Exhibit
10.03
CARDINAL HEALTH,
INC.
DIRECTORS’ STOCK OPTION
AGREEMENT
UNDER THE
AMENDED AND
RESTATED
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 of $
(i.e., the equivalent of $
for each full Share). The Option has been granted pursuant to the
Cardinal Health, Inc. Amended and Restated Outside Directors Equity
Incentive Plan, as amended (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, unless
previously forfeited, shall vest and become exercisable on
, and shall expire on
. Notwithstanding the foregoing, in the event of a Change of
Control prior to Grantee’s termination of service on the
Company’s Board of Directors (the “Board”), the
Option shall vest in full.
§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.
§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.
§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 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
(50%) 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 of service on
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 5 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 of
service on the Board for any reason. The Grantee shall remain
subject to the recoupment provisions of Section 5 of this
agreement and tax withholding provisions of Section 10(d) of
the Plan following transfer of the Option.
§4. Termination of Service
on the Board .
(a) Termination of Service by
Death . If the Grantee ceases to be a member of the Board by
reason of death, any unvested portion of the Option shall vest upon
and become exercisable in full from and after such death. The
Option may thereafter be exercised by any transferee of Grantee, if
applicable, or by the legal representative of the estate or by the
legatee of Grantee under the will of Grantee until expiration of
the original term of the Option.
(b) Other Termination of
Service . If the Grantee ceases to be a member of the Board for
any reason other than death, any unexercised portion of the Option
which has not vested on such date of termination of service on the
Board will automatically terminate on the date of such termination
of service. Any unexercised portion of the Option which otherwise
is exercisable by the Grantee (or any transferee) shall remain
exercisable until expiration of the original term of the Option;
provided, however, that upon the discharge of the Grantee as a
Director of the Company for Cause (as defined below), the Option
(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.
§5. Special
Forfeiture/Repayment Rules . For so long as Grantee continues
as a Director of the Company and for three years following
Grantee’s termination of service on the Board,
Grantee
2
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 any transferee
resulting from the exercise of suc
