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EXHIBIT 10.17
July 25, 2000
Xxxx X. Xxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Agreement Concerning Retirement
Dear Xxxx:
This letter confirms our agreement as of February 1, 2000 respecting your
retirement as Chief Operating Officer ("COO") of Cardinal Health, Inc.
("Company"), as follows:
1. DUTIES/TITLE
a) Effective February 9, 2000, you will become Vice Chairman of the
Board, in addition to President, COO and a Director. You will remain
COO and President until the earlier of (i) the date on which your
successor has commenced work, or (ii) December 31, 2000 (the "Search
Period").
b) Upon conclusion of the Search Period, you shall relinquish the
President and COO positions, but may remain an employee of the
Company for a period of 12 months (the "Transition Period"). During
the Transition Period, you shall be an executive in transition
available up to 10 days per month (inclusive of any time necessary
to attend Board of Directors meetings and meetings of Board
Committees) to perform such tasks and pursue such projects of an
executive nature as the CEO of the Company shall assign, if any, in
the CEO's sole discretion.
c) At any time, upon request of either the Chairman or the Board, you
shall tender your resignation as Vice Chairman and a Director.
d) At any time before, or upon conclusion of, the Transition Period,
you, at your election, may either (i) immediately "retire" within
the meaning of the Company's various incentive and welfare plans, in
which case all duties required of you and all compensation and
benefits payable to you, other than vested benefits and, in
accordance with their terms, previously granted stock based
incentives (collectively, the "Prior Entitlements"), shall cease and
the "Retirement Period" shall commence, or (ii) elect to remain a
consulting executive employee of the Company in a consulting
capacity for a period of up to two years (the "Consulting Period")
at an annual salary of $50,000 per year. In either case, you may
pursue other employment, so long as the requirements of Section 4
below are observed.
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If you have not earlier elected to retire, upon the conclusion of
the Consulting Period, you agree to and shall retire and the
"Retirement Period" shall commence.
2. TERMINATION/DEATH/DISABILITY
a) You may terminate your employment with the Company at any time, but
in such event any compensation or benefits payable hereunder, other
than the Prior Entitlements, shall cease although you shall remain
bound by the terms of Section 4 below.
b) Should the Company, in its discretion, elect to terminate your
employment at any time prior to the end of the Transition Period,
you may exercise your rights under Section 1(d) above and shall
retain any rights you may have to any Prior Entitlements, provided
however that should you elect to retire at the time of such
termination, you shall no longer be bound by the non-competition and
non-hiring/non-solicitation restrictions contained in Sections 4(a)
and 4(b) below.
c) If you die or become incapacitated prior to retirement such that you
cannot perform the essential functions of your position with or
without reasonable accommodation, you shall not receive any further
compensation or benefits other than long term disability coverage
and the Prior Entitlements.
3. COMPENSATION/INCENTIVES/BENEFITS
a) Upon execution of this letter and through the Search Period, you
shall remain at your current rate of pay with such duties,
perquisites and benefits as you currently enjoy as President and
COO. Upon commencement of the Transition Period, your annual salary
shall become $750,000, payable on the same terms and conditions as
salaries of other corporate executives of the Company. Upon
commencement of the Consulting Period, if any, your annual salary
shall become $50,000, payable on the same terms and conditions as
salaries of other corporate executives of the Company. Upon
commencement of the Retirement Period, all compensation and benefits
payable to you, other than the Prior Entitlements, shall cease and
your rights and benefits shall be limited to those of a retiree of
the Company.
b) With respect to the Company's 2000 fiscal year, you shall be
eligible to receive an annual bonus at such a percentage and upon
such terms and conditions as those applicable to other, similarly
situated, bonused executives. If the Search Period ends during
fiscal year 2001 of the Company, you shall be eligible to receive a
pro-rated bonus for such year. Other than this, you shall receive no
further bonuses at any time.
c) As of February 9, 2000, you shall receive a non-qualified option
grant in the amount of 50,000 shares (the "Final Grant").
d) During the Transition Period and the Consulting Period, if any, you
may use Company aircraft on an as-available basis while pursuing
company business.
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This use of aircraft may include any necessary commuting to Company
offices. In addition, during such periods, all travel expenses you
incur in pursuit of Company business shall be reimbursed.
4. RESTRICTIONS
a) During the "Restricted Period" (defined below) you shall not engage
with or invest in, counsel or advise or be employed by any
enterprise which competes with the Company by developing,
manufacturing or selling any product or service of a type,
respectively, developed, manufactured or sold by the Company or any
subsidiary thereof. The "Restricted Period" means the period ending
on December 31, 2001 unless you have elected to remain a consulting
employee of the Company, in which case the Restricted Period shall
end when the Consulting Period ends.
b) During the Restricted Period, you shall not, without prior written
consent of Company, directly or indirectly, solicit or hire any
person who was or is at any time during the preceding three months
an employee of the Company or any of its affiliates.
c) At all times, you agree to maintain as confidential all secret or
confidential information of the Company and any of its affiliates
and you agree never to divulge same unless compelled to do so by
court order.
d) At all times, you agree to refrain from actions or statements,
written or oral, which disparage the Company, its affiliates or any
of their senior management. You also agree to refrain from any
action which has the effect of interfering with the Company's or any
of its affiliates' relationships with their customers.
e) In addition to all other limitations and conditions, receipt and
continued vesting and exercisability of all of your stock-based
incentives, including the Final Grant, are conditioned upon your
continuing observance of the provisions of this Section 4 and, in
the event of a breach of any such provision, any gains achieved by
you with respect to any such incentives shall be subject to clawback
as provided in the Final Grant. In addition, the Company may seek
injunctive relief to enforce the provisions of this Section 4.
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5. ANNOUNCEMENT OF DEPARTURE
Your retirement from your positions as COO, Vice Chairman or Director may
be announced in a Company press release at such time and in such manner as
you and the Company may mutually agree.
6. MISCELLANEOUS
a) This Agreement shall be governed by Ohio law and all legal actions
or proceedings, including those brought under Section 4 of this
letter, shall be brought only in federal or state courts in Franklin
County, Ohio. The prevailing party in any such case may recover
attorneys' fees and costs from the loser. In addition, this
Agreement shall be severable, and either party's failure to insist
upon strict compliance shall not be deemed a waiver. This Agreement
is our entire agreement and may only be amended in writing.
b) You and the Company agree to execute, simultaneous herewith, a
mutual release in the form attached as Exhibit "A", so as to comply
with the provisions of the Older Worker Benefit Protection Act.
If this letter correctly states our agreement, I would ask that you execute one
of the enclosed originals and return it to me.
Very truly yours,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
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