EX-10.21






Exhibit 10.21




CARDINAL HEALTH, INC.

RESTRICTED SHARES AGREEMENT




     This Agreement is entered into in Franklin Country, Ohio. 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] (each such vesting date, the “Vesting
Date” with respect to the Restricted Shares scheduled to vest on such date)]. 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.



          (a) General. 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.




          (b) Death or Disability. If a Termination of Employment occurs prior to the vesting
in full of the Restricted Shares by reason of Awardee’s death or Disability, but at least 6 months
from the Grant Date, then the restrictions with respect to any unvested Restricted Shares shall
immediately lapse and such Restricted Shares shall vest in full and shall not be forfeited.




          (c) Retirement. If a Termination of Employment occurs prior to the vesting in full of
the Restricted Shares by reason of the Awardee’s Retirement, but at least 6 months from the Grant
Date, then a Ratable Portion of each installment of the Restricted Shares that would have vested on
each future Vesting Date shall immediately vest and become exercisable. Such Ratable Portion
shall, with respect to the applicable installment, be an amount equal to such installment of the
Restricted Shares scheduled to vest on the applicable Vesting Date multiplied by a fraction, the
numerator of which shall be the number of days from the Grant Date through the date of such
termination, and the denominator of which shall be the number of days from the Grant Date through
such Vesting Date. For purposes of this Agreement and this Award under the Plan, “Retirement”
shall refer to Age 55 Retirement, which means Termination of Employment by a Participant (other
than by reason of death or Disability and other than in the event of Termination for Cause) from
the Company and its Affiliates (a) after attaining age fifty-five (55), and (b) having at least ten
(10) years of continuous service with the Company and its Affiliates, including service with an
Affiliate of the Company prior to the time that such Affiliate became an Affiliate of the Company.
For purposes of the age and/or service requirement, the Administrator may, in its discretion,
credit a Participant with additional age and/or years of service.




     4. Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement,
“Triggering Conduct” shall include the following: disclosing or using in any capacity other than as



 









 







necessary in the performance of duties assigned by the Company and its Affiliates
(collectively, the “Cardinal Group”) any confidential information, trade secrets or other business
sensitive information or material concerning the Cardinal Group; violation of Company policies,
including conduct which 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 signed
by Awardee; directly or indirectly employing, contacting concerning employment, or participating in
any way 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 Awardee’s
Termination of Employment; 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, potential customers, vendors and/or suppliers that
were known to Awardee; and breaching any provision of any employment or severance agreement with a
member of the Cardinal Group. As used in this Agreement, “Competitor Triggering Conduct” shall
include, either during Awardee’s employment or within one year following Termination of Employment,
accepting employment with or serving as a consultant or advisor or in any other capacity to an
entity that is in competition with the business conducted by any member of the Cardinal Group (a
“Competitor”), including, but not limited to, employment or another business relationship with any
Competitor if Awardee has been introduced to trade secrets, confidential information or business
sensitive information during Awardee’s employment with the Cardinal Group and such information
would aid the Competitor because the threat of disclosure of such information is so great that, for
purposes of this Agreement, it must be assumed that such disclosure would occur.



     5. Special Forfeiture/Repayment Rules. For so long as Awardee continues as an
employee with the Cardinal Group and for three years following Termination of Employment regardless
of the reason, Awardee agrees not to engage in Triggering Conduct. If Awardee engages in
Triggering Conduct during the time period set forth in the preceding sentence or in Competitor
Triggering Conduct during the time period referenced in the definition of “Competitor Triggering
Conduct” set forth in Paragraph 4 above, then:



     (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 date of vesting (i.e., the market
value of the Restricted Shares on the date of vesting), that have already vested at any time within
three years prior to the Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee
engages only in Competitor Triggering Conduct, then the Look-Back Period shall be shortened to
exclude any period more than one year prior to Awardee’s Termination of Employment, but including
any period between the time of Termination of Employment and the time of Awardee’s engaging in
Competitor Triggering Conduct. Awardee may be released from Awardee’s obligations under this
Paragraph 5 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.
Nothing in this Paragraph 5 constitutes a so-called “noncompete” covenant. This Paragraph 5 does,
however, prohibit certain conduct while Awardee is associated with the Cardinal Group and
thereafter and does provide for the forfeiture or repayment of the benefits granted by this
Agreement under certain circumstances, including, but not limited to, Awardee’s acceptance of
employment with a Competitor. 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 Paragraph 5 and Awardee’s continuing
obligations



2









 







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 inconsistent provisions shall be null and void. Awardee acknowledges and
agrees that the provisions 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 Paragraphs 4 and 5 are ancillary to, or part of, an
otherwise enforceable agreement at the time the agreement is made.



     6. 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.



     7. 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). Any additional Shares which the Awardee
may become entitled to receive by virtue of a merger or reorganization in which the Company is the
surviving corporation or any other change in capital structure shall be subject to the same vesting
requirements and restrictions set forth above.



     8. 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



3









 







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.



     9. Governing Law/Venue for Dispute Resolution/Costs and Legal Fees. 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 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 Paragraphs 4 and 5 of this Agreement 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 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.
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 any other 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. Any provision of this Agreement which is determined by a court of
competent jurisdiction to be invalid or unenforceable should be construed or limited in a manner
that is valid and enforceable and that comes closest to the business objectives intended by such
provision, without invalidating or rendering unenforceable the remaining provisions of this
Agreement.



     10. 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 Triggering
Conduct or Competitor Triggering Conduct, shall be final and binding unless such decision is
arbitrary and capricious.



     11. 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.



4









 





     12. 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.



     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, 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:	 	 	 	 
	 

	 	 	 	 

	 	     






5









 





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 provisions in the Agreement regarding “Triggering Conduct/Competitor
Triggering Conduct” and “Special Forfeiture/Repayment Rules” set forth in Paragraphs 4 and 5 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
	 	     
	 
	 	 	 	 
	 

	 	 

Date]
	 	     






6