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Exhibit 10.07
DIRECTORS' STOCK OPTION AGREEMENT
UNDER THE
OUTSIDE DIRECTORS EQUITY INCENTIVE PLAN
Cardinal Health, Inc., an Ohio corporation (the "Company"),
has
granted to ____________ (the "Grantee"), an option (the
"Option") to purchase
_______ Common Shares, without par value (the "Shares"), of the
Company for a
total purchase price (the "Option Price") of $________ (i.e.,
the equivalent of
$____ for each full Share). The Option has been granted pursuant
to the Cardinal
Health, Inc. Outside Directors Equity Incentive Plan (the
"Plan") and shall
include and be subject to all provisions of the Plan, which are
hereby
incorporated herein by reference, and shall be subject to the
following
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. This option shall be exercisable at any time on or
after ____________,
20__ and prior to ____________, 20__.
Section 1. Method of Exercise. At any time when the Option
is
exercisable under the Plan, the Option shall be exercisable from
time to time by
written notice to the Company (the date such notice is received
by the Company,
the "Exercise Date") which shall:
(a) state that the Option is thereby being exercised, the
number of Shares with respect to which the Option is
being exercised, each person in whose name any
certificates for the Shares should be registered and his
or her address and social security number;
(b) be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by
anyone other than the Grantee, 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; and
(c) contain such representations, warranties and agreements
with respect to the investment intent of such person or
persons in form and substance satisfactory to counsel
for the Company.
Section 2. Payment of Exercise Price. The full exercise price
for
the Option shall be paid to the Company: (i) in cash, (ii) by
delivery of Shares
with a fair market value equal to the total exercise price at
the time of
exercise, (iii) by attestation of ownership of such
already-owned Shares, (iv)
by delivery of cash on the extension of credit by a
broker-dealer to whom the
Grantee (or other person authorized to exercise the Option) has
submitted a
notice of exercise or an irrevocable election to effect such
extension of
credit, or (v) by a combination of the preceding methods. Any
Shares delivered
or attested to in payment of an exercise price shall be valued
as of the
Exercise Date.
Section 3. Transferability. The Option shall be transferable (I)
at
the Grantee's death, by the Grantee by will or pursuant to the
laws of descent
and distribution, and (II) by the Grantee during the Grantee'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 the Grantee,
or any other persons sharing the Grantee's household (other than
tenants or
employees) (collectively, "Family Members"), (b) a trust or
trusts for
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the primary benefit of the Grantee or such Family Members, (c) a
foundation in
which the Grantee or such Family Members control the management
of assets, or
(d) a partnership in which the Grantee 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 Subsections II(a), (b),
or (c), above,
with respect to the original Grantee. The Committee 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 fifty
percent of the
voting interests are owned by the Grantee or Family Members in
exchange for an
interest in that entity shall be considered to be a transfer for
consideration.
Within ten days of any transfer, the Grantee shall notify the
Stock Option
Administrator 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 Grantee
shall be deemed
to refer to the transferee. The events of Grantee's termination
from the Board
of Directors of the Company (the "Board") provided in Section 4
hereof shall
continue to be applied with respect to the original Grantee,
following which the
Option shall be exercisable by the transferee only to the
extent, and for the
periods, specified in Section 4. The conduct prohibited of
Grantee in Section 6
hereof shall continue to be prohibited of Grantee 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 the Grantee to the same extent as would have been the case
of the Grantee
had the Option not been transferred. The Company shall have no
obligation to
notify any transferee of the Option of the Grantee's termination
as a member of
the Board for any reason. The Grantee shall remain subject to
the recoupment
provisions of Section 6 of this agreement and tax withholding
provisions of
Section 9(d) of the Plan following transfer of the Option.
Section 4. Termination of Relationship. If a Grantee ceases to
be a
member of the Board for any reason other than for Cause (as
defined in Section 5
below), then all Options or any unexercised portion of such
Options which
otherwise are exercisable by such Grantee (or any transferee)
shall remain
exercisable until expiration of the original term of such
Option.
Section 5. Termination for Cause. Notwithstanding any provision
to
the contrary in the Plan or in this agreement, upon the
discharge of the Grantee
as a director of the Company for Cause (as defined below), all
unexercised
Options awarded to such Grantee (whether then held by Grantee or
any transferee)
shall immediately lapse and be of no further force or effect.
For purposes of
this agreement, "Cause" means on account of any act of fraud or
intentional
misrepresentation or embezzlement, misappropriation or
conversion of assets of
the Company or any subsidiary, or the intentional and repeated
violation of the
written policies or procedures of the Company.
Section 6. Special Forfeiture/Repayment Rules. For so long
as
Grantee continues as a Director of the Company and for three
years following
Grantee's termination as a Director of the Company, Grantee
agrees not to engage
in Triggering Conduct. If Grantee engages in Triggering Conduct
during the time
period set forth in the preceding sentence or in Competitor
Triggering Conduct
during the time period set forth in the definition of such
conduct below, then:
(a) the Option (or any part thereof that has not been exercised)
shall
immediately and automatically terminate, be forfeited, and shall
cease to be
exercisable at any time; and (b) the Grantee shall, within 30
days following
written notice from the Company, pay to the Company an amount
equal to the gross
option gain realized or obtained by the Grantee or
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