Exhibit 10.03
CARDINAL HEALTH, INC.
RESTRICTED SHARE UNITS AGREEMENT
On [grant date] (the "Grant Date"), Cardinal Health, Inc, an Ohio
corporation (the "Company"), has awarded to [employee name] ("Awardee") [# of
shares] Restricted Share Units (the "Restricted Share Units" or "Award"),
representing an unfunded unsecured promise of the Company to deliver common
shares, without par value, of the Company (the "Shares") to Awardee as set forth
herein. The Restricted Share Units have been granted pursuant to the Cardinal
Health, Inc. 2005 Long-Term Incentive Plan (the "Plan") and shall be subject to
all provisions of the Plan, which are incorporated herein by reference, and
shall be subject to the provisions of this Restricted Share Units Agreement
(this "Agreement"). Capitalized terms used in this Agreement which are not
specifically defined shall have the meanings ascribed to such terms in the Plan.
1. Vesting. Subject to the provisions set forth elsewhere in this
Agreement, the Restricted Share Units shall vest [CLIFF VESTING ALTERNATIVE: on
[vesting date] (the "Vesting Date")] [INSTALLMENT VESTING ALTERNATIVE: in
accordance with the following schedule: [vesting schedule] (each such vesting
date, the "Vesting Date" with respect to the Restricted Share Units scheduled to
vest on such date)]. Notwithstanding the foregoing, in the event of a Change of
Control prior to Awardee's Termination of Employment, the Restricted Share Units
shall vest in full.
2. Transferability. The Restricted Share Units shall not be transferable.
3. Termination of Employment. Except as set forth below, if a Termination
of Employment occurs prior to the vesting of a Restricted Share Unit, such
Restricted Share Unit shall be forfeited by Awardee. If a Termination of
Employment occurs prior to the vesting in full of the Restricted Share Units by
reason of Awardee's death, then any unvested Restricted Share Units shall vest
in full and shall not be forfeited.
4. Triggering Conduct/Competitor Triggering Conduct. As used in this
Agreement, "Triggering Conduct" shall include the following: disclosing or using
in any capacity other than as necessary in the performance of duties assigned by
the Company and its Affiliates (collectively, the "Cardinal Group") any
confidential information, trade secrets or other business sensitive information
or material concerning the Cardinal Group; violation of Company policies,
including conduct which would constitute a breach of any of the Certificates of
Compliance with Company Policies and/or the Certificates of Compliance with
Company Business Ethics Policies signed by Awardee; directly or indirectly
employing, contacting concerning employment, or participating in any way in the
recruitment for employment of (whether as an employee, officer, director, agent,
consultant or independent contractor), any person who was or is an employee,
representative, officer or director of the Cardinal Group at any time within the
12 months prior to Awardee's Termination of Employment; any action by Awardee
and/or his or her representatives that either does or could reasonably be
expected to undermine, diminish or otherwise damage the relationship between the
Cardinal Group and any of its customers, potential customers, vendors and/or
suppliers that were known to Awardee; and breaching any provision of any
employment or severance agreement with a member of the Cardinal Group. As used
in this Agreement, "Competitor Triggering Conduct" shall include, either during
Awardee's employment or within one year following Termination of Employment,
accepting employment with or serving as a consultant or advisor or in any other
capacity to an entity that is in competition with the business conducted by any
member of the Cardinal Group (a "Competitor"), including, but not limited to,
employment or another business relationship with any Competitor if Awardee has
been introduced to trade secrets, confidential information or business sensitive
information during Awardee's employment with the Cardinal Group and such
information would aid the Competitor because the threat of disclosure
of such information is so great that, for purposes of this Agreement, it must be
assumed that such disclosure would occur.
5. Special Forfeiture/Repayment Rules. For so long as Awardee continues as
an Employee with the Cardinal Group and for three years following Termination of
Employment regardless of the reason, Awardee agrees not to engage in Triggering
Conduct. If Awardee engages in Triggering Conduct during the time period set
forth in the preceding sentence or in Competitor Triggering Conduct during the
time period referenced in the definition of "Competitor Triggering Conduct" set
forth in Paragraph 4 above, then:
(a) any Restricted Share Units that have not yet vested or that vested
within the Look-Back Period (as defined below) with respect to such Triggering
Conduct or Competitor Triggering Conduct and have not yet been settled by a
payment pursuant to Paragraph 6 hereof shall immediately and automatically
terminate, be forfeited, and cease to exist; and
(b) Awardee shall, within 30 days following written notice from the
Company, pay to the Company an amount equal to (x) the aggregate gross gain
realized or obtained by Awardee resulting from the settlement of all Restricted
Share Units pursuant to Paragraph 6 hereof (measured as of the settlement date
(i.e., the market value of the Restricted Share Units on such settlement date))
that have already been settled and that had vested at any time within three
years prior to the Triggering Conduct (the "Look-Back Period"), minus (y) $1.00.
If Awardee engages only in Competitor Triggering Conduct, then the Look-Back
Period shall be shortened to exclude any period more than one year prior to
Awardee's Termination of Employment, but including any period between the time
of Termination of Employment and the time of Awardee's engaging in Competitor
Triggering Conduct.
Awardee may be released from his or her obligations under this Paragraph 5
if and only if the Administrator (or its duly appointed designee) determines, in
writing and in its sole discretion, that such action is in the best interests of
the Company. Nothing in this Paragraph 5 constitutes a so-called "noncompete"
covenant. This Paragraph 5 does, however, prohibit certain conduct while Awardee
is associated with the Cardinal Group and thereafter and does provide for the
forfeiture or repayment of the benefits granted by this Agreement under certain
circumstances, including, but not limited to, Awardee's acceptance of employment
with a Competitor. Awardee agrees to provide the Company with at least 10 days
written notice prior to directly or indirectly accepting employment with, or
serving as a consultant or advisor or in any other capacity to, a Competitor,
and further agrees to inform any such new employer, before accepting employment,
of the terms of this Paragraph 5 and Awardee's continuing obligations contained
herein. No provision of this Agreement shall diminish, negate or otherwise
impact any separate noncompete or other agreement to which Awardee may be a
party, including, but not limited to, any of the Certificates of Compliance with
Company Policies and/or the Certificates of Compliance with Company Business
Ethics Policies; provided, however, that to the extent that any provisions
contained in any other agreement are inconsistent in any manner with the
restrictions and covenants of Awardee contained in this Agreement, the
provisions of this Agreement shall take precedence and such other inconsistent
provisions shall be null and void. Awardee acknowledges and agrees that the
provisions contained in this Agreement are being made for the benefit of the
Company in consideration of Awardee's receipt of the Restricted Share Units, in
consideration of employment, in consideration of exposing Awardee to the
Company's business operations and confidential information, and for other good
and valuable consideration, the adequacy of which consideration is hereby
expressly confirmed. Awardee further acknowledges that the receipt of the
Restricted Share Units and execution of this Agreement are voluntary actions on
the part of Awardee and that the Company is unwilling to provide the Restricted
Share Units to Awardee without including the restrictions and covenants of
Awardee contained in this
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Agreement. Further, the parties agree and acknowledge that the provisions
contained in Paragraphs 4 and 5 are ancillary to, or part of, an otherwise
enforceable agreement at the time the agreement is made.
6. Payment. Subject to the provisions of Paragraphs 4 and 5 of this
Agreement, on the [VESTING PAYMENT ALTERNATIVE: date of vesting of any
Restricted Share Unit] [DEFERRED PAYMENT ALTERNATIVE: [___-month][___-year]
anniversary of the first date on which Awardee ceases to be an Employee of the
Company (unless such cessation does not constitute a "separation from service"
within the meaning of Section 409A(a)(2)(B)(i) of the Code, and the regulations
thereunder, in which case the settlement contemplated by this paragraph shall
occur on the first date that does so constitute a "separation from service")],
Awardee shall be entitled to receive from the Company (without any payment on
behalf of Awardee other than as described in Paragraph 10) the Shares
represented by [VESTING PAYMENT ALTERNATIVE: such Restricted Share Unit]
[DEFERRED PAYMENT ALTERNATIVE: any then-vested Restricted Share Units; provided,
however, that, subject to the next sentence, in the event that some or all of
the Restricted Share Units vest prior to the [INSTALLMENT VESTING ALTERNATIVE:
applicable] Vesting Date as a result of the death of Awardee or as a result of a
Change of Control, Awardee shall be entitled to receive the corresponding Shares
from the Company on the date of such vesting. Notwithstanding the proviso of the
preceding sentence, if Restricted Share Units vest as a result of the occurrence
of a Change of Control under circumstances where such occurrence would not
qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the
Code, and the regulations thereunder, such proviso shall not apply and Awardee
shall be entitled to receive the corresponding Shares from the Company on the
date that would have applied absent such proviso]. Elections to defer receipt of
the Shares beyond the date of settlement provided herein may be permitted in the
discretion of the Administrator pursuant to procedures established by the
Administrator in compliance with the requirements of Section 409A of the Code.
7. Dividends. Awardee shall not receive cash dividends on the Restricted
Share Units but instead shall, with respect to each Restricted Share Unit,
receive a cash payment from the Company on each cash dividend payment date with
respect to the Shares with a record date between the Grant Date and the earlier
of the forfeiture of such unit in accordance with the terms hereof or the
settlement of such unit pursuant to Paragraph 6 hereof, such cash payment to be
in an amount equal to the dividend that would have been paid on the Common Share
represented by such unit.
8. Right of Set-Off. By accepting these Restricted Share Units, Awardee
consents to a deduction from, and set-off against, any amounts owed to Awardee
by any member of the Cardinal Group from time to time (including, but not
limited to, amounts owed to Awardee as wages, severance payments or other fringe
benefits) to the extent of the amounts owed to the Cardinal Group by Awardee
under this Agreement.
9. No Shareholder Rights. Awardee shall have no rights of a shareholder
with respect to the Restricted Share Units, including, without limitation,
Awardee shall not have the right to vote the Shares represented by the
Restricted Share Units.
10. Withholding Tax. The Company shall have the right to require Awardee
to pay to the Company the amount of any taxes which the Company is required to
withhold with respect to the Restricted Share Units (including the amount of any
taxes which the Company is required to withhold with respect to the cash
payments described in Paragraph 7 hereof) or, in lieu thereof, to retain, or
sell without notice, a sufficient number of Shares to cover the amount required
to be withheld. In the case of any amounts withheld for taxes pursuant to this
provision in the form of Shares, the amount withheld shall not exceed the
minimum required by applicable law and regulations. The Company shall have the
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right to deduct from all cash payments paid pursuant to Paragraph 7 hereof the
amount of any taxes which the Company is required to withhold with respect to
such payments.
11. Beneficiary Designation. Awardee may designate a beneficiary to
receive any Shares to which Awardee is entitled with respect to the Restricted
Share Units which vest as a result of Awardee's death. Notwithstanding the
foregoing, if Awardee engages in Triggering Conduct or Competitor Triggering
Conduct as herein defined, the Restricted Share Units subject to such
beneficiary designation shall be subject to the Special Forfeiture/Repayment
Rules and the Company's Right of Set-Off or other right of recovery set forth in
this Agreement, and all rights of the beneficiary shall be subordinated to the
rights of the Company pursuant to such provisions of this Agreement. Awardee
acknowledges that the Company may exercise all rights under this Agreement and
the Plan against Awardee and Awardee's estate, heirs, lineal descendants and
personal representatives and shall not be limited to exercising its rights
against Awardee's beneficiary.
12. Governing Law/Venue. This Agreement shall be governed by the laws of
the State of Ohio, without regard to principles of conflicts of law, except to
the extent superceded by the laws of the United States of America. The parties
agree and acknowledge that the laws of the State of Ohio bear a substantial
relationship to the parties and/or this Agreement and that the Restricted Share
Units and benefits granted herein would not be granted without the governance of
this Agreement by the laws of the State of Ohio. In addition, all legal actions
or proceedings relating to this Agreement shall be brought in state or federal
courts located in Franklin County, Ohio, and the parties executing this
Agreement hereby consent to the personal jurisdiction of such courts. Awardee
acknowledges that the covenants contained in Paragraphs 4 and 5 of this
Agreement are reasonable in nature, are fundamental for the protection of the
Company's legitimate business and proprietary interests, and do not adversely
affect Awardee's ability to earn a living in any capacity that does not violate
such covenants. The parties further agree that in the event of any violation by
Awardee of any such covenants, the Company will suffer immediate and irreparable
injury for which there is no adequate remedy at law. In the event of any
violation or attempted violations of the restrictions and covenants of Awardee
contained in this Agreement, the Cardinal Group shall be entitled to specific
performance and injunctive relief or other equitable relief, including the
issuance ex parte of a temporary restraining order, without any showing of
irreparable harm or damage, such irreparable harm being acknowledged and
admitted by Awardee, and Awardee hereby waives any requirement for the securing
or posting of any bond in connection with such remedy, without prejudice to the
rights and remedies afforded the Cardinal Group hereunder or by law. In the
event that it becomes necessary for the Cardinal Group to institute legal
proceedings under this Agreement, Awardee shall be responsible to the Company
for all costs and reasonable legal fees incurred by the Company with regard to
such proceedings. Any provision of this Agreement which is determined by a court
of competent jurisdiction to be invalid or unenforceable should be construed or
limited in a manner that is valid and enforceable and that comes closest to the
business objectives intended by such provision, without invalidating or
rendering unenforceable the remaining provisions of this Agreement.
13. Action by the Administrator. The parties agree that the interpretation
of this Agreement shall rest exclusively and completely within the sole
discretion of the Administrator. The parties agree to be bound by the decisions
of the Administrator with regard to the interpretation of this Agreement and
with regard to any and all matters set forth in this Agreement. The
Administrator may delegate its functions under this Agreement to an officer of
the Cardinal Group designated by the Administrator (hereinafter the "Designee").
In fulfilling its responsibilities hereunder, the Administrator or its Designee
may rely upon documents, written statements of the parties or such other
material as the Administrator or its Designee deems appropriate. The parties
agree that there is no right to be heard or to appear before the Administrator
or its Designee and that any decision of the Administrator or its Designee
relating to this Agreement, including, without limitation, whether particular
conduct constitutes Triggering Conduct or
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Competitor Triggering Conduct, shall be final and binding unless such decision
is arbitrary and capricious.
14. Prompt Acceptance of Agreement. The Restricted Share Unit grant
evidenced by this Agreement shall, at the discretion of the Administrator, be
forfeited if this Agreement is not manually executed and returned to the
Company, or electronically executed by Awardee by indicating Awardee's
acceptance of this Agreement in accordance with the acceptance procedures set
forth on the Company's third-party equity plan administrator's web site, within
90 days of the Grant Date.
15. Electronic Delivery and Consent to Electronic Participation. The
Company may, in its sole discretion, decide to deliver any documents related to
the Restricted Share Unit grant under and participation in the Plan or future
Restricted Share Units that may be granted under the Plan by electronic means or
to request Awardee's consent to participate in the Plan by electronic means.
Awardee hereby consents to receive such documents by electronic delivery and to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company,
including the acceptance of restricted share unit grants and the execution of
restricted share unit agreements through electronic signature.
16. Notices. All notices, requests, consents and other communications
required or provided under this Agreement to be delivered by Awardee to the
Company will be in writing and will be deemed sufficient if delivered by hand,
facsimile, nationally recognized overnight courier, or certified or registered
mail, return receipt requested, postage prepaid, and will be effective upon
delivery to the Company at the address set forth below:
Cardinal Health, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: Chief Legal Officer
Facsimile: (000) 000-0000
All notices, requests, consents and other communications required or provided
under this Agreement to be delivered by the Company to Awardee may be delivered
by e-mail or in writing and will be deemed sufficient if delivered by e-mail,
hand, facsimile, nationally recognized overnight courier, or certified or
registered mail, return receipt requested, postage prepaid, and will be
effective upon delivery to the Awardee.
CARDINAL HEALTH, INC.
By: ________________________________
Its: _______________________________
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ACCEPTANCE OF AGREEMENT
Awardee hereby: (a) acknowledges that he or she has received a copy of the Plan,
a copy of the Company's most recent annual report to shareholders and other
communications routinely distributed to the Company's shareholders, and a copy
of the Plan Description dated [date of Plan Description] pertaining to the Plan;
(b) accepts this Agreement and the Restricted Share Units granted to him or her
under this Agreement subject to all provisions of the Plan and this Agreement,
including the provisions in the agreement regarding "Triggering
Conduct/Competitor Triggering Conduct" and "Special Forfeiture/Repayment Rules"
set forth in paragraphs 4 and 5 above; (c) represents that he or she understands
that the acceptance of this Agreement through an on-line or electronic system,
if applicable, carries the same legal significance as if he or she manually
signed the Agreement; (d) represents and warrants to the Company that he or she
is purchasing the Restricted Share Units for his or her own account, for
investment, and not with a view to or any present intention of selling or
distributing the Restricted Share Units either now or at any specific or
determinable future time or period or upon the occurrence or nonoccurrence of
any predetermined or reasonably foreseeable event; and (e) agrees that no
transfer of the Shares delivered in respect of the Restricted Share Units shall
be made unless the Shares have been duly registered under all applicable Federal
and state securities laws pursuant to a then-effective registration which
contemplates the proposed transfer or unless the Company has received a written
opinion of, or satisfactory to, its legal counsel that the proposed transfer is
exempt from such registration.
[_________________________________
Awardee's Signature
_________________________________
Awardee's Social Security Number
_________________________________
Date]
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