EX-10.20







Exhibit 10.20




CARDINAL HEALTH, INC.

RESTRICTED SHARES AGREEMENT




     On [grant date] (the “Grant Date”), Cardinal Health, Inc., an Ohio corporation (the
“Company”), has awarded to [employee name] (“Awardee”), [# of shares] common shares, without par
value, of the Company (the “Restricted Shares”). The Restricted Shares have been granted pursuant
to the Cardinal Health, Inc. 2005 Long-Term Incentive Plan, as amended (the “Plan”), and shall be
subject to all provisions of the Plan, which are incorporated herein by reference, and shall be
subject to the provisions of this Restricted Shares Agreement (this “Agreement”). Capitalized
terms used in this Agreement which are not specifically defined shall have the meanings ascribed to
such terms in the Plan.



     1. Vesting. Subject to the provisions set forth elsewhere in this Agreement, the
Restricted Shares shall vest [CLIFF ALTERNATIVE: on [vesting date]] [INSTALLMENT ALTERNATIVE: in
accordance with the following schedule: [vesting schedule]]. Notwithstanding the foregoing, in
the event of a Change of Control prior to Awardee’s Termination of Employment, the Restricted
Shares shall vest in full.



     2. Transferability. Prior to the applicable vesting of a Restricted Share, Awardee
shall not be permitted to sell, transfer, pledge, assign or otherwise encumber the then unvested
Restricted Share, except as otherwise provided in Paragraph 3 of this Agreement.



     3. Termination of Employment. Except as set forth below, if a Termination of
Employment occurs prior to the vesting of a Restricted Share, such Restricted Share shall be
forfeited by Awardee. If a Termination of Employment occurs prior to the vesting in full of the
Restricted Shares by reason of Awardee’s death, then the restrictions with respect to any unvested
Restricted Shares shall lapse and such Restriced Shares shall vest in full and not be forfeited.



     4. Agreement Not to Disclose or Use Confidential Information, Trade Secrets or Other
Business Sensitive Information. The parties acknowledge and agree that the Company and its
Affiliates (collectively, the “Cardinal Group”) is the sole and exclusive owner of Confidential
Information, Trade Secrets or Other Business Sensitive Information (as hereinafter defined) and
that the Cardinal Group has legitimate business interests in protecting such information. The
parties further acknowledge and agree that the Cardinal Group has invested, and continues to
invest, considerable amounts of time and money in obtaining, developing and preserving the
confidentiality of such information. Further, the parties agree that, because of the trust and
fiduciary relationship arising between Awardee and the Cardinal Group, Awardee owes the Cardinal
Group a fiduciary duty to preserve and protect such information from any and all unauthorized
disclosure and use. Accordingly, Awardee shall not, either directly or indirectly, disclose such
information to any third party whatsoever and shall not use such information in any manner, except
as authorized in the reasonable performance of Awardee’s duties while employed by the Cardinal
Group. “Confidential Information, Trade Secrets or Other Business Sensitive Information” shall
include any such information as defined by applicable law and any information about the business of
the Cardinal Group and its customers that is not generally known to, or readily ascertainable by,
the public, including, but not limited to, financial information and models, customer lists,
business plans or strategies, marketing and sales plans or strategies, the identity, compensation
and qualifications of employees of the Cardinal Group, sources of supply, pricing policies,
operational methods, product specification or technical processes, new product information,
formulation techniques, customer contacts, profit or cost information, research and development
information or other information that the Cardinal Group has developed or compiled.



     5. Delivery of Company Property. Awardee recognizes and agrees that all documents,
magnetic media, computer disks, desktop and laptop computers and other tangible items that were



 









 







provided by the Cardinal Group and/or that contain Confidential Information, Trade Secrets or Other
Business Sensitive Information as defined above are the sole and exclusive property of the Cardinal
Group. Upon request by the Cardinal Group, Awardee shall promptly and immediately return to the
Cardinal Group all such documents, media, disks, desktop and laptop computers and other tangible
items. Upon the Termination of Employment with the Cardinal Group, Awardee shall promptly and
immediately return to the Cardinal Group any and all such documents, media, disks, desktop and
laptop computers or other tangible items, without request by the Cardinal Group. Awardee shall not
take any such information or make/retain copies of such information for any purpose whatsoever
except as is necessary for the reasonable performance of Awardee’s duties while employed by the
Cardinal Group.



     6. Other Covenants. Except as modified by Paragraph 10 below, Awardee hereby
covenants and agrees that, in consideration of the grant hereunder, Awardee shall not, either
directly or indirectly, on Awardee’s own behalf or on any other’s behalf, engage in or assist
others in any of the following activities:




     (a) Awardee shall not engage in any action or conduct that is a violation of the
policies of the Cardinal Group, including conduct that would constitute a breach of any of
the Certificates of Compliance with Company Policies and/or the Certificates of Compliance
with Company Business Ethics Policies executed by Awardee;




     (b) During Awardee’s employment with the Cardinal Group and for 12 months following the
Termination of Employment for any reason, Awardee shall not, either directly or indirectly,
employ, contact concerning employment, or participate in any manner in the recruitment for
employment of (whether as an employee, officer, director, agent, consultant or independent
contractor), any person who was or is an employee, representative, officer or director of
the Cardinal Group at any time within the 12 months prior to the Termination of Employment
with the Cardinal Group;




     (c) Awardee shall not at any time during employment with the Cardinal Group nor at any
time thereafter disparage the Cardinal Group or any of its employees, officers,
representatives, services or products;




     (d) During Awardee’s employment with the Cardinal Group and for 12 months following the
Termination of Employment for any reason, Awardee shall not engage in any action or conduct
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, potential customers,
vendors or suppliers that were known to Awardee in the performance of Awardee’s job duties
while employed with the Cardinal Group;




     (e) During Awardee’s employment with the Cardinal Group and for 12 months following the
Termination of Employment for any reason, Awardee shall not solicit or accept business of
the same type as that in which Awardee was employed by the Cardinal Group from any customer,
potential customer, vendor or supplier of the Cardinal Group that was known to Awardee in
the performance of Awardee’s job duties while employed with the Cardinal Group, nor shall
Awardee during such time period solicit or accept such business within any geographic area
in which Awardee was assigned or for which Awardee had any managerial responsibility;




     (f) During Awardee’s employment with the Cardinal Group and for 12 months
following the Termination of Employment for any reason, Awardee shall not accept
employment with or serve as a consultant or advisor or in any other capacity to an entity
that is in competition



2









 







with the business conducted by any member of the Cardinal Group
within a geographic area in which Awardee was assigned or for which Awardee had any
managerial responsibility; and




     (g) Awardee shall not breach or violate any provision of any employment or severance
agreement that Awardee has with any member of the Cardinal Group.



     7. Inevitable Disclosure. The parties specifically acknowledge and agree that the
provisions of this Agreement are reasonable in light of the fact that, in the event that Awardee
would become employed or otherwise associated with a competitor of the Cardinal Group, it would be
inevitable that Awardee would disclose Confidential Information, Trade Secrets or Other Business
Sensitive Information as defined above to such competitor. The parties acknowledge and agree that
Awardee has been introduced by the Cardinal Group to such Confidential Information, Trade Secrets
or Other Business Sensitive Information as defined above and that such information would aid the
competitor and that the threat of such inevitable disclosure is so great that, for purposes of this
Agreement, it must be assumed that such disclosure would occur.



     8. Covenants Are Independent Elements. The parties acknowledge that the obligations
and covenants set forth in Paragraphs 4 through 7 above and, if applicable, Paragraph 10 below are
essential independent elements of this Restricted Share grant and that, but for Awardee agreeing to
comply with them, the Cardinal Group would not have granted such Restricted Shares to Awardee. The
parties agree and acknowledge that the provisions contained in Paragraphs 4 through 7 above and, if
applicable, Paragraph 10 below are ancillary to, or part of, an otherwise enforceable agreement at
the time the agreement is made with regard to such paragraphs. The existence of any claim by
Awardee against the Cardinal Group, whether based on this Agreement or otherwise, shall not operate
as a defense to the enforcement of the covenants contained in Paragraphs 4 through 7 above and, if
applicable, Paragraph 10 below. The covenants contained in Paragraphs 4 through 7 above and, if
applicable, Paragraph 10 below will remain in full force and effect whether Awardee is terminated
by the Cardinal Group or voluntarily resigns.



     9. Assignment of Covenants. The rights of the Cardinal Group under this Agreement
shall inure to the benefit of, and be binding upon, its successors and assigns. Any successor or
assign of the Cardinal Group is authorized to enforce the covenants contained in this Agreement.
Any successor or assign of the Cardinal Group is authorized by the parties to enforce the covenants
contained herein as if the name of such successor or assign shall replace the Cardinal Group
throughout this Agreement and any consent and/or notice, written or otherwise, is hereby waived and
deemed unnecessary by Awardee.



     10. California Specific Modifications. This paragraph shall supercede and modify
certain of the covenants, obligations and restrictions of Awardee set forth in Paragraph 6 above in
the event that, and only during such time that, Awardee’s principal employment with the Cardinal
Group is in the State of California. In the event that any of the provisions contained in
Subparagraphs 6(d) through (f) and Paragraph 7 above are inconsistent with the provisions of this
Paragraph 10 with regard to the State of California, then the provisions contained in Subparagraphs
6(d) through (f) and Paragraph 7 shall not apply and the following provisions shall apply instead:




     (a) Within the geographic area in which Awardee was assigned or for which Awardee had
any managerial responsibility, Awardee shall not, during Awardee’s employment with the
Cardinal Group and for 12 months following Termination of Employment for any reason, solicit
or
actually transact business with any existing customer of the Cardinal Group of which
Awardee’s knowledge of the existence of that customer or of that customer’s purchasing
habits, product preferences or commercial practices exists because of Awardee’s receipt of



3









 







Confidential Information, Trade Secrets or Other Business Sensitive Information from the
Cardinal Group; and




     (b) Regardless of geographic area, Awardee shall not, during the period of Awardee’s
employment with the Cardinal Group and for 12 months following Termination of Employment for
any reason, solicit business from any customers of the same type as the business of the
Cardinal Group at the time of the Termination of Employment with the Cardinal Group whose
identities are not already within the public domain if Awardee directly serviced such
customers, was assigned to such customers, was responsible for such customers or otherwise
had personal contact with such customers during the 12-month period immediately preceding
expiration of Awardee’s employment with the Cardinal Group.


In the event that Awardee is reassigned to any other state within the United States of America
other than the State of California or to any other country, then all of the provisions of
Paragraphs 6 and 7 above shall apply in full force and effect and the provisions of this Paragraph
10 shall not apply.




     11. Reasonableness of Restrictions Contained in Agreement. Awardee acknowledges that
the covenants contained in this Agreement are reasonable in nature, are fundamental for the
protection of the legitimate business and proprietary interests of the Cardinal Group, are
necessary to protect the goodwill between the Cardinal Group and its customers, and do not
adversely affect Awardee’s ability to earn a living in any capacity that does not violate such
covenants. The parties further agree that in the event of any violation by Awardee of any such
covenants, the Company will suffer immediate and irreparable injury for which there is no adequate
remedy at law.



     12. Special Forfeiture/Repayment Rules. If Awardee engages in conduct that is in
violation of the covenants and restrictions contained in this Agreement, then Awardee shall be
subject to the following special forfeiture/repayment rules in addition to any other remedy that
the Cardinal Group may have:



     (a) any Restricted Shares that have not yet vested shall immediately and automatically
terminate, be forfeited, and shall cease to exist; and



     (b) Awardee shall, within 30 days following written notice from the Company, pay to the
Company an amount equal to (x) the aggregate gross gain realized or obtained by Awardee resulting
from the vesting of all Restricted Shares, measured as of the Vesting Date (i.e., the market value
of the Restricted Shares on the Vesting Date), that have already vested at any time within three
years prior to the conduct by Awardee that is in violation of the covenants and restrictions of
this Agreement (the “Look-Back Period”), minus (y) $1.00.



     Awardee may be released from Awardee’s obligations under this Paragraph 12 if and only if the
Administrator (or its duly appointed designee) determines, in writing and in its sole discretion,
that such action is in the best interests of the Company. Awardee agrees to provide the Company
with at least 10 days written notice prior to directly or indirectly accepting employment with or
serving as a consultant or advisor or in any other capacity to a competitor, and further agrees to
inform any such new employer, before accepting employment, of the terms of this Agreement and
Awardee’s continuing obligations contained herein. No provision of this Agreement shall diminish,
negate or otherwise impact any separate noncompete or other agreement to which Awardee may be a
party, including, but not limited to, any of the Certificates of Compliance with Company Policies
and/or the Certificates of Compliance with Company
Business Ethics Policies; provided, however, that to the extent that any provisions contained
in any other agreement are inconsistent in any manner with the restrictions and covenants of
Awardee contained in this Agreement, the provisions of this Agreement shall take precedence and
such other



4









 







inconsistent provisions shall be null and void. Awardee acknowledges and agrees that
the restrictions and covenants of Awardee contained in this Agreement are being made for the
benefit of the Company in consideration of Awardee’s receipt of the Restricted Shares, in
consideration of employment, in consideration of exposing Awardee to the Company’s business
operations and confidential information, and for other good and valuable consideration, the
adequacy of which consideration is hereby expressly confirmed. Awardee further acknowledges that
the receipt of the Restricted Shares and execution of this Agreement are voluntary actions on the
part of Awardee and that the Company is unwilling to provide the Restricted Shares to Awardee
without including the restrictions and covenants of Awardee contained in this Agreement. Further,
the parties agree and acknowledge that the provisions contained in Paragraph 6 and, if applicable,
Paragraph 10 are ancillary to, or part of, an otherwise enforceable agreement at the time the
agreement is made.



     13. Right of Set-Off. By accepting these Restricted Shares, Awardee consents to a
deduction from, and set-off against, any amounts owed to Awardee by any member of the Cardinal
Group from time to time (including, but not limited to, amounts owed to Awardee as wages, severance
payments or other fringe benefits) to the extent of the amounts owed to the Cardinal Group by
Awardee under this Agreement.



     14. Shareholder Rights and Restrictions. Except with regard to the disposition of
Restricted Shares and the receipt of dividends, Awardee shall generally have all rights of a
shareholder with respect to the Restricted Shares from the Grant Date, including, without
limitation, the right to vote such Restricted Shares, but subject, however, to those restrictions
in this Agreement or in the Plan. Dividends with respect to the Restricted Shares shall be accrued
until the Vesting Date for such Restricted Shares and paid thereon (subject to the same vesting
requirements as the underlying Restricted Share award).



     15. Withholding Tax.



     (a) Generally. Awardee is liable and responsible for all taxes owed in connection with the
Restricted Shares, regardless of any action the Company takes with respect to any tax withholding
obligations that arise in connection with the Restricted Shares. The Company does not make any
representation or undertaking regarding the tax treatment or treatment of any tax withholding in
connection with the grant or vesting of the Restricted Shares or the subsequent sale of the
Restricted Shares. The Company does not commit and is under no obligation to structure the
Restricted Shares to reduce or eliminate Awardee’s tax liability.



     (b) Payment of Withholding Taxes. Prior to any event in connection with the Restricted Shares
(e.g., vesting) that the Company determines may result in any domestic or foreign tax withholding
obligation, whether national, federal, state or local, including any employment tax obligation (the
“Tax Withholding Obligation”), Awardee is required to arrange for the satisfaction of the minimum
amount of such Tax Withholding Obligation in a manner acceptable to the Company. Unless Awardee
elects to satisfy the Tax Withholding Obligation by an alternative means that is then permitted by
the Company, Awardee’s acceptance of this Agreement constitutes Awardee’s instruction and
authorization to the Company to withhold on Awardee’s behalf the number of Restricted Shares when
the Restricted Shares become vested as the Company determines to be sufficient to satisfy the Tax
Withholding Obligation. In the case of any amounts withheld for taxes pursuant to this provision
in the form of shares, the amount withheld shall not exceed the minimum required by applicable law
and regulations.



     16. Beneficiary Designation. Awardee may designate a beneficiary to receive any
Restricted Shares to which the Awardee is entitled and which vest as a result of Awardee’s death.
Notwithstanding the foregoing, if Awardee engages in conduct that is in violation of the covenants
and restrictions



5









 







contained in this Agreement, the Restricted Shares subject to such beneficiary
designation shall be subject to the Special Forfeiture/Repayment Rules and the Company’s Right of
Set-Off or other right of recovery set forth in this Agreement, and all rights of the beneficiary
shall be subordinated to the rights of the Company pursuant to such provisions of this Agreement.
Awardee acknowledges that the Company may exercise all rights under this Agreement and the Plan
against Awardee and Awardee’s estate, heirs, lineal descendants and personal representatives and
shall not be limited to exercising its rights against Awardee’s beneficiary.



     17. Governing Law/Venue. This Agreement shall be 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
Shares and benefits granted herein 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 shall be brought 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. In
the event of any violation or attempted violations of the restrictions and covenants of Awardee
contained in this Agreement, the Cardinal Group shall be entitled to specific performance and
injunctive relief or other equitable relief including the issuance ex parte of a temporary
restraining order without any showing of irreparable harm or damage, such irreparable harm being
acknowledged and admitted by Awardee, and Awardee hereby waives any requirement for the securing or
posting of any bond in connection with such remedy, without prejudice to the rights and remedies
afforded the Cardinal Group hereunder or by law. In the event that it becomes necessary for the
Cardinal Group to institute legal proceedings under this Agreement, Awardee shall be responsible to
the Company for all costs and reasonable legal fees incurred by the Company with regard to such
proceedings.



     18. Severability. It is the desire and intent of the parties that the provisions of
this Agreement shall be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any
particular provision or portion of this Agreement shall be determined by a court of competent
jurisdiction to be invalid or unenforceable as written, it is the intent and desire of the parties
that the court shall modify the language of such provision or portion of this Agreement to the
extent necessary to make it valid and enforceable. If no such modification by the court is
possible, this Agreement shall be deemed amended to delete therefrom only the provision or portion
thus determined to be invalid or unenforceable. Such modification or deletion is to apply only
with respect to the operation of such provision in the particular jurisdiction in which such court
determination is made.



     19. Action by the Administrator. The parties agree that the interpretation of this
Agreement shall rest 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. The Administrator may delegate its functions under this Agreement to an officer of the
Cardinal Group designated by the Administrator (hereinafter the “Designee”). In fulfilling its
responsibilities hereunder, the Administrator or its Designee may rely upon documents, written
statements of the parties or such other material as the Administrator or its Designee deems
appropriate. The parties agree that there is no right to be heard or to appear before the
Administrator or its Designee and that any decision of the Administrator or its Designee relating
to this Agreement, including, without limitation, whether particular conduct constitutes a
violation of the
covenants, obligations and restrictions of Awardee set forth in Paragraphs 4 through 6 and, if
applicable, Paragraph 10 above, shall be final and binding unless such decision is arbitrary and
capricious.



6









 





     20. Prompt Acceptance of Agreement. The Restricted Shares grant evidenced by this
Agreement shall, at the discretion of the Administrator, be forfeited if this Agreement is not
manually executed and returned to the Company, or electronically executed by Awardee by indicating
Awardee’s acceptance of this Agreement in accordance with the acceptance procedures set forth on
the Company’s third-party equity plan administrator’s web site, within 90 days of the Grant Date.



     21. Electronic Delivery and Consent to Electronic Participation. The Company may, in
its sole discretion, decide to deliver any documents related to the Restricted Shares grant under
and participation in the Plan or future Restricted Shares 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 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 grants and the
execution of restricted share agreements through electronic signature.



     22. 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, facsimile, 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: Chief Legal Officer

Facsimile: (614) 757-2797




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 the Awardee.



	 	 	 	 	 	 	 
	 	 	CARDINAL HEALTH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
	 	 
	 
	 

	 	Its:
	 	 
	 	 
	 

	 	 	 	 	 	 





7









 






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 dated [date of Plan Description],
pertaining to the Plan; (b) voluntarily and knowingly accepts this Agreement and the Restricted
Shares granted to him or her under this Agreement subject to all provisions of the Plan and this
Agreement, including the obligations and covenants set forth in Paragraphs 4 through 7 above and,
if applicable, Paragraph 10 above; (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; (d) represents and warrants to the
Company that he or she is purchasing the Restricted Shares for his or her own account, for
investment, and not with a view to or any present intention of selling or distributing the
Restricted Shares either now or at any specific or determinable future time or period or upon the
occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and (e) agrees
that no transfer of the Restricted Shares shall be made unless the Restricted 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
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Awardee’s Social Security Number	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Date]	 	 






8