Cardinal Health Inc. (CAH) announced that its board has approved a special meeting of shareholders to vote on a proposed employee stock option exchange program and also declared regular quarterly dividend.
The proposed option exchange program is a "value-for-value" exchange, where eligible employees who hold certain Cardinal Health stock options would be given a limited period of time to exchange those options for a lesser number of new options with an exercise price equal to the closing price of Cardinal Health common shares on the date the new options are granted.
An adjustment, which is expected to be approximately 15 percent, will be applied to the exchange ratios that will effectively discount the fair value of the new options and should eliminate any additional compensation expense that the company would otherwise recognize on the new options.
The proposed option exchange program would be available only for stock options with an exercise price above the 52-week high trading price of Cardinal Health's common shares, as determined at the start of the program and would exclude any options granted in the last 12 months.
The company said that its board also approved a regular quarterly dividend of $0.14 per share, payable on July 15 to shareholders of record on July 1. The company had approximately 360 million shares outstanding as of April 30.
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