RESTRICTED SHARE UNITS AGREEMENT
Exhibit 10.47
Cardinal Health, Inc., an Ohio corporation (the “Company”), hereby grants to Xxxxxx Xxxxxxxx
(“Grantee”) 5,000 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 “Common Shares”) to Grantee as set forth herein. The Restricted Share Units are being
granted pursuant to the Cardinal Health, Inc. Broadly-based Equity Incentive Plan, as amended (the
“Plan”), and shall be subject to all provisions of the Plan, which are hereby incorporated herein
by reference, and shall be subject to all provisions of this agreement. Capitalized terms used
herein that are not specifically defined herein 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 in full (100%) on May 17, 2007 (the “Vesting Date”).
2. Purchase Price. The purchase price of the Restricted Share Units shall be $0.
3. Transferability. The Restricted Share Units shall not be transferable.
4. Termination of Service. Unless otherwise determined by the Committee at or after
grant or termination, and except as set forth below, if Grantee’s Continuous Service to the Company
and its subsidiaries (collectively, the “Cardinal Group”) terminates prior to the Vesting Date, all
of the Restricted Share Units that have not vested shall be forfeited by Grantee. If Grantee’s
Continuous Service terminates prior to the vesting of all of the Restricted Share Units by reason
of Grantee’s death or total or partial disability, then the restrictions with respect to a ratable
portion of the Restricted Share Units shall lapse and such shares shall not be forfeited. Such
ratable portion shall be determined with respect to this award of Restricted Share Units as an
amount equal to the number of Restricted Share Units awarded to Grantee multiplied by a fraction,
the numerator of which is the number of whole calendar months between the date of this grant (the
“Grant Date”) and the date of such death or disability and the denominator of which is the number
of whole calendar months between the Grant Date and the Vesting Date. For purposes of this
agreement, the term “Continuous Service” shall mean the absence of any interruption or termination
of service as an employee or director of any entity within the Cardinal Group.
5. Triggering Conduct/Competitor Triggering Conduct. As used in this agreement,
“Triggering Conduct” shall include disclosing or using in any capacity other than as necessary in
the performance of duties assigned by 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 Grantee; 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 the termination of Grantee’s
employment with the Cardinal Group; any action by Grantee and/or his 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 Grantee; 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 Grantee’s employment or within one year following Grantee’s
termination of employment with the Cardinal Group, 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 Grantee has been introduced
to trade secrets, confidential information or business sensitive information during Grantee’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.
6. Special Forfeiture/Repayment Rules. For so long as Grantee continues as an
employee with the Cardinal Group and for three years following Grantee’s termination of employment
with the Cardinal Group regardless of the reason, Grantee agrees not to engage in Triggering
Conduct. If Grantee 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 5 above, then:
(a) the Restricted Share Units (or any part thereof that have not vested) shall immediately
and automatically terminate, be forfeited, and shall cease to vest at any time; and
(b) Grantee shall, within 30 days following written notice from the Company, pay to the
Company an amount equal to the gross gain realized or obtained by Grantee resulting from the
vesting of such Restricted Share Units, measured at the date of vesting (i.e., the market value of
the Restricted Share Units on the vesting date), with respect to any portion of the Restricted
Share Units that has already vested at any time within three years prior to the Triggering Conduct
(the “Look-Back Period”), less $1.00. If Grantee engages only in Competitor Triggering Conduct,
then the Look-Back Period shall be shortened to exclude any period more than one year prior to
Grantee’s termination of employment with the Cardinal Group, but including any period between the
time of Grantee’s termination and engagement in Competitor Triggering Conduct. Grantee may be
released from Grantee’s obligations under this paragraph 6 only if the Committee (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 6 constitutes a so-called “noncompete”
covenant. This paragraph 6 does, however, prohibit certain conduct while Grantee 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,
Grantee’s acceptance of employment with a Competitor. Grantee 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 6 and
Grantee’s continuing obligations contained herein. No provision of this
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agreement shall diminish, negate or otherwise impact any separate noncompete or other
agreement to which Grantee 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 Grantee contained
in this agreement, the provisions of this agreement shall take precedence and such other
inconsistent provisions shall be null and void. Grantee acknowledges and agrees that the
provisions contained in this agreement are being made for the benefit of the Company in
consideration of Grantee’s receipt of the Restricted Share Units, in consideration of employment,
in consideration of exposing Grantee 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. Grantee further acknowledges that the receipt of the Restricted Share
Units and execution of this agreement are voluntary actions on the part of Grantee and that the
Company is unwilling to provide the Restricted Share Units to Grantee without including the
restrictions and covenants of Grantee contained in this agreement. Further, the parties agree and
acknowledge that the provisions contained in paragraphs 5 and 6 are ancillary to, or part of, an
otherwise enforceable agreement at the time the agreement is made.
7. Payment. Subject to the provisions of paragraphs 5 and 6 of this agreement, on the
one year anniversary of the day immediately following the date of Grantee’s termination of
employment with the Cardinal Group, or on such earlier date as may be approved by the Chairman of
the Company as to all or any portion of the Restricted Share Units, Grantee shall be entitled to
receive from the Company (without any payment on behalf of Grantee other than as described in
paragraph 11) the Common Shares represented by this Award.
8. Dividends. Grantee shall not receive cash dividends on the Restricted Share Units
but instead shall receive a cash payment from the Company on each cash dividend payment date with
respect to the Common Shares with a record date between the Grant Date and the earlier of the
termination or forfeiture of this grant in accordance with the terms hereof or the payment
described in paragraph 7 hereof, such cash payment to be in an amount equal to the dividends that
would have been paid on the Common Shares represented by the Restricted Share Units.
9. Right of Set-Off. By accepting these Restricted Share Units, Grantee consents to a
deduction from, and set-off against, any amounts owed to Grantee by any member of the Cardinal
Group from time to time (including, but not limited to, amounts owed to Grantee as wages, severance
payments or other fringe benefits) to the extent of the amounts owed to the Cardinal Group by
Grantee under this agreement.
10. No Shareholder Rights. Grantee shall have no rights of a shareholder with respect
to the Restricted Share Units, including, without limitation, Grantee shall not have the right to
vote the Common Shares represented by the Restricted Share Units.
11. Withholding Tax. The Company shall have the right to require Grantee 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
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withhold with respect to the cash payments described in paragraph 8 hereof) or, in lieu
thereof, to retain, or sell without notice, a sufficient number of Common 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 Common Shares, the amount withheld shall not exceed the minimum required
by applicable law and regulations.
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.
Grantee acknowledges that the covenants contained in paragraphs 5 and 6 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 Grantee’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 Grantee 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 Grantee 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 Grantee, and
Grantee 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, Grantee 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.
| CARDINAL HEALTH, INC. |
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| DATE OF GRANT: May 17, 2004 | By: | /s/ Xxxx X. Xxxxxxxx | ||
| Xxxx X. Xxxxxxxx | ||||
| Executive Vice President | ||||
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ACCEPTANCE OF AGREEMENT
Grantee hereby: (a) acknowledges that he has received a copy of the Plan, a copy of the Company’s
most recent Annual Report and other communications routinely distributed to the Company’s
shareholders, and a copy of the Plan Description dated November 17, 2003 pertaining to the Plan;
(b) accepts this agreement and the Restricted Share Units granted to him under this agreement
subject to all provisions of the Plan and this agreement; (c) represents and warrants to the
Company that he is purchasing the Restricted Share Units for his 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 (d) agrees that no transfer
of the Common Shares delivered in respect of the Restricted Share Units shall be made unless the
Common 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.
| /s/ Xxxxxx Xxxxxxxx
|
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| 6/27/04
|
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