Exhibit 10.21
RESTRICTED SHARE UNITS AGREEMENT
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 "Common Shares") to Grantee as set forth herein.
The Restricted Share Units have been granted pursuant to the Cardinal Health,
Inc. Amended and Restated Equity Incentive Plan, as amended (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 accordance with the
following schedule: [percentage of Restricted Share Units vesting on each
applicable anniversary of the Grant Date] (each such vesting date, the "Vesting
Date" with respect to the Restricted Share Units scheduled to vest on such
date).
2. PURCHASE PRICE. The purchase price of the Restricted Share Units shall
be $0.00.
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 (as hereinafter defined) to the Company and its subsidiaries
(collectively, the "Cardinal Group") terminates prior to the Vesting Date, with
respect to an unvested Restricted Share Unit, such Restricted Share Unit shall
be forfeited by Grantee. If Grantee's Continuous Service terminates prior to the
vesting in full of the Restricted Share Units by reason of Grantee's death or
disability (as defined in the Plan), then the restrictions with respect to a
ratable portion of any unvested Restricted Share Units shall lapse and such
ratable portion shall not be forfeited. Such ratable portion shall be determined
separately with respect to the Restricted Share Units scheduled to vest on each
applicable Vesting Date, and shall be an amount equal to the number of
Restricted Share Units scheduled to vest on such Vesting Date multiplied by a
fraction, the numerator of which is the number of days from the Grant Date
through the date of such death or disability, and the denominator of which is
the number of days from the Grant Date through such 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. AGREEMENT NOT TO DISCLOSE OR USE CONFIDENTIAL INFORMATION, TRADE SECRETS
OR OTHER BUSINESS SENSITIVE INFORMATION. The parties acknowledge and agree that
the Cardinal Group is the sole and exclusive owner of Confidential Information,
Trade Secrets or Other Business Sensitive Information (as hereinafter defined)
and that the Cardinal Group has
legitimate business interests in protecting such information. The parties
further acknowledge and agree that the Cardinal Group has invested, and
continues to invest, considerable amounts of time and money in obtaining,
developing and preserving the confidentiality of such information. Further, the
parties agree that, because of the trust and fiduciary relationship arising
between Grantee and the Cardinal Group, Grantee owes the Cardinal Group a
fiduciary duty to preserve and protect such information from any and all
unauthorized disclosure and use. Accordingly, Grantee shall not, either directly
or indirectly, disclose such information to any third party whatsoever and shall
not use such information in any manner, except as authorized in the reasonable
performance of Grantee's duties while employed by the Cardinal Group.
"Confidential Information, Trade Secrets or Other Business Sensitive
Information" shall include any such information as defined by applicable law and
any information about the business of the Cardinal Group and its customers that
is not generally known to, or readily ascertainable by, the public, including,
but not limited to, financial information and models, customer lists, business
plans or strategies, marketing and sales plans or strategies, the identity,
compensation and qualifications of employees of the Cardinal Group, sources of
supply, pricing policies, operational methods, product specification or
technical processes, new product information, formulation techniques, customer
contacts, profit or cost information, research and development information or
other information that the Cardinal Group has developed or compiled.
6. DELIVERY OF COMPANY PROPERTY. Grantee recognizes and agrees that all
documents, magnetic media, computer disks, desktop and laptop computers and
other tangible items that were provided by the Cardinal Group and/or that
contain Confidential Information, Trade Secrets or Other Business Sensitive
Information as defined above are the sole and exclusive property of the Cardinal
Group. Upon request by the Cardinal Group, Grantee shall promptly and
immediately return to the Cardinal Group all such documents, media, disks,
desktop and laptop computers and other tangible items. Upon the termination of
Grantee's employment with the Cardinal Group, Grantee shall promptly and
immediately return to the Cardinal Group any and all such documents, media,
disks, desktop and laptop computers or other tangible items, without request by
the Cardinal Group. Grantee shall not take any such information or make/retain
copies of such information for any purpose whatsoever except as is necessary for
the reasonable performance of Grantee's duties while employed by the Cardinal
Group.
7. OTHER COVENANTS. Except as modified by Paragraph 11 below, Grantee
hereby covenants and agrees that, in consideration of the grant hereunder,
Grantee shall not, either directly or indirectly, on Grantee's own behalf or on
any other's behalf, engage in or assist others in any of the following
activities:
(a) Grantee shall not engage in any action or conduct that is a
violation of the policies of the Cardinal Group, including conduct that
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 executed by Grantee;
(b) During Grantee's employment with the Cardinal Group and for 12
months following the termination of such employment for any reason, Grantee
shall not, either directly or indirectly, employ, contact concerning
employment, or participate in any
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manner 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;
(c) Grantee shall not at any time during employment with the Cardinal
Group nor at any time thereafter disparage the Cardinal Group or any of its
employees, officers, representatives, services or products;
(d) During Grantee's employment with the Cardinal Group and for 12
months following the termination of such employment for any reason, Grantee
shall not engage in any action or conduct 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 or suppliers that were known to Grantee in the
performance of Grantee's job duties while employed with the Cardinal Group;
(e) During Grantee's employment with the Cardinal Group and for 12
months following the termination of such employment for any reason, Grantee
shall not solicit or accept business of the same type as that in which
Grantee was employed by the Cardinal Group from any customer, potential
customer, vendor or supplier of the Cardinal Group that was known to
Grantee in the performance of Grantee's job duties while employed with the
Cardinal Group, nor shall Grantee during such time period solicit or accept
such business within any geographic area in which Grantee was assigned or
for which Grantee had any managerial responsibility;
(f) During Grantee's employment with the Cardinal Group and for 12
months following the termination of such employment for any reason, Grantee
shall not accept employment with or serve 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 within a geographic area in
which Grantee was assigned or for which Grantee had any managerial
responsibility; and
(g) Grantee shall not breach or violate any provision of any
employment or severance agreement that Grantee has with any member of the
Cardinal Group.
8. INEVITABLE DISCLOSURE. The parties specifically acknowledge and agree
that the provisions of this Agreement are reasonable in light of the fact that,
in the event that Grantee would become employed or otherwise associated with a
competitor of the Cardinal Group, it would be inevitable that Grantee would
disclose Confidential Information, Trade Secrets or Other Business Sensitive
Information as defined above to such competitor. The parties acknowledge and
agree that Grantee has been introduced by the Cardinal Group to such
Confidential Information, Trade Secrets or Other Business Sensitive Information
as defined above and that such information would aid the competitor and that the
threat of such inevitable disclosure is so great that, for purposes of this
Agreement, it must be assumed that such disclosure would occur.
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9. COVENANTS ARE INDEPENDENT ELEMENTS. The parties acknowledge that the
obligations and covenants set forth in Paragraphs 5 through 8 above and, if
applicable, Paragraph 11 below are essential independent elements of this
Restricted Share grant and that, but for Grantee agreeing to comply with them,
the Cardinal Group would not have granted such Restricted Share Units to
Grantee. The parties agree and acknowledge that the provisions contained in
Paragraphs 5 through 8 above and, if applicable, Paragraph 11 below are
ancillary to, or part of, an otherwise enforceable agreement at the time the
agreement is made with regard to such paragraphs. The existence of any claim by
Grantee against the Cardinal Group, whether based on this Agreement or
otherwise, shall not operate as a defense to the enforcement of the covenants
contained in Paragraphs 5 through 8 above and, if applicable, Paragraph 11
below. The covenants contained in Paragraphs 5 through 8 above and, if
applicable, Paragraph 11 below will remain in full force and effect whether
Grantee is terminated by the Cardinal Group or voluntarily resigns.
10. ASSIGNMENT OF COVENANTS. The rights of the Cardinal Group under this
Agreement shall inure to the benefit of, and be binding upon, its successors and
assigns. Any successor or assign of the Cardinal Group is authorized to enforce
the covenants contained in this Agreement. Any successor or assign of the
Cardinal Group is authorized by the parties to enforce the covenants contained
herein as if the name of such successor or assign shall replace the Cardinal
Group throughout this Agreement and any consent and/or notice, written or
otherwise, is hereby waived and deemed unnecessary by Grantee.
11. CALIFORNIA SPECIFIC MODIFICATIONS. This paragraph shall supercede and
modify certain of the covenants, obligations and restrictions of Grantee set
forth in Paragraph 7 above in the event that, and only during such time that,
Grantee's principal employment with the Cardinal Group is in the State of
California. In the event that any of the provisions contained in Subparagraphs
7(d) through (f) above are inconsistent with the provisions of this Paragraph 11
with regard to the State of California, then the provisions contained in
Subparagraphs 7(d) through (f) shall not apply and the following provisions
shall apply instead:
(a) Within the geographic area in which Grantee was assigned or for
which Grantee had any managerial responsibility, Grantee shall not, during
Grantee's employment with the Cardinal Group and for 12 months following
termination of such employment for any reason, solicit or actually transact
business with any existing customer of the Cardinal Group of which
Grantee's knowledge of the existence of that customer or of that customer's
purchasing habits, product preferences or commercial practices exists
because of Grantee's receipt of Confidential Information, Trade Secrets or
Other Business Sensitive Information from the Cardinal Group; and
(b) Regardless of geographic area, Grantee shall not, during the
period of Grantee's employment with the Cardinal Group and for 12 months
following termination of such employment for any reason, solicit business
from any customers of the same type as the business of the Cardinal Group
at the time of the termination of Grantee's employment with the Cardinal
Group whose identities are not already within the public
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domain if Grantee directly serviced such customers, was assigned to such
customers, was responsible for such customers or otherwise had personal
contact with such customers during the 12-month period immediately
preceding expiration of Grantee's employment with the Cardinal Group.
In the event that Grantee is reassigned to any other state within the United
States of America other than the State of California or to any other country,
then all of the provisions of Paragraph 7 above shall apply in full force and
effect and the provisions of this Paragraph 11 shall not apply.
12. REASONABLENESS OF RESTRICTIONS CONTAINED IN AGREEMENT. Grantee
acknowledges that the covenants contained in this Agreement are reasonable in
nature, are fundamental for the protection of the legitimate business and
proprietary interests of the Cardinal Group, are necessary to protect the
goodwill between the Cardinal Group and its customers, 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.
13. SPECIAL FORFEITURE/REPAYMENT RULES. If Grantee engages in conduct that
is in violation of the covenants and restrictions contained in this Agreement,
then Grantee shall be subject to the following special forfeiture/repayment
rules in addition to any other remedy that the Cardinal Group may have:
(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 conduct
that is in violation of the covenants and restrictions contained in this
Agreement and have not yet been settled by a payment pursuant to Paragraph
14 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 7 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 conduct by Grantee that is in
violation of the covenants and restrictions contained in this Agreement
(the "Look-Back Period"), minus (y) $1.00.
Grantee may be released from Grantee's obligations under this Paragraph 13
if and 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. 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 Agreement and 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
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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
restrictions and covenants of Grantee 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 Paragraph 7 and,
if applicable, Paragraph 11 are ancillary to, or part of, an otherwise
enforceable agreement at the time the agreement is made.
14. PAYMENT. Subject to the provisions of Paragraphs 5 through 8 and, if
applicable, Paragraph 11, of this Agreement, on the [VESTING PAYMENT
ALTERNATIVE: date of vesting of any] [DEFERRED PAYMENT ALTERNATIVE:
[___-month][___-year] anniversary of the first date on which Grantee ceases to
be an employee of the Company, or, to the extent permitted by Treasury
Regulations, on such other date as may be approved by the Committee 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 17) the Common Shares represented by such Restricted
Share Units [DEFERRED PAYMENT ALTERNATIVE: ;provided, however, that, subject to
the next sentence, in the event that some or all of the Restricted Share Units
vest prior to the applicable Vesting Date as a result of the death or disability
of Grantee or as a result of a Change of Control, Grantee shall be entitled to
receive the corresponding Common 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 disability or 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 Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder,
such proviso shall not apply and Grantee shall be entitled to receive the
corresponding Common Shares from the Company on the date that would have applied
absent such proviso]. Elections to defer receipt of the Common 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 [VESTING PAYMENT ALTERNATIVE: Internal
Revenue Code of 1986, as amended] [DEFERRED PAYMENT ALTERNATIVE: Code].
15. DIVIDENDS. Grantee shall not receive cash dividends on the Restricted
Share Unit 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 Common Shares with a record date between the Grant Date and the
earlier of the forfeiture of such unit in accordance with the
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terms hereof or the settlement of such unit pursuant to Paragraph 14 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.
15. 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.
16. 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.
17. 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 withhold with respect to the cash
payments described in Paragraph 15 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. The Company shall
have the right to deduct from all cash payments paid pursuant to Paragraph 15
hereof the amount of any taxes which the Company is required to withhold with
respect to such payments.
18. BENEFICIARY DESIGNATION. Grantee may designate a beneficiary to receive
any Common 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 conduct that is in
violation of the covenants and restrictions contained in this Agreement, 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.
19. 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 superseded 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. In the
event of any violation or attempted violations of the restrictions and
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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.
20. SEVERABILITY. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be determined by a court of competent jurisdiction to be
invalid or unenforceable as written, it is the intent and desire of the parties
that the court shall modify the language of such provision or portion of this
Agreement to the extent necessary to make it valid and enforceable. If no such
modification by the court is possible, this Agreement shall be deemed amended to
delete therefrom only the provision or portion thus determined to be invalid or
unenforceable. Such modification or deletion is to apply only with respect to
the operation of such provision in the particular jurisdiction in which such
court determination is made.
21. 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 Cardinal Group 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 or its Designee and that any decision of the
Committee or its Designee relating to this Agreement, including, without
limitation, whether particular conduct constitutes a violation of the covenants,
obligations and restrictions of Grantee set forth in Paragraphs 5 through 7 and,
if applicable, Paragraph 11 above, shall be final and binding unless such
decision is arbitrary and capricious.
22. 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.
23. ELECTRONIC DELIVERY. The Company may, in its sole discretion, decide to
deliver any documents related to the Restricted Share Units 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 Grantee's consent to
participate in the Plan by electronic means. Grantee hereby consents to receive
such documents by electronic delivery and, if requested, to participate in the
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Plan through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.
CARDINAL HEALTH, INC.
DATE OF GRANT: By:
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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 on Form 10-K 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 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.
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Grantee's Signature
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Grantee's Social Security Number
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Date
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