Exhibit 10.20

 

AMERISOURCEBERGEN CORPORATION

 

2002 MANAGEMENT STOCK INCENTIVE PLAN, AS AMENDED

 

1. Background and Purpose.

 

(a) Background. This AmerisourceBergen Corporation 2002 Management Stock
Incentive Plan (the “Plan”) is the result of the merger, effective April 23,
2002 (the “Effective Date”), of the Bergen Brunswig Corporation 1999 Management
Stock Incentive Plan (the “Prior Bergen Plan”) with and into the AmeriSource
Health Corporation 2001 Stock Option Plan (the “Prior AmeriSource Plan”)
(collectively, with the Bergen Brunswig Corporation 1999 Management Stock
Incentive Plan, the “Prior Plans”). Upon the merger of the Prior Plans, this
Plan was amended and restated in the form set forth in this document and renamed
the AmerisourceBergen Corporation 2002 Management Stock Incentive Plan (the
“Plan”). The Prior AmeriSource Plan was approved by the shareholders of
AmeriSource Health Corporation and the Prior Bergen Plan was approved by the
shareholders of the Bergen Brunswig Corporation, in each case before the closing
of the merger which created AmerisourceBergen Corporation. Upon the closing of
such merger, the number of shares subject to rights granted under the Prior
Plans and, as to stock options, the option price for such options, were adjusted
in accordance with the terms of the merger agreement. Each of the Prior Plans
was then adopted by AmerisourceBergen Corporation. This document applies to all
grants made under this Plan on or after the Effective Date. Each grant made
under either of the Prior Plans will remain subject to the terms of the
applicable Prior Plan, as in existence immediately prior to the Effective Date,
provided that upon the forfeiture or lapse of any right granted under either of
the Prior Plans, the shares underlying such right shall again be available for
issuance pursuant to this Plan. Effective as of October 30, 2002, subject to
approval by the shareholders of AmerisourceBergen Corporation at the annual
meeting of shareholders to be held on February 27, 2003, the Plan was further
amended, among other purposes, to increase the number of shares issuable under
the Plan. Effective as of April 22, 2003, the Plan was further amended to
include certain operational provisions. Effective as of August 10, 2004, the
Plan was further amended to extend the time to exercise following Voluntary
Retirement.

 

(b) Purpose. The purpose of the AmerisourceBergen Corporation 2002 Management
Stock Incentive Plan (the “Plan”) is to provide designated employees of
AmerisourceBergen Corporation (the “Company”) and its subsidiaries with the
opportunity to receive grants of stock awards and other incentive compensation
as provided in the Plan. The Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby
benefiting the Company’s shareholders, and will align the economic interests of
the participants with those of the shareholders.

 

2. Definitions. For purposes of the Plan, the following terms shall be defined
as follows:

 

“Administrator” means the individual or individuals, if any, to whom the
Committee delegates authority under the Plan in accordance with Section 3(d). If
no delegation of authority is in effect, the Committee shall serve as the
Administrator.

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“Award” means an award made pursuant to the terms of the Plan to an Eligible
Individual in the form of Stock Options, Stock Appreciation Rights, Stock
Awards, Performance Share Awards, Section 162(m) Awards or other awards
determined by the Committee.

 

“Award Agreement” means a written agreement or certificate granting an Award. An
Award Agreement shall be executed by an officer on behalf of the Company and
shall contain such terms and conditions as the Committee deems appropriate and
that are not inconsistent with the terms of the Plan. The Administrator may in
its discretion require that an Award Agreement be executed by the Participant to
whom the relevant Award is made.

 

“Board” means the Board of Directors of the Company.

 

A “Change in Control” shall be deemed to have occurred if:

 

  (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 35% of the voting power of the then outstanding
securities of the Company, and such person owns more aggregate voting power of
the Company’s then outstanding securities entitled to vote generally in the
election of directors than any other person;

 

  (ii) The shareholders of the Company approve (or, if shareholder approval is
not required, the Board approves) an agreement providing for (x) the merger or
consolidation of the Company with another corporation where the shareholders of
the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to 50% or more of all votes to which all
shareholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (y) the sale or other disposition of all or
substantially all of the assets of the Company, or (z) a liquidation or
dissolution of the Company; or

 

  (iii) After April 23, 2002, directors are elected such that a majority of the
members of the Board shall have been members of the Board for less than two
years, unless the election or nomination for election of each new director who
was not a director at the beginning of such two-year period was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the applicable
rulings and regulations thereunder.

 

“Committee” means the Compensation and Succession Planning Committee of the
Board, any successor committee thereto or any other committee appointed by the
Board to administer the Plan.

 

“Common Stock” means the Common Stock of the Company.

 

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“Disability” means eligibility for disability benefits under the terms of the
Company’s long-term disability plan in effect at the time a Participant becomes
disabled.

 

“Eligible Individuals” means the individuals described in Section 6 who are
eligible for Awards under the Plan.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
applicable rulings and regulations thereunder.

 

“Fair Market Value.”

 

(i) If Shares are publicly traded, then the Fair Market Value per Share shall be
determined as follows: (x) if the principal trading market for the Shares is a
national securities exchange or the Nasdaq National Market, the last reported
sale price thereof on the latest date preceding the relevant date upon which a
sale was reported, or (y) if the Shares are not principally traded on such
exchange or market, the mean between the last reported “bid” and “asked” prices
of Shares on the latest date preceding relevant date upon which a sale was
reported, as reported on Nasdaq or, if not so reported, as reported by the
National Daily Quotation Bureau, Inc. or as reported in a customary financial
reporting service, as applicable and as the Committee determines.

 

(ii) If the Common Stock is not publicly traded or, if publicly traded, is not
subject to reported transactions or “bid” or “asked” quotations as set forth
above, the Fair Market Value per share shall be as determined by the Committee.

 

“Incentive Stock Option” means a Stock Option that is an “incentive stock
option” within the meaning of Section 422 of the Code and designated by the
Committee as an Incentive Stock Option in an Award Agreement.

 

“Nonqualified Stock Option” means a Stock Option that is not an Incentive Stock
Option.

 

“Parent” means any corporation that is a “parent corporation” within the meaning
of Section 424(e) of the Code with respect to the relevant entity.

 

“Participant” means an Eligible Individual to whom an Award has been granted
under the Plan.

 

“Performance Period” means a fiscal year of the Company or such other period
that may be specified by the Committee in connection with the grant of a Section
162(m) Award.

 

“Performance Share Award” means a conditional Award of shares of Common Stock
granted to an Eligible Individual pursuant to Section 11 hereof.

 

“Section 162(m) Award” means an Award described in Section 13 hereof.

 

“Section 162(m) Participant” means, for a given fiscal year of the Company, any
Participant designated by the Committee by not later than 90 days following the
start of such year as a Participant (or such other time as may be required or
permitted by Section 162(m) of the Code) whose compensation for such fiscal year
may be subject to the limit on deductible compensation imposed by Section 162(m)
of the Code.

 

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“Stock Appreciation Right” means an Award to receive all or some portion of the
appreciation on shares of Common Stock granted to an Eligible Individual
pursuant to Section 9 hereof.

 

“Stock Award” means an Award of shares of Common Stock granted to an Eligible
Individual pursuant to Section 10 hereof.

 

“Stock Option” means an Award to purchase shares of Common Stock granted to an
Eligible Individual pursuant to Section 8 hereof.

 

“Subsidiary” means (i) any corporation which is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code with respect to the Company or
(ii) any other corporation or other entity in which the Company, directly or
indirectly, has an equity or similar interest and which the Administrator
designates as a Subsidiary for the purposes of the Plan.

 

“Substitute Award” means an Award granted upon assumption of, or in substitution
for, outstanding awards previously granted by a company or other entity in
connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock.

 

3. Administration of the Plan.

 

(a) Power and Authority of the Committee. The Plan shall be administered by the
Committee which shall have full power and authority, subject to the express
provisions hereof, (i) to select Participants from the Eligible Individuals,
(ii) to make Awards in accordance with the Plan, (iii) to determine the number
of Shares subject to each Award or the cash amount payable in connection with an
Award, (iv) to determine the terms and conditions of each Award, including,
without limitation, those related to vesting, forfeiture, payment and
exercisability, and the effect, if any, of a Participant’s termination of
employment with the Company or, subject to Section 16 hereof, of a Change in
Control on the outstanding Awards granted to such Participant, and including the
authority to amend the terms and conditions of an Award after the granting
thereof to a Participant in a manner that is not prejudicial to the rights of
such Participant in such Award, (v) to specify and approve the provisions of the
Award Agreements delivered to Participants in connection with their Awards, (vi)
to interpret any Award Agreement delivered under the Plan, (vii) to prescribe,
amend and rescind rules and procedures relating to the Plan, (viii) to vary the
terms of Awards to take account of tax, securities law and other regulatory
requirements of foreign jurisdictions, (ix) subject to the provisions of the
Plan and subject to such additional limitations and restrictions as the
Committee may impose, to delegate to one or more officers at the Company some or
all of its authority under the Plan, and (x) to make all other determinations
and to formulate such procedures as may be necessary or advisable for the
administration of the Plan.

 

(b) Plan Construction and Interpretation. The Committee shall have full power
and authority, subject to the express provisions hereof, to construe and
interpret the Plan.

 

(c) Determinations of Committee Final and Binding. All determinations by the
Committee in carrying out and administering the Plan and in Construing and
interpreting the Plan shall be final, binding and conclusive for all purposes
and upon all persons interested herein.

 

(d) Delegation of Authority. The Committee may, but need not, from time to time
delegate some or all of its authority under the Plan to an Administrator
consisting of one or more members of the Committee or of one or more officers of
the Company. The Committee may also delegate its

 

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authority to make Awards under the Plan to the Company’s Chief Executive
Officer, provided, however, that if the Committee so delegates its authority,
the Chief Executive Officer shall not have the authority to make Awards (i) to
any Eligible Individual respecting more than 25,000 shares of Common Stock in
any calendar year, (ii) to all Eligible Individuals respecting more than 125,000
shares of Common Stock in the aggregate in any calendar year or (iii) to
Eligible Individuals (A) who are subject on the date of the award to the
reporting rules under Section 16(a) of the Exchange Act, who are Section 162(m)
Participants or (B) who are officers of the Company who are delegated authority
by the Committee hereunder. Any delegation hereunder shall be subject to the
restrictions and limits that the Committee specifies at the time of such
delegation or thereafter. Nothing in the Plan shall be construed as obligating
the Committee to delegate authority to an Administrator, and the Committee may
at any time rescind the authority delegated to an Administrator appointed
hereunder or appoint a new Administrator. At all times, the Administrator
appointed under this Section 3(d) shall serve in such capacity at the pleasure
of the Committee. Any action undertaken by the Administrator in accordance with
the Committee’s delegation of authority shall have the same force and effect as
if undertaken directly by the Committee, and any reference in the Plan to the
Committee shall, to the extent consistent with the terms and limitations of such
delegation, be deemed to include a reference to the Administrator.

 

(e) Liability of Committee. No member of the Committee shall be liable for
anything whatsoever in connection with the administration of the Plan except
such person’s own willful misconduct. Under no circumstances shall any member of
the Committee be liable for any act or omission of any other member of the
Committee. In the performance of its functions with respect to the Plan, the
Committee shall be entitled to rely upon information and advice furnished by the
Company’s officers, the Company’s accountants, the Company’s counsel and any
other party the Committee deems necessary, and no member of the Committee shall
be liable for any action taken or not taken in reliance upon any such advice.

 

4. Duration of Plan. The Plan shall remain in effect until terminated by the
Board and thereafter until all Awards granted under the Plan are satisfied by
the issuance of shares of Common Stock or the payment of cash or are terminated
under the terms of the Plan or under the Award Agreement entered into in
connection with the grant thereof. Notwithstanding the foregoing, no Awards may
be granted under the Plan after the tenth anniversary of the original effective
date of the Prior Bergen Plan.

 

5. Shares of Stock Subject to the Plan. Subject to adjustment as provided in
Section 15(b) hereof, the number of shares of Common Stock that may be issued
under the Plan pursuant to Awards (including Awards granted before the Effective
Date, April 23, 2002, of this amended, restated and renamed Plan) shall not
exceed, in the aggregate, 11,900,000 shares (the “Section 5 Limit”), of which
the number of shares of Common Stock that may be issued under the Plan pursuant
to Incentive Stock Options may not exceed, in the aggregate, 3,700,000 shares
and the number of shares of Common Stock that may be issued under Sections 9, 10
and 11 of the Plan may not exceed in the aggregate, 185,000 shares. Such shares
may be either authorized but unissued shares, treasury shares or any combination
thereof. For purposes of determining the number of shares that remain available
for issuance under the Plan, the following rules shall apply:

 

(a) the number of shares subject to outstanding Awards shall be charged against
the Section 5 Limit; and

 

(b) the Section 5 Limit shall be increased by:

 

(i) the number of shares subject to an Award (or portion thereof) which lapses,
expires or is otherwise terminated without the issuance of such shares or is
settled by the delivery of consideration other than shares,

 

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(ii) the number of shares tendered to pay the exercise price of a Stock Option
or other Award, and

 

(iii) the number of shares withheld from any Award to satisfy a Participant’s
tax withholding obligations or, if applicable, to pay the exercise price of a
Stock Option or other Award.

 

In addition, any shares underlying Substitute Awards shall not be counted
against the Section 5 Limit set forth in the first sentence of this Section 5.

 

(c) For purposes of this Section 5 and Section 6(b), with respect to Awards of
nonqualified stock options, the Section 5 Limit shall be deemed to be reduced
first by shares of Common Stock attributable to the Prior AmeriSource Plan, to
the extent of the first 125,000 shares of Common Stock subject to nonqualified
stock options to any single Eligible Individual under the Plan for any calendar
year until all shares of Common Stock attributable to the Prior AmeriSource Plan
have been exhausted. Shares of Common Stock attributable to the Prior Bergen
Plan shall be deemed to be reduced with respect to Awards of nonqualified stock
options to any Eligible Individual for any calendar year in excess of 125,000
shares of Common Stock, or after all shares of Common Stock attributable to the
Prior AmeriSource Plan have been exhausted. Shares of Common Stock attributable
to the Prior Bergen Plan shall also be deemed to be reduced with respect to all
Awards to Eligible Individuals other than Awards of nonqualified stock options.

 

6. Eligible Individuals.

 

(a) Eligibility Criteria. Awards may be granted by the Committee to individuals
(“Eligible Individuals”) who are officers or other key employees or consultants
of the Company or a Subsidiary with the potential to contribute to the future
success of the Company or its Subsidiaries. Members of the Committee will not be
eligible to receive Awards under the Plan. An individual’s status as an
Administrator will not affect his or her eligibility to participate in the Plan.

 

(b) Maximum Number of Shares per Eligible Individual. In accordance with the
requirements under Section 162(m) of the Code, the Prior Bergen Plan provided
for a limit on grants of Awards to Eligible Individuals of 370,000 shares of
Common Stock (as calculated on a post-merger basis) in respect of any fiscal
year of the Company, provided that any Award that is made as bonus compensation,
or is made in lieu of compensation that otherwise would be payable to an
Eligible Individual, shall be considered made in respect of the fiscal year to
which such bonus or other compensation relates or otherwise was earned. In
accordance with the requirements under Section 162(m) of the Code, the Prior
AmeriSource Plan provided for a limit on grants of Awards to Eligible
Individuals of 125,000 shares of Common Stock (as calculated on a post-merger
basis) in respect of any calendar year. Under the Plan as amended, restated and
renamed in this document effective as of April 23, 2002, the applicable limit on
grants of Awards to Eligible Individuals in respect of any fiscal year of the
Company shall be 370,000 shares of Common Stock to the extent that shares of
Common Stock attributable to the Prior Bergen Plan remain available under the
Section 5 Limit. After all of the shares of Common Stock attributable to the
Prior Bergen Plan previously available under the Section 5 Limit have been
exhausted, the limit on grants of Awards to Eligible Individuals in respect of
any calendar year shall be 125,000 shares of Common Stock.

 

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7. Awards Generally. Awards under the Plan may consist of Stock Options, Stock
Appreciation Rights, Stock Awards, Performance Share Awards, Section 162(m)
Awards or other awards determined by the Committee. The terms and provisions of
an Award shall be set forth in a written Award Agreement approved by the
Committee and delivered or made available to the Participant as soon as
practicable following the date of the award. The vesting, exercisablity, payment
and other restrictions applicable to an Award (which may include, without
limitation, restrictions on transferability or provision for mandatory resale to
the Company) shall be determined by the Committee and set forth in the
applicable Award Agreement. Notwithstanding the foregoing, the Committee may
accelerate (i) the vesting or payment of any Award, (ii) the lapse of
restrictions on any Award or (iii) the date on which any Option or Stock
Appreciation Right first becomes exercisable. The date of a Participant’s
termination of employment for any reason shall be determined in the sole
discretion of the Committee. The Committee shall also have full authority to
determine and specify in the applicable Award Agreement the effect, if any, that
a Participant’s termination of employment for any reason will have on the
vesting, exercisability, payment or lapse of restrictions applicable to an
outstanding Award.

 

8. Stock Options.

 

(a) Terms of Stock Options Generally. Subject to the terms of the Plan and the
applicable Award Agreement, each Stock Option shall entitle the Participant to
whom such Stock Option was granted to purchase the number of shares of Common
Stock specified in the applicable Award Agreement and shall be subject to the
terms and conditions established by the Committee in connection with the Award
and specified in the applicable Award Agreement. Upon satisfaction of the
conditions to exercisability specified in the applicable Award Agreement, a
Participant shall be entitled to exercise the Stock Option in whole or in part
and to receive, upon satisfaction or payment of the exercise price or an
irrevocable notice of exercise in the manner contemplated by Section 8(d) below,
the number of shares of Common Stock in respect of which the Stock Option shall
have been exercised. Stock Options may be either Nonqualified Stock Options or
Incentive Stock Options. Notwithstanding anything contained in the Plan to the
contrary:

 

(i) Termination of Employment For Cause. If a Participant is notified that the
Participant will be involuntarily terminated from employment with the Company or
any Subsidiary for Cause, then all unexercised stock options subject to any
Award Agreement shall be forfeited as of the date of such notice, whether or not
then exercisable, except to the extent otherwise specified in the applicable
Award Agreement. For purposes of this Section 8, “Cause” shall mean a
determination by the Board that any of the following has occurred: (A) an act or
acts of dishonesty by the Participant constituting a felony under applicable law
and resulting or intending to result directly or indirectly in gain to or
personal enrichment of the Participant at the Company’s expense; or (B) a
material breach of subsection (1), (2) or (3) below.

 

(1) Full-Time Employment. The Participant shall devote his time, attention and
effort during regular business hours to the business of the Company and shall
not during the term of employment be engaged in any other substantial business
activity whether or not such business activity is pursued for gain, profit or
other pecuniary advantage; but this shall not be construed as preventing the
Participant from investing his personal assets in businesses which do not
compete with the Company in such form or manner as will not require substantial
services on the part of the Participant in the operation of the affairs of the
companies in which such investments are made. Notwithstanding the foregoing, the
Participant may purchase securities in any corporation whose securities are
regularly traded, provided that such purchases shall not result in his owning
beneficially at any time more than one percent (1%) of any class of securities
of any corporation engaged in a business competitive with that of the Company.

 

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(2) Unauthorized Disclosure. During the term of the Participant’s employment
with the Company, and for a period of two (2) years thereafter, the Participant
shall not, without the written consent of the Board or the Executive Committee,
disclose to any person, other than as required by law or court order, or other
than to an employee of the Company or any of its affiliated corporations, or
other than to a person to whom disclosure is necessary or appropriate in
connection with the performance by the Participant of his duties (including but
not limited to disclosure to the Company’s outside accountants, attorneys or
bankers of information properly requested by such persons), any confidential
information obtained by Participant while the Participant is in the employ of
the Company. For purposes of this Plan, “confidential information” shall mean
any information of the Company that the Company treats as confidential as well
as any information that a prudent officer of the Company would consider to be
proprietary or confidential to the Company, including without limitation,
information with respect to any of the Company’s services, customers, suppliers,
techniques, patents and patent applications, methods (including manufacturing
methods), products, designs, financial projections, industry projections or
analyses, planned or pending agreements or future plans; provided, however, that
“confidential information” shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by the
Participant) or any information of a type not otherwise considered confidential
by persons engaged in the same business or a business similar to that conducted
by the Company.

 

(3) Works For Hire Acknowledgment; Assignment. The Participant acknowledges that
all of the Participant’s work on and contributions to the Company’s products
(the “Products”), including, without limitation, any and all patterns, designs,
artworks and other expressions in any tangible medium (collectively, the
“Works”) are within the scope of the Participant’s employment and are a part of
the services, duties and responsibilities of the Participant. All of the
Participant’s work on and contributions to the Works will be rendered and made
by the Participant for, at the instigation of, and under the overall direction
of the Company, and all of the Participant’s said work and contributions, as
well as the Works, are and at all times shall be regarded as “work made for
hire” as that term is used in the United States Copyright Laws. Without
curtailing or limiting this acknowledgment, the Participant hereby assigns,
grants, and delivers exclusively to the Company, as to work on and contribution
to the Products pursuant hereto all rights, titles, and interests in and to any
such Works, and all copies and versions, including all copyrights and renewals.
The Participant will execute and deliver to the Company, or its successors and
assigns, such other and further assignments, instruments and documents as it
from time to time reasonably may request for the purpose of establishing,
evidencing, and enforcing or defending its complete, exclusive perpetual, and
worldwide ownership of all rights, titles, and interests of every kind and
nature whatsoever, including all copyrights in and to the Works. The Participant
hereby constitutes and appoints the Company as its agent and attorney-in-fact,
with full power of substitution, to execute and deliver said assignments,
instruments or documents as the Participant may fail or refuse to execute and
deliver, this power and agency being coupled with an interest and being
irrevocable.

 

(ii) Other Termination of Employment. Except as otherwise provided above or in
an Award Agreement, if a Participant terminates employment with the Company or
any Subsidiary for any reason other than for “Cause” and such Participant has
not satisfied the conditions to exercisability specified in the applicable Award
Agreement, then the Participant shall forfeit those Stock Options which have not
yet become exercisable as of the date of such termination of employment.

 

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(b) Exercise Price. The exercise price per share of Common Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant
and set forth in the Award Agreement, provided, however, that the exercise price
per share shall be no less than 100% of the Fair Market Value per share on the
date of grant. Notwithstanding the foregoing, the exercise price per share of a
Stock Option that is a Substitute Award may be less than the Fair Market Value
per share on the date of award, provided that the excess of:

 

(i) the aggregate Fair Market Value (as of the date such Substitute Award is
granted) of the shares subject to the Substitute Award, over

 

(ii) the aggregate exercise price thereof, does not exceed the excess of:

 

(iii) the aggregate fair market value (as of the time immediately preceding the
transaction giving rise to the Substitute Award, such fair market value to be
determined by the Committee) of the shares of the predecessor entity that were
subject to the award assumed or substituted for by the Company, over

 

(iv) the aggregate exercise price of such shares.

 

(c) Option Term. The term of each Stock Option shall be fixed by the Committee
and set forth in the Award Agreement provided, however, that a Stock Option
shall not be exercisable after the expiration of ten (10) years after the date
the Stock Option is granted. Notwithstanding the foregoing:

 

(i) Termination of Employment Without Cause. If a Participant is notified that
the Participant will be involuntarily terminated from employment with the
Company or any Subsidiary without Cause, then the term of the Participant’s
Stock Option shall end on the earlier of the date set forth in the applicable
Award Agreement or one (1) year from the date of the Participant’s termination
of employment.

 

(ii) Disability. If a Participant terminates employment with the Company or any
Subsidiary due to Disability, then the term of the Participant’s Stock Option
shall end on the earlier of the date set forth in the applicable Award Agreement
or one (1) year from the date of the Participant’s termination of employment.

 

(iii) Death. If a Participant terminates employment with the Company or any
Subsidiary due to death, such Participant’s estate shall have the right to
exercise the Participant’s Stock Options for a period ending on the earlier of
the term set forth in the applicable Award Agreement or one (1) year from the
date of the Participant’s death.

 

(iv) Voluntary Termination of Employment. Except as otherwise provided in
Section 8(c)(v) of the Plan, if a Participant terminates employment with the
Company or any Subsidiary and such Participant has satisfied the conditions to
exercisability specified in the applicable Award Agreement as of the date of
such voluntary termination, then the term of the Participant’s Stock Options
shall end on the earlier of the date set forth in the applicable Award Agreement
or three (3) months from the date of the Participant’s termination of
employment.

 

(v) Voluntary Retirement. Effective with Awards granted on or after August 10,
2004, if a Participant terminates employment with the Company or any Subsidiary
due to Voluntary Retirement after having (A) reached age sixty-two (62) and (B)
completed five (5) years of continuous service with the Company or its
Subsidiaries, then the term of the Participant’s Stock Option shall end

 

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on the earlier of the date set forth in the applicable Award Agreement or three
(3) years from the date of the Participant’s Voluntary Retirement. For purposes
of this Section 8, “Voluntary Retirement” shall mean any voluntary termination
of employment by a Participant after reaching age sixty-two (62) and completing
five (5) years of continuous service with the Company or its Subsidiaries.

 

(d) Method of Exercise. Subject to the provisions of the applicable Award
Agreement the exercise price of a Stock Option may be paid in cash or previously
owned shares or a combination thereof or in whole or in part through the
withholding of shares subject to the Stock Option with a value equal to the
exercise price. In accordance with the rules and procedures established by the
Administrator for this purpose, the Stock Option may also be exercised through a
“cashless exercise” procedure which is approved by the Administrator involving a
broker or dealer approved by the Administrator, which affords Participants the
opportunity to sell immediately some or all of the shares underlying the
exercised portion of the Stock Option in order to generate sufficient cash to
pay the Stock Option exercise price or to satisfy withholding tax obligations
related to the Stock Option.

 

9. Stock Appreciation Rights. Stock Appreciation Rights shall be subject to the
terms and conditions established by the Committee in connection with the Award
thereof and specified in the applicable Award Agreement. Upon satisfaction of
the conditions to the payment specified in the applicable Award Agreement, each
Stock Appreciation Right shall entitle a Participant to an amount, if any, equal
to the Fair Market Value of a share of Common Stock on the date of exercise over
the Stock Appreciation Right exercise price specified in the applicable Award
Agreement. At the discretion of the Administrator, payments to a Participant
upon exercise of a Stock Appreciation Right may be made in Shares, cash or a
combination thereof. A Stock Appreciation Right may be granted alone or in
addition to other Awards, or in tandem with a Stock Option. If granted in tandem
with a Stock Option, a Stock Appreciation Right shall cover the same number of
shares of Common Stock as covered by the Stock Option (or such lesser number of
shares as the Committee may determine) and shall be exercisable only at such
time or times and to the extent the related Stock Option shall be exercisable,
and shall have the same term and exercise price as the related Stock Option.
Upon exercise of a Stock Appreciation Right granted in tandem with a Stock
Option, the related Stock Option shall be canceled automatically to the extent
of the number of shares covered by such exercise; conversely, if the related
Stock Option is exercised as to some or all of the shares covered by the tandem
grant, the tandem Stock Appreciation Right shall be canceled automatically to
the extent of the number of shares covered by the Stock Option exercised.

 

10. Stock Awards. Stock Awards shall consist of one or more shares of Common
Stock granted to an Eligible Individual, and shall be subject to the terms and
conditions established by the Committee in connection with the Award and
specified in the applicable Award Agreement; provided, however, that each Stock
Award shall be subject to at least one of the following minimum repurchase or
lapse restrictions: (a) a performance-based repurchase or lapse restriction that
expires not less than one (1) year following the date of grant or (b) a
time-based repurchase or lapse restriction that expires based on the Eligible
Individual remaining employed or otherwise providing services to the Company for
not less than three (3) years. Except in the case of death or permanent
disability of an Eligible Individual and as otherwise permitted by Section 16,
neither the Board nor the Administrator shall be permitted to waive any
repurchase or lapse restriction applicable to any Stock Award.

 

11. Performance Share Awards. Performance Share Awards shall be evidenced by an
Award Agreement in such form and containing such terms and conditions as the
Committee deems appropriate and which are not inconsistent with the terms of the
Plan. Each Award Agreement shall set forth the number of shares of Common Stock
to be earned by a Participant upon satisfaction of

 

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certain specified performance criteria and subject to such other terms and
conditions as the Committee deems appropriate. Payment in settlement of a
Performance Share Award shall be made as soon as practicable following the
conclusion of the applicable performance period, or at such other time as the
Administrator shall determine, in shares of Common Stock, in an equivalent
amount of cash or in a combination of Common Stock and cash, as the
Administrator shall determine.

 

12. Other Awards. The Committee shall have the authority to specify the terms
and provisions of other forms of equity-based or equity-related Awards not
described above which the Committee determines to be consistent with the purpose
of the Plan and the interests of the Company, which Awards may provide for cash
payments based in whole or in part on the value or future value of Common Stock,
for the acquisition or future acquisition of Common Stock, or any combination
thereof. Other Awards shall also include cash payments (including the cash
payment of dividend equivalents) under the Plan which may be based on one or
more criteria determined by the Committee which are unrelated to the value of
Common Stock and which may be granted in tandem with, or independent of, other
Awards under the Plan.

 

13. Section 162(m) Awards.

 

(a) Terms of Section 162(m) Awards Generally. In addition to any other Awards
under the Plan, the Company may make Awards that are intended to qualify as
“qualified performance-based compensation” for purposes of Section 162(m) of the
Code (“Section 162(m) Awards”). Section 162(m) Awards may consist of Stock
Options, Stock Appreciation Rights, Stock Awards, Performance Share Awards or
Other Awards the vesting, exercisability and/or payment of which is conditioned
upon the attainment for the applicable Performance Period of specified
performance targets related to designated performance goals for such period
selected by the Committee from among the performance goals specified in Section
13(b) below. Section 162(m) Awards will be made in accordance with the
procedures specified in applicable Treasury regulations for compensation
intended to be “qualified performance-based compensation.”

 

(b) Performance Goals. For purposes of this Section 13, performance goals shall
be limited to one or more of the following: (i) net revenue, (ii) net earnings,
(iii) operating earnings or income, (iv) absolute and/or relative return on
equity or assets, (v) earnings per share, (vi) cash flow, (vii) pretax profits,
(viii) earnings growth, (ix) revenue growth, (x) book value per share, (xi)
stock price and (xii) performance relative to peer companies, each of which may
be established on a corporate-wide basis or established with respect to one or
more operating units, divisions, acquired businesses, minority investments,
partnerships or joint ventures.

 

(c) Other Performance-Based Compensation. The Committee’s decision to make, or
not to make, Section 162(m) Awards within the meaning of this Section 13 shall
not in any way prejudice the qualification of any other Awards as performance
based compensation under Section 162(m). In particular, Awards of Stock Options
may, pursuant to applicable regulations promulgated under Section 162(m), be
qualified as performance-based compensation for Section 162(m) purposes without
regard to this Section 13.

 

14. Non-transferability. No Award granted under the Plan or any rights or
interests therein shall be sold, transferred, assigned, pledged or otherwise
encumbered or disposed of except by will or by the laws of descent and
distribution or as may otherwise be required by law; provided, however, that the
Administrator may, subject to such terms and conditions as the Administrator
shall specify, permit the transfer of an Award to a Participant’s family members
or to one or more trusts established in whole or

 

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in part for the benefit of one or more of such family members; provided further,
that the restrictions in this sentence shall not apply to the shares received in
connection with an Award after the date that the restrictions on transferability
of such shares set forth in the applicable Award Agreement have lapsed. During
the lifetime of a Participant, a Stock Option or Stock Appreciation Right shall
be exercisable only by, and payments in settlement of Awards shall be payable
only to the Participant, or, if applicable, the family member or trust to whom
such Stock Option, Stock Appreciation Right or other Award has been transferred
in accordance with the previous sentence.

 

15. Recapitalization or Reorganization.

 

(a) Authority of the Company and Shareholders. The existence of the Plan, the
Award Agreements and the Awards granted hereunder shall not affect or restrict
in any way the right or power of the Company or the shareholders of the Company
to make or authorize any adjustment, recapitalization, reorganization or other
change in the Company’s capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference
stocks whose rights are superior to or affect the Common Stock or the rights
thereof or which are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

 

(b) Change in Capitalization. Notwithstanding any provision of the Plan or any
Award Agreement, in the event of any change in the outstanding Common Stock by
reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, stock split, combination or exchange of shares or any other
significant corporate event affecting the Common Stock, the Committee, in its
discretion, may make (i) such proportionate adjustments it considers appropriate
(in the form determined by the Committee in its sole discretion) to prevent
diminution or enlargement of the rights of Participants under the Plan with
respect to the aggregate number of shares of Common Stock for which Awards in
respect thereof may be granted under the Plan. The number of shares of Common
Stock covered by each outstanding Award, and the exercise or Award prices in
respect thereof and/or (ii) such other adjustments as it deems appropriate. The
Committee’s determination as to what, if any, adjustments shall be made shall be
final and binding on the Company and all Participants.

 

16. Change in Control.

 

(a) If, within two (2) years following a Change in Control which occurs after
the Effective Date, a Participant’s employment with the Company or any
Subsidiary is involuntarily terminated by the Company or any Subsidiary, whether
or not for Cause (as defined in Section 8) (unless the Change in Control occurs
within two years after the Effective Date and such result would, in the
reasonable opinion at the Company’s Independent accountants delivered prior to
the effective date of such Change in Control, preclude the event giving rise to
such Change in Control from being accounted for as a pooling of interests) (i)
all Stock Options or Stock Appreciation Rights of such Participant then
outstanding shall become fully exercisable as of the date of the Change in
Control, whether or not then exercisable, (ii) all restrictions and conditions
of all Stock Awards of such Participant then outstanding shall lapse as of the
date of the Change in Control, and (iii) all Performance Share Awards of such
Participant shall be deemed to have been fully earned as of the date of the
Change in Control. In addition, in the event of a Change in Control occurring
after the Effective Date, the Board or the Committee may (unless the Change in
Control occurs within two years after the Effective Date and such result would,
in the reasonable opinion of the Company’s independent accountants delivered
prior

 

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to the effective date of such Change in Control, preclude the event giving rise
to such Change in Control from being accounted for as a pooling of interests),
in its sole discretion, make any or all of the following adjustments: (A) by
written notice to each holder of a Stock Option (an “Optionee”) provide that
such Optionee’s Stock Options shall be cancelled unless exercised within thirty
(30) days (or such longer period as the Board or the Committee, as the case may
be, shall determine) alter the date of such notice; (B) provide for the payment
upon termination or cancellation of a Stock Option (whether or not such Stock
Option is otherwise exercisable) of an amount in cash or Securities equal to:
(x) the excess, if any, of the aggregate Fair Market Value as of the data of
such Change in Control of the Common Stock then subject to the Stock Option over
the product of the number of shares of Common Stock then subject to the Stock
Option and the exercise price, less (y) an amount equal to the federal, state
and local taxes, if any, required to be withheld or paid as a result of such
payment; and (C) make any other adjustments, or take other reasonable action, as
the Board or the Committee, as the case may be, deem appropriate provided that
no such action impairs any rights that an Optionee has under the Plan without
such Optionee’s consent.

 

17. Amendment of the Plan; Amendment of Outstanding Stock Options. The Board or
Committee may at any time and from time to time terminate, modify, suspend or
amend the Plan in whole or in part; provided, however, that no such termination,
modification, suspension or amendment shall be effective without shareholder
approval if such approval is required to comply with any applicable law or stock
exchange rule; and provided further, that the Board or Committee may not,
without shareholder approval, amend the Plan if such amendment could, at the
time of such amendment, reasonably be expected to result in a material: (i)
increase the benefits accruing to participants under the Plan; (ii) increase the
aggregate number of shares issuable under the Plan; or (iii) modification of the
requirements as to eligibility for participation in the Plan. No termination,
modification, suspension or amendment of the Plan shall, without the consent of
a Participant to whom any Awards shall previously have been granted, adversely
affect his or her rights under such Awards. Notwithstanding any provision herein
to the contrary, the Board or Committee shall have broad authority to amend the
Plan or any Stock Option to take into account changes in applicable tax laws,
securities laws, accounting rules and other applicable state and federal laws.

 

18. No Repricing of Stock Options. Notwithstanding any provision in the Plan to
the contrary, the Committee shall not permit the repricing of Stock Options by
any method, including by cancellation and reissuance, without first obtaining
shareholder approval.

 

19. Miscellaneous.

 

(a) Tax Withholding. No later than the date as of which an amount first becomes
includible in the gross income of the Participant for applicable income tax
withholding purposes with respect to any award under the Plan, the Participant
shall pay to the Company or make arrangements satisfactory to the Administrator
regarding the payment or any federal, state or local taxes of any kind required
by law to be withheld with respect to such amount. Unless otherwise determined
by the Administrator, in accordance with rules and procedures established by the
Administrator, the minimum required withholding obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligation of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.

 

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(b) Election to Withhold Shares. If the Committee so permits, a Participant may
elect to satisfy the Company’s income tax withholding obligation with respect to
a Stock Option by having shares withheld up to an amount that does not exceed
the Participant’s maximum marginal tax rate for federal (including FICA), state
and local tax liabilities. The election must be in a form and manner prescribed
by the Committee and shall be subject to the prior approval of the Committee.

 

(c) No Right to Grants or Employment. No Eligible Individual or Participant
shall have any claim or right to receive grants of Awards under the Plan.
Nothing in the Plan or in any Award or Award Agreement shall confer upon any
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, as the case may be, or interfere in any way with
the right of the Company or a Subsidiary to terminate the employment of any of
its employees at any time, with or without cause.

 

(d) Unfunded Plan. The Plan is intended to constitute an unfunded plan for
incentive compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Administrator may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or payments in lieu thereof with respect to awards
hereunder.

 

(e) Other Employee Benefit Plans. Payments received by a Participant under any
Award made pursuant to the provisions of the Plan shall not be included in, and
shall not affect the determination of benefits under any other employee benefit
plan or similar arrangement provided by the Company or any Subsidiary.

 

(f) Securities Law Restrictions. The Administrator may require each Eligible
Individual purchasing or acquiring shares of Common Stock pursuant to a Stock
Option or other Award under the Plan to represent to and agree with the Company
in writing that such Eligible Individual is acquiring the shares for investment
and not with a view to the distribution thereof. All certificates for shares of
Common Stock delivered under the Plan shall be subject to such stock transfer
orders and other restrictions as the Administrator may deem advisable under the
rules, regulations, and other requirements of the Securities and Exchange
Commission, the New York Stock Exchange or any other exchange upon which the
Common Stock is then listed, and any applicable federal or state securities law,
and the Administrator may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions. No shares of
Common Stock shall be issued hereunder unless the Company shall have determined
that such issuance is in compliance with, or pursuant to an exemption from, all
applicable federal and state securities laws.

 

(g) Compliance with Rule 16b-3.

 

(i) The Plan is intended to comply with Rule 16b-3 under the Exchange Act or its
successors under the Exchange Act and the Administrator shall interpret and
administer the provisions of the Plan or any Award Agreement in a manner
consistent therewith. To the extent any provision of the Plan or Award Agreement
or any action by the Administrator fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the
Administrator. Moreover, in the event the Plan or an Award Agreement does not
include a provision required by Rule 16b-3 to be stated therein, such provision
(other than one relating to eligibility requirements, or the price and amount of
Awards) shall be deemed automatically to be incorporated by reference into the
Plan or such Award Agreement insofar as Participants subject to Section 16 of
the Exchange Act are concerned.

 

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(ii) Notwithstanding anything contained in the Plan or any Award Agreement to
the contrary, if the consummation of any transaction under the Plan would result
in the possible imposition of liability on a Participant pursuant to Section
16(b) of the Exchange Act, the Administrator shall have the right, in its sole
discretion, but shall not be obligated, to defer such transaction to the extent
necessary to avoid such liability.

 

(h) Award Agreement. In the event of any conflict or inconsistency between the
Plan and any Award Agreement, the Plan shall govern, and the Award Agreement
shall be interpreted to minimize or eliminate any such conflict or
inconsistency.

 

(i) No Fractional Shares. No fractional shares of Common Stock shall be issued
or delivered pursuant to the Plan or any Option. The Committee shall determine
whether cash, other awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated

 

(j) Headings. Section headings are for reference only. In the event of a
conflict between a title and the content of a Section, the content of the
Section shall control.

 

(k) Expenses. The costs and expenses of administering the Plan shall be borne by
the Company.

 

(l) Applicable Law. . The validity, construction, interpretation and effect of
the Plan and Option Instruments issued under the Plan shall exclusively be
governed by and determined in accordance with the law of the State of Delaware,
without giving effect to the conflicts of laws principles thereof.

 

Effective Date. The Plan, as amended, restated and renamed as set forth in this
document, shall be effective as of April 23, 2002. Effective as of October 30,
2002, subject to approval by the shareholders of AmerisourceBergen Corporation
at the annual meeting of shareholders to be held on February 27, 2003, the Plan
was further amended, among other purposes, to increase the number of shares
issuable under the Plan. Effective as of April 22, 2003, the Plan was further
amended to include certain operational provisions. Effective as of August 10,
2004, the Plan was further amended to extend the time to exercise following
Voluntary Retirement.

 

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