount determined under clause (a) or (b), as applicable:

(a) for a Participant who reached his Normal Retirement Date or Early Retirement Date or otherwise became entitled to receive benefits under the Plan prior to April 1, 2004, the total of (i) plus (ii), divided by 60, where: (i) is the base monthly salary of a Participant, whether paid in cash or shares of the Company’s stock, during the 60 months preceding the applicable date of reference; and (ii) is the Participant’s annual bonus, whether paid in cash or shares of the Company’s stock, earned for the year in which Participant Retires or otherwise becomes entitled to receive benefits under the Plan and the four immediately preceding years; and

(b) for a Participant who reached his Normal Retirement Date or Early Retirement Date or otherwise became entitled to receive benefits under the Plan on or after April 1, 2004, the highest 60-consecutive month average of (i) plus (ii), for the last 120 months preceding the applicable date of reference, where: (i) is the base monthly salary of a Participant, whether paid in cash or shares of the Company’s stock; and (ii) is the Participant’s annual bonus, paid over the same 60-consecutive month period, whether paid in cash or shares of the Company’s stock; provided that no more than 5 annual bonuses shall be included in the calculation of Final Average Pay under this clause (b) and provided further, that if a higher average results from calculating a Participant’s Final Average Pay using the total of (i) plus (ii) under this clause (b), divided by 60, where: (i) is the base monthly salary of the Participant, paid in cash or shares of the Company’s stock, during the 60 consecutive months preceding the applicable date of reference and (ii) is the Participant’s annual bonus, paid in cash or shares of the Company’s stock, earned for the year in which the Participant Retires or otherwise becomes entitled to receive benefits under the Plan and the four immediately preceding years, then such higher average shall be the Participant’s Final Average Pay .


		5		Revised January 1, 2005

The following rules shall apply for purposes of determining a Participant’s Final Average Pay under clause (a) or (b) above: (i) if any portion of a Participant’s base salary or annual bonus is paid pursuant to the issuance of shares of the Company’s stock, such shares shall be valued on the date of issuance, whether or not the stock is then vested; (ii) a Participant’s Final Average Pay shall be determined without regard to any compensation reductions or deferrals under Section 125 or 401(k) of the Code; (iii) a Participant’s Final Average Pay shall not include amounts paid as an automobile allowance or other amounts that are in addition to his or her regular base monthly salary and (iv) any period in which a Participant suffers a Total and Permanent Disability shall be disregarded in determining his or her Final Average Pay .

1.17.

Good Reason

Good Reason means that after a Change in Control, (a) the Participant does not receive salary increases comparable to the salary increases that the Participant received in prior years or, if greater, that other employees in comparable positions receive in the current year; or (b) the Participant’s compensation or employment related benefits are reduced; or (c) the Participant’s status, title(s), office(s), working conditions, or management responsibilities are diminished (other than changes in reporting or management responsibilities required by applicable federal or state law); or (d) the Participant’s place of employment is relocated more than fifty (50) miles from his or her place of employment immediately before the Change in Control, without the Participant’s consent. A Participant’s resignation will not be considered for Good Reason unless it occurs within six months after an event described in subsection (a), (b), (c), or (d) of the preceding sentence, or within six months after the last in a series of such events.

1.18.

Grandfathered Benefit

Grandfathered Benefit means the portion of the Normal Retirement Allowance or Early Retirement Allowance described in the following sentences that is payable to a Participant who, on December 31, 2004, (a) was employed by the Company or an Affiliate and (b) either (i) had attained age 65 or (ii) had attained age 55 and completed a number of Years of Service that, when added to the Participant’s age on December 31, 2004, equals at least 70. The Grandfathered Benefit shall be computed under Section 3.01 or 3.02, as applicable, based on the Participant’s Final Average Pay, Qualified Defined Benefit Plan Benefit, 401(k) Plan Benefit, Social Security Benefit and any other defined benefit pension plan benefits as of December 31, 2004. The Grandfathered Benefit shall be computed taking into account any actuarial adjustments required under Section 3.02 or to reflect the actual date benefits commence to be paid.

1.19.

Holding Company Vice President

Holding Company Vice President means an individual who holds the title of Vice President of the Company.

1.20.

Lineal Descendant

Lineal Descendant means a Participant’s child, grandchild, or great-grandchild, or child of any of the foregoing persons. References in this Plan to a Participant’s Lineal Descendants or to a child, grandchild, or great-grandchild or child of any of the Participant or any Lineal Descendant shall include adopted persons.


		6		Revised January 1, 2005

1.21.

Normal Retirement Allowance

Normal Retirement Allowance means the benefit described in Section 3.01.

1.22.

Normal Retirement Date

Normal Retirement Date means the first day of a month coincident with or following a Participant’s Retirement after the Participant has attained age 65.

1.23.

Participant

Participant means an individual who has been selected to participate in the Plan in accordance with Article II.

1.24.

Plan

Plan means the Owens & Minor, Inc. Supplemental Executive Retirement Plan.

1.25.

Qualified Defined Benefit Plan

Qualified Defined Benefit Plan means a defined benefit pension plan that is maintained by the Company or an Affiliate and which satisfies the requirements of Section 401(a) and related sections of the Code.

1.26.

Qualified Defined Benefit Plan Benefit

Qualified Defined Benefit Plan Benefit means the monthly benefit that would be payable to the Participant from all Qualified Defined Benefit Plans in the form of an annuity payable for the lifetime of the Participant with no survivor’s benefits. The amount of the Qualified Defined Benefit Plan Benefit shall be determined as an annuity commencing as of the Participant’s Early Retirement Date (in the case of the payment of an Early Retirement Allowance) or as of the Participant’s Normal Retirement Date (in the case of the payment of a Normal Retirement Allowance) or as of the date of the Participant’s termination of employment under Section 3.04 (in the case of a payment of a Change in Control Allowance) or as of December 31, 2004 (in the case of the calculation of the Participant’s Grandfathered Benefit). The Qualified Defined Benefit Plan Benefit shall be taken into account in determining the amount payable to the Participant under this Plan regardless of the benefit the Participant actually receives under any Qualified Defined Benefit Plan.

1.27.

Regional Vice President

Regional Vice President means an individual who holds the title of Regional Vice President of the Company.


		7		Revised January 1, 2005

1.28.

Retire and Retirement

Retire and Retirement mean a Separation From Service from the Company and its Affiliates (i) at or after the attainment of age 55 and after completing a number of Years of Service that, when added to Participant’s age at the time of such Separation From Service, equals at least 70 or (ii) at or after the attainment of age 65.

1.29	Senior Officer

Senior Officer means an individual who holds the title of Senior Vice President of the Company or an Affiliate or who holds a position with the Company or an Affiliate that is more senior than Senior Vice President.

1.30.

Separates From Service and Separation From Service

Separates From Service and Separation From Service mean, as of any given date, the termination of a Participant’s employment with the Company and its Affiliates as contemplated by Treasury Regulation Section 1.409A-1(h) on account of death, retirement or otherwise. Whether a Participant has experienced a termination of employment for purposes of this definition shall be determined by the Committee in accordance with Treasury Regulations Section 1.409A -1(h)(ii). Consistent with the foregoing, the Committee shall make such determination based on whether the relevant facts and circumstances indicate that the Participant and the Company or Affiliate reasonably anticipate that either (a) no further services will be performed by the Participant for the Company or any Affiliate after such date (whether as an employee or an independent contractor) or (b) the bona fide services to be performed by the Participant (whether as an employee or an independent contractor) after such date would permanently decrease to no more than twenty (20) percent of the average level of such services provided by the Participant over the thirty-six (36)-month period immediately preceding such date (or if the Participant has been providing services to the Company or an Affiliate for a period less than thirty-six (36) months, the full period of services to such employer). The Committee may designate an alternative percentage for a reasonably anticipated permanent decrease in the level of bona fide services that will constitute a Separation From Service in accordance with the provisions of Treasury Regulations Section 1.409A-1(h)(ii).

In addition to the foregoing, the following rules shall apply to determine whether an individual has experienced a Separation From Service:

(a) if an individual provides services to the Company or an Affiliate both as an employee and a member of the Board or a member of the board of directors of an Affiliate [(or any analogous position with respect to a non-corporate Affiliate)], the services that such individual provides as a director shall not be taken into account in determining whether such individual has experienced a Separation From Service to the extent provided in treasury Regulations Section 1.409A-1(h)(1)-(5); and

(b) the Committee will determine the extent to which an individual who is not providing services to the Company or an Affiliate on account of a military leave, sick leave or other bona fide leave of absence, including an unpaid leave of absence, shall be treated as having a Separation From Service consistent with the provisions of Treasury Regulations Section 1.409A-1(h)(i) and (ii).


		8		Revised January 1, 2005

1.31.

Social Security Benefit

Social Security Benefit means the monthly benefit that the Participant is entitled to receive under Section 215 of the Social Security Act, without regard to any reduction in such benefit on account of excess earnings and without regard to whether the Participant elects to receive such benefit. The amount of the Social Security Benefit shall be determined as of the Participant’s Early Retirement Date (in the case of the payment of an Early Retirement Allowance) or as of the Participant’s Normal Retirement Date (in the case of the payment of a Normal Retirement Allowance) or as of the date of the Participant’s termination of employment under Section 3.04 (in the case of a payment of a Change in Control Allowance) or as of December 31, 2004 (in the case of the calculation of the Participant’s Grandfathered Benefit) and shall be reduced by .333% for each month by which the month in which the Participant’s Retirement or other termination of employment occurs precedes the month in which the Participant will attain age 62.

1.32.

Specified Employee

Specified Employee means a “specified employee” as defined in Treasury Regulations Section 1.409A-1(i) which is a Participant who, as of the date of his or her Separation From Service, is a “key employee” of the company or any Affiliate within the meaning of clauses (i), (ii) or (iii) of Section 416(i)(1)(A) of the Code (such provisions applied in accordance with the Treasury Regulations promulgated under Section 416 of the Code and disregarding section 416(i) (5) of the Code) at any time during the 12-month period ending on a “specified employee identification date.” If a Participant is a key employee as of a “specified employee identification date,” the Participant is treated as a key employee under the Plan for the entire 12-month period beginning on the “specified employee effective date.”

The following definitions apply for purposes of determining whether a Participant is a Specified Employee for purposes of the Plan:

(a) the Plan’s “specified employee identification date” shall be December 31 of each calendar year; provided, however, the Committee may at any time and from time to time designate a different “specified employee identification date” pursuant to and in accordance with Treasury Regulations Section 1.409A-1(i)(3); and provided, further however, that such change shall not be effective for a period of twelve (12)months;

(b) the Plan’s “specified employee effective date” shall be the first day of the fourth month following the applicable specified employee identification date described above. The Committee may designate a different “specified employee effective date” pursuant to and in accordance with Treasury Regulations Section 1.409A(1)(i); and


		9		Revised January 1, 2005

1.415(c)-2(d), were not using any of the elective special timing rules provided in Treasury Regulations Section 1.415(c)-2(e), and were not using any of the elective special rules provided in Treasury Regulations Section 1.415(c)-2(g). The Committee may, in its discretion, designate a different definition of “compensation” in order to identify “key employees” during a particular period pursuant to and in accordance with Treasury Regulations Section 1.409A-1(i)(2).

1.33.

Spouse

Spouse means the person to whom the Participant is legally married on the date of reference.

1.34.

Total and Permanent Disability

Total and Permanent Disability means a disability which (i) resulted from bodily or mental injury or disease, (ii) has existed continuously for at least six months and (iii) in the opinion of the Committee prevents the Participant from performing his or her regularly assigned duties with the Company and its Affiliates. The Committee may require the Participant to prove his or her continued Total and Permanent Disability once during each calendar year and absent such proof the Total and Permanent Disability shall be deemed to have ceased.

1.35.

Treasury Regulations

Treasury Regulations means final and temporary regulations promulgated under the Code by the United States Department of Treasury.

1.36.

Years of Service

Years of Service means the total years of service credited to a Participant for purposes of determining his or her vested or nonforfeitable interest in a Qualified Defined Benefit Plan. Notwithstanding the foregoing, a Participant shall be credited with Years of Service during a period of Total and Permanent Disability as if he or she was employed by the Company during such period.

ARTICLE II

PARTICIPATION

Consistent with the purposes of the Plan and the Company’s intent in adopting the Plan, the Committee shall designate employees of the Company and its Affiliates who are eligible to participate in the Plan. An individual shall remain a Participant only so long as the Committee continues such designation; provided, however, that a designation may not be changed or revoked after that Participant has reached his Early Retirement Date or Normal Retirement Date, or that Participant or his or her Beneficiary has become entitled to a benefit under the Plan, or during a period in which the Participant suffers a Total and Permanent Disability. Further, a designation may not be changed or revoked after a Change in Control.

Membership on the Board or a committee of the Board (other than the Committee) shall not by itself render an individual ineligible to participate in the Plan. An individual who is a member of the Committee may not participate in the Plan during his or her service on the Committee.


		10		Revised January 1, 2005

ARTICLE III

RETIREMENT AND CHANGE IN CONTROL ALLOWANCES

3.01.

Normal Retirement Allowance

Except as provided in Section 3.03(b) and subject to the requirements of Article V and Section 8.01, a Normal Retirement Allowance shall be payable to a Participant who Retires on or after his or her Normal Retirement Date. The monthly Normal Retirement Allowance shall be the difference between (i) and (ii) below where


(i) =		the Applicable Percentage of the Participant’s Final Average Pay (determined as of his or her Normal Retirement Date) and

(ii) =		the sum of the Qualified Defined Benefit Plan Benefit and the 401(k) Plan Benefit and the Social Security Benefit and the defined benefit pension plan(s) benefits(s) of any other prior employer or employers.

3.02.

Early Retirement Allowance

Except as provided in Section 3.03(b) and subject to the requirements of Article V and Section 8.01, an Early Retirement Allowance shall be payable to a Participant who Retires on or after his or her Early Retirement Date and before his or her Normal Retirement Date. The monthly Early Retirement Allowance shall be equal to the benefit calculated in Section 3.01, but determined as of the Participant’s Early Retirement Date, reduced by .333% for each month by which the month in which Participant’s Early Retirement Date occurs precedes the month in which he or she would first have become eligible for a Normal Retirement Allowance. Notwithstanding the foregoing, the .333% reduction referenced in the preceding sentence shall not apply to a Participant who Retires at or after attainment of age 62 and after completing 20 Years of Service and before his or her Normal Retirement Date, so that the monthly Early Retirement Allowance for such a Participant shall be equal to the benefit calculated in Section 3.01, but determined as of the Participant’s Early Retirement Date.

3.03.

Payment of Retirement Allowances

(a) The payment of the retirement allowance payable under Section 3.01 or Section 3.02 to a Participant who is not a Specified Employee as of the date he or she Retires shall begin on the 15 ^th day of the month following the month in which the Participant Retires. The payment of the retirement allowance shall continue to be paid as of the 15 ^th day of each month thereafter until the month in which the Participant dies. No further retirement allowance payments will be made under Section 3.01 or Section 3.02 following the month in which the Participant dies.

(b) The following provisions apply to the payment of the retirement allowance payable under Section 3.01 or Section 3.02 to a Participant who is a Specified Employee as of the date he or she Retires.


		11		Revised January 1, 2005

(i) The payment of the Participant’s Grandfathered Benefit shall begin on the 15 ^th day of the month following the month in which the Participant Retires.

(ii) The payment of the Participant’s 409A Benefit shall begin on the 15 ^th day of the month that is seven months following the month in which the Participant Retires. The monthly retirement allowance paid to such Participant on the 15 ^th day of such seventh month shall include any amounts that would have been paid to the Participant under Section 3.03(b)(i) had the six month delay described in this clause (ii) not been in effect.

The payment of the retirement allowance described in this Section 3.03 shall continue to be paid as of the 15 ^th day of each month after the first month specified in clauses (i) and (ii) above until the month in which the Participant dies. No further retirement allowance payments will be made under Section 3.01 or Section 3.02 following the month in which the Participant dies.

3.04.

Change in Control Allowance

(a) Except as provided in Section 3.05(b) and subject to the requirements of Article V and Section 8.01, a Change in Control Allowance shall be payable to a Participant who experiences a Separation From Service by reason of (a) his or her termination by the Company or an Affiliate (other than for Cause) or (b) who resigns his or her employment with the Company or an Affiliate with Good Reason following a Change in Control, but prior to his or her Early Retirement Date or Normal Retirement Date. The monthly Change in Control Allowance shall be equal to (i) the benefit calculated in Section 3.01, but determined as of the date of Participant’s Separation From Service in accordance with this Section 3.04, multiplied by (ii) a fraction, the numerator of which is the number of Years of Service that the Participant has accrued on the date of his or her Separation From Service under this Section 3.04, and the denominator of which is the number of Years of Service that the Participant would have accrued if he or she had remained in the continuous employ of the Company and its Affiliates through the earlier of the date that he or she would first have become eligible for an Early Retirement Allowance and the date that he or she would first have become eligible for a Normal Retirement Allowance; reduced by (iii) .333% for each month by which the month in which Participant Separates From Service under this Section 3.04 precedes the month in which he or she would first have become eligible for a Normal Retirement Allowance.

(b) If a Participant Separates From Service following a Change in Control as described in the first sentence of Section 3.04(a), and such Participant, on December 31, 2004, (a) was employed by the Company or an Affiliate and (b) had either (i) attained age 65 or (ii) attained age 55 and completed a number of Years of Service that, when added to the Participant’s age on December 31, 2004, equals at least 70, then the retirement allowance payable to such Participant shall be paid in accordance with the provisions of Section 3.01, 3.02 and 3.03, as applicable.

3.05.

Payment of Change in Control Allowance

(a) The payment of the Change in Control Allowance payable under Section 3.04 to a Participant who is not a Specified Employee as of the date such Participant Separates From


		12		Revised January 1, 2005

Service shall begin on the 15 ^th day of the month following the month in which such Separation From Service occurs following a Change in Control, or, if later, on the 30 ^th day after the Change in Control. The payment of the Change in Control Allowance shall continue to be paid as of the 15 ^th day of each month thereafter until the month in which the Participant dies. No further retirement allowance payments will be made under Section 3.04 or Section 3.05 following the month in which the Participant dies.

(b) The payment of the Change in Control Allowance payable under Section 3.04 to a Participant who is a Specified Employee as of the date such Participant Separates From Service will begin on the 15 ^th day of the month that is seven months following the month in which such Separation From Service occurs. The monthly retirement allowance paid to such Participant on the 15 ^th day of such seventh month shall include any amounts that would have been paid to the Participant under Section 3.05(a) had the six month delay described in this Section 3.05(b) not been in effect. The payment of the Change in Control Allowance under this Section 3.05(b) shall be paid as of the 15 ^th day of each month thereafter until the month in which the Participant dies. No further Change in Control Allowance payments will be made under Section 3.04 or 3.05 following the month in which the Participant dies.

(c) No further Change in Control Allowance payments will be made under Section 3.04 or 3.05 following the month in which the Participant dies.

ARTICLE IV

PAYMENTS IN THE EVENT OF DEATH

4.01.

Death On or Before Retirement

(a) Subject to the requirements of Article V and Section 8.01, a benefit shall be payable under this Section 4.01(a) if the Participant dies prior to the commencement of a retirement allowance under Article III. The monthly benefit payable under this Section 4.01(a) shall be equal to the Applicable Percentage of the Participant’s Final Average Pay (determined as of the last day of the month preceding the month in which the Participant died).

(b) Subject to the requirements of Article V and Section 8.01, a benefit shall be payable under this Section 4.01(b) if the Participant’s Separation From Service on the date of the Participant’s death would constitute his or her Retirement. The monthly benefit payable under this Section 4.01(b) shall be the greater of (i) the benefit that would have been payable under Section 4.01(a) if the date of the Participant’s death had not been a date on which the Participant could Retire and (ii) the monthly benefit that would have been payable under Article III if the Participant’s employment had terminated on the date of his or her death for reasons other than his or her death.

(c) The payment of the benefit described in the Section 4.01(a) or (b), as applicable, shall be paid to the Participant’s Beneficiary beginning on the 15th day of the month following the month in which the Participant died. The payment of that benefit to the Participant’s Beneficiary will continue as of the 15th day of each month thereafter until the earlier of (i) the death of the Participant’s Beneficiary and (ii) a total of 180 months’ benefits have been paid to the Participant’s Beneficiary. In the event of the death of the Participant’s Beneficiary before a


		13		Revised January 1, 2005

total of 180 payments have been made, the present value of the remainder of such 180 payments shall be paid in a lump sum to the estate of the Beneficiary, using the “applicable interest rate” as defined in Section 417(e)(3)(A)(ii) of the Code to calculate the present value.

(d) No benefit will be payable under this Section if the Participant is not survived by any Beneficiary.

4.02.

Death After Retirement or Change in Control Separation From Service

(a) Subject to the requirements of Article V and Section 8.01, a benefit shall be payable under this Section if the Participant dies after the commencement of a retirement allowance under Article III or after a Separation of Service under circumstances that entitle him or her to a Change in Control Allowance under Article III and before his or her receipt of 180 payments of the benefit payable under Section 3.03 or 3.05, as applicable. The monthly benefit payable under this Section 4.02 shall be equal to the monthly allowance to which the Participant was entitled under Article III immediately prior to the Participant’s death.

(b) The payment of the benefit described in the preceding Subsection (a) shall be paid to the Participant’s Beneficiary beginning on the 15th day of the month following the month in which the Participant died. The payment of that benefit to the Participant’s Beneficiary will continue as of the 15th day of each month thereafter until the earlier of (i) a total of 180 payments have been made under the Plan to the Participant and his or her Beneficiary, and (ii) the death of the Participant’s Beneficiary. In the event of the death of Participant’s Beneficiary before a total of 180 payments have been made, the present value of the remainder of such 180 payments shall be paid in a lump sum to the estate of the Beneficiary, using the “applicable interest rate” as defined in Section 417(e)(3)(A)(ii) of the code to calculate the present value.

ARTICLE V

VESTING AND CONTINUOUS EMPLOYMENT

5.01.

Vesting

No benefit will be payable under the Plan unless the Participant remains in the continuous employ of the Company and its Affiliates from his or her most recent designation as a Participant by the Committee until:

(i)

his or her Early Retirement Date;

(ii)

his or her Normal Retirement Date;

(iii)

his or her death; or

(iv)

his or her Separation From Service under circumstances that entitle the Participant to a Change in Control Allowance.


		14		Revised January 1, 2005

Notwithstanding the foregoing, no benefit shall be payable under this Plan if the Participant’s employment with the Company and its Affiliates terminates or is terminated for Cause.

5.02.

Total and Permanent Disability

(a) Except as provided in Section 5.02(c) and subject to the requirements of Article V and Section 8.01, a retirement allowance shall be payable to a Participant who Separates From Service on account of a Total and Permanent Disability after being in the continuous employ of the Company and its Affiliates from his or her most recent designation as a Participant by the Committee.

(b) A Participant described in Section 5.02(a) who is not a Specified Employee as of the date the Participant Separates From Service on account of a Total and Permanent Disability will begin receiving an Early Retirement Allowance or Normal Retirement Allowance on the 15 ^th day of the month following the month in which occurs the later of (i) the date of the Participant’s Separation From Service or (ii) the earlier of (A) the first date that the Participant would have been eligible to receive an Early Retirement Allowance or (B) the first date that the Participant would have been eligible to receive a Normal Retirement Allowance.

(c) A Participant described in Section 5.02(a) who is a Specified Employee as of the date the Participant Separates From Service on account of a Total and Permanent Disability will begin receiving an Early Retirement Allowance or Normal Retirement Allowance on the 15 ^th day of the month following the month in which occurs the later of (i) the date the Participant Separates From Service or (ii) the earlier of (A) the first date that the Participant would have been eligible to receive an Early Retirement Allowance or (B) the first date that the Participant would have been eligible to receive a Normal Retirement Allowance; provided, however, that if the Participant’s Total and Permanent Disability does not satisfy the requirements of a “disability” within the meaning of Treasury Regulations Section 1.409A-3(i)(4), then the commencement of the Participant’s 409A Benefit shall be delayed until the 15 ^th day of the month that is seven months following the month in which the Participant Separates From Service. If the Participant’s 409A Benefit is subject to the six month delay described in the preceding sentence, then the monthly retirement allowance that is paid to the Participant on the 15 ^th day of the seventh month shall include any amounts that would have been paid to the Participant under Section 5.02 had the six month delay described in the preceding sentence not been in effect.

(d) Section 5.02(a) shall not apply if the Participant recovers from his or her Total and Permanent Disability prior to the date his or her retirement allowance is scheduled to begin and such Participant does not return to the active employ of the Company and its Affiliates at that time. In that event, the Participant will be deemed to have Separated From Service as of the date such Participant first Separated From Service on account of his or her Total and Permanent Disability.

5.03.

Continuous Employment

The Committee, in its discretion, shall determine the extent, if any, to which leaves or absence for military service, governmental service and other reasons shall be deemed not to have caused an interruption in a Participant’s continuous employment with the Company and its Affiliates.


		15		Revised January 1, 2005

5.04.

Non-Competition

(a) As a condition for participating in the Plan, each Participant acknowledges that during his or her employment by the Company and its Affiliates, he or she will have access to and obtain confidential documents and information relating to the business of the Company and its Affiliates. Each Participant acknowledges and agrees that because the Company is granting him or her such access and permitting him or her to obtain such confidential documents and information, any competition by him or her with the Company unfairly would result in material damage to the Company and its Affiliates and cause Company and its Affiliates to suffer irreparable damage.

(b) Each Participant thus agrees that, once he or she has become entitled to a benefit under this Plan in accordance with Section 5.01, then during his or her employment and for a period of five years immediately following termination of his or her employment (for any reason), Participant shall not directly or indirectly own, manage, operate, join, control, be employed by or consult with any firm or business entity which is in the same business as, or similar to, the Company or any of its Affiliates and which competes with the Company or any of its Affiliates. Recognizing the broad geographic scope and unique nature of the business of the Company and its Affiliates, and expressly acknowledging the Company’s legitimate interest in this restriction, Participant agrees that this restriction shall apply within a radius of 500 miles from the Participant’s principal assignment with the Company and its Affiliates.

(c) Each Participant further agrees that, once he or she has become entitled to a benefit under this Plan in accordance with Section 5.01, then during his or her employment and for a period of five years immediately following Separation From Service (for any reason), the Participant will not hire, solicit for hire or encourage to leave the Company’s or an Affiliate’s employment any person who is then an employee of the Company or an Affiliate.

(d) Each Participant agrees that in the event of any breach or threatened breach of his or her promises in this Section, the Company will not have an adequate remedy at law and will suffer substantial and irreparable damage. Each Participant accordingly agrees that the Company shall be entitled to obtain specific enforcement of his or her promises, including but not limited to temporary and permanent injunctions restraining Participant from breaching such promises. In addition to any remedy that may be afforded the Company, upon a breach or threatened breach of the promise in this Section, such Participant shall forfeit all rights under this Plan and no benefit or further benefit shall be payable to the Participant, or any Beneficiary. This provision shall not bar the Company from any other remedies available to it for such breach or threatened breach, including the recovery of damages and attorneys’ fees.

(e) The prohibitions of this Section are severable, and a finding by any court that any one prohibition is unenforceable shall not affect the validity of any other prohibition. Additionally, should any court find that any provision of this Section is unenforceable, each Participant and the Company specifically authorize the court to modify that provision and to enforce that provision as modified.


		16		Revised January 1, 2005

ARTICLE VI

ADMINISTRATION OF THE PLAN

6.01.

Generally

(a) The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee may adopt such rules and regulations as may be necessary to carry out the purposes hereof. The Committee’s interpretation and construction of any provision of the Plan shall be final and conclusive.

(b) Without limiting the provisions of the preceding Subsection and subject to the provisions of the Plan, the Committee shall take such actions and may adopt such rules and regulations as may be necessary in order to ensure that the payment of a Participant’s benefits that become vested on or after January 1, 2005, is consistent with the provisions of Section 409A of the Code and any Treasury Regulations or administrative guidance promulgated thereunder.

6.02.

Indemnification

The Company shall indemnify and save harmless each member of the Committee against any and all expenses and liabilities arising out of his or her membership on the Committee, excepting only expenses and liabilities arising out of his or her own willful misconduct. Expenses against which a member of the Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

6.03.

Determining Benefits

In addition to the powers hereinabove specified, the Committee shall have the power to compute and certify the amount, kind and method of distribution of benefits from time to time payable to or on behalf of Participants under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant or a Beneficiary is entitled to a benefit under the Plan and the timing of payment for such benefit.

6.04.

Cooperation

To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the compensation of all Participants, their Retirement, death or other cause for Separation From Service, and such other pertinent facts as the Committee may require.

6.05.

Claims

(a) It is not necessary to file a claim in order to receive Plan benefits.

(b) On receipt of a claim for Plan benefits, the Committee must respond in writing within ninety days. If necessary, the Committee’s first notice must indicate any special circumstances requiring an extension of time for the Committee’s decision. The extension notice must indicate the date by which the Committee expects to render a decision; an extension of time for processing may not exceed ninety days after the end of the initial period.


		17		Revised January 1, 2005

(c) If a claim is wholly or partially denied, the Committee must give written notice within the time provided in subsection (b). An adverse notice must specify each reason for denial. There must be specific reference to provisions of the Plan or related documents on which the denial is based. If additional material or information is necessary for the claimant to perfect the claim, it must be described and there must be an explanation of why that material or information is necessary. Adverse notice must disclose appropriate information about the steps that the claimant must take if he or she wishes to submit the claim for review. If notice that a claim has been denied is not furnished within the time required in subsection (b), the claim is deemed denied.

(d) The full value of a payment made according to the provisions of the Plan satisfies that much of the claim and all related claims under the Plan against the Committee and the Company and its Affiliates, each of whom, as a condition to a payment from it or directed by it, may require the Participant, Beneficiary, or legal representative to execute a receipt and release of the claim in a form determined by the person requesting the receipt and release.

6.06.

Review of Claims

(a) On proper written request for review from a claimant to the Committee, there must be a review by the Board. The Committee must receive the written request before sixty-one days after the claimant’s receipt of notice that a claim has been denied according to the preceding Plan Section. The claimant and an authorized representative are entitled to be present and heard if any hearing is used as part of the review.

(b) The Board must determine whether there will be a hearing. Before any hearing, the claimant or a duly authorized representative may review all Plan documents and other papers that affect the claim and may submit issues and comments in writing. The Board must schedule any hearing to give sufficient time for this review and submission, giving notice of the schedule and deadlines for submissions.

(c) The Board must advise the claimant in writing of the final determination after review. The decision on review must be written in a manner calculated to be understood by the claimant, and it must include specific reasons for the decision and specific references to the pertinent provisions of the Plan or related documents on which the decision is based. The written advice must be rendered within sixty days after the request for review is received, unless special circumstances require an extension of time for processing. If an extension is necessary, the decision must be rendered as soon as possible but no later than 120 days after receipt of the request for review. If the Board has regularly scheduled meetings at least quarterly, the following rules govern the time for the decision after review. If the claimant’s written request for review is received more than thirty days before a Board meeting, the decision of the Board must be rendered at the next meeting after the request for review is received. If the claimant’s written request for review is received thirty days or less before a Board meeting, the decision of the Board must be rendered at the Board’s second meeting after the request for review has been received. If special circumstances (such as the need to hold a hearing) require an extension of


		18		Revised January 1, 2005

time for processing, the decision of the Board must be rendered not later than the Board’s third meeting after the request for review has been received. If an extension of time for review is required, written notice of the extension must be furnished to the claimant before the extension begins. If notice that a claim has been denied on review is not received by the claimant within the time required in this paragraph, the claim is deemed denied on review.

ARTICLE VII

TERMINATION, AMENDMENT OR MODIFICATION OF PLAN

7.01.

Reservation of Rights

Except as otherwise specifically provided, the Company reserves the right to terminate, amend or modify this Plan wholly or partially at any time and from time to time. Such right to terminate, amend or modify the Plan shall be exercised by the Board. Notwithstanding the preceding, with respect to an affected Participant, the Plan may not be amended, modified or terminated after a Change in Control unless the affected Participant agrees to such amendment, modification or termination in writing. Further, no termination of the Plan shall cause a distribution of benefits to or for the benefit of a Participant that is in violation of Section 409A of the Code and any Treasury Regulations promulgated thereto.

7.02.

Limitation of Actions

The rights of the Company set forth in the preceding Section are subject to the condition that its Board shall take no action to terminate the Plan or decrease the benefit that would become payable or is payable, as the case may be, with respect to a Participant or a Beneficiary after the Participant has reached his or her Early Retirement Date or Normal Retirement Date or the Participant, or his or her Beneficiary has become entitled to a benefit under the Plan.

7.03.

Effect of Termination

ARTICLE VIII

MISCELLANEOUS

8.01.

Limitation on Benefits

(a) For purposes of this Plan, the following terms shall have the meanings indicated below:

(i) “Accounting Firm” means the public accounting firm retained as the Company’s independent auditor as of the date immediately prior to the Change in Control, or, for any Participant subject to an Executive Severance Agreement, such other independent accounting firm as may be appointed in accordance with that Agreement.

(ii) “Capped Parachute Payments” means the largest amount of Parachute Payments that may be paid to a Participant without liability for any excise tax under Code Section 4999.


		19		Revised January 1, 2005

(iii) “Net After Tax Amount” means the amount of any Parachute Payments or Capped Parachute Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any state or local income taxes applicable to a Participant as in effect on the date of the payment under this Section 8.01. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Parachute Payments, as applicable, in effect for the year for which the determination is made.

(iv) “Parachute Payment” means a payment that is described in Code Section 280G(b)(2) (without regard to whether the aggregate present value of such payments exceeds the limit prescribed by Code Section 280G(b)(2)(A)(ii)). The amount of any Parachute Payment shall be determined in accordance with Code Section 280G and the regulations promulgated thereunder, or, in the absence of final regulations, the proposed regulations promulgated under Code Section 280G.

(b) The benefit payable to a Participant under this Plan and under other plans, programs, and agreements may constitute Parachute Payments that are subject to the “golden parachute” rules of Code Section 280G and the excise tax of Code Section 4999. It is the Company’s intention to reduce any Parachute Payments (but not any payment, distribution or other benefit that is not a Parachute Payment) if, and only to the extent that, a reduction will allow the affected Participant to receive a greater Net After Tax Amount than he or she would receive absent a reduction. The remaining provisions of this subsection describe how that intent will be effectuated.

(c) The Accounting Firm will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm will also determine the Net After Tax Amount attributable to that Participant’s total Parachute Payments.

(d) The Accounting Firm will next determine the amount of that Participant’s Capped Parachute Payments. Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to that Participant’s Capped Parachute Payments.

(e) That Participant will receive the total Parachute Payments unless the Accounting Firm determines that the Capped Parachute Payments will yield a higher Net After Tax Amount, in which case that Participant will receive the Capped Parachute Payments. If that Participant will receive the Capped Parachute Payments, his or her benefit under this Plan will be adjusted, if at all, in the manner determined by the Committee, taking into account the provisions of any Executive Severance Agreement or other agreement to which the Participant may be subject that specifies the manner in which Parachute Payments must be reduced. The Accounting Firm will notify the Participant and the Company if it determines that the Parachute Payments must be reduced to the Capped Parachute Payments and will send the Participant and the Company a copy of its detailed calculations supporting that determination.

(f) If, pursuant to Subsection (e), a Participant will receive the total Parachute Payments, the Company shall indemnify the Participant and hold him harmless against all claims, losses, damages, penalties, expenses, and excise taxes. To effect this indemnification, the Company must pay the Participant an additional amount (the “Gross-Up Payment”) that after


		20		Revised January 1, 2005

payment by the Participant of all taxes, including, without limitation, any income, employment and excise taxes (and any interest and penalties imposed with respect thereto), imposed upon the Gross-Up Payment leaves the Participant a net amount from the Gross-Up Payment equal to the excise tax under Code Section 4999 imposed on the Parachute Payments. The determination of any additional amount that must be paid under this paragraph must be made by the Company in good faith.

(g) As a result of any uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under this Section 8.01, it is possible that amounts will have been paid or distributed to a Participant that should not have been paid or distributed under this Section 8.01 (“Overpayments”), or that additional amounts should be paid or distributed to a Participant under this Section 8.01 (“Underpayments”). If the Accounting Firm determines, based on either controlling precedent, substantial authority or the assertion of a deficiency by the Internal Revenue Service against a Participant or the Company, which assertion the Accounting Firm believes has a high probability of success, that an Overpayment has been made, then the Participant shall have an obligation to pay the Company upon demand an amount equal to the sum of the Overpayment plus interest on such Overpayment at the prime rate provided in Code Section 7872(f)(2) from the date of the Participant’s receipt of such Overpayment until the date of such repayment; provided, however, that the Participant shall be obligated to make such repayment if, and only to the extent, that the repayment would either reduce the amount on which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that determination and the Company will pay the amount of that Underpayment to the Participant promptly in a lump sum, with interest calculated on such Underpayment at the prime rate provided in Code Section 7872(f)(2) from the date such Underpayment should have been paid until actual payment.

(h) All determinations made by the Accounting Firm under this Section 8.01 are binding on the Participant and the Company and must be made as soon as practicable but no later than thirty days after a Participant’s termination of employment following a Change in Control. Within thirty days after the termination, the Company will commence payment of the Participant’s Change in Control Allowance, or a reduced Change in Control Allowance as calculated by the Accounting Firm pursuant to this Section 8.01.

(i) All references in this Section 8.01 to a Participant and to an amount payable to the Participant shall be interpreted to include the Participant’s Beneficiary and amounts payable to the Participant’s Beneficiary, if applicable.

8.02.

Unfunded Plan


		21		Revised January 1, 2005

Beneficiary under this Plan. If the Company, in its sole discretion, elects to purchase life insurance on the life of a Participant in connection with the Plan, the Participant must submit to a physical examination, if required by the insurer, and otherwise cooperate in the issuance of such policy or his or her rights under the Plan will be forfeited.

8.03.

Other Benefits and Agreements

The benefits, if any, provided for a Participant or his or her Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees (other than an Executive Salary Continuation Agreement), and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating.

8.04.

Withholding Taxes

The benefit, if any payable to a Participant or his or her Beneficiary under the Plan shall be reduced by the amounts which the Company, in its discretion, determines shall be withheld under applicable federal, state and local income taxes and for any applicable employment-related taxes.

8.05.

Restrictions on Transfer of Benefits

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the Committee, shall cease and terminate, and, in such event, the Committee may hold or apply the same or any part thereof for the benefit of such Participant or his or her Beneficiary or other dependents, or any of them, in such manner and in such portion as the Committee may deem proper.

8.06.

No Guarantee of Employment

The Plan does not in any way limit the right of the Company or an Affiliate at any time and for any reason to terminate the Participant’s employment or such Participant’s status as an officer of the Company or an affiliate. In no event shall the Plan by its terms or implications constitute an employment contract of any nature whatsoever between the Company or an Affiliate and a Participant.

8.07.

Successors

The Plan shall be binding upon the Company and its successors and assigns; subject to the powers set forth in Article VII, and upon a Participant and his or her Beneficiary and either of their assigns, heirs, executors and administrators.


		22		Revised January 1, 2005

8.08.

Construction

Headings are given for ease of reference and must be disregarded in interpreting the Plan. Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural.


		23		Revised January 1, 2005

Exhibit I

Owens & Minor, Inc.

Supplemental Executive Retirement Plan

The benefits, if any, payable to or on behalf of the following individuals are governed by the terms and conditions set forth in Exhibit II:

[List grandfathered participants]


		24		Revised January 1, 2005

Exhibit II

OWENS & MINOR, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Introduction

The Plan is further amended and restated, effective as of January 1, 2005, to comply with requirements applicable to certain nonqualified deferred compensation plans under section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any Treasury Regulations promulgated thereto. Vested benefits under the Plan as of December 31, 2004, generally are not subject to the provisions of Section 409A of the Code or any Treasury Regulations promulgated thereto. Such Plan benefits may be paid to Participants pursuant to the terms of the Plan in effect on October 3, 2004 and without regard to the limitations of Section 409A of the Code or any Treasury Regulations promulgated thereto.

Article I

Definitions

1.01.

409A Benefit means the benefit payable under the Plan determined under clause (a) or (b), as applicable.

(a) For a Participant who, on December 31, 2004, has neither (i) attained age 65 nor (ii) attained age 62 and completed at least 20 Years of Service, the 409A Benefit shall be the retirement allowance payable to such Participant under the applicable provisions of the Plan.


		25		Revised January 1, 2005

(b) For a Participant who, on December 31, 2004, has (i) attained age 65 or (ii) attained age 62 and completed at least 20 Years of Service, the 409A Benefit shall be the portion of the Normal Retirement Allowance or Early Retirement Allowance payable to such Participant under Article III, that exceeds the Participant’s Grandfathered Benefit as of the date such benefits commence.

1.02	Affiliate means any “subsidiary corporation” or “parent corporation” (within the meaning of Section 425 of the Internal Revenue Code of 1986, as amended) of the Company.

1.03.

Board means the Board of Directors of the Company.

1.04.

Change in Control means that

(i)

(ii)

during any period of two consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (ii) or (iv) of this Section) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of a majority of the directors then still in office who either (x) were directors at the beginning of such period or (y) were so elected or nominated with such approval, cease for any reason to constitute at least a majority of the Board;

(iii)


		26		Revised January 1, 2005

(iv)

the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.

1.05.

Child means the legally born or adopted child of a Participant.

1.06.

Committee means the Compensation and Benefits Committee of the Board.

1.07.

Company means Owens & Minor, Inc.

1.08.

Early Retirement Allowance means the benefit described in Section 3.01.

1.09.

Early Retirement Date means the first day of a month coincident with or following a Participant’s Retirement after attaining age 62 and after completing at least 20 Years of Service.

1.10.

Final Pay means the average base monthly salary of a Participant during the 60 months preceding the date of reference. A Participant’s Final Pay shall be determined without regard to any compensation reductions or deferrals under Section 125 or 401(k) of the Internal Revenue Code of 1986, as amended. A Participant’s Final Pay shall not include amounts paid as a bonus, automobile allowance or other amounts that are in addition to his or her regular base monthly salary. Any period in which a Participant suffers a Total and Permanent Disability shall be disregarded in determining his or her Final Pay .

1.11.

Grandfathered Benefit means the portion of the Normal Retirement Allowance or Early Retirement Allowance described in the following sentence that is payable to a Participant who, on December 31, 2004, (a) was employed by the Company or an Affiliate and (b) either (i) had attained age 65 or (ii) had attained age 62 and completed at least 20 Years of Service. The Grandfathered Benefit shall be computed under Section 3.01 or 3.02, as applicable, based on the Participant’s Final Average Pay, Qualified Plan Benefit, Social Security Benefit and any other defined benefit pension plan benefits of any other prior employer or employers, as of December 31, 2004.

1.12.

Minimum Benefit means the monthly benefit shown with respect to a Participant on Schedule A or B or C, as applicable. If no such amount is shown on Schedule A or B or C the Minimum Benefit shall be zero.

1.13.

Normal Retirement Allowance means the benefit described in Section 3.02.

1.14.

Normal Retirement Date means the first day of a month coincident with or following a Participant’s Retirement after attaining age 65.

1.15.

Participant means an individual who has been selected to participate in the Plan in accordance with Article II. The term Participant includes a Schedule A Participant and a Schedule B Participant and a Schedule C Participant.


		27		Revised January 1, 2005

1.16.

Plan means the Owens & Minor, Inc. Supplemental Executive Retirement Plan.

1.17.

Qualified Plan means a defined benefit pension plan that is maintained by the Company or an Affiliate and which satisfies the requirements of Section 401(a) and related sections of the Internal Revenue Code.

1.18.

Retire and Retirement mean a Separation From Service from the Company and its Affiliates (i) at or after the attainment of age 62 and the completion of 20 Years of Service or (ii) at or after the attainment of age 65.

1.19.

Schedule A Participant means a Participant who is listed on Schedule A of the Plan.

1.20.

Schedule B Participant means a Participant who is listed on Schedule B of the Plan.

1.21.

Schedule C Participant means a Participant who is listed on Schedule C of the Plan.

1.22.

Separates From Service and Separation From Service mean, as of any given date, the termination of a Participant’s employment with the Company and its Affiliates as contemplated by Treasury Regulation Section 1.409A-1(h) on account of death, retirement or otherwise. Whether a Participant experiences a termination of employment for purposes of this definition shall be determined by the Committee in accordance with Treasury Regulations Section 1.409A -1(h)(ii). Consistent with the foregoing, the Committee shall make such determination based on whether the relevant facts and circumstances indicate that the Participant and the Company or Affiliate reasonably anticipate that either (a) no further services will be performed by the Participant for the Company or any Affiliate after such date (whether as an employee or an independent contractor) or (b) the bona fide services to be performed by the Participant (whether as an employee or an independent contractor) after such date would permanently decrease to no more than twenty (20) percent of the average level of such services provided by the Participant over the thirty-six (36)-month period immediately preceding such date (or if the Participant has been providing services to the Company or an Affiliate for a period less than thirty-six (36) months, the full period of services to such employer). The Committee may designate an alternative percentage a reasonably anticipated permanent decrease in the level of bona fide services that will constitute a Separation From Service in accordance with the provisions of Treasury Regulations Section 1.409A-1(h)(ii).

In addition to the foregoing, the following rules shall apply to determine whether an individual has experienced a Separation From Service:

(a) if an individual provides services to the Company or an Affiliate both as an employee and a member of the Board or a member of the board of directors of an Affiliate, the services that such individual provides as a director shall not be taken into account in determining whether such individual has experienced a Separation From Service to the extent provided in Treasury Regulations Section 1.409A-1(h)(1)-(5); and

(b) the Committee will determine the extent to which an individual who is not providing services to the Company or an Affiliate on account of a military leave, sick leave or other bona fide leave of absence, including an unpaid lease of absence, shall be treated as having a Separation From Service consistent with the provisions of Treasury Regulations Section 1.409A-1(h)(i) and (ii).


		28		Revised January 1, 2005

1.23.

Specified Employee means a “specified employee” as defined in Treasury Regulations Section 1.409A-1(i) which is a Participant who, as of the date of his or her Separation From Service, is a “key employee” of the Company or any Affiliate within the meaning of clauses (i), (ii) or (iii) of Section 416(i)(1)(A) of the Code (such provisions applied in accordance with the Treasury Regulations promulgated under Section 416 of the Code and disregarding section 416(i)(5) of the Code) at any time during the 12-month period ending on a “specified employee identification date.” If a Participant is a key employee as of a “specified employee identification date,” the Participant is treated as a key employee under the Plan for the entire 12-month period beginning on the “specified employee effective date.”

The following definitions apply for purposes of determining whether a Participant is a Specified Employee for purposes of the Plan:

(c) the definition of “compensation” used for purposes of identifying a “key employee” under clauses (i), (ii) or (iii) of Section 416(i)(1)(A) of the Code shall be the definition set forth in Treasury Regulations Section 1.415(c)-2(a) and applied as if the Company or Affiliate thereof were not using any safe harbor provided in Treasury Regulations Section 1.415(c)-2(d), were not using any of the elective special timing rules provided in Treasury Regulations Section 1.415(c)-2(e), and were not using any of the elective special rules provided in Treasury Regulations Section 1.415(c)-2(g). The Committee may, in its discretion, designate a different definition of “compensation” in order to identify “key employees” during a particular period pursuant to and in accordance with Treasury Regulations Section 1.409A-1(i)(2).

1.24.

Spouse means the person to whom the Participant is legally married on the date of reference.

1.25.


		29		Revised January 1, 2005

1.26.

Treasury Regulations means final and temporary regulations promulgated under the Code by the United States Department of Treasury.

1.27.

Years of Service means the total years of service credited to a Participant for purposes of determining his or her vested or nonforfeitable interest in a Qualified Plan. Notwithstanding the foregoing, a Participant shall be credited with Years of Service during a period of Total and Permanent Disability as if he or she was employed by the Company during such period.

Article II

Participation

Consistent with the purposes of the Plan and the Company’s intent in adopting the Plan, the Committee shall designate employees of the Company and its Affiliates who are eligible to participate in the Plan. An individual shall remain a Participant only so long as the Committee continues such designation; provided, however, that a designation may not be changed or revoked after that Participant has reached his or her Early Retirement Date, Normal Retirement Date, that Participant, his or her Spouse or Child has become entitled to a benefit under the Plan or during a period in which the Participant suffers a Total and Permanent Disability. Nor may a designation be changed or revoked after a Change in Control.

Article III

Retirement Allowances

3.01.

Early Retirement Allowance .

(i) = 45% of the Participant’s Final Pay (determined as of a date that is the earlier of (I) the Participant’s Early Retirement Date or (II) April 1, 2004), and

(ii) = the sum of (x) the Qualified Plan Benefit and (y) the Social Security Benefit and (z) the defined benefit pension plan(s) benefit(s) of any other prior employer or employers.


		30		Revised January 1, 2005

3.02.

Normal Retirement Allowance .

(i) = the Minimum Benefit, and

(ii) = the difference between (x) and (y) where

(x) = the Applicable Percentage of the Participant’s Final Pay (determined as of a date that is the earlier of (I) the Participant’s Normal Retirement Date or (II) April 1, 2004) and

(y) = the sum of the Qualified Plan Benefit and the Social Security Benefit and

(z) the defined benefit pension plan(s) benefits(s) of any other prior employer or employers.

For purposes of this Section, the Applicable Percentage shall be 65% with respect to the Normal Retirement Allowance of a Schedule A Participant and 55% with respect to the Normal Retirement Allowance of a Schedule B Participant and 45% with respect to the Normal Retirement Allowance of a Schedule C Participant.

3.03.

Payment of Retirement Allowances .

(a) The payment of the retirement allowance payable under this Article III to a Participant who is not a Specified Employee as of the date he or she Retires shall begin on the 15th day of the month following the month in which the Participant Retires. The payment of the retirement allowance shall continue to be paid as of the 15th day of each month thereafter until the month in which the Participant dies. No further retirement allowance payments will be made under this Article III following the month in which the Participant dies.

(b) The following provisions apply to the payment of the retirement allowance payable under this Article III to a Participant who is a Specified Employee as of the date he or she Retires.

(i) The payment of the Participant’s Grandfathered Benefit shall begin on the 15 ^th day of the month following the month in which the Participant Retires.


		31		Revised January 1, 2005

The payment of the retirement allowance described in this Subsection 3.03(b) shall continue to be paid as of the 15 ^th day of each month after the first month specified in clauses (i) and (ii) above until the month in which the Participant dies. No further retirement allowance payments will be made under this Article III following the month in which the Participant dies.

3.04.

Qualified Plan Benefit Under Article III .

For purposes of determining the amount payable to a Participant under this Article III, the term Qualified Plan Benefit means the monthly benefit that would be payable to the Participant from all Qualified Plans in the form of an annuity payable for the lifetime of the Participant with no survivor’s benefits. The amount of the Qualified Plan Benefit shall be determined as of the Participant’s Early Retirement Date (in the case of the payment of an Early Retirement Allowance) or as of the Participant’s Normal Retirement Date (in the case of the payment of a Normal Retirement Allowance) or as of December 31, 2004 (in the case of the calculation of the Participant’s Grandfathered Benefit). The Qualified Plan Benefit shall be taken into account in determining the amount payable to the Participant under this Article III regardless of the benefit the Participant actually receives under any Qualified Plan.

3.05.

Social Security Benefit Under Article III .

For purposes of determining the amount payable to a Participant under this Article III, the term Social Security Benefit means the monthly benefit that the Participant is entitled to receive under Section 215 of the Social Security Act, without regard to any reduction in such benefit on account of excess earnings and without regard to whether the Participant elects to receive such benefit. The amount of the Social Security Benefit shall be determined as of the Participant’s Early Retirement Date (in the case of the payment of an Early Retirement Allowance) or as of the Participant’s Normal Retirement Date (in the case of the payment of a Normal Retirement Allowance) or as of December 31, 2004 (in the case of the calculation of the Participant’s Grandfathered Benefit).

Article IV

Payments in the Event of Death

4.01.

Death Prior to Retirement .

(a) Subject to the requirements of Article V and Section 8.01, a benefit shall be payable under this Section if the Participant dies prior to the commencement of a retirement allowance under Article III. The monthly benefit payable under this Section shall be equal to the Applicable Percentage of the Participant’s Final Pay (determined on the date that is the earlier of (i) the last day of the month preceding the month in which the Participant died or (ii) April 1, 2004).


		32		Revised January 1, 2005

Participant’s surviving Spouse will continue as of the 15th day of each month thereafter until the earlier of (i) the death of the surviving Spouse or (ii) the surviving Spouse has received 180 months’ benefits.

(ii) If the Participant’s surviving Spouse dies before receiving 180 monthly payments under the preceding paragraph, the benefit described in the preceding Subsection (a) shall be divided among and payable to the surviving Children who have not attained age 25 before the death of the Participant’s surviving Spouse. The payment to each Child shall begin on the 15th day of the month following the month in which occurred the death of the surviving Spouse. The payments will continue with respect to each Child on the 15th day of each month thereafter until the earlier of (i) a total of 180 monthly payments have been made to the surviving Spouse and that Child, (ii) that Child attains the age of 25 or (iii) the death of that Child.

(c) The payment of the benefit described in the preceding Subsection (a) shall be governed by this Subsection if the Participant is not survived by his or her Spouse but is survived by at least one Child who has not attained the age of 25 before the date of the Participant’s death. In that event the benefit described in the preceding Subsection (a) shall be divided among and payable to the surviving Children who have not attained the age of 25 before the date of the Participant’s death. The payments to each Child shall begin on the 15th day of the month following the month in which occurred the death of the Participant. The payments will continue with respect to each such Child on the 15th day of each month thereafter until the earlier of (i) that Child’s receipt of 180 monthly payments, (ii) that Child’s attainment of age 25, or (iii) the death of that Child.

(d) No benefit will be payable under this Section if the Participant is not survived by his or her Spouse and each Child who survives the Participant attained the age of 25 before the date of the Participant’s death.

4.02.

Death After Retirement .

(a) Subject to the requirements of Article V and Section 8.01, a benefit shall be payable under this Section if the Participant dies after the commencement of a retirement allowance under Article III and before his or her receipt of 180 payments of that benefit. The monthly benefit payable under this Section shall be equal to monthly allowance to which the Participant was entitled under Article III immediately prior to the Participant’s death.

(b) (i) The payment of the benefit described in the preceding Subsection (a) shall be governed by this Subsection if the Participant is survived by his or her Spouse. That benefit will be paid to the Participant’s surviving Spouse beginning on the 15th day of the month following the month in which the Participant died. The payment of that benefit to the Participant’s surviving Spouse will continue as of the 15th day of each month thereafter until the earlier of (i) a total of 180 payments have been made under the Plan to the Participant and his or her surviving Spouse or (ii) the death of the surviving Spouse.

(ii) If the Participant’s surviving Spouse dies before the Participant and the surviving Spouse have received a total of 180 payments under the Plan, the benefit described in the preceding Subsection (a) shall be divided among and payable to the surviving Children who


		33		Revised January 1, 2005

have not attained the age of 25 before the date of the surviving Spouse’s death. The payment to each such Child shall begin on the 15th day of the month following the month in which the surviving Spouse died. The payments will continue with respect to each such Child until the earlier of (i) a total of 180 payments have been made under the Plan to the Participant, the surviving Spouse and that Child, (ii) that Child attains the age of 25, or (iii) the death of that Child.

(c) The payment of the benefit described in the preceding Subsection (a) shall be governed by this Subsection if the Participant is not survived by his or her Spouse but is survived by at least one Child who has not attained the age of 25 before the date of the Participant’s death. In that event the benefit described in the preceding Subsection (a) shall be divided among and payable to the surviving Children who have not attained the age of 25 before the date of the Participant’s death. The payment shall begin on the 15th day of the month following the month in which the Participant died. The payments shall continue with respect to each such Child on the 15th day of each month thereafter until the earlier of (i) a total of 180 payments have been made under the Plan to the Participant and that Child, (ii) the Child’s attainment of age 25, or (iii) the death of that Child.

4.03.

Applicable Percentage .

For purposes of computing the benefit payable under Section 4.01, the Applicable Percentage shall be 25% with respect to payments on behalf of a Schedule A Participant and 15% with respect to payments on behalf of a Schedule B Participant and on behalf of a Schedule C Participant.

Article V

Vesting and Continuous Employment

5.01.

Vesting .

(i)

his Early Retirement Date in the case of the payment of an Early Retirement Allowance or the benefit described in Section 4.02;

(ii)

his Normal Retirement Date in the case of the payment of a Normal Retirement Allowance or the benefit described in Section 4.02; or

(iii)

his death in the case of the benefit described in Section 4.01.


		34		Revised January 1, 2005

Notwithstanding the foregoing, no benefit shall be payable under this Plan if the Participant is Separated from Service on account of his or her conviction of a felony involving dishonesty directed against the Company or an Affiliate or his or her conviction of a crime of moral turpitude that is injurious to the business reputation of the Company or an Affiliate.

5.02.

Total and Permanent Disability .

(a) Notwithstanding Section 5.01 and except as provided in Section 5.02(b) and subject to the requirements of Article V and Section 8.01, a retirement allowance shall be payable to a Participant who Separates From Service on account of a Total and Permanent Disability after being in the continuous employ of the Company and its Affiliates from his or her most recent designation as a Participant by the Committee.

(d) Section 5.02(a) shall not apply if the Participant recovers from his or her Total and Permanent Disability prior to the date his retirement allowance is scheduled to begin. If such Participant does not return to the active employ of the Company and its Affiliates at that time, the Participant will be deemed to have Separated From Service as of the date such Participant first Separated From Service on account of his or her Total and Permanent Disability.


		35		Revised January 1, 2005

5.03.

Continuous Employment .

5.04.

Non-Competition .

(b) Each Participant thus agrees that, once he or she has become entitled to a benefit under this Plan in accordance with Section 5.01, then during his or her employment and for a period of five years immediately following termination of his or her employment (for any reason), Participant shall not directly or indirectly own, manage, operate, join, control, be employed by or consult with any firm or business entity which is in the same business as, or similar to, the Company or any of its Affiliates and which competes with the Company or any of its Affiliates. Recognizing the broad geographic scope and unique nature of the business of the Company and its Affiliates, and expressly acknowledging the Company’s legitimate interest in this restriction, each Participant agrees that this restriction shall apply within a radius of 500 miles from such Participant’s principal assignment with the Company and its Affiliates.

(c) Each Participant further agrees that, once he or she has become entitled to a benefit under this Plan in accordance with Section 5.01, then during his or her employment and for a period of five years immediately following his or her Separation From Service (for any reason), the Participant will not hire, solicit for hire or encourage to leave the Company’s or an Affiliate’s employment any person who is then an employee of the Company or an Affiliate.

(d) Each Participant agrees that in the event of any breach or threatened breach of his or her promises in this Section, the Company will not have an adequate remedy at law and will suffer substantial and irreparable damage. Each Participant accordingly agrees that the Company shall be entitled to obtain specific enforcement of his or her promises, including but not limited to temporary and permanent injunctions restraining such Participant from breaching such promises. In addition to any remedy that may be afforded the Company, upon a breach or threatened breach of the promise in this Section, such Participant shall forfeit all rights under this Plan and no benefit or further benefit shall be payable to the Participant, his or her surviving Spouse or Child. This provision shall not bar the Company from any other remedies available to it for such breach or threatened breach, including the recovery of damages and attorneys’ fees.


		36		Revised January 1, 2005

Article VI

Administration of the Plan

6.01.

Generally .

6.02.

Indemnification .

6.03.

Determining Benefits .

In addition to the powers hereinabove specified, the Committee shall have the power to compute and certify the amount, kind and method of distribution of benefits from time to time payable to or on behalf of Participants under the Plan, to authorize all disbursements for such purposes, and to determine whether a Participant, a surviving Spouse or Child is entitled to a benefit under the Plan and the timing of payment for such benefit.

6.04.

Cooperation .


		37		Revised January 1, 2005

6.05.

Claims .

(a) It is not necessary to file a claim in order to receive Plan benefits.

(d) The full value of a payment made according to the provisions of the Plan satisfies that much of the claim and all related claims under the Plan against the Committee and the Company and its Affiliates, each of whom, as a condition to a payment from it or directed by it, may require the Participant, surviving Spouse, Child, or legal representative to execute a receipt and release of the claim in a form determined by the person requesting the receipt and release.

6.06.

Review of Claims .


		38		Revised January 1, 2005

special circumstances require an extension of time for processing. If an extension is necessary, the decision must be rendered as soon as possible but no later than 120 days after receipt of the request for review. If the Board has regularly scheduled meetings at least quarterly, the following rules govern the time for the decision after review. If the claimant’s written request for review is received more than thirty days before a Board meeting, the decision of the Board must be rendered at the next meeting after the request for review is received. If the claimant’s written request for review is received thirty days or less before a Board meeting, the decision of the Board must be rendered at the Board’s second meeting after the request for review has been received. If special circumstances (such as the need to hold a hearing) require an extension of time for processing, the decision of the Board must be rendered not later than the Board’s third meeting after the request for review has been received. If an extension of time for review is required, written notice of the extension must be furnished to the claimant before the extension begins. If notice that a claim has been denied on review is not received by the claimant within the time required in this paragraph, the claim is deemed denied on review.

Article VII

Termination, Amendment or Modification of Plan

7.01.

Reservation of Rights .

7.02.

Limitation on Actions .

The rights of the Company set forth in the preceding Section are subject to the condition that its Board shall take no action to terminate the Plan or decrease the benefit that would become payable or is payable, as the case may be, with respect to a Participant, surviving Spouse or Child after the Participant has reached his or her Early Retirement Date or the Participant, his or her surviving Spouse or a Child has become entitled to a benefit under the Plan.

7.03.

Effect of Termination .

Except as provided in Sections 7.01 and 7.02, upon the termination of this Plan by the Board, the Plan shall be of no further force or effect, and neither the Company nor the Participant or his or her surviving Spouse and Children shall have any further obligation or right under this Plan. Likewise, the rights of any individual who was a Participant and who ceases to be designated as a Participant by the Committee shall cease upon such action.


		39		Revised January 1, 2005

Article VIII

Miscellaneous

8.01.

Limitation on Benefits .

Notwithstanding any other provision of the Plan, if the benefit payable to a Participant, surviving Spouse or Child would constitute a “parachute payment” (as defined in section 280G of the Internal Revenue Code of 1986, as amended), the amount payable under the Plan and all such other payments shall be reduced to the largest amount that will result in no portion of any such payments being subject to the excise tax imposed by section 4999 of the Internal Revenue Code of 1986, as amended. The determination of any reduction pursuant to this Section shall be made by the Committee in good faith before any such payments are made to the Participant, surviving Spouse or Child.

8.02.

Unfunded Plan .

The Company has only a contractual obligation to make payments of the benefits described in the Plan. All benefits are to be satisfied solely out of the general corporate assets of the Company which shall remain subject to the claims of its creditors. No assets of the Company will be segregated or committed to the satisfaction of its obligations to any Participant, surviving Spouse or Child under this Plan. If the Company, in its sole discretion, elects to purchase life insurance on the life of a Participant in connection with the Plan, the Participant must submit to a physical examination, if required by the insurer, and otherwise cooperate in the issuance of such policy or his or her rights under the Plan will be forfeited.

8.03.

Other Benefits and Agreements .

The benefits, if any, provided for a Participant, his or her surviving Spouse and his or her Children under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company for its employees (other than an Executive Salary Continuation Agreement), and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company in which a Participant is participating.

8.04.

Withholding Taxes .

The benefit, if any payable to a Participant, his or her surviving Spouse and his or her Children under the Plan shall be reduced by the amounts which the Company, in its discretion, determines shall be withheld under applicable federal, state and local income taxes and for any applicable employment-related taxes.

8.05.

Restrictions on Transfer of Benefits .


		40		Revised January 1, 2005

the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the Committee, shall cease and terminate, and, in such event, the Committee may hold or apply the same or any part thereof for the benefit of such Participant, his or her surviving Spouse, Children, or other dependents, or any of them, in such manner and in such portion as the Committee may deem proper.

8.06.

No Guarantee of Employment .

8.07.

Successors .

The Plan shall be binding upon the Company and its successors and assigns; subject to the powers set forth in Article VII, and upon a Participant, his or her surviving Spouse and Children and either of their assigns, heirs, executors and administrators.

8.08.

Construction .


		41		Revised January 1, 2005

Exhibit 10.2

Third Amendment

to the

Owens & Minor, Inc. Pension Plan

(As Amended and Restated with Amendments adopted through April 27, 2006)

I.	Miscellaneous Technical and Conforming Changes .

First: Plan section 1.09, “Compensation,” is amended by replacing, in the second paragraph, the reference to “Savings and Protection Plan for Employees of Owens & Minor, Inc.,” with “Owens & Minor 401(k) Savings and Retirement Plan”.

Second: Plan section 1.09 is further amended effective as of the later of January 1, 1998 or the first day of the first plan year the Plan was operated in accordance with the definition below:

Deemed 125 Compensation . Amounts under Code section 125 include any amounts not available to a Participant in cash in lieu of group health coverage under the Employer’s group health plan because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code section 125 only if the Employer does not request or collect information regarding the Participant’s other health coverage as part of the enrollment process for the Employer’s health plan.

Third: The first paragraph of Plan section 1.19, “Employee,” is amended by replacing “and any person considered a leased employee within the definition of IRC Section 414(n)” with “and any person considered a Leased Employee”.

Fourth: Plan section 1.19 is further amended by replacing in the second paragraph “leased employee” with “Leased Employee” each time it occurs.

Fifth: Effective January 1, 2000, the first sentence in the second paragraph of Plan section 1.20, “Employer,” is amended by replacing the phrase “in determining highly compensated employees under IRC Section 414(q)” with “in determining Highly Compensated Employees”.

Sixth: Plan section 2.01, “Eligibility,” is amended by deleting the second paragraph.


Owens & Minor, Inc. Pension Plan		1

Seventh: Effective January 1, 2008, Plan section 4.05, Rollover Distributions,” is amended by adding new subsection (c) at the end thereof:

(c) Rollover Notice. The Committee shall provide to each Participant who is entitled to make an Eligible Rollover Distribution a notice that describes the Plan’s default distribution procedure in the event the Participant fails to make a rollover election and that satisfies Code section 402(f) at least 30 but not more than 90 days before the Participant’s Annuity Starting Date.

Eighth: Plan section 10.01, “Amendment of the Plan,” is amended by adding the following sentence at the end thereof:

In addition, the Board, or the executive committee of the Board, may delegate to the President, Chief Executive Officer, Chief Financial Officer, or Senior Vice President - Human Resources all or part of the authority to amend the Plan or Trust Agreement.

Ninth: Effective January 1, 2000, Plan section 10.03, “Restriction on Benefits for Top Twenty-Five (25) Highly Compensated Employees - Effective for Plan Years Commencing On and After January 1, 1994,” is amended by replacing “highly compensated employee” and “highly compensated employee, as defined in IRC Section 414(q)” with “Highly Compensated Employee” in each case.

Tenth: Effective January 1, 2002, Plan section 12.03(c), “Definitions, Top Heavy Plan” is amended by replacing the last sentence in subsection (i) with the following:

In the case of a distribution made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting “five year period”‘ for “one year period.”

Eleventh: Effective January 1, 2002, Plan section 12.03(c) is further amended by replacing paragraph (1) in subsection (iv) with the following paragraph:

(1) effective January 1, 2002, each plan of the Employer in which a Key Employee is a Participant during the Plan Year containing the determination date or any of the four preceding plan years (regardless of whether the Plan has terminated).


Owens & Minor, Inc. Pension Plan		2

II.

Pension Protection Act of 2006 amendments for changes effective in 2007 and 2008 .

Twelfth: Effective January 1, 2007, the first paragraph in Plan section 4.02, “Available Options,” is replaced with the following paragraph:

Subject to Sections 4.05(a)-(e) no less than thirty (30) days and no more than 90 days prior to the Annuity Starting Date, each Participant and his Spouse shall be given a written notice to the effect that benefits thereafter payable shall be in the form specified in Section 4.03 unless the Participant, with the written consent of his Spouse, elects to the contrary during the 90-day period prior to the Annuity Starting Date. The notice shall describe, in a manner intended to be understood by the Participant and his Spouse, (a) the terms and conditions of the optional forms of benefit payments under Plan section 4.02, (b) the Participant’s right to make, and the effect of, an election to receive benefits under the optional forms of payment and the rights of the Participant’s Spouse (if any) with respect to such election, (c) his right to make and the effect of, an election not to receive benefits in the normal form of payment, (d) the right to make, and the effect of, a revocation of any election, (e) the general financial effect of selecting an optional form of benefit, (f) the right to defer any distribution until the Participant’s benefit is no longer immediately distributable, and (g) sufficient additional information explaining the relative forms of benefit under the Plan, and (h) for notices given in Plan Years beginning on or after January 1, 2007, such notice shall also include a description of how much larger benefits will be if the commencement of distributions is deferred. If a Participant or his Spouse requests additional information, as permitted under the terms of the notice, commencement of benefits for any purpose hereunder shall not begin until at least 90 days following the receipt of such additional information.

Thirteenth: Effective January 1, 2008, Plan section 4.05, “Rollover Distributions,” is amended by adding the following sentence at the end of subsection (b)(ii):

For distributions made after December 31, 2007, an Eligible Retirement Plan means a Roth individual retirement account defined in Code section 408A provided that, for distributions made in Plan Years prior to 2010, the distributee’s modified adjusted gross income does not exceed the limitation in Code section 408A(d)(3)(A).

Fourteenth: Plan section 6.06, “Lump Sum Death Benefit,” is amended by adding the following as the second paragraph:

Transfers Treated as Direct Rollovers for Non-Spouse Beneficiaries. Effective January 1, 2008, a Non-Spouse Beneficiary (including a trust that is the named beneficiary of the deceased Participant) who is entitled to receive a lump sum distribution of the deceased Participant’s Accrued Benefit may elect to make


Owens & Minor, Inc. Pension Plan		3

a trustee-to-trustee transfer of all or a portion of such benefit to an individual retirement account (an IRA) described in Code section 408(a) or (b) which is established and titled in a manner that identifies it as an inherited IRA under Code section 402(c)(11). The Participant shall obtain the consent of his or her Spouse with regard to the designation of his Non-Spouse Beneficiary. A distribution under this paragraph shall not be subject to the direct rollover requirements of Code section 401(a)(31) and Plan section 4.05, the notice requirements of Code section 402(f) and subsection (c), or the mandatory withholding requirements of Code section 3405(c).

Fifteenth: Plan section 13.06(d), “Determination of Qualified Domestic Relations Order,” is amended by adding the following as the last paragraph therein:

Effective April 6, 2007, a Domestic Relations Order does not fail to be treated as a Qualified Domestic Relations Order solely because (i) the Domestic Relations Order is issued after the death of the Participant, (ii) at the time the Domestic Relations Order is issued, the Spouse no longer meets the definition of Surviving Spouse under the Plan, (iii) the Domestic Relations Order is issued after the Participant’s Annuity Starting Date, or (iv) the Domestic Relations Order is issued after, or revises, a prior Domestic Relations Order or Qualified Domestic Relations Order.

Sixteenth: The Appendix entitled “Actuarial Equivalent Factors” is amended by adding the following sentence at the end of the second paragraph in subsection (3)(b) (“Normal and Optional Methods of Retirement Benefit Payments, Lump Sum Payments”):

This amount shall be known as the Applicable Interest Rate and shall be effective through December 31, 2007.

Seventeenth: Subsection (3)(b) in the Appendix is further amended by adding the following paragraph after the second paragraph therein:

•

Notwithstanding the previous paragraph, and effective for distributions in Plan Years beginning on or after January 1, 2008, Code section 417(e)(3) Applicable Interest Rate shall mean the adjusted first, second, and third segment rates applied under rules similar to the rules of Code section 430(h)(2)(C) as of the December preceding the Plan Year which contains the date of distribution, or such other time as the Secretary of the Treasury may prescribe by regulation. For this purpose, the adjusted first, second, and third segment rates are determined without regard to the 24-month averaging provided under Code section 430(h)(2)(D)(i). In accordance with the transition rule provided in Code section 417(e)(3)(D)(ii) segment rates shall be phased in over five years, using a combination of the new and old rates consisting of 20% of the segment rate in 2008, 40% in 2009, 60% in 2010, 80% in 2011, and 100% in 2012.


Owens & Minor, Inc. Pension Plan		4

Eighteenth: Subsection (3)(b) in the Appendix is further amended by replacing the last paragraph therein with the following paragraphs:

The Applicable Mortality Table means the mortality table set forth in Revenue Ruling 95-6, 1995-14 C.B. 80, or such other mortality table as may be prescribed by the Secretary of the Treasury (for purposes of Code section 417(e)) based on the prevailing Commissioner’s standard table used to determine reserves for group annuity contracts issued on the date as of which the present value is being determined.

Effective December 31, 2002, and notwithstanding any other provisions to the contrary, the Applicable Mortality Table used for purposes of adjusting any benefit or limitation under Code sections 415(b)(2)(B), (C), or (D) for purposes of Plan section 9.01 and the Applicable Mortality Table used for purposes of satisfying the requirements of Code section 417(e) is the table prescribed in Revenue Ruling 2001-62.

•

Code section 417(e)(3) Applicable Mortality Table : Notwithstanding the previous paragraphs, and for distributions with Annuity Starting Dates occurring during Plan Years beginning on or after January 1, 2008, the Applicable Mortality Table for purposes of satisfying the requirements of Code section 417(e)(3) shall mean the mortality table specified for the Plan Year under Code section 430(h)(3)(A). The Code section 417(e)(3) Applicable Mortality Table for each subsequent year shall be provided by the Department of Treasury and will be determined from the Code section 430(h)(3)(A) mortality tables on the same basis as the 2008 Applicable Mortality Table described in Revenue Ruling 2007-67, and shall automatically apply to distributions with Annuity Starting Dates (other than a retroactive annuity starting date) to which the specific subsequent Applicable Mortality Table applies, without the necessity of amending the Plan.

The Applicable Mortality Table that is used for purposes of adjusting any benefit or limitation under Code section 415(b)(2)(B), (C), or (D) shall remain the same.

Nineteenth: The Appendix is further amended by adding by following paragraphs at the end of subsection (3)(b) therein:

Actuarial Equivalence for Payments Subject to Code section 417(e)(3) . The straight life annuity that is actuarially equivalent to the Participant’s form of benefit shall be determined under this subsection 3(b) if the form of the Participant’s benefit is subject to Code section 417(e)(3) ( i.e. , payable in the form of a decreasing annuity, including a lump sum). In this case, the actuarially equivalent straight life annuity shall be determined as follows:

(A) Annuity Starting Date in Plan Years Beginning After 2005 . If the Annuity Starting Date of the Participant’s form of benefit is in a Plan Year


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beginning after 2005, the Actuarially Equivalent straight life annuity is the greatest of the annual amount of the straight life annuity commencing at the Annuity Starting Date that has the same actuarial present value as the particular form of benefit payable, computed using:

(i) the interest rate and mortality table (or other tabular factor) specified in the Plan for purposes of adjusting benefits in the same form; or

(ii) a 5.5 percent interest rate and the Applicable Mortality Table; and

(iii) the Applicable Interest Rate and the Applicable Mortality Table, divided by 1.05

(B) Annuity Starting Dates in Plan Years Beginning Before 2006 . If the Annuity Starting Date of the Participant’s form of benefit is in a Plan Year beginning before 2006, the Actuarially Equivalent straight life annuity is the greater of the annual amount of the straight life annuity commencing at the Annuity Starting Date that has the same actuarial present value as the particular form of benefit payable, computed using:

(i) the interest rate and mortality table (or other tabular factor) specified in the Plan for purposes of adjusting benefits in the same form; or

(ii) a 5.5 percent interest rate and the Applicable Mortality Table except that, in the case of Plan Years beginning before 2004, “the Applicable Interest Rate” shall be substituted for “5.5 percent interest rate.”

(C) Annuity Starting Dates in 2004 . If the Annuity Starting Date of the Participant’s benefit is on or after the first day of the first Plan Year beginning in 2004 and before December 31, 2004, the application of paragraph (B), above, shall not cause the amount payable under the Participant’s form of benefit to be less than the benefit calculated under the Plan, taking into account the limitations of this Plan section 9.01 and Code section 415 as incorporated by reference therein, except that the Actuarially Equivalent straight life annuity is equal to the annual amount of the straight life annuity commencing at the same Annuity Starting Date that has the same actuarial present value as the Participant’s form of benefit, computed using whichever of the following sets of factors produces the greatest annual amount:

(i) the interest rate and mortality table (or other tabular factor) specified in the Plan for purposes of adjusting benefits in the same form;

(ii) the Applicable Interest Rate and Applicable Mortality Table; or

(iii) the Applicable Interest Rate (as in effect on the last day of the last Plan Year beginning before January 1, 2004, under provisions of the Plan then adopted and in effect) and the Applicable Mortality Table.


Owens & Minor, Inc. Pension Plan		6

III.

Final Treasury Regulations under Code section 415 effective for Limitation Years starting on and after July 1, 2007.

Twentieth: Plan section 9.01, “Maximum Retirement Benefit,” is amended by replacing subsection (a) with the following:

(a) Notwithstanding any other provisions in this Plan, the maximum annual benefit to which a Participant is entitled to under the Plan, shall not, in any Limitation Year, exceed the applicable limitations of Section 415 of the Code and the final Treasury Regulations promulgated thereunder. Code section 415 is hereby incorporated by reference. The limitations shall be applied on a uniform basis with respect to all similarly situated participants in a Limitation Year. The amount payable to a Participant in any Limitation Year shall not exceed the Code section 415(b) limit applicable at the Annuity Starting Date, notwithstanding cost-of-living adjustments pursuant to final Treasury Regulations section 1.415(d)-1 as applicable. If there is any discrepancy between the provisions of this Article IX and the provisions of Code section 415 and the Regulations thereunder, such discrepancy shall be resolved in such a way as to give full effect to the provisions of Code section 415 and accompanying Treasury Regulations.

Twenty-first: Plan section 9.01 is further amended by adding new subsection (f) at the end thereof:

(f) Grandfathered Benefits . The application of the provisions of this Plan section 9.01 shall not cause the maximum permissible benefit for any Participant to be less than the Participant’s Accrued Benefit under all the Defined Benefit Plans of the Employer or a predecessor employer as of the end of the last Limitation Year beginning before July 1, 2007 under provisions of the plans that were both adopted and in effect before April 5, 2007. The preceding sentence applies only if the provisions of such Defined Benefit Plans that were both adopted and in effect before April 5, 2007, satisfied the applicable requirements of statutory provisions, regulations, and other published guidance relating to Code section 415 in effect as of the end of the last Limitation Year beginning before July 1, 2007, as described in Treasury Regulations section 1.415(a)-1(g)(4).


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Exhibit 10.3

OWENS & MINOR, INC.

DIRECTORS’ DEFERRED COMPENSATION PLAN

As Amended and Restated

Effective January 1, 2005

TABLE OF CONTENTS


INTRODUCTION		1

ARTICLE I DEFINITIONS		1

ARTICLE II ADMINISTRATION		3

ARTICLE III DEFERRED FEE PROGRAM		4

ARTICLE IV SHAREHOLDER RIGHTS		8

ARTICLE V ADJUSTMENT UPON CHANGE IN COMMON STOCK		9

ARTICLE VI COMPLIANCE WITH LAW, ETC.		9

ARTICLE VII GENERAL PROVISIONS		9

ARTICLE VIII AMENDMENT AND TERMINATION		10

ARTICLE IX DURATION OF PLAN		10

INTRODUCTION

The Owens & Minor Directors’ Deferred Compensation Plan (the Plan) is effective as of January 1, 2005. The Plan is an amendment and restatement of the Deferred Fee Program that was part of the Owens & Minor, Inc. 2003 Directors’ Compensation Plan (the 2003 Plan). Except with respect to the Deferred Fee Program, the 2003 Plan remains effective in accordance with its terms and is not affected by the adoption of the Plan.

The Plan governs both a Participant’s Grandfather Account, i.e. , the portion of a Participant’s Account that was credited on or before, December 31, 2004 (as adjusted for investment earnings and losses after 2004) and the Participant’s Current Account, i.e. , the portion of a Participant’s Account that was credited on and after January 1, 2005 (as adjusted for investment earnings and losses).

The Deferred Fee Program under the 2003 Plan is amended and restated to assure compliance with Section 409A of the Code. The Plan must be administered and interpreted so that (i) the Grandfather Accounts remain exempt from Section 409A of the Code and (ii) the requirements of Section 409A of the Code are satisfied with respect to the Current Accounts.

The Plan is intended to assist the Company in promoting a greater identity of interest between Participants and the Company and its shareholders. The Plan is also intended to assist the Company in attracting and retaining non-employee Directors by affording them an opportunity to share in the future success of the Company.

ARTICLE I

DEFINITIONS

1.01.

Account

Account means an unfunded deferred compensation account established by the Company pursuant to the Plan, consisting of one or more Subaccounts. A Participant’s Account also shall be divided, if appropriate, into a Grandfather Account and a Current Account.

1.02.

Allocation Date

Allocation Date means any date on which an amount representing all or a part of a Participant’s Compensation is to be credited to his or her Account pursuant to an effective deferral election. The Allocation Date for the Retainer Fee shall be the date the Retainer Fee was payable (but for the deferral election) and for Meeting Fees shall be the date the meeting is held.

1.03.

Beneficiary

Beneficiary means any person or entity designated as such in a current Election Form. If there is no valid designation or if no designated Beneficiary survives the Participant, the Beneficiary is the Participant’s estate.

1.04.

Board

Board means the Board of Directors of the Company.

1.05.

Code

Code means the Internal Revenue Code of 1986, and any amendments thereto.

1.06.

Committee

Committee means the Governance and Nominating Committee of the Board.

1.07.

Common Stock

Common Stock means the Common Stock of the Company.

1.08.

Common Stock Account

Common Stock Account means the Subaccount whose value shall be based on the value of units representing shares of Common Stock and dividend equivalents.

1.09.

Company

Company means Owens & Minor, Inc.

1.10.

Compensation

Compensation means the sum of the Retainer Fee and the Meeting Fees payable by the Company to each Participant, including any additional amount paid to a chairman of a committee for additional services.

1.11.

Current Account

Current Account means the portion of the Account reflecting the deferral of Compensation that otherwise was payable after 2004.

1.12.

Deferred Amount

Deferred Amount means the amount (determined as a percentage of the Retainer Fee and the Meeting Fees) subject to a current deferral election.

1.13.

Election Date

Election Date means the date established by the Committee by which a Participant must submit a valid Election Form to the Committee. Except as provided in the following sentence, the Election Date shall not be later than December 31 preceding the calendar year in which Compensation is earned. In the year that an individual is first elected or appointed to the Board, the Election Date shall be the thirtieth day after the date of such election or appointment if the individual was not previously eligible to participate in a nonqualified deferred compensation plan that was maintained by the Company and that provided a benefit based on an individual account balance.

1.14.

Election Form

Election Form means a valid deferral election form (in the form approved by the Committee) properly completed and signed and that specifies the Deferred Amount and the time at which, and the form in which, the Deferred Amount will be distributed.

1.15.

Exchange Act

Exchange Act means the Securities Exchange Act of 1934, as amended.

1.16.

Extraordinary Distribution Request Form

Extraordinary Distribution Request Form means the extraordinary distribution request form (in the form approved by the Committee) properly completed and executed by a Participant, or Beneficiary who wishes to request an extraordinary distribution of amounts credited to his or her Account in accordance with Section 3.09.

1.17.

Grandfather Account

Grandfather Account means the portion of the Account reflecting the deferral of Compensation that otherwise was payable before 2005.

1.18.

Meeting Fees

Meeting Fees means the portion of a Participant’s Compensation that is based upon his or her attendance at Board meetings and meetings of committees of the Board.

1.19.

Participant

Participant means a member of the Board who is not then an employee or officer of the Company. An individual shall continue to be a Participant as long as an Account is being maintained for his or her benefit.

1.20.

Plan

Plan means the Owens & Minor, Inc. Director’s Deferred Compensation Plan.

1.21.

Retainer Fee

Retainer Fee means the portion of a Participant’s Compensation that is fixed and paid without regard to his or her attendance at meetings and, for purposes of clarification, includes such amounts paid in cash and Stock Awards.

1.22.

Stock Award

Stock Award means the portion of a Participant’s Retainer Fee, if any, that is payable in shares of Common Stock.

1.23.

Subaccount

Subaccount means a subaccount established in accordance with Section 3.03.

ARTICLE II

ADMINISTRATION

The Plan shall be administered by the Committee. The Committee shall have complete authority to interpret all provisions of this Plan; to prescribe the forms that will be used under the Plan; to adopt, amend, and rescind rules and regulations pertaining to the administration of the

Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee. Any decision made, or action taken, by the Committee or in connection with the administration of this Plan shall be final and conclusive. No member of the Committee shall be liable for any act done in good faith with respect to this Plan. All expenses of administering this Plan shall be paid by the Company.

ARTICLE III

DEFERRED FEE PROGRAM

3.01.

Deferral Elections

(a) A Participant may make a deferral election with respect to all or a part of his or her Compensation to be earned and payable after the Election Date by completing and executing an Election Form and submitting it to the Secretary of the Company. A deferral election relating to a Retainer Fee shall be in integral multiples of twenty-five percent (25%) of the portion of the Retainer Fee payable in cash and an integral multiple of twenty-five percent (25%) of the portion of the Retainer Fee payable as a Stock Award. A deferral election relating to Meeting Fees shall be in integral multiples of twenty-five percent (25%) of each Meeting Fee. On or before the Election Date, an individual who is not a member of the Board may complete an Election Form contingent upon the individual becoming a Participant in which case the Deferral Election will be effective with respect to all or part of his or her Compensation to be earned and payable on and after becoming a Participant and after the date of the deferral election.

(b) In accordance with the terms of the Plan, the Participant shall indicate on the Election Form: (i) the percentage of the Retainer Fee and the percentage of the Meeting Fee that he or she wishes to defer; (ii) the distribution date; (iii) whether distributions are to be in a lump sum, in installments or a combination thereof; (iv) his or her Beneficiary or Beneficiaries; and (v) the Subaccounts to which the Deferred Amount is to be allocated.

(c) A deferral election shall remain in effect with respect to all future Compensation until a new deferral election is made by the Participant in accordance with Section 3.01(a); provided, however, that on each Election Date a deferral election becomes irrevocable with respect to Compensation to be earned and payable in the calendar year after the Election Date.

3.02.

Beneficiary Election Modification

A Participant shall be permitted at any time to modify his or her Beneficiary designation by completing and executing a new Election Form and submitting it to the Secretary of the Company.

3.03.

Investments

(a) The Company shall establish an Account (for bookkeeping purposes only), for each Participant and for each Beneficiary to whom installment distributions are being made. On each Allocation Date, the Company shall allocate to each Participant’s Account an amount equal to his Deferred Amount.

(b) The Company shall establish within each Account one or more Subaccounts, which shall be credited with earnings and charged with losses, if any. One Subaccount shall be the Common Stock Account. The other Subaccounts, if any, shall be designated by the Committee from time to time.

(c) Subject to the provisions of Sections 3.04 and 3.05, on each Allocation Date, each Participant’s Subaccount shall be credited with an amount equal to the Deferred Amount designated by the Participant for allocation to such Subaccounts. Each Subaccount shall be credited with earnings and charged with losses as if the amounts allocated thereto actually had been invested in the investment designated as that subaccount.

3.04.

Investment Directions

In connection with his or her initial deferral election, each Participant shall make an investment direction on his or her Election Form with respect to the portion of such Participant’s Deferred Amount that is to be allocated to each Subaccount of the Participant’s Account. Any apportionment of Deferred Amounts (and of increases or decreases in Deferred Amounts) among the Subaccounts shall be in integral multiples of ten percent (10%). An investment direction shall become effective with respect to a Subaccount on the first day of the calendar month following the Election Date. All investment directions shall remain in effect with respect to all future Deferred Amounts until a new investment direction made by the Participant in accordance with Section 3.05 becomes effective.

3.05.

New Investment Directions

A Participant may make a new investment direction with respect to his or her Deferred Amount only by completing and executing a new Election Form and submitting it to the Secretary of the Company. A new investment direction shall become effective with respect to a Subaccount on the first day of the calendar month following the Election Date.

3.06.

Investment Transfers

A Participant or a Beneficiary (after the death of the Participant) may transfer to one or more different Subaccounts all or a part (in integral multiples of ten percent (10%)) of the amounts credited to a Subaccount by completing and executing a transfer form and submitting it to the Secretary of the Company. Except as provided in the following sentence, any transfer of amounts among the Subaccounts shall become effective on the first day of the calendar month following the specified transfer date. With respect to a transfer to or from the Common Stock Account of a Participant then subject to Section 16 of the Exchange Act, the transfer shall become effective on the first day of the first calendar month following the specified transfer date that is at least six months after the Participant’s most recent “opposite way” discretionary transaction (as such term is defined in Securities and Exchange Commission Rule 16b-3).

3.07.

Distribution Elections

(a) A Participant’s Grandfather Account shall be distributed on the date or the occurrence of the event as specified in one or more Election Forms as in effect on December 31, 2004.

(b) A Participant’s Current Account shall be distributed on the date or the occurrence of the event as specified in one or more Election Forms subject to the following:

(1) Each Participant shall designate on his or her Election Form a distribution date for each Deferred Amount credited to the Participant’s Current Account. Subject to clause (2) below, the distribution date may be (i) the first day of a calendar month specified by the Participant, (ii) the first day of a calendar month following the date of termination of the Participant’s service as a member of the Board, (iii) the earlier of a specified date or termination of service on the Board or (iv) the later of a specified date or termination of service on the Board.

(2) If a distribution (i) is payable upon the occurrence of a specified date, i.e. , it is not payable on account of the termination of the Participant’s service as a member of the Board and (ii) requires a cash distribution of the Participant’s interest in the Common Stock Account, the distribution shall not be made before the first day of the calendar month that is at least six months after the Participant’s most recent “opposite way” discretionary transaction (as such term is defined in Securities and Exchange Commission Rule 16b-3). If a distribution (i) is payable on account of the termination of the Participant’s service as a member of the Board, (ii) the Participant is a “specified employee” (as defined in Section 409A of the Code) and (iii) the Participant’s service as a member of the Board terminated for reasons other than the Participant’s death or because the Participant is “disabled” (as defined Section 409A of the Code), the distribution shall be made as of the first day of the seventh month beginning after the termination of the Participant’s service as a member of the Board.

(3) Except as provided in clause (4) below, after the applicable Election Date a Participant cannot change the distribution date specified on his or her Election Form.

(4) A Participant may specify a distribution date for his or her current Account that differs from a prior Election Form with respect to Compensation earned and payable after the Election Date on or after the new Election Form is completed. In addition, no later than December 31, 2008, a Participant may change the distribution date for Deferred Amounts credited to his or her Current Account if the new Election Form does not require a distribution in the year in which the new election is made nor postpone to a later year a distribution that would have been made in the year in which the new election is made. A new distribution date elected under this clause (4) must be a distribution date that satisfies clause (1) above.

(c) If the Distribution Date is the first day of the month following the Participant’s death or a fixed date which in fact occurs after the Participant’s death or if at the time of death the Participant was receiving distributions in installments, the balance remaining in the Participant’s Account shall be payable to his or her Beneficiaries as set forth on the Participant’s current Election Form or Forms. Upon the death of a Beneficiary who is receiving distributions in installments, the balance remaining in the Account of the Beneficiary shall be payable to the Beneficiary’s estate in a lump sum.

(d) All distributions shall be paid in cash and, except as provided in Section 3.09(b)(ii), shall be deemed to have been made from each Subaccount pro rata. Notwithstanding the preceding sentence, with the consent of the Committee a Participant or Beneficiary may elect to receive a distribution from the Common Stock Account in whole shares of Common Stock and cash in lieu of a fractional share. Shares of Common Stock may be distributed only in accordance with the terms of a plan approved by the Company’s shareholders.

3.08.

Form of Distribution

(a) A Participant’s Grandfather Account shall be distributed in the form specified on one or more Election Forms as in effect on December 31, 2004. If the Grandfather Account is distributed in installments, the amount of each installment shall be determined by dividing the Grandfather Account balance by the number of remaining installments. If a Participant receives a distribution from a Grandfather Account on an installment basis, amounts remaining in the Grandfather Account shall continue to accrue earnings and incur losses in accordance with the terms of Section 3.03.

(b) A Participant’s Current Account shall be distributed in the form specified on one or more Election Forms subject to the following:

(1) Each Participant shall designate on his or her Election Form the manner in which each Deferred Amount credited to the Participant’s Current Account will be paid. A Participant’s Election Form may specify that distributions from his or her Current Account shall be paid (i) in a lump sum, (ii) no more than one hundred eighty (180) monthly installments, (iii) no more than sixty (60) quarterly installments or (iv) no more than fifteen (15) annual installments. Each installment shall be determined by dividing the Current Account balance by the number of remaining installments. If a Participant receives a distribution from his or her Current Account on an installment basis, amounts remaining in the Current Account shall continue to accrue earnings and incur losses in accordance with the terms of Section 3.03.

(2) Except as provided in clause (3) below, after the applicable Election Date a Participant may not change the form of distribution specified on his or her Election Form for his or her Current Account.

(3) A Participant may specify a distribution form for his or her Current Account that differs from a prior Election Form with respect to Compensation earned and payable after the Election Date on or after the new Election Form is completed. In addition, no later than December 31, 2008, a Participant may change the form of distribution for Deferred Amounts credited to his or her Current Account if the new Election Form does not relate to an amount to be distributed in the year in which the new election is made or an amount that would have been distributed in that year but for the new Election Form. A new distribution form elected under this clause (3) must specify a form of payment that satisfies clause (1) above.

3.09.

Extraordinary Distributions

(a) Notwithstanding the foregoing, a Participant may request an extraordinary distribution of all or part of the amount credited to his or her Account on account of an “unforeseeable emergency” (as defined in Section 409A of the Code).

(b) A request for an extraordinary distribution shall be made by completing and executing an Extraordinary Distribution Request Form and submitting it to the Secretary of the Company. All extraordinary distributions shall be subject to approval by the Committee. The Extraordinary Distribution Request Form shall indicate: (i) the amount to be distributed from the Account; (ii) the Subaccount(s) from which the distribution is to be made; and (iii) the “unforeseeable emergency” requiring the distribution. The amount of any extraordinary distribution shall not exceed the lesser of the amount determined by the Committee to be required to meet the immediate financial need of the applicant or the amount credited to the Participant’s Account.

(c) An extraordinary distribution shall be made with respect to amounts credited to any of the Subaccounts, if the recipient is not then subject to Section 16 of the Exchange Act, on the first day of the calendar month next following approval of the extraordinary distribution request by the Committee. An extraordinary distribution requested by a Participant who is then subject to Section 16 of the Exchange Act shall commence with respect to amounts credited to the Common Stock Account on the first day of the first calendar month that is at least six months following the Participant’s most recent “opposite way” discretionary transaction (as such term is defined in Securities and Exchange Commission Rule 16b-3) or, if later, the first day of the calendar month next following approval of the extraordinary distribution request by the Committee.

3.10.

Termination of Service; Specified Employees

(a) As used in this Plan, the phrase “termination of service on the Board” and similar language means a separation from service as contemplated by Treasury Regulation Section 1.409A-1(h).

(b) If a Participant is a “specified employee,” a distribution that is payable on account of the Participant’s termination of service on the Board shall not be made before the date that is six months after the termination of service. The preceding sentence shall not apply, and the distribution shall not be postponed if the termination of service is on account of the Participant’s death or because the Participant is disabled within the meaning of Section 409A of the Code. The term “specified employee” has the meaning set forth in Treasury Regulation Section 1.409A-1(i) (based on a “specified employee identification date” of December 31 and a “specified employee effective date” of the following April 1).

ARTICLE IV

SHAREHOLDER RIGHTS

No Participant shall have any rights as a shareholder with respect to his or her participation in the Plan unless and until the Participant receives a distribution of Common Stock from his or her Common Stock Account.

ARTICLE V

ADJUSTMENT UPON CHANGE IN COMMON STOCK

The records of the Company Stock Account shall be adjusted, as the Committee shall determine to be equitably required in the event that (a) the Company (i) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (ii) engages in a transaction to which Section 424 of the Code applies or (b) there occurs any other event which, in the judgment of the Committee necessitates such action. Any determination made under this Article V by the Committee shall be final and conclusive.

The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the records of the Company Stock Account.

ARTICLE VI

COMPLIANCE WITH LAW, ETC.

No Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable federal and state laws and regulations, any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company’s shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. No Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Committee may deem advisable from regulatory bodies having jurisdiction over such matters.

ARTICLE VII

GENERAL PROVISIONS

7.01.

Unfunded Plan

The Plan shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by grants under, or participation in, this Plan. Any liability of the Company to any person with respect to any grant under, or participation in, this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.

7.02.

Rules of Construction

Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The use of the singular includes the plural and the reference to one gender includes the other. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.

7.03.

Nontransferability

A Participant may not transfer or assign any rights that he or she has under this Plan other than by will or the laws of descent and distribution. No right or interest of any Participant or Beneficiary under the Plan shall be liable for, or subject to, any lien, obligation or liability of such Participant or Beneficiary.

ARTICLE VIII

AMENDMENT AND TERMINATION

The Board may amend or terminate this Plan from time to time; provided, however, that no amendment may become effective until shareholder approval is obtained if approval of the Company’s shareholders is required by applicable law or the rules of any stock exchange on which the Common Stock is listed for trading. No amendment shall, without a Participant’s consent, adversely affect any rights of such Participant under the Plan as in effect at the time such amendment is made. No amendment or termination of the Plan may cause a distribution of Plan benefits that does not satisfy requirements of Sections 409A of the Code.

ARTICLE IX

DURATION OF PLAN

The Plan shall remain in effect as to amounts deferred before that date until all Participants’ Accounts have been distributed in full, unless sooner terminated by the Board.

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 September 30, 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;

The registrant’s 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s ability to record, process, summarize and report financial information; and

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: November 6, 2008

/s/ CRAIG R. SMITH

Craig R. Smith

Chief Executive Officer

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 September 30, 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;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

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: November 6, 2008

/s/ JAMES L. BIERMAN

James L. Bierman

Chief Financial Officer

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 September 30, 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.

November 6, 2008

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 September 30, 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:

(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/ JAMES L. BIERMAN

James L. Bierman

Chief Financial Officer

Owens & Minor, Inc.

November 6, 2008

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