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ADJUSTMENTS TO CARDINAL HEALTH RESTRICTED SHARE AWARDS AND TERMS

Equity Incentive Plan Agreement

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Title: ADJUSTMENTS TO CARDINAL HEALTH RESTRICTED SHARE AWARDS AND TERMS
Governing Law: Ohio     Date: 9/15/2009

ADJUSTMENTS TO CARDINAL HEALTH RESTRICTED SHARE AWARDS AND TERMS, Parties: cardinal health  inc , carefusion corporation
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Exhibit 10.68

R ESTRICTED S HARES

(U.S. C ARDINAL E MPLOYEES (C URRENT AND F ORMER ))

A DJUSTMENTS TO C ARDINAL H EALTH R ESTRICTED S HARE A WARDS AND T ERMS OF

C ARE F USION R ESTRICTED S HARE A WARDS

August 31, 2009

As a result of the separation of the clinical and medical products businesses of Cardinal Health, Inc. (“ Cardinal Health ”) by means of a spin-off of those businesses to Cardinal Health’s shareholders, effective August 31, 2009 (the “ Spin-Off ”), each outstanding restricted share award granted by Cardinal Health to you will be treated as follows:

 

 

 

With respect to each outstanding restricted share award initially granted by Cardinal Health to you on or prior to September 26, 2007 (each, a “ Pre-2007 Cardinal Restricted Share ”) pursuant to the terms of Cardinal Health’s 2005 Long-Term Incentive Plan, as amended and restated effective as of November 5, 2008 (the “ Cardinal LTIP ”), and related grant agreements (the “ Cardinal Health Restricted Share Agreements ”), you are receiving, as of the effective time of the Spin-Off, 0.5 shares of restricted common stock of CareFusion Corporation (each, a “ CareFusion Restricted Share ”) for each Pre-2007 Cardinal Restricted Share. Your Pre-2007 Cardinal Restricted Shares will otherwise be unaffected by the Spin-Off.

 

 

 

Each outstanding restricted share award initially granted to you after September 26, 2007 (each, a “ Post-2007 Cardinal Restricted Share ”) will be cancelled and new Cardinal Health restricted shares will be issued to you (each, a “ New Cardinal Health Restricted Share ”) as of the effective time of the Spin-Off.

Pre-2007 Cardinal Restricted Shares

Your Pre-2007 Cardinal Restricted Shares will continue to be governed by, and subject to the restrictions set forth in, (i) your Cardinal Health Restricted Share Agreements, as amended (including the provisions in the agreements relating to “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules”) and (ii) the Cardinal LTIP. Please note that CareFusion Corporation (“ CareFusion ”) and its affiliates are third party beneficiaries of all rights that benefit CareFusion with respect to your Pre-2007 Cardinal Restricted Shares and as a result CareFusion may enforce with full force and effect all terms and conditions that benefit CareFusion with respect to such restricted shares.

New Cardinal Health Restricted Shares

Your New Cardinal Health Restricted Shares are granted under, and subject to, the terms and conditions of the Cardinal LTIP. They are also subject to the terms and conditions set forth on Appendix A attached hereto (the “ New Cardinal Health Restricted Shares Agreement ”), which, except for the number of shares subject to the award, are the same terms that applied to your Post-2007 Cardinal Restricted Shares as set forth in the Cardinal Health Restricted Share Agreement for such award (including


R ESTRICTED S HARES

(U.S. C ARDINAL E MPLOYEES (C URRENT AND F ORMER ))

 

paragraphs 4 and 5 of the agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules”). The number of shares subject to each New Cardinal Health Restricted Share can be found on the website of Cardinal Health’s third-party equity plan administrator. The New Cardinal Health Restricted Shares Agreement and its terms have been approved by the Human Resources and Compensation Committee of Cardinal Health.

CareFusion Restricted Shares

Your CareFusion Restricted Shares are granted under, and subject to, the terms and conditions of the CareFusion Corporation 2009 Long-Term Incentive Plan. They are also subject to the terms of the Cardinal Health Restricted Share Agreement for the corresponding Pre-2007 Cardinal Restricted Shares (including paragraphs 3 and 4 of the agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules”) and the Cardinal LTIP, which have been adjusted and restated on Appendix B attached hereto for purposes of applying them to your CareFusion Restricted Shares and have been approved by the Human Resources and Compensation Committees of Cardinal Health and CareFusion. Please note that Cardinal Health and its affiliates are third party beneficiaries of all rights that benefit Cardinal Health with respect to your CareFusion Restricted Shares and as a result Cardinal Health may enforce with full force and effect all terms and conditions that benefit Cardinal Health with respect to such restricted shares.


R ESTRICTED S HARES

(U.S. C ARDINAL E MPLOYEES (C URRENT AND F ORMER ))

 

Appendix A

CARDINAL HEALTH, INC.

RESTRICTED SHARES AGREEMENT

As a result of the separation of the clinical and medical products businesses of Cardinal Health, Inc. (“Cardinal Health”) by means of a spin-off of at least 80.1% of the outstanding common stock of CareFusion Corporation to Cardinal Health’s shareholders, effective on August 31, 2009 (the “Spin-Off”) and cancellation of outstanding restricted share awards (the “Original Restricted Shares”) that were granted to Awardee on a certain date occurring after September 26, 2007 (the “Original Grant Date”), Cardinal Health has awarded to Awardee a certain number of common shares, without par value, of Cardinal Health, subject to certain restrictions (the “New Cardinal Health Restricted Shares”). The “Number of Shares” that are covered by the New Cardinal Health Restricted Shares can be found on the website of Cardinal Health’s third-party equity plan administrator.

The New Cardinal Health Restricted Shares have been granted pursuant to the Cardinal Health, Inc. 2005 Long-Term Incentive Plan, amended and restated effective as of November 8, 2005 (the “Plan”), and shall be subject to all provisions of the Plan, which are incorporated herein by reference, and all provisions of this Restricted Shares Agreement (this “Agreement”).

Capitalized terms used in this Agreement which are not specifically defined herein will have the meanings ascribed to such terms in the Plan.

1. Vesting . Subject to the provisions set forth elsewhere in this Agreement and unless a vesting schedule for the Original Restricted Shares provides otherwise, the New Cardinal Health Restricted Shares shall vest in accordance with the following schedule: 33.33% of the New Cardinal Health Restricted Shares shall vest on the first anniversary of the Original Grant Date, an additional 33.33% of the New Cardinal Health Restricted Shares shall vest on the second anniversary of the Original Grant Date, and the final 33.34% of the New Cardinal Health Restricted Shares shall vest on the third anniversary of the Original Grant Date (each such vesting date being the “Vesting Date” with respect to the New Cardinal Health Restricted Shares scheduled to vest on such date). If the vesting schedule for the Original Restricted Shares provides otherwise, then the New Cardinal Health Restricted Shares shall vest in accordance with the schedule applicable to the Original Restricted Shares.

2. Transferability . Prior to the applicable vesting of the New Cardinal Health Restricted Shares, Awardee shall not be permitted to sell, transfer, pledge, assign or otherwise encumber the then unvested New Cardinal Health Restricted Shares, except as otherwise provided in paragraph 3 of this Agreement.

3. Termination of Employment .

(a) General . Except as set forth below, if a Termination of Employment occurs prior to the vesting of the New Cardinal Health Restricted Shares, such New Cardinal Health Restricted Shares shall be forfeited by Awardee.

(b) Death or Disability . If a Termination of Employment occurs prior to the vesting in full of the New Cardinal Health Restricted Shares by reason of Awardee’s death or Disability, but at least 6 months from the Original Grant Date, then the restrictions with respect to

 

1


R ESTRICTED S HARES

(U.S. C ARDINAL E MPLOYEES (C URRENT AND F ORMER ))

 

any unvested New Cardinal Health Restricted Shares shall immediately lapse and such New Cardinal Health Restricted Shares shall vest in full and shall not be forfeited.

(c) Retirement . If a Termination of Employment occurs prior to the vesting in full of the New Cardinal Health Restricted Shares by reason of Awardee’s Retirement, but at least 6 months from the Original Grant Date, then a Ratable Portion of each installment of the New Cardinal Health Restricted Shares that would have vested on each future Vesting Date shall immediately vest and not be forfeited. Such Ratable Portion shall, with respect to the applicable installment, be an amount equal to such installment of the New Cardinal Health Restricted Shares scheduled to vest on the applicable Vesting Date multiplied by a fraction, the numerator of which shall be the number of days from the Original Grant Date through the date of such termination, and the denominator of which shall be the number of days from the Original Grant Date through such Vesting Date. For purposes of this Agreement and this Award under the Plan, “Retirement” shall refer to Age 55 Retirement, which means Termination of Employment by a Participant (other than by reason of death or Disability and other than in the event of Termination for Cause) from the Cardinal Group (a) after attaining age fifty-five (55), and (b) having at least ten (10) years of continuous service with the Cardinal Group, including service with an Affiliate of Cardinal Health prior to the time that such Affiliate became an Affiliate of Cardinal Health. For purposes of the age and/or service requirement, the Administrator may, in its discretion, credit a Participant with additional age and/or years of service.

4. Triggering Conduct/Competitor Triggering Conduct . As used in this Agreement, “Triggering Conduct” shall include the following: 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 Cardinal Health policies, including, but not limited to, conduct which would constitute a breach of any certificate of compliance or similar attestation/certification signed by Awardee; 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 Awardee’s Termination of Employment; any action by Awardee and/or his or her 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 Awardee; 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 Awardee’s employment or within one year following Termination of Employment, 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 Awardee has been introduced to trade secrets, confidential information or business sensitive information during Awardee’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.

5. Special Forfeiture/Repayment Rules . For so long as Awardee continues as an employee with the Cardinal Group and for three years following Termination of Employment regardless of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in Triggering Conduct during the time period set forth in the preceding sentence or in

 

2


R ESTRICTED S HARES

(U.S. C ARDINAL E MPLOYEES (C URRENT AND F ORMER ))

 

Competitor Triggering Conduct during the time period referenced in the definition of “Competitor Triggering Conduct” set forth in paragraph 4 above, then:

(a) any New Cardinal Health Restricted Shares that have not yet vested shall immediately and automatically terminate, be forfeited, and shall cease to exist; and

(b) Awardee shall, within 30 days following written notice from Cardinal Health, pay to Cardinal Health an amount equal to (x) the aggregate gross gain realized or obtained by Awardee resulting from the vesting of all New Cardinal Health Restricted Shares, measured as of the date of vesting ( i.e. , the market value of the New Cardinal Health Restricted Shares on the date of vesting), that have already vested at any time within three years prior to the Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period more than one year prior to Awardee’s Termination of Employment, but include any period between the time of Termination of Employment and the time of Awardee’s engaging in Competitor Triggering Conduct. Awardee may be released from Awardee’s obligations under this paragraph 5 if and only if the Administrator (or its duly appointed designee) determines, in writing and in its sole discretion, that such action is in the best interests of Cardinal Health. Nothing in this paragraph 5 constitutes a so-called “noncompete” covenant. This paragraph 5 does, however, prohibit certain conduct while Awardee 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, Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide Cardinal Health 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 5 and Awardee’s continuing obligations contained herein. No provision of this Agreement shall diminish, negate or otherwise impact any separate noncompete or other agreement to which Awardee may be a party, including, but not limited to, any certificate of compliance or similar attestation/certification signed by Awardee; 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 Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and such other inconsistent provisions shall be null and void. Awardee acknowledges and agrees that the provisions contained in this Agreement are being made for the benefit of Cardinal Health in consideration of Awardee’s receipt of the New Cardinal Health Restricted Shares, in consideration of employment, in consideration of exposing Awardee to Cardinal Health’s business operations and confidential information, and for other good and valuable consideration, the adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that the receipt of the New Cardinal Health Restricted Shares and this Agreement are voluntary actions on the part of Awardee and Cardinal Health is unwilling to provide the New Cardinal Health Restricted Shares to Awardee without including the restrictions and covenants of Awardee contained in this Agreement. Further, Awardee and Cardinal Health agree and acknowledge that the provisions contained in paragraphs 4 and 5 are ancillary to, or part of, an otherwise enforceable agreement at the time the agreement is made.

6. Change of Control . Notwithstanding anything herein to the contrary, in the event a Change of Control occurs, on the date that such Change of Control occurs, the restrictions applicable to any unvested New Cardinal Health Restricted Shares shall lapse and the Award shall be fully vested.

 

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R ESTRICTED S HARES

(U.S. C ARDINAL E MPLOYEES (C URRENT AND F ORMER ))

 

7. Right of Set-Off . Any amounts Awardee owes from time to time to any member of the Cardinal Group with respect to the New Cardinal Health Restricted Shares may be deducted from, and set-off against, any amounts owed to Awardee by any member of the Cardinal Group from time to time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other fringe benefits). Any amounts Awardee owes from time to time to CareFusion Corporation or one of its affiliates with respect to the New Cardinal Health Restricted Shares may be deducted from, and set-off against, any amounts owed to Awardee by CareFusion Corporation or one of its affiliates from time to time (including, but not limited to, amounts owed to Awardee as wages, severance payments or other fringe benefits).

8. Shareholder Rights and Restrictions . Except with regard to the disposition of the New Cardinal Health Restricted Shares and the receipt of dividends, Awardee shall generally have all rights of a shareholder with respect to the New Cardinal Health Restricted Shares from the effective time of the Spin-Off, including, without limitation, the right to vote such New Cardinal Health Restricted Shares, but subject, however, to those restrictions set forth in this Agreement or in the Plan. Dividends with respect to the New Cardinal Health Restricted Shares shall be accrued until the Vesting Date for such New Cardinal Health Restricted Shares and paid thereon (subject to the same vesting requirements as the underlying New Cardinal Health Restricted Share award). In addition, if Awardee was entitled to one or more cash dividend payments under the Original Restricted Shares that had not been paid prior to the effective time of the Spin-Off, then the Company shall pay such cash dividends on the Vesting Date. Any additional Shares which Awardee may become entitled to receive by virtue of a merger or reorganization in which Cardinal Health is the surviving corporation or any other change in capital structure shall be subject to the same vesting requirements and restrictions set forth above.

9. Withholding Tax .

(a) Generally . Awardee is liable and responsible for all taxes owed in connection with the New Cardinal Health Restricted Shares, regardless of any action Cardinal Health takes with respect to any tax withholding obligations that arise in connection with the New Cardinal Health Restricted Shares. Cardinal Health does not make any representation or undertaking regarding the tax treatment or the treatment of any tax withholding in connection with the grant or vesting of the New Cardinal Health Restricted Shares or the subsequent sale of the New Cardinal Health Restricted Shares. Cardinal Health does not commit and is under no obligation to structure the New Cardinal Health Restricted Shares to reduce or eliminate Awardee’s tax liability.

(b) Payment of Withholding Taxes . Prior to any event in connection with the New Cardinal Health Restricted Shares ( e.g. , vesting) that Cardinal Health determines may result in any domestic or foreign tax withholding obligations, whether national, federal, state or local, including any employment tax obligation (the “Tax Withholding Obligation”), Awardee is required to arrange for the satisfaction of the minimum amount of such Tax Withholding Obligations in a manner acceptable to Cardinal Health. Unless Awardee elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by Cardinal Health, Cardinal Health shall withhold on Awardee’s behalf the number of New Cardinal Health Restricted Shares when the New Cardinal Health Restricted Shares become vested as Cardinal Health determines to be sufficient to satisfy the Tax Withholding Obligation. In the case of any amounts withheld for taxes pursuant to this provision in the form of Shares, the amount withheld shall not exceed the minimum required by Applicable Law and regulations.

 

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R ESTRICTED S HARES

(U.S. C ARDINAL E MPLOYEES (C URRENT AND F ORMER ))

 

10. Governing Law/Venue for Dispute Resolution/Costs and Legal Fees . The New Cardinal Health Restricted Shares are 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. Awardee and Cardinal Health agree and acknowledge that


 
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