Exhibit 10.4

 
CARDINAL HEALTH, INC.
DIRECTORS’ RESTRICTED SHARE UNITS AGREEMENT

This Restricted Share Units 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 [Director name]
(“Awardee”), [# of Shares] Stock Units (the “Restricted Share Units” or
“Award”), representing an unfunded unsecured promise of the Company to deliver
common shares, without par value, of the Company (the “Shares”) to Awardee as
set forth in this Agreement. The Restricted Share Units have been granted
pursuant to the Amended Cardinal Health, Inc. 2011 Long-Term Incentive Plan (the
“Plan”), and are subject to all provisions of the Plan, which are incorporated
in this Agreement by reference, and are subject to the provisions of this
Agreement. Capitalized terms used in this Agreement which are not specifically
defined have the meanings ascribed to such terms in the Plan.
1.Vesting of Restricted Share Units. The Restricted Share Units vest on [vesting
date(s)] (the “Vesting Date”), subject to the provisions of this Agreement,
including those relating to Awardee’s continued service on the Board. In the
event of a Change of Control, the Restricted Share Units (to the extent not
previously vested or forfeited) vest in full, except to the extent that (a)
Awardee is asked to continue to serve on the Board or to serve as a member of
the board of directors (or similar governing body) of the Company’s successor in
the Change of Control or another entity that is affiliated with the Company or
its successor following the Change of Control; and (b) a Replacement Award is
offered to Awardee in accordance with Section 16(b) of the Plan.

2.Transferability. The Restricted Share Units are not transferable.

3.Termination of Service on the Board. If Awardee ceases to be a member of the
Board prior to the vesting of the Restricted Share Units for any reason other
than Awardee’s death, all of the then unvested Restricted Share Units shall be
forfeited by Awardee immediately after Awardee ceases to be a member of the
Board. If Awardee ceases to be a member of the Board prior to the vesting or
forfeiture of the Restricted Share Units by reason of Awardee’s death, then such
Restricted Share Units vest in full and are not forfeited.

4.Special Forfeiture and Repayment Rules. This Agreement contains special
forfeiture and repayment rules intended to encourage conduct that protects the
legitimate business assets of the Company and its Affiliates (collectively, the
“Cardinal Group”) and discourage conduct that threatens or harms those assets.
The Company does not intend to have the benefits of this Agreement reward or
subsidize conduct detrimental to the Company, and therefore will require the
forfeiture of the benefits offered under this Agreement and the repayment of
gains obtained from this Agreement, according to the rules specified below.
Activities that trigger the forfeiture and repayment rules are divided into two
categories: Misconduct and Competitor Conduct.

(a)Misconduct. During service on the Board and for three years after Awardee’s
termination of service on the Board for any reason, Awardee agrees not to engage
in Misconduct. If Awardee engages in Misconduct during service on the Board or
within three years after Awardee’s termination of service on the Board for any
reason, then

(i)Awardee immediately forfeits the Restricted Share Units that have not yet
vested or that vested at any time within three years prior to the date the
Misconduct first occurred and have not yet been paid pursuant to Paragraph 5,
and those forfeited Restricted Share Units automatically terminate, and

(ii)Awardee shall, within 30 days following written notice from the Company, pay
to the Company in cash an amount equal to (A) the gross gain to Awardee
resulting from the payment of Restricted Share Units pursuant to Paragraph 5
that had vested at any time within three years prior to the date the Misconduct
first occurred less (B) $1.00. The gross gain is the Fair Market Value of the
Shares represented by the Restricted Share Units on the date of receipt.

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As used in this Agreement, “Misconduct” means
(A)disclosing or using any of the Cardinal Group’s confidential information (as
defined by the applicable Cardinal Group policies and agreements) without proper
authorization from the Cardinal Group or in any capacity other than as necessary
for the performance of Awardee’s duties as a Director of the Company;

(B)violation of the Standards of Business Conduct or any successor code of
conduct or other applicable Cardinal Group policies, including but not limited
to conduct which would constitute a breach of any representation or certificate
of compliance signed by Awardee;

(C)fraud, gross negligence or willful misconduct by Awardee, including but not
limited to fraud, gross negligence or willful misconduct causing or contributing
to a material error resulting in a restatement of the financial statements of
any member of the Cardinal Group;

(D)directly or indirectly soliciting or recruiting for employment or contract
work on behalf of a person or entity other than a member of the Cardinal Group,
any person who is an employee, representative, officer or director in the
Cardinal Group or who held one or more of those positions at any time within the
12 months prior to Awardee’s termination of service on the Board;

(E)directly or indirectly inducing, encouraging or causing an employee of the
Cardinal Group to terminate his/her employment or a contract worker to terminate
his/her contract with a member of the Cardinal Group;

(F)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, prospective
customers, vendors, suppliers or employees known to Awardee; or

(G)breaching any provision of any agreement with a member of the Cardinal Group.

Nothing in this Agreement will prevent Awardee from testifying truthfully as
required by law, prohibit or prevent Awardee from filing a charge with or
participating, testifying or assisting in any investigation, hearing,
whistleblower proceeding or other proceeding before any federal, state or local
government agency (e.g., Equal Employment Opportunity Commission, National Labor
Relations Board, Securities and Exchange Commission, etc.), or prevent Awardee
from disclosing Cardinal Group’s confidential information in confidence to a
federal, state or local government official for the purpose of reporting or
investigating a suspected violation of law.
(b)Competitor Conduct. If Awardee engages in Competitor Conduct during service
on the Board or within one year after Awardee’s termination of service on the
Board for any reason, then

(i)Awardee immediately forfeits the Restricted Share Units that have not yet
vested or that vested at any time within one year prior to the date the
Competitor Conduct first occurred and have not yet been paid pursuant to
Paragraph 5, and those forfeited Restricted Share Units automatically terminate,
and

(ii)Awardee shall, within 30 days following written notice from the Company, pay
to the Company in cash an amount equal to (A) the gross gain to Awardee
resulting from the payment of Restricted Share Units pursuant to Paragraph 5
that had vested at any time since the earlier of one year prior to the date the
Competitor Conduct first occurred or one year prior to Awardee’s termination of
service on the Board, if applicable, less (B) $1.00. The gross gain is the Fair
Market Value of the Shares represented by the Restricted Share Units on the date
of receipt.

As used in this Agreement, “Competitor Conduct” means accepting employment with,
or directly or indirectly providing services to, a Competitor in the United
States. A “Competitor” means any person or business that

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competes with the products or services provided by a member of the Cardinal
Group or about which Awardee obtained confidential information (as defined by
the applicable Cardinal Group policies or agreements). For purposes of this
Agreement, the nature and extent of Awardee’s activities, if any, disclosed to
and reviewed by the Audit or Nominating and Governance Committees of the Board
(each, a “Specified Committee”) prior to the date of Awardee’s termination of
service on the Board will not be deemed to be Competitor Conduct unless
specified to the contrary by the Specified Committee in a written notice given
to Awardee within 90 days after the Specified Committee is notified in writing
of such activities.
(c)General.

(i)Nothing in this Paragraph 4 constitutes or is to be construed as a
“noncompete” covenant or other restraint on employment or trade. The execution
of this Agreement is voluntary. Awardee is free to choose to comply with the
terms of this Agreement and receive the benefits offered or else reject this
Agreement with no adverse consequences to Awardee’s service on the Board.

(ii)Awardee agrees to provide the Company with at least 10 days written notice
prior to accepting employment with or providing services to a Competitor within
one year after Awardee’s termination of service on the Board.

(iii)Awardee acknowledges receiving sufficient consideration for the
requirements of this Paragraph 4, including Awardee’s receipt of the Restricted
Share Units. Awardee further acknowledges that the Company would not provide the
Restricted Share Units to Awardee without Awardee’s promise to abide by the
terms of this Paragraph 4. The parties also acknowledge that the provisions
contained in this Paragraph 4 are ancillary to, or part of, an otherwise
enforceable agreement at the time this Agreement is made.

(iv)Awardee may be released from the obligations of this Paragraph 4 if and only
if the Administrator determines, in writing and in the Administrator’s sole
discretion, that a release is in the best interests of the Company.

5.Payment.

(a)General. Subject to the provisions of Paragraph 4 and Paragraphs 5(b), (c)
and (d) below, Awardee is entitled to receive from the Company (without any
payment by or on behalf of Awardee) the Shares represented by the vested
Restricted Share Units on the Vesting Date.

(b)Death. To the extent that Restricted Share Units are vested on the date of
Awardee’s death, Awardee is entitled to receive the corresponding Shares from
the Company on the date of death.

(c)Change of Control. To the extent that Restricted Share Units are vested on
the date of a Change of Control, Awardee is entitled to receive the
corresponding Shares from the Company on the date of the Change of Control;
provided, however, that if such Change of Control would not qualify as a
permissible date of distribution under Section 409A(a)(2)(A)(v) of the Code and
the regulations thereunder, and where Section 409A of the Code applies to such
distribution as a deferral of compensation, Awardee is entitled to receive the
corresponding Shares from the Company on the date that would have otherwise
applied pursuant to Paragraphs 5(a) or (b).

(d)Elections to Defer Receipt. Elections to defer receipt of the Shares beyond
the date of payment provided in this Agreement may be permitted in the
discretion of the Administrator pursuant to procedures established by the
Administrator in compliance with the requirements of Section 409A of the Code.

6.Dividend Equivalents. Awardee is not entitled to receive cash dividends on the
Restricted Share Units, but will receive a dividend equivalent payment from the
Company in an amount equal to the dividends that would have been paid on each
Share underlying the Restricted Share Units if it had been outstanding between
the

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Grant Date and the payment date of any such Share (i.e., based on the record
date for cash dividends). Subject to an election to defer receipt as permitted
under Paragraph 5(d), the Company shall pay dividend equivalent payments in cash
as soon as reasonably practicable after the payment date of the Restricted Share
Units to which such dividend equivalents relate.

7.Right of Set-Off. By accepting the Restricted Share Units, Awardee consents to
a deduction from, and set-off against, any amounts owed to Awardee that are not
treated as “non-qualified deferred compensation” under Section 409A of the Code
by any member of the Cardinal Group from time to time (including, but not
limited to, amounts owed to Awardee as Director annual retainer fees, meeting
fees or other fringe benefits) to the extent of the amounts owed to the Company
by Awardee under this Agreement.

8.No Shareholder Rights. Awardee has no rights of a shareholder with respect to
the Restricted Share Units, including no right to vote the Shares represented by
the Restricted Share Units until such Shares vest and are paid to Awardee.

9.Governing Law/Venue for Dispute Resolution/Costs and Legal Fees. This
Agreement is 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. The parties agree and acknowledge that the laws of
the State of Ohio bear a substantial relationship to the parties and/or this
Agreement and that the Restricted Share Units and benefits granted in this
Agreement would not be granted without the governance of this Agreement by the
laws of the State of Ohio. In addition, all legal actions or proceedings
relating to this Agreement must be brought exclusively in state or federal
courts located in Franklin County, Ohio and the parties executing this Agreement
hereby consent to the personal jurisdiction of such courts. Awardee acknowledges
that the covenants contained in Paragraph 4 are reasonable in nature, are
fundamental for the protection of the Company’s legitimate business and
proprietary interests, and do not adversely affect Awardee’s ability to earn a
living. In the event that it becomes necessary for the Company to institute
legal proceedings under this Agreement, Awardee is responsible to the Company
for all costs and reasonable legal fees incurred by the Company in connection
with the proceedings. Any provision of this Agreement which is determined by a
court of competent jurisdiction to be invalid or unenforceable or to disqualify
the Award under any Applicable Law should be construed or limited in a manner
that is valid and enforceable and that comes closest to the business objectives
intended by the provision, without invalidating or rendering unenforceable the
remaining provisions of this Agreement.

10.Defend Trade Secrets Act Notice. Under the federal Defend Trade Secrets Act
of 2016, Awardee will not be held criminally or civilly liable under any federal
or state trade secret law for the disclosure of a trade secret that: (a) is made
(i) in confidence to a federal, state, or local government official, either
directly or indirectly, or to an attorney; and (ii) solely for the purpose of
reporting or investigating a suspected violation of law; or (b) is made to
Awardee’s attorney in relation to a lawsuit for retaliation against Awardee for
reporting a suspected violation of law; or (c) is made in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is made under
seal.

11.Action by the Administrator. The parties agree that the interpretation of
this Agreement rests exclusively and completely within the sole discretion of
the Administrator. The parties agree to be bound by the decisions of the
Administrator with regard to the interpretation of this Agreement and with
regard to any and all matters set forth in this Agreement. In fulfilling its
responsibilities hereunder, the Administrator may rely upon documents, written
statements of the parties, financial reports or other material as the
Administrator deems appropriate. The parties agree that there is no right to be
heard or to appear before the Administrator and that any decision of the
Administrator relating to this Agreement, including whether particular conduct
constitutes Misconduct or Competitor Conduct, is final and binding.

12.Electronic Delivery and Consent to Electronic Participation. The Company may,
in its sole discretion, decide to deliver any documents related to the
Restricted Share Unit grant under and participation in the Plan or future
Restricted Share Units that may be granted under the Plan by electronic means or
to request Awardee’s consent to participate in the Plan by electronic means.
Awardee hereby consents to receive such

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documents by electronic delivery and to participate in the Plan through an
on-line or electronic system established and maintained by the Company or
another third party designated by the Company, including the acceptance of
restricted share unit grants and the execution of restricted share unit
agreements through electronic signature.

13.Notices. All notices, requests, consents and other communications required or
provided under this Agreement to be delivered by Awardee to the Company will be
in writing and will be deemed sufficient if delivered by hand, nationally
recognized overnight courier, or certified or registered mail, return receipt
requested, postage prepaid, and will be effective upon delivery to the Company
at the address set forth below:

Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
Attention: Deputy General Counsel

All notices, requests, consents and other communications required or provided
under this Agreement to be delivered by the Company to Awardee may be delivered
by e-mail or in writing and will be deemed sufficient if delivered by e-mail,
hand, facsimile, nationally recognized overnight courier, or certified or
registered mail, return receipt requested, postage prepaid, and will be
effective upon delivery to Awardee.
14.Amendment. Any amendment to the Plan is deemed to be an amendment to this
Agreement to the extent that the amendment is applicable hereto; provided,
however, that no amendment may impair the rights of Awardee with respect to an
outstanding Restricted Share Unit unless agreed to by Awardee and the Company,
which agreement must be in writing and signed by Awardee and the Company. Other
than following a Change of Control, no such agreement is required if the
Administrator determines in its sole discretion that such amendment either (a)
is required or advisable in order for the Company, the Plan or the Restricted
Share Units to satisfy any Applicable Law or to meet the requirements of any
accounting standard or (b) is not reasonably likely to significantly diminish
the benefits provided under the Restricted Share Units, or that any such
diminishment has been adequately compensated, including pursuant to Section
16(c) of the Plan.

15.Adjustments. The number of Shares issuable for each Restricted Share Unit and
the other terms and conditions of the Award evidenced by this Agreement are
subject to adjustment as provided in Section 16 of the Plan.

16.Compliance with Section 409A of the Code. To the extent applicable, it is
intended that this Agreement comply with the provisions of Section 409A of the
Code. This Agreement shall be administered in a manner consistent with this
intent, and any provision that would cause this Agreement or the Plan to fail to
satisfy Section 409A of the Code shall have no force or effect until amended to
comply with Section 409A of the Code (which amendment may be retroactive to the
extent permitted by Section 409A of the Code and may be made by the Company
without the consent of Awardee).

17.No Right to Future Awards or Board Membership. The grant of the Restricted
Share Units under this Agreement to Awardee is a voluntary, discretionary award
being made on a one-time basis and it does not constitute a commitment to make
any future awards. Nothing contained in this Agreement shall confer upon Awardee
any right to continued service as a member of the Board.

18.Successors and Assigns. Without limiting Paragraph 2, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of Awardee, and the
successors and assigns of the Company.
CARDINAL HEALTH, INC.
 
 
By:
 
Its:
 

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ACCEPTANCE OF AGREEMENT
Awardee hereby: (a) acknowledges that he or she has received a copy of the Plan,
a copy of the Company’s most recent annual report to shareholders and other
communications routinely distributed to the Company’s shareholders, and a copy
of the Plan Description pertaining to the Plan; (b) accepts this Agreement and
the Restricted Share Units granted to him or her under this Agreement subject to
all provisions of the Plan and this Agreement, including the provisions in the
Agreement regarding “Special Forfeiture and Repayment Rules” set forth in
Paragraph 4; (c) represents that he or she understands that the acceptance of
this Agreement through an on-line or electronic system, if applicable, carries
the same legal significance as if he or she manually signed the Agreement; and
(d) agrees that no transfer of the Shares delivered in respect of the Restricted
Share Units may be made unless the Shares have been duly registered under all
applicable Federal and state securities laws pursuant to a then-effective
registration which contemplates the proposed transfer or unless the Company has
received a written opinion of, or satisfactory to, its legal counsel that the
proposed transfer is exempt from such registration.

                                                                       
Awardee’s Signature

                                                                       
Date