Exhibit 10.09
DIRECTORS' RESTRICTED SHARE UNITS AGREEMENT
UNDER THE
AMENDED AND RESTATED
OUTSIDE DIRECTORS EQUITY INCENTIVE PLAN
On _____________ (the "Grant Date"), Cardinal Health, Inc, an Ohio
corporation (the "Company"), has granted to _________ ("Grantee") ________
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 Grantee as set forth herein. The
Restricted Share Units have been granted pursuant to the Cardinal Health, Inc.
Amended and Restated Outside Directors Equity 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"). In the event of a conflict between the provisions
of this Agreement and the provisions of the Plan, the provisions of the Plan
shall control. 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 in full (100%) on __________
(the "Vesting Date"). Notwithstanding the foregoing, in the event of a Change of
Control prior to Grantee's termination of service on the Company's Board of
Directors (the "Board"), the Restricted Share Units shall vest in full.
2. Transferability. The Restricted Share Units shall not be transferable.
3. Termination of Service on the Board. If the Grantee ceases to be a
member of the Board prior to the vesting of the Restricted Share Units for any
reason other than Grantee's death, all of the then unvested Restricted Share
Units shall be forfeited by Grantee. If the Grantee ceases to be a member of the
Board prior to the vesting of the Restricted Share Units by reason of Grantee's
death, then such Restricted Share Units shall vest in full and not be forfeited.
4. Special Forfeiture/Repayment Rules. For so long as Grantee continues as
a Director of the Company and for three years following Grantee's termination of
service on the Board, 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" below, 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 5 hereof shall immediately and automatically
terminate, be forfeited, and cease to exist; and
(b) Grantee 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 Grantee resulting from the settlement of all Restricted
Share Units pursuant to Paragraph 5 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 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
service on the Board, but including any period between the time of Grantee's
termination of service on the Board and the time Grantee engaged in 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 as
a Director of the Company any confidential information, trade secrets or other
business sensitive information or material concerning the Company or its
subsidiaries (collectively, the "Cardinal Group"); violation of Company
policies, including conduct which would constitute a breach of the then-most
recent version of the Certificate of Compliance with Company Policies and/or
Certificate of Compliance with Company Business Ethics Policies signed by the
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 twelve (12) months prior to the
termination of employment or service with the Cardinal Group; any action by
Grantee and/or Grantee's 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 benefit
or severance agreement with a member of the Cardinal Group. As used in this
Agreement, "Competitor Triggering Conduct" shall include, either during
Grantee's service as a Director or within one year following Grantee's
termination of service on the Board, accepting employment with or serving as a
consultant, advisor, or 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 service as a
Director of the Company 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. For
purposes of this Agreement, the nature and extent of Grantee's activities, if
any, disclosed to and reviewed by the Nominating and Governance Committee of the
Board (the "Nominating Committee") prior to the date of Grantee's termination of
service on the Board shall not, unless specified to the contrary by the
Nominating Committee in a written notice given to Grantee, be deemed to be
Competitor Triggering Conduct. The Committee shall resolve in good faith any
disputes concerning whether particular conduct constitutes Triggering Conduct or
Competitor Triggering Conduct, and any such determination by the Committee shall
be conclusive and binding on all interested persons. The Grantee may be released
from Grantee's obligations under this Paragraph 4 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 4 constitutes a so-called "noncompete" covenant.
However, this Paragraph 4 does 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 the Grantee's acceptance of
employment with a Competitor. Grantee agrees to provide the Company with at
least ten days written notice prior to directly or indirectly accepting
employment with or serving as a consultant, 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 4 and of the Grantee's
continuing obligations contained herein.
No provision of this 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 the then-most recent version of the Certificate of
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Compliance with Company Policies and/or Certificate 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 Paragraph 4 are being made for the benefit of the
Company in consideration of Grantee's receipt of the Restricted Share Units, 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 this
Paragraph 4 are ancillary to or part of an otherwise enforceable agreement at
the time the agreement is made.
5. Payment. Subject to the provisions of Paragraph 4 of this Agreement, on
the [VESTING PAYMENT ALTERNATIVE: date of vesting of the Restricted Share Units]
[DEFERRED PAYMENT ALTERNATIVE: [___-month][___-year] anniversary of the first
date on which Grantee ceases to be a director 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 Internal Revenue Code of 1986, as amended (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")], Grantee shall be entitled to receive
from the Company (without any payment on behalf of Grantee) the Shares
represented by [VESTING PAYMENT ALTERNATIVE: such Restricted Share Units]
[DEFERRED PAYMENT ALTERNATIVE: the 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 Vesting Date as a result of the
death of Grantee or as a result of a Change of Control, Grantee 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 Grantee 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 Committee pursuant to procedures established by the Committee
in compliance with the requirements of Section 409A of the Code.
6. 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 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 5 hereof,
such cash payment to be in an amount equal to the dividends that would have been
paid on the Shares represented by the Restricted Share Units.
7. 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 the Company 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 Company by Grantee under this Agreement.
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8. 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 Shares represented by the
Restricted Share Units.
9. Beneficiary Designation. Grantee may designate a beneficiary to receive
any Shares to which the Grantee is entitled with respect to the Restricted Share
Units which vest as a result of Grantee's death. Notwithstanding the foregoing,
if Grantee 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. Grantee
acknowledges that the Company may exercise all rights under this Agreement and
the Plan against Grantee and Grantee's estate, heirs, lineal descendants and
personal representatives and shall not be limited to exercising its rights
against Grantee's beneficiary.
10. 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
the 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 Paragraph 4 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 the
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 Company 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 Company hereunder or by law. In the event that
it becomes necessary for the Company 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.
11. Action by the Committee. The parties agree that the interpretation of
this Agreement shall rest exclusively and completely within the sole discretion
of the Committee. The parties agree to be bound by the decisions of the
Committee with regard to the interpretation of this Agreement and with regard to
any and all matters set forth in this Agreement. The Committee may delegate its
functions under this Agreement to an officer of the Company designated by the
Committee (hereinafter the "Designee"). In fulfilling its responsibilities
hereunder, the Committee or its Designee may rely upon documents, written
statements of the parties, or such other material as the Committee or its
Designee deems appropriate. The parties agree that there is no right to be heard
or to appear before the Committee
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or its Designee and that any decision of the Committee or its Designee relating
to this Agreement, including without limitation whether particular conduct
constitutes Triggering Conduct or Competitor Triggering Conduct, shall be final
and binding unless such decision is arbitrary and capricious.
12. Prompt Acceptance of Agreement. The Restricted Share Units grant
evidenced by this Agreement shall, at the discretion of the Committee, be
forfeited if this Agreement is not executed by Grantee and returned to the
Company within 30 days of the Grant Date set forth below.
CARDINAL HEALTH, INC.
DATE OF GRANT: By: ___________________________
Its:___________________________
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ACCEPTANCE OF AGREEMENT
Grantee 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 ___________ 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; (c)
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 (d) 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.
________________________________
Grantee's Signature
________________________________
Date
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