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:
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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.
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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.
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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
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(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
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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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(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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(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