|
Exhibit
10.1
CARDINAL HEALTH,
INC.
NONQUALIFIED STOCK OPTION
AGREEMENT
This agreement is entered
into in Franklin County, Ohio. On [date of grant] (the “Grant
Date”), Cardinal Health, Inc., an Ohio corporation (the
“Company”), has awarded to [employee name]
(“Awardee”), an option (the “Option”) to
purchase [# of shares] common shares, without par value, of the
Company (the “Shares”) for a price of [$X.XX] per
share. The Option has been granted under the Cardinal Health, Inc.
2005 Long-Term Incentive Plan, as amended (the “Plan”),
and will include and be subject to all provisions of the Plan,
which are incorporated herein by reference, and will be subject to
the provisions of this agreement. Capitalized terms used in this
agreement which are not specifically defined will have the meanings
ascribed to such terms in the Plan. [CLIFF ALTERNATIVE: This Option
shall vest and become exercisable on the
[ ]
anniversary of the Grant Date (the “Vesting Date”),
subject to the provisions of this agreement, including those
relating to the Awardee’s continued employment with the
Company and its Affiliates (collectively, the “Cardinal
Group”).] [INSTALLMENT ALTERNATIVE: This Option shall vest
and become exercisable in
[ ]
installments, which shall be as nearly equal as possible, on the
first
[ ]
anniversaries of the Grant Date (each a “Vesting Date”
with respect to the portion of the Option scheduled to vest on such
date), subject in each case to the provisions of this agreement,
including those relating to the Awardee’s continued
employment with the Company and its Affiliates (collectively, the
“Cardinal Group”).] Notwithstanding the foregoing, in
the event of a Change of Control prior to Awardee’s
Termination of Employment, the Option shall vest in full. This
Option shall expire on [date of expiration] (the “Grant
Expiration Date”).
1. Method of Exercise and
Payment of Price .
(a) Method of Exercise
. At any time when all or a portion of the Option is exercisable
under the Plan and this agreement, some or all of the exercisable
portion of the Option may be exercised from time to time by written
notice to the Company, or such other method of exercise as may be
specified by the Company, including without limitation, exercise by
electronic means on the web site of the Company’s third-party
equity plan administrator, which will:
(i) state the number of whole
Shares with respect to which the Option is being exercised;
and
(ii) if the Option is being
exercised by anyone other than Awardee, if not already provided, be
accompanied by proof satisfactory to counsel for the Company of the
right of such person or persons to exercise the Option under the
Plan and all applicable laws and regulations.
(b) Payment of Price .
The full exercise price for the portion of the Option being
exercised shall be paid to the Company as provided
below:
(i) in cash;
(ii) by check or wire
transfer (denominated in U.S. Dollars);
(iii) subject to any
conditions or limitations established by the Administrator, other
Shares which (A) in the case of Shares acquired from the
Company (whether upon the exercise of an Option or otherwise), have
been owned by the Participant for more than six months on the date
of surrender (unless this condition is waived by the
Administrator), and (B) have a Fair Market Value on the date
of surrender equal to or greater than the aggregate exercise price
of the Shares as to which said Option shall be exercised (it being
agreed that the excess of the Fair Market Value over the aggregate
exercise price shall be refunded to the Awardee, with any
fractional Share being repaid in cash);
(iv) consideration received
by the Company under a broker-assisted sale and remittance program
acceptable to the Administrator; or
(v) any combination of the
foregoing methods of payment.
2. Transferability .
The Option shall be transferable (I) at Awardee’s death,
by Awardee by will or pursuant to the laws of descent and
distribution, and (II) by Awardee during Awardee’s lifetime,
without payment of consideration, to (a) the spouse, former
spouse, parents, stepparents, grandparents, parents-in-law,
siblings, siblings-in-law, children, stepchildren, children-in-law,
grandchildren, nieces or nephews of Awardee, or any other persons
sharing Awardee’s household (other than tenants or employees)
(collectively, “Family Members”), (b) a trust or
trusts for the primary benefit of Awardee or such Family Members,
(c) a foundation in which Awardee or such Family Members
control the management of assets, or (d) a partnership in
which Awardee or such Family Members are the majority or
controlling partners; provided, however, that subsequent transfers
of the transferred Option shall be prohibited, except (X) if
the transferee is an individual, at the transferee’s death by
the transferee by will or pursuant to the laws of descent and
distribution, and (Y) without payment of consideration to the
individuals or entities listed in subparagraphs II(a), (b) or
(c), above, with respect to the original Awardee. The Administrator
may, in its discretion, permit transfers to other persons and
entities as permitted by the Plan. Neither a transfer under a
domestic relations order in settlement of marital property rights
nor a transfer to an entity in which more than 50% of the voting
interests are owned by Awardee or Family Members in exchange for an
interest in that entity shall be considered to be a transfer for
consideration. Within 10 days of any transfer, Awardee shall notify
the Compensation and Benefits department of the Company in writing
of the transfer. Following transfer, the Option shall continue to
be subject to the same terms and conditions as were applicable
immediately prior to transfer and, except as otherwise provided in
the Plan or this agreement, references to the original Awardee
shall be deemed to refer to the transferee. The events of a
Termination of Employment of Awardee provided in paragraph 3 hereof
shall continue to be applied with respect to the original Awardee,
following which the Option shall be exercisable by the transferee
only to the extent, and for the periods, specified in paragraph 3.
The Company shall have no obligation to notify any transferee of
Awardee’s Termination of Employment with the Cardinal Group
for any reason. The conduct prohibited of Awardee in paragraphs 5
and 6 hereof shall continue to be prohibited of Awardee following
transfer to the same extent as immediately prior to transfer and
the Option (or its economic value, as applicable) shall be subject
to forfeiture by the transferee and recoupment from Awardee to the
same extent as would have been the case of Awardee had the Option
not been transferred. Awardee shall remain subject to the
recoupment provisions of paragraphs 5 and 6 of this agreement and
tax withholding provisions of Section 29 of the Plan following
transfer of the Option.
3. Termination of
Employment .
(a) Termination of
Employment by Reason of Death or Disability . If a Termination
of Employment occurs by reason of death or Disability prior to the
vesting in full of the Option, but at least six (6) months
from the Grant Date, then any unvested portion of the Option shall
vest upon and become exercisable in full from and after such death
or Disability. The Option may thereafter be exercised by the
Awardee, any transferee of Awardee, if applicable, or by the legal
representative of the estate or by the legatee of Awardee under the
will of Awardee from the date of such death or Disability until the
Grant Expiration Date.
(b) Termination of
Employment by Reason of Retirement . If a Termination of
Employment occurs by reason of Retirement prior to the vesting in
full of the Option, but at least six (6) months from the Grant
Date, then a Ratable Portion of each installment of the Option that
would have vested on each future Vesting Date shall immediately
vest and become exercisable. Such Ratable Portion shall,
with
2
respect to the applicable installment,
be an amount equal to such installment of the Option scheduled to
vest on the applicable Vesting Date multiplied by a fraction, the
numerator of which shall be the number of days from the Grant Date
through the date of such termination, and the denominator of which
shall be the number of days from the Grant Date through such
Vesting Date. The Option, to the extent vested, may be exercised by
Awardee (or any transferee, if applicable) until the Grant
Expiration Date. If Awardee dies after Retirement, but before the
Grant Expiration Date, the Option, to the extent vested, may be
exercised by any transferee of the Option, if applicable, or by the
legal representative of the estate or by the legatee of Awardee
under the will of Awardee from and after such death until the Grant
Expiration 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 Company and its Affiliates
(a) after attaining age fifty-five (55), and (b) having
at least ten (10) years of continuous service with the Company
and its Affiliates, including service with an Affiliate of the
Company prior to the time that such Affiliate became an Affiliate
of the Company. 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.
(c) Other Termination of
Employment . If a Termination of Employment occurs by any
reason other than death, Retirement or Disability (each at least
six (6) months from Grant Date), any unexercised portion of
the Option which has not vested on such date of Termination of
Employment will automatically be forfeited. Subject to
Section 16(b)(ii) of the Plan, Awardee (or any transferee, if
applicable) will have 90 days from the date of Termination of
Employment or until the Grant Expiration Date, whichever period is
shorter, to exercise any portion of the Option that is vested and
exercisable on the date of Termination of Employment; provided,
however, that if the Termination of Employment was a Termination
for Cause, as determined by the Administrator, the Option may be
immediately canceled by the Administrator (whether then held by
Awardee or any transferee).
4. Restrictions on
Exercise . The Option is subject to all restrictions in this
agreement and/or in the Plan. As a condition of any exercise of the
Option, the Company may require Awardee or his or her transferee or
successor to make any representation and warranty to comply with
any applicable law or regulation or to confirm any factual matters
(including Awardee’s compliance with the terms of paragraphs
5 and 6 of this agreement or any employment or severance agreement
between the Cardinal Group and Awardee) reasonably requested by the
Company. The Option shall not be exercisable if such exercise would
involve a violation of any Applicable Law.
5. 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 th
|
