EXHIBIT 10.12
RESTRICTED SHARE UNITS AGREEMENT
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Cardinal Health, Inc, an Ohio corporation (the "Company") hereby grants
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Grantee") 150,000 Restricted Share Units (the
"Restricted Share Units" or "Award"), representing an unfunded unsecured promise
of the Company to deliver Common Shares to the Grantee as set forth herein. The
Restricted Share Units are being 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 hereby incorporated herein by
reference, and shall be subject to all provisions of this agreement. Capitalized
terms used herein which are not specifically defined herein shall have the
meanings ascribed to such terms in the Plan.
1. VESTING. The Restricted Share Units shall vest in full on
June 30, 2004
2. PURCHASE PRICE. The purchase price of the Restricted Share
Units shall be $-0-.
3. TERMINATION OF SERVICE. Unless otherwise determined by the
Committee at or after grant or termination and except as set forth below, if the
Grantee's Continuous Service (as defined below) to the Company and its
subsidiaries (collectively, the "Cardinal Group") terminates, prior to June 30,
2004, all of the Restricted Share Units that have not vested shall be forfeited
by the Grantee. If the Grantee's Continuous Service terminates prior to the
vesting of all of the Restricted Share Units by reason of the Grantee's death or
"Disability," by the Grantee for "Good Reason" or by the Company other than for
"Cause" (as each such term is defined in the Employment Agreement between the
Grantee and the Company, dated as of November 20, 2001 (the "Employment
Agreement")), then all of the Restricted Share Units shall immediately fully
vest. 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.
4. PROHIBITED CONDUCT. The Grantee hereby agrees to comply
with the covenants set forth in Section 9(d) and Section 9(e) of the Employment
Agreement, as if such covenants were set forth herein in their entirety. For
purposes of this Agreement, a violation of Section 9(d) or (e) of the Employment
Agreement shall constitute "Competitor Triggering Conduct" hereunder.
Grantee acknowledges and agrees that the provisions contained
in this Section 4 are being made for the benefit of the Company in consideration
of Grantee's receipt of the Restricted Share Units, 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 this Section 4.
No provision of this agreement shall diminish, negate, or
otherwise impact any separate noncompete agreement to which Grantee may be a
party.
5. PAYMENT. On the later to occur of (a) the Grantee's 62nd
birthday or (b) the first date on which the Grantee would not be a "covered
employee" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended, or on such
earlier date as may be approved by the Board of Directors of the Company, the
Grantee shall be entitled to receive from the Company (without any payment on
behalf of the Grantee) the Company Common Shares represented by this Award. All
Common Shares represented by this Award, when issued, shall be duly authorized
and shall be (i) validly issued, fully paid and nonassessable, (ii) registered
for sale, and for resale, by Grantee under Federal and state securities laws and
shall remain registered so long as the shares may not be freely sold in the
absence of such registration and (iii) listed, or otherwise qualified, for
trading in the United States on each national securities exchange or national
securities market system on which the Company Common Shares are listed or
qualified.
6. DIVIDENDS. The 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 of the Company in an amount equal to
the dividends that would have been paid on the Company Common Shares represented
by the Restricted Share Unit.
7. SPECIAL FORFEITURE/REPAYMENT RULES. If the Grantee engages
in Competitor Triggering Conduct prior to the second anniversary of the date on
which the Restricted Share Units vest hereunder, then subject to Grantee's
rights of Due Process (as defined in the Employment Agreement): (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) the Grantee shall, within 60 days following written notice
from the Company, pay to the Company an amount equal to the gross gain realized
or obtained by the 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), less $1.00; provided, the Grantee shall not be
deemed to have engaged in Competitor Triggering Conduct until he shall have been
afforded Due Process. The Grantee may be released from Grantee's obligations
under this Section 7 only if the Committee (or its duly appointed agent )
determines, in writing and in its sole discretion, that such action is in the
best interests of the Company. Nothing in this Section 7 constitutes a so-called
"non-compete" covenant. However, this Section 7 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. This Agreement is subject
to the provisions of Grantee's Employment Agreement. Grantee acknowledges and
agrees that the provisions contained in this Section 7 are being made for the
benefit of the Company in consideration of Grantee's receipt of the Restricted
Share Units, 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 this Section 7.
8. WITHHOLDING TAX. The Company shall have the right to
require the 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 or,
in lieu thereof, to withhold a sufficient amount of Common Shares underlying the
Restricted Share Units to cover the amount required to be withheld. In the case
of any amounts withheld for taxes pursuant to this provision in the
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form of Common Shares, the amount withheld shall not exceed the minimum required
by applicable law and regulation.
9. LAW/VENUE MISCELLANEOUS.
(a) 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. 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 personal jurisdiction of such courts. The Grantee
acknowledges that the covenants contained in Sections 4 and 7 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 Sections 4 or 7 of this agreement, the
Company shall be entitled to specific performance and injunctive relief or other
equitable relief as provided under Section 9 of the Employment Agreement.
(b) The Company represents and warrants that (a) it is fully
authorized by its Board or the Committee (and of any person or body whose action
is required) to enter into this Agreement and to perform its obligations under
it, (b) the execution, delivery and performance of this Agreement by the Company
does not violate any applicable law, regulation, order, judgment or decree or
any agreement, plan or corporate governance document of the Company, and (c)
upon the execution and delivery of this Agreement by the Company and Grantee,
this Agreement shall be the valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally.
(c) In the event of any conflict between the Plan and the
terms and conditions in this Agreement, this Agreement shall govern unless the
terms and conditions of the Plan are more favorable to Grantee. If such terms
and conditions are more favorable to Grantee, then the Company and Grantee agree
that this Agreement is amended to the extent necessary to enable Grantee to gain
the benefit of the more favorable terms and conditions of the Plan.
CARDINAL HEALTH, INC.
DATE OF GRANT: November 20, 2001 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Executive Vice President
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ACCEPTANCE OF AGREEMENT
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The 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 August 8, 2001 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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Grantee's Signature
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Grantee's Social Security Number
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