Exhibit 10.01
EMPLOYMENT AGREEMENT
     This EMPLOYMENT AGREEMENT by and between Cardinal Health, Inc., an Ohio
corporation (the “Company”) and R. Kerry Clark (the “Executive”) is dated as of
the 17th day of April, 2006 (the “Agreement”).
     IT IS HEREBY AGREED AS FOLLOWS:
     1. Effective Date. The “Effective Date” shall mean the date hereof.
     2. Employment Period. The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to serve the Company, subject to the terms and
conditions of this Agreement, for the period commencing on the Effective Date
and ending on June 30, 2009, unless prior to such date the employment of the
Executive is terminated pursuant to this Agreement (the “Employment Period”).
     3. Terms of Employment. (a) Position and Duties. (i) (A) During the
Employment Period, the Executive shall serve as President and Chief Executive
Officer of the Company with such authority, duties and responsibilities as are
customarily assigned to such position. The Executive shall report directly to
the Board of Directors of the Company (the “Board”). The Executive shall serve
on the Board, and prior to the end of the Employment Period shall be named
Chairman of the Board; and (B) the Executive’s services shall be performed in
Dublin, Ohio.
          (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote his full business attention and time to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement for the
Executive to (A) continue to serve on the board of directors of Textron, Inc.
and, subject to the approval of the Board, serve on other corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not materially interfere with the
performance of the Executive’s responsibilities as an employee of the Company in
accordance with this Agreement.
          (iii) No later than August 31, 2007, the Executive shall establish and
maintain his primary residence in the Dublin, Ohio area and will relocate his
family and possessions to such primary residence.
          (b) Compensation (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary (“Annual Base Salary”) at a rate
of not less than $1,400,000 payable in accordance with the Company’s normal
payroll policies. The Executive’s Annual Base Salary shall be reviewed, and may
be increased but not decreased, at least annually

 

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by the Board pursuant to its normal performance review policies for senior
executives. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased.
          (ii) Annual Bonus. With respect to each fiscal year ending during the
Employment Period, the Executive shall be eligible to receive an annual bonus
(“Annual Bonus”) determined and paid at the sole discretion of the Company
pursuant to terms and conditions of the Company bonus plan for which Executive
is then eligible. Executive’s Annual Bonus target under this Agreement shall be
equal to not less than 160% of the Executive’s Annual Base Salary (the
“Reference Bonus”). The actual Annual Bonus, which could be higher or lower than
the Reference Bonus, shall be based on the attainment of performance objectives
as determined no later than 90 days after the beginning of the fiscal year by
the Human Resources and Compensation Committee of the Board (the “Committee”) in
consultation with the Executive, and shall be paid, subject to any effective
deferral elections that may be made by the Executive pursuant to any deferred
compensation plans that the Company may maintain, within two and a half months
following the end of the fiscal year for which the Annual Bonus is earned.
Notwithstanding the foregoing, for the period from the Effective Date through
June 30, 2006, the Executive shall receive a bonus equal to the product of (x)
$2,240,000 and (y) a fraction, the numerator of which is the number of days from
the Effective Date until June 30, 2006, and the denominator of which is 365. For
fiscal year 2007, the Executive’s Annual Bonus shall be no less than $1,120,000.
          (iii) Equity-Based Grants and Long-Term Incentives. On the Effective
Date, the Company shall grant the Executive 110,600 restricted stock units (the
“Initial RSUs”) and 665,000 Company stock options (the “Initial Options”) with a
strike price of $70, all in accordance with the terms of the Company’s Restated
and Amended Equity Incentive Plan (the “LTIP”). For each fiscal year thereafter,
commencing with the August 2007 award Executive shall receive a target long-term
incentive award of 600% of his Annual Base Salary in accordance with the terms
of the LTIP. The Executive shall also be eligible to participate in the
Company’s Long-Term Incentive Cash Plan.
          (iv) Other Employee Benefit Plans. During the Employment Period, the
Executive and/or the Executive’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under savings and retirement
plans that are tax-qualified under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the “Code”), in plans that are supplemental to any such
tax-qualified plans, and welfare benefit plans, practices, policies and programs
provided by the Company, but not any severance plan, practice, policy or
program, on a basis that is no less favorable than those generally applicable or
made available to other senior executives of the Company. The Executive shall be
eligible for participation in fringe benefits and perquisite plans, practices,
policies and programs (including, without limitation, expense reimbursement
plans, practices, policies and programs) on a basis that is commensurate with
his position and no less favorable than those generally applicable or made
available to other most senior executives of the Company.

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          (v) Expenses. The Company shall reimburse the Executive on an
after-tax basis for all reasonable expenses incurred in connection with the
relocation of his primary residence to Dublin, Ohio, and his temporary living
expenses prior to such relocation, and the negotiation of this Agreement. During
the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all expenses incurred by the Executive in accordance with the
Company’s policies for its senior executives.
          (vi) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the plans, policies, programs and
practices of the Company as in effect with respect to the senior executives of
the Company.
     4. Termination of Employment. (a) Death or Disability. The Executive’s
employment shall terminate automatically upon the Executive’s death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may provide the Executive with
written notice in accordance with Section 10(b) of this Agreement of its
intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall mean the absence of the Executive
from the Executive’s duties with the Company on a full-time basis for 120
consecutive days or longer (or an aggregate period of 180 days or longer) as a
result of incapacity due to mental or physical illness[ which is determined to
be total and permanent by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal representative].
     (b) Cause. The Company may terminate the Executive’s employment during the
Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:
          (i) the willful and continued failure of the Executive to perform
substantially the Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board or its representative, which specifically identifies the
manner in which the Board believes that the Executive has not substantially
performed the Executive’s duties, or
          (ii) the willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company or its
affiliates, or
          (iii) conviction of a felony or any crime involving dishonesty or
moral turpitude or guilty or nolo contendere plea by the Executive with respect
thereto; or
          (iv) a material breach of Section 8 of this Agreement.
For purposes of this provision, no act or failure to act on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s act or omission was in the best interests of the

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Company. Any act, or failure to act, based upon express authority given pursuant
to a resolution duly adopted by the Board with respect to such act or omission
or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board (not including the executive) at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i), (ii), or (iv) above, and
specifying the particulars thereof in detail.
     (c) Good Reason. The Executive’s employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean in the absence of a written consent of the Executive:
          (i) the assignment to the Executive of any duties materially
inconsistent in any respect with the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3(a) of this Agreement, or any other
action by the Company which results in a material diminution in such position,
authority, duties or responsibilities, excluding for this purpose any action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
          (ii) any failure by the Company to comply with any of the provisions
of Section 3(b) of this Agreement, other than a failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
          (iii) the Company requiring the Executive to be based at any office or
location more than 35 miles from that provided in Section 3(a)(i)(B) hereof,
provided that reasonable travel required in connection with Executive’s
reporting relationships and responsibilities to the Board shall not be deemed a
breach hereof;
          (iv) any purported termination by the Company of the Executive’s
employment otherwise than as expressly permitted by this agreement;
          (v) any failure by the Company to comply with Section 9(c) of this
Agreement; or
          (vi) the failure of the Company to appoint the Executive Chairman of
the Board on or before June 30, 2008.
     (d) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 10(b) of this Agreement.
For purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific

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termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than 30 days after the giving of such notice). The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.
     (e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive with or
without Good Reason, the date of receipt of the Notice of Termination or any
later date specified therein within 30 days of such notice, as the case may be,
(ii) if the Executive’s employment is terminated by the Company other than for
Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive’s
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
     (f) Resignation. Upon termination of the Executive’s employment for any
reason, the Executive agrees to resign, as of the Date of Termination, to the
extent applicable, from any positions that the Executive holds with the Company
and its affiliated companies, the Board (and any committees thereof) and the
Board of Directors (and any committees thereof) of any of the affiliated
companies.
     5. Obligations of the Company upon Termination. (a) Good Reason; Other Than
for Cause, Death or Disability. If, during the Employment Period, the Company
shall terminate the Executive’s employment other than for Cause, death or
Disability or the Executive shall terminate employment for Good Reason:
          (i) subject to the execution by the Executive and the Company of a
mutual release of claims in favor of the Company, the Company shall pay to the
Executive in a lump sum in cash within 30 days after the Date of Termination the
aggregate of the following amounts:
   A. the sum of (1) the Executive’s accrued Annual Base Salary and any accrued
vacation pay through the Date of Termination, (2) the Executive’s business
expenses that have not been reimbursed by the Company as of the Date of
Termination that were incurred by the Executive prior to the Date of Termination
in accordance with the applicable Company policy, and (3) the Executive’s Annual
Bonus earned for the fiscal year immediately preceding the fiscal year in which
the Date of Termination occurs if such bonus has not been paid as of the Date of
Termination (the sum of the amounts described in clauses (1) through (3), shall
be hereinafter referred to as the “Accrued Obligations”); and

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   B. the product of (1) the Reference Bonus, and (2) a fraction, the numerator
of which is the number of days from July 1 in the fiscal year in which the Date
of Termination occurs through the Date of Termination, and the denominator of
which is 365 (the “Pro Rata Bonus”); and
          (ii) the Company shall pay to the Executive in 24 equal monthly
installments, the amount equal to the product of (1) a fraction, the numerator
of which is the number of days from the Date of Termination until June 30, 2009
and the denominator of which is 365, and (2) the sum of (x) the Executive’s
Annual Base Salary and (y) the Reference Bonus; provided that such amount shall
not be less than 1.5 times the sum of the Annual Base Salary and the Reference
Bonus; and
          (iii) the Initial RSUs and the Initial Stock Options shall vest and
become immediately exercisable, as the case may be and all vested stock options
held by the Executive shall be exercisable for the remainder of their term,
without regard to any provisions relating to earlier termination of the stock
options based on termination of employment (the “Equity Benefits”); and
          (iv) until June 30, 2009, the Company shall continue to provide
medical and dental benefits to the Executive and his eligible dependents as if
the Executive remained an active employee of the Company (collectively “Welfare
Benefits”); and
          (v) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies through the Date of Termination (such other amounts and
benefits shall be hereinafter referred to as the “Other Benefits”). As used in
this Agreement, the term “affiliated companies” shall include any company
controlled by, controlling or under common control with the Company.
Notwithstanding the foregoing provisions of this Section 5(a), to the extent
required in order to comply with Section 409A of the Code, cash amounts that
would otherwise be payable under this Section 5(a) during the six-month period
immediately following the Date of Termination shall instead be paid, with
interest on any delayed payment at the applicable federal rate provided for in
Section 7872(f)(2)(A) of the Code (“Interest”), on the first business day after
the date that is six months following the Executive’s “separation from service”
within the meaning of Section 409A.
     (b) Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive’s legal representatives under this
Agreement, other than for (i) payment of Accrued Obligations, (ii) the timely
payment or provision of Other Benefits, (iii) payment of the Pro Rata Bonus,
(iv) the Welfare Benefits and (v) the Equity Benefits. Accrued Obligations shall
be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum
in cash within 30 days of the Date of Termination and the Pro Rata Bonus shall
be paid to the Executive’s estate or beneficiary, as applicable, on the date
specified in Section 5(a)(i). With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 5(b)

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shall include death benefits for which the Company pays as in effect on the date
of the Executive’s death and the continued provision of the Welfare Benefits.
The applicable period of health benefit continuation under COBRA shall begin on
the Date of Termination. In the event of the Executive’s death after his
termination of employment, but prior to the receipt of all amounts to which he
is entitled under this Agreement, all remaining amounts to which he is entitled
shall be paid to his estate or beneficiary, as applicable.
     (c) Disability. If the Executive’s employment is terminated by the Company
by reason of the Executive’s Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for (i) payment of Accrued Obligations, (ii) the timely payment or
provision of Other Benefits, (iii) payment of the Pro Rata Bonus, (iv) the
Welfare Benefits and (v) the Equity Benefits, provided, that to the extent
required in order to comply with Section 409A of the Code, amounts and benefits
to be paid or provided under this Section 5(c) shall be paid, with Interest, or
provided to the Executive on the first business day after the date that is six
months following the Executive’s “separation from service” within the meaning of
Section 409A. Accrued Obligations shall be paid to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of
Termination and the Pro Rata Bonus shall be paid to the Executive’s estate or
beneficiary, as applicable, on the date specified in Section 5(a)(i). With
respect to the provision of Other Benefits, the term Other Benefits as utilized
in this Section 5(c) shall include, and the Executive shall be entitled after
the Disability Effective Date to receive, disability and the continued provision
of Welfare Benefits. The applicable period of health benefit continuation under
COBRA shall begin on the Date of Termination.
     (d) Cause; Other than for Good Reason. If the Executive’s employment shall
be terminated by the Company for Cause or the Executive terminates his
employment without Good Reason during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive (i) the Accrued Obligations through the Date
of Termination and (ii) Other Benefits, in each case to the extent theretofore
unpaid. Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination, provided, that to the extent required
in order to comply with Section 409A of the Code, amounts and benefits to be
paid or provided under this sentence of Section 5(d) shall be paid, with
Interest, or provided to the Executive on the first business day after the date
that is six months following the Executive’s “separation from service” within
the meaning of Section 409A.
     6. Full Settlement. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and, such amounts shall
not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any contest by
either party (including, as the case may be, the Company, any of its affiliates
or their respective predecessors, successors or assigns, or the Executive, his
estate, beneficiaries or their respective successors and assigns) of the
validity or

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enforceability of, or liability under, any provision of this Agreement
(including as a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement); plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code, if the Executive prevails on any material claim made by him, and
disputed by the Company under the terms of this Agreement.
     7. Certain Additional Payments by the Company. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Company or any of its affiliates to or
for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 7) (a “Payment”) would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or
any interest or penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding
any income taxes and penalties imposed pursuant to Section 409A, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
     (b) Subject to the provisions of Section 7(c), all determinations required
to be made under this Section 7, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young LLC
or such other nationally recognized certified public accounting firm reasonably
acceptable to the Executive as may be designated by the Company (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested by
the Company. All fees and expenses of the Accounting Firm shall be borne solely
by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7,
shall be paid by the Company to the Executive or directly to the Internal
Revenue Service, in the sole discretion of the Company, within five days of the
later of (i) the due date for the payment of any Excise Tax, and (ii) the
receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 7(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

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     (c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:
          (i) give the Company any information reasonably requested by the
Company relating to such claim,
          (ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
          (iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
          (iv) permit the Company to participate in any proceedings relating to
such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 7(c), the Company shall control all proceedings taken in connection
with such contest, and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either pay the
tax claimed to the appropriate taxing authority on behalf of the Executive and
direct the Executive to sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided, however,
that, if the Company pays such claim and directs the Executive to sue for a
refund, the Company shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such payment or with
respect to any imputed income in connection with such payment; and provided,
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues
with respect to which the Gross-Up Payment would be payable hereunder, and the
Executive shall be entitled to

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settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
     (d) If, after the receipt by the Executive of a payment by the Company of
an amount on the Executive’s behalf pursuant to Section 7(c), the Executive
becomes entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Company’s complying with the requirements of Section 7(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon and after taxes applicable thereto). If, after
payment by the Company of an amount on the Executive’s behalf pursuant to
Section 7(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then the amount of such payment
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
     8. Covenants. (a) Introduction. The parties acknowledge that the provisions
and covenants contained in this Section 8 are ancillary and material to this
Agreement and that the limitations contained herein are reasonable in geographic
and temporal scope and do not impose a greater restriction or restraint than is
necessary to protect the goodwill and other legitimate business interests of the
Company. The parties also acknowledge and agree that the provisions of this
Section 8 do not adversely affect the Executive’s ability to earn a living in
any capacity that does not violate the covenants contained herein. The parties
further acknowledge and agree that the provisions of Section 10(a) below are
accurate and necessary because (i) this Agreement is entered into in the State
of Ohio, (ii) Ohio has a substantial relationship to the parties and to this
transaction, (iii) Ohio is the headquarters state of the Company, which has
operations nationwide and has a compelling interest in having its employees
treated uniformly within the United States, (iv) the use of Ohio law provides
certainty to the parties in any covenant litigation in the United States, and
(v) enforcement of the provision of this Section 8 would not violate any
fundamental public policy of Ohio or any other jurisdiction.
     (b) Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company and all of its subsidiaries,
partnerships, joint ventures, limited liability companies, and other affiliates
(collectively, the “Cardinal Group”), all secret or confidential information,
knowledge or data relating to the Cardinal Group and its businesses (including,
without limitation, any proprietary and not publicly available information
concerning any processes, methods, trade secrets, research secret data, costs,
names of users or purchasers of their respective products or services, business
methods, operating procedures or programs or methods of promotion and sale) that
the Executive has obtained or obtains during the Executive’s employment by the
Cardinal Group and that is not public knowledge (other than as a result of the
Executive’s violation of this Section 8(b)) (“Confidential Information”). For
the purpose of this Section 8(b), information shall not be deemed to be publicly
available merely because it is embraced by general disclosures or because
individual features or combinations thereof are publicly available. The
Executive shall not communicate, divulge or disseminate Confidential Information
at any time during or after the Executive’s employment with the Cardinal Group,
except with prior written consent of the applicable Cardinal Group company, or
as otherwise required by law or legal process. All records, files, memoranda,
reports, customer lists, drawings, plans, documents and the like that the
Executive uses, prepares or comes into contact

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with during the course of the Executive’s employment shall remain the sole
property of the Company and/or the Cardinal Group, as applicable, and shall be
turned over to the applicable Cardinal Group company upon termination of the
Executive’s employment.
     (c) Non-Recruitment of Cardinal Group Employees, etc. Executive shall not,
at any time during the Restricted Period (as defined in this Section 8(c)),
without the prior written consent of the Company, engage in the following
conduct (a “Solicitation”): (i) directly or indirectly, contact, solicit,
recruit or employ (whether as an employee, officer, director, agent, consultant,
or independent contractor) any person who was or is at any time during the
previous twelve months an employee, representative, officer or director of the
Cardinal Group; or (ii) take any action to encourage or induce any employee,
representative, officer or director of the Cardinal Group to cease their
relationship with the Cardinal Group for any reason. A “Solicitation” does not
include any recruitment of employees within or for the Cardinal Group. The
“Restricted Period” means the period of Executive’s employment with the Cardinal
Group (without regard to any period during which Executive serves as a
consulting employee) and the additional period ending on the second anniversary
of the Executive’s Date of Termination or date of retirement, as applicable.
     (d) No Competition — Solicitation of Business. During the Restricted
Period, the Executive shall not (either directly or indirectly or as an officer,
agent, employee, partner or director of any other company, partnership or
entity) solicit, service, or accept on behalf of any competitor of the Cardinal
Group the business of (i) any customer of the Cardinal Group at the time of the
Executive’s employment or Date of Termination, or (ii) any potential customer of
the Cardinal Group which the Executive knew to be an identified, prospective
purchaser of services or products of the Cardinal Group.
     (e) No Competition — Employment by Competitor. During the Restricted
Period, the Executive shall not invest in (other than in a publicly traded
company with a maximum investment of no more than 1% of outstanding shares),
counsel, advise, or be otherwise engaged or employed by, any entity or
enterprise that competes with the Cardinal Group, by developing, manufacturing
or selling any product or service of a type, respectively, developed,
manufactured or sold by the Cardinal Group (each such person described and not
excepted, as a customer, potential customer or a competitor under Section 8(d)
or this Section 8(e) is a “Competitor”).
     (f) No Disparagement
          (i) The Executive and the Company shall at all times refrain from
taking action or making statement, written or oral, that (A) denigrate,
disparage or defame the goodwill or reputation of Executive or the Cardinal
Group, as the case may be, or any of its trustees, officers, security holders,
partners, agents or former or current employees and directors, or (B) are
intended to, or may be reasonably expected to, adversely affect the morale of
the employees of the Cardinal Group. The Executive further agrees not to make
any negative statement to third parties relating to the Executive’s employment
or any aspect of the businesses of Cardinal Group and not to make any statements
to third parties about the circumstances of the termination of the Executive’s
employment, or about the Cardinal Group or its trustees, directors,

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officer, security holders, partners, agents or former or current employees and
directors, except as may be required by a court or government body
          (ii) The Executive further agrees that, following termination of
employment for any reason, the Executive shall assist and cooperate with the
Company with regard to any matter or project in which the Executive was involved
during the Executive’s employment with the Company, including but not limited to
any litigation that may be pending or arise after such termination of
employment. Further, the Executive agrees to notify the Company at the earliest
reasonable opportunity of any contact that is made by any third parties
concerning any such matter or project. The Company shall not unreasonably
request such cooperation of Executive and shall cooperate with the Executive in
scheduling any assistance by the Executive taking into account the Executive’s
business and personal affairs and shall compensate the Executive for any lost
wages or expenses associated with such cooperation and assistance.
     (g) Inventions. All plans, discoveries and improvements, whether patentable
or unpatentable, made or devised by the Executive, whether alone or jointly with
others, from the date of the Executive’s initial employment by the Company and
continuing until the end of any period during which the Executive is employed by
the Cardinal Group, relating or pertaining in any way to the Executive’s
employment with or the business of the Cardinal Group, shall be promptly
disclosed in writing to the Secretary of the Board and are hereby transferred to
and shall redound to the benefit of the Company and shall become and remain its
ole and exclusive property. The Executive agrees to execute any assignment to
the Company or its nominee, of the Executive’s entire right, title and interest
in and to any such discoveries and improvements and to execute any other
instruments and documents requisite or desirable in applying for and obtaining
patents, trademarks or copyrights, at the expense of the Company, with respect
thereto in the United States and in all foreign countries, that may be required
by the Company. The Executive further agrees, during and after the Employment
Period, to cooperate to the extent and in the manner required by the Company, in
the prosecution or defense of any patent or copyright claims or any litigation,
or other proceeding involving any trade secrets, processes, discoveries or
improvements covered by this Agreement, but all necessary expenses thereof shall
be paid by the Company.
     (h) Acknowledgement and Enforcement. The Executive acknowledges and agrees
that: (A) the purpose of the foregoing covenants, including without limitation
the noncompetition covenants of Section 8(d) and (e), is to protect the
goodwill, trade secrets and other Confidential Information of the Company;
(B) because of the nature of the business in which the Cardinal Group is engaged
and because of the nature of the Confidential Information to which the Executive
has access, the Company would suffer irreparable harm and it would be
impractical and excessively difficult to determine the actual damages of the
Cardinal Group in the event the Executive breached any of the covenants of this
Section 8; and (C) remedies at law (such as monetary damages) for any breach of
the Executive’s obligations under this Section 8 would be inadequate. The
Executive therefore agrees and consents that if the Executive commits any breach
of a covenant under this Section 8 or threatens to commit any such breach, the
Company shall have the right (in addition to, and not in lieu of, any other
right or remedy that

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may be available to it) to temporary and permanent injunctive relief from a
court of competent jurisdiction, without posting any bond or other security and
without the necessity of proof of actual damage.
     9. Successors. (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive. This Agreement shall inure to the benefit of and be enforceable by
the Executive’s legal representatives, heirs or legatees and the Executive by
written notice to the Company may designate any beneficiary with respect to any
amounts due under this Agreement upon the Executive’s death.
     (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
     (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
     10. Miscellaneous. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference to principles
of conflict of laws. If, under any such law, any portion of this Agreement is at
any time deemed to be in conflict with any applicable statute, rule, regulation
or ordinance, such portion shall be deemed to be modified or altered to conform
thereto. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
     (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other parties or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

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If to the Executive:
  At the most recent address
 
  on file at the Company.
 
   
With a copy to:
  Mayer, Brown, Rowe & Maw LLP
 
  71 South Wacker Drive
 
  Chicago, IL 60606
 
  Attention: Herbert W. Krueger
 
   
If to the Company:
  Cardinal Health, Inc.
 
  7000 Cardinal Place
 
  Dublin, Ohio 43017
 
  Attention: Chief Legal Officer

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with the law.
     (d) Notwithstanding any other provision of this Agreement, the Company may
withhold from any amounts payable under this Agreement such Federal, state,
local or foreign taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
     (e) The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 4(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement, except as specifically provided in a written consent pursuant to
Section 4(c).
     (f) Except as otherwise expressly provided herein, from and after the
Effective Time, this Agreement shall supersede any other employment, severance
or change of control agreement between the parties and between the Executive
with respect to the subject matter hereof . Any provision of this Agreement that
by its terms continues after the expiration of the Employment Period or the
termination of the Executive’s employment shall survive in accordance with its
terms.
     (g) If any compensation or benefits provided by this Agreement may result
in the application of Section 409A of the Code, the Company shall, in
consultation with the Executive, modify the Agreement in the least restrictive
manner necessary in order to exclude such compensation from the definition of
“deferred compensation” within the meaning of such Section 409A or in order to
comply with the provisions of Section 409A, other applicable provision(s) of the
Code and/or any rules, regulations or other regulatory guidance issued under

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such statutory provisions and without any diminution in the value of the
payments to the Executive.
     (h) The Executive hereby warrants that the Executive is free to enter into
this Agreement and to perform the services described herein. The Company hereby
warrants that this Agreement and the equity awards provided hereunder have been
duly authorized.

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     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.

            R. KERRY CLARK
      /s/ R. Kerry Clark                     CARDINAL HEALTH, INC.
      By /s/ Robert D. Walter       Name:   Robert D. Walter      Title:  
Executive Chairman of the Board