Document:

EX-10.38

Exhibit 10.38

CARDINAL HEALTH, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

Dollars at Work*:

Grant Date:

Exercise Price:

Grant Vesting Date:

Grant Expiration Date:

Cardinal Health, Inc., an Ohio corporation (the “Company”), has granted to [employee name]
(“Grantee”), an option (the “Option”) to purchase [# of shares] common shares, without par value,
of the Company (the “Shares”) for a total purchase price of      , (i.e., the equivalent
of [stock price] for each full Share). The Option has been granted under the Cardinal Health, Inc.
Broadly-based Equity Incentive Plan, as amended (the “Plan”), and will include and be subject to
all provisions of the Plan, which are incorporated herein by reference, and will be subject to the
provisions of this agreement. Capitalized terms used in this agreement which are not specifically
defined will have the meanings ascribed to such terms in the Plan. This Option shall be
exercisable at any time on or after
and prior to.

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Robert D. Walter	 	 
	Chairman and CEO	 	 

 

			
	*	 	Dollars at Work and total purchase price may vary due to rounding (up to the dollar amount of one
full Share).

1. Method of Exercise and Payment of Price.

 

 

(a) Method of Exercise. At any time when the Option is exercisable under the Plan and this
agreement, the Option may be exercised from time to time by written notice to the Company which
will:

     (i) state the number of Shares with respect to which the Option is being exercised; and

     (ii) if the Option is being exercised by anyone other than Grantee, be accompanied by proof
satisfactory to counsel for the Company of the right of such person or persons to exercise the
Option under the Plan and all applicable laws and regulations.

(b) Payment of Price. The full exercise price for the Option shall be paid to the Company
as provided in the Plan.

2. Transferability. The Option shall be transferable (I) at Grantee’s death, by Grantee by
will or pursuant to the laws of descent and distribution, and (II) by Grantee during Grantee’s
lifetime, without payment of consideration, to (a) the spouse, former spouse, parents, stepparents,
grandparents, parents-in-law, siblings, siblings-in-law, children, stepchildren, children-in-law,
grandchildren, nieces or nephews of Grantee, or any other persons sharing Grantee’s household
(other than tenants or employees) (collectively, “Family Members”), (b) a trust or trusts for the
primary benefit of Grantee or such Family Members, (c) a foundation in which Grantee or such Family
Members control the management of assets, or (d) a partnership in which Grantee or such Family
Members are the majority or controlling partners; provided, however, that subsequent transfers of
the transferred Option shall be prohibited, except (X) if the transferee is an individual, at the
transferee’s death by the transferee by will or pursuant to the laws of descent and distribution,
and (Y) without payment of consideration to the individuals or entities listed in subparagraphs
II(a), (b) or (c), above, with respect to the original Grantee. The Human Resources and
Compensation Committee of the Board of Directors of the Company (the “Committee”) may, in its
discretion, permit transfers to other persons and entities as permitted by the Plan. Neither a
transfer under a domestic relations order in settlement of marital property rights nor a transfer
to an entity in which more than 50% of the voting interests are owned by Grantee or Family Members
in exchange for an interest in that entity shall be considered to be a transfer for consideration.
Within 10 days of any transfer, Grantee shall notify the Stock Option Administrator of the Company
in writing of the transfer. Following transfer, the Option shall continue to be subject to the
same terms and conditions as were applicable immediately prior to transfer and, except as otherwise
provided in the Plan or this agreement, references to the original Grantee shall be deemed to refer
to the transferee. The events of termination of employment of Grantee provided in paragraph 3
hereof shall continue to be applied with respect to the original Grantee, following which the
Option shall be exercisable by the transferee only to the extent, and for the periods, specified in
paragraph 3. The Company shall have no obligation to notify any transferee of Grantee’s
termination of employment with the Company for any reason. The conduct prohibited of Grantee in
paragraphs 5 and 6 hereof shall continue to be prohibited of Grantee following

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transfer to the same extent as immediately prior to transfer and the Option (or its economic value, as applicable) shall
be subject to forfeiture by the transferee and recoupment from Grantee to the same extent as would
have been the case of Grantee had the Option not been transferred. Grantee shall remain subject to
the recoupment provisions of paragraphs 5 and 6 of this agreement and tax withholding provisions of
Section 10(d) of the Plan following transfer of the Option.

3. Termination of Relationship.

(a) Termination by Death. If Grantee’s employment by the Company and its subsidiaries
(collectively, the “Cardinal Group”) terminates by reason of death, then, unless otherwise
determined by the Committee within 60 days of such death, any unvested portion of the Option shall
vest upon and become exercisable in full from and after the 60th day after such death. The Option
may thereafter be exercised by any transferee of Grantee, if applicable, or by the legal
representative of the estate or by the legatee of Grantee under the will of Grantee for a period of
one year (or such other period as the Committee may specify at or after grant or death) from the
date of death or until the Grant Expiration Date, whichever period is shorter.

(b) Termination by Reason of Retirement or Disability. If Grantee’s employment by the
Cardinal Group terminates prior to the Grant Vesting Date by reason of retirement or disability
(each as defined in the Plan), then, unless otherwise determined by the Committee within 60 days of
such retirement or disability, a Ratable Portion (defined below) of the Option will vest on the
Grant Vesting Date. Such “Ratable Portion” shall be an amount equal to the number of Shares the
subject of the Option, multiplied by a fraction the numerator of which shall be the number of full
months between the Grant Date and the date of retirement or disability, and the denominator of
which shall be the number of full months from the Grant Date to the Grant Vesting Date. The Option
may be exercised after the Grant Vesting Date by Grantee (or any transferee, if applicable) until
the earlier of the fifth anniversary of the date of such retirement or disability or the Grant
Expiration Date (the “Exercise Period”); provided, however, that any vesting that would otherwise
occur during the 60-day period beginning immediately after such retirement or disability shall not
occur until the end of such 60-day period. If Grantee has at least 15 years of service with the
Cardinal Group at the time of retirement, the Option may be exercised after the Grant Vesting Date
by Grantee (or any transferee, if applicable) until the Grant Expiration Date. Notwithstanding the
foregoing, if Grantee dies after retirement or disability but before the expiration of the Exercise
Period, unless otherwise determined by the Committee within 60 days of such death, the Ratable
Portion of the Option shall vest upon the 60th day after such death, and the Option may be
exercised by any transferee of the Option, if applicable, or by the legal representative of the
estate or by the legatee of Grantee under the will of Grantee from and after the 60th day after
such death, for a period of one year (or such other period as the Committee may
specify at or after grant or death) from the date of death or until the expiration of the Exercise
Period, whichever period is shorter.

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(c) Other Termination of Employment. If Grantee’s employment by the Cardinal Group
terminates for any reason other than death, retirement or disability (subject to Section 7 of the
Plan regarding acceleration of the vesting of the Option upon a Change of Control), any unexercised
portion of the Option which has not vested on such date of termination will automatically terminate
on the date of such termination. Unless otherwise determined by the Committee at or after grant or
termination, Grantee (or any transferee, if applicable) will have 90 days (or such other period as
the Committee may specify at or after grant or termination) from the date of termination or until
the Grant Expiration Date, whichever period is shorter, to exercise any portion of the Option that
is then vested and exercisable on the date of termination; provided, however, that if the
termination was for Cause, as determined by the Committee, the Option may be immediately canceled
by the Committee (whether then held by Grantee or any transferee).

4. Restrictions on Exercise. The Option is subject to all restrictions in this agreement
and/or in the Plan. As a condition of any exercise of the Option, the Company may require Grantee
or his or her transferee or successor to make any representation and warranty to comply with any
applicable law or regulation or to confirm any factual matters (including Grantee’s compliance with
the terms of paragraphs 5 and 6 of this agreement or any employment or severance agreement between
any member of the Cardinal Group and Grantee) reasonably requested by the Company.

5. Triggering Conduct/Competitor Triggering Conduct. As used in this agreement,
“Triggering Conduct” shall include disclosing or using in any capacity other than as necessary in
the performance of duties assigned by 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 Grantee; 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 the termination of Grantee’s employment with the Cardinal Group; any action by
Grantee 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 Grantee; 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 Grantee’s
employment or within one year following Grantee’s termination of employment with the Cardinal
Group, 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 Grantee has been introduced to trade secrets, confidential
information or business sensitive information

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during Grantee’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.

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

(a) the Option (or any part thereof that has not been exercised) shall immediately and
automatically terminate, be forfeited, and shall cease to be exercisable at any time; and

(b) Grantee shall, within 30 days following written notice from the Company, pay the Company an
amount equal to the gross option gain realized or obtained by Grantee or any transferee resulting
from the exercise of such Option, measured at the date of exercise (i.e., the difference between
the market value of the Shares underlying the Option on the exercise date and the exercise price
paid for such Shares underlying the Option), with respect to any portion of the Option that has
already been exercised at any time within three years prior to the Triggering Conduct (the
“Look-Back Period”), less $1.00. If Grantee engages only in Competitor Triggering Conduct, then
the Look-Back Period shall be shortened to exclude any period more than one year prior to Grantee’s
termination of employment with the Cardinal Group, but including any period between the time of
Grantee’s termination and engagement in Competitor Triggering Conduct. Grantee may be released
from Grantee’s obligations under this paragraph 6 only if the Committee (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 6 constitutes a so-called “noncompete”
covenant. This paragraph 6 does, however, prohibit certain conduct while Grantee 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,
Grantee’s acceptance of employment with a Competitor. Grantee 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 6 and
Grantee’s continuing obligations contained herein. No provisions of this agreement shall diminish,
negate or otherwise impact any separate noncompete or other agreement to which Grantee 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 Grantee contained in this agreement, the provisions of this agreement shall take precedence and
such other inconsistent provisions shall be null and void. Grantee acknowledges and agrees that
the restrictions

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contained in this agreement are being made for the benefit of the Company in
consideration of Grantee’s receipt of the Option, in consideration of employment, in consideration
of exposing Grantee 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. Grantee further acknowledges that the receipt of the Option and execution of this
agreement are voluntary actions on the part of Grantee and that the Company is unwilling to provide
the Option to Grantee without including the restrictions and covenants of Grantee contained in this
agreement. Further, the parties agree and acknowledge that the provisions contained in paragraphs
5 and 6 are ancillary to, or part of, an otherwise enforceable agreement at the time the agreement
is made.

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

8. 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 superceded 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 Option 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. Grantee
acknowledges that the covenants contained in paragraphs 5 and 6 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 Grantee’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
Grantee 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 Grantee 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 Grantee, and Grantee 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, Grantee 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

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intended by such provision, without invalidating or
rendering unenforceable the remaining provisions of this agreement.

9. Action by the Committee. The parties agree that the interpretation of this agreement
shall rest exclusively and completely within the good faith province and discretion of the
Committee. The parties agree to be bound by the decisions of the Committee with regard to the
interpretation of this agreement and with regard to any and all matters set forth in this
agreement. The Committee may delegate its functions under this agreement to an officer of the
Cardinal Group designated by the Committee (hereinafter the “designee”). In fulfilling its
responsibilities hereunder, the Committee or its designee may rely upon documents, written
statements of the parties or such other material as the Committee or its designee deems
appropriate. The parties agree that there is no right to be heard or to appear before the
Committee or its designee and that any decision of the Committee 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.

10. Prompt Acceptance of Agreement. The Option grant evidenced by this agreement shall, at
the discretion of the Committee, be forfeited if this agreement is not executed by Grantee and
returned to the Company within 90 days of the Grant Date set forth on the first page of this
agreement.

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ACCEPTANCE OF AGREEMENT

Grantee hereby: (a) acknowledges receiving a copy of the Plan, which has either been previously
delivered or is provided with this agreement, and represents that he or she is familiar with and
understands all provisions of the Plan and this agreement; and (b) voluntarily and knowingly
accepts this agreement and the Option granted to him or her under this agreement subject to all
provisions of the Plan and this agreement. Grantee further acknowledges receiving a copy of the
Company’s most recent Annual Report on Form 10-K and other communications routinely distributed to
the Company’s shareholders and a copy of the Plan Description dated November 17, 2003 pertaining to
the Plan.

	 	 	 	 	 
	 

	 	 

Signature
	 	 
	 
	 	 	 	 
	 

	 	 

Print Name
	 	 
	 
	 	 	 	 
	 

	 	 

Grantee’s Social Security Number
	 	 
	 
	 	 	 	 
	 

	 	 

Date
	 	 

8EX-10.43

Exhibit 10.43

EMPLOYMENT AGREEMENT

     THIS AGREEMENT, dated and effective as of August 23, 2004 (the “Effective Date”) is made and
entered into by and between Cardinal Health, Inc., an Ohio corporation (the “Company”), and Dwight
Winstead (the “Executive”).

     WHEREAS, the Company and the Executive desire to set forth in a written agreement the terms
and conditions under which the Executive will render services to the Company from and after the
Effective Date.

     NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, agree as follows:

     1. Employment Period. The Company shall employ, or shall cause one of its
subsidiaries or affiliates to employ, the Executive, and the Executive shall serve the Company, on
the terms and conditions set forth in this Agreement, during the three-year period beginning on the
Effective Date and ending on the third (3rd) anniversary of the Effective Date, unless prior to
such date the employment of the Executive is terminated in accordance with Section 4 of this
Agreement (such period, the “Employment Period”). For purposes of this Agreement, any reference to
the “Company” shall mean, where appropriate, the actual Cardinal subsidiary or affiliate that
employs the Executive. The Employment Period may be extended by mutual written agreement of the
parties.

     2. Position and Duties. (a) During the Employment Period, the Executive shall serve
as President and Chief Operating Officer, TBD segment, with the duties and responsibilities
customarily assigned to such position, and such other duties and responsibilities as Chairman and
Chief Executive Officer, TBD segment shall from time to time assign to the Executive;
provided that the Company may change the Executive’s title, duties and responsibilities
(including reporting responsibilities) at any time without violating this provision, so long as the
Executive remains in an executive position.

     (b) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled under the practices and policies of the Company as in effect from
time to time, the Executive shall devote the Executive’s full business attention and time to the
business and affairs of the Company, and shall use the Executive’s reasonable best efforts to carry
out such responsibilities faithfully and efficiently. It shall not be considered a violation of
the foregoing for the Executive to (A) serve on corporate boards or committees with the prior
consent of the Chief Executive Officer – TBD segment and the Chief Operating Officer of Cardinal
Health, Inc., (B) serve on civic or charitable boards or committees, (C) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (D) 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.

     (c) As of the Effective Date, the Executive’s services shall be performed primarily at the
Company’s offices located in San Diego, California.

 

 

     3. Compensation. (a) Salary. During the Employment Period, as compensation
for the Executive’s services hereunder, the Company shall pay to the Executive an annual base
salary (the “Base Salary”) at the rate of not less than $438,000, payable at such times and
intervals as the Company customarily pays the base salaries of its other executive employees;
provided that the Base Salary may be reduced as part of a reduction that applies proportionately to
all employees who are otherwise similar to the Executive with respect to amount of compensation and
level of managerial responsibility before such reduction.

     (b) Annual Bonus. In addition to the Base Salary, during the Employment Period the
Executive shall be eligible to receive an annual bonus (an “Annual Bonus”) determined and paid at
the sole discretion of the Company pursuant to the terms and conditions of the Company bonus plan
for which the Executive is then eligible, as such plan is in effect from time to time, or any
successor thereto (the “Bonus Plan”). The parties hereto agree and acknowledge that the
Executive’s Annual Bonus target under this Agreement shall be equal to 90 percent (90%) of the Base
Salary.

     (c) Option Grant. As of the Effective Date, the Company shall grant the Executive an
option to purchase 100,000 common shares, without par value, of the Company (the “Option”) pursuant
to the terms and conditions set forth in the Nonqualified Stock Option Agreement attached to this
Agreement as Exhibit A (the ‘“Option Agreement”). The Executive acknowledges and agrees that he
will not be eligible to receive annual grants of options to purchase common shares of the Company
during the Company’s fiscal 2006 year, unless any such grant is authorized by the Human Resources
and Compensation Subcommittee of the Board of Directors of the Company.

     (d) Employee Benefits. During the Employment Period, the Executive shall be entitled
to receive employee benefits (including, without limitation, medical, life insurance and other
welfare benefits and benefits under retirement and savings plans) and vacation to the same extent
as, and on the same terms and conditions as, other similarly situated executives of the Company
from time to time.

     (e) Expenses. The Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive during the Employment Period in carrying out the
Executive’s duties under this Agreement, provided that the Executive complies with the policies,
practices and procedures of the Company then applicable to the Executive for submission of expense
reports, receipts, or similar documentation of such expenses.

     4. Employment Termination. (a) Termination by the Company. During the
Employment Period, the Executive’s employment may be terminated by the Company under any of the
following circumstances: (i) upon the inability of the Executive to perform the essential functions
of his position with or without reasonable accommodation, which inability continues for a
consecutive period of 120 days or longer or an aggregate period of 180 days or longer
(“Incapacity”), in either instance during the Employment Period; (ii) for “Cause,” defined as (A)
any willful or grossly negligent conduct by Executive that demonstrably and materially injures the
Company; (B) any act by the Executive of fraud or intentional misrepresentation or embezzlement,
misappropriation or conversion of assets of the Company or any subsidiary; (C) the Executive being
convicted of, confessing to, or becoming the subject of proceedings that provide a reasonable basis
for the Company to believe the Executive has engaged in, a felony or any crime involving dishonesty
or moral turpitude; (D) the Executive’s intentional and repeated violation of the written policies
or procedures of the Company; (E) the Executive violating any provision of Section 5 of this
Agreement; (F) the Executive’s willful and continued failure for a significant period of time to
perform Executive’s duties; and (iii) for any other reason (a termination without “Cause”). The
Company shall give the Executive notice of termination specifying which of the foregoing provisions
is applicable and (in the case of clause (i) or (ii) the factual basis therefore, and the
termination shall be

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effective upon the 30th day after such notice is given (hereinafter, the date on which the
Executive ceases to be an employee of the Company for any reason (including, without limitation, by
action of the Executive), whether or not during the Employment Period, is referred to as the “Date
of Termination”).

     (b) Termination by the Executive. The Executive may terminate his employment during
the Employment Period for any reason upon 30 days advanced written notice to the Company.

     (c) Consequences of Termination by the Company without Cause. (i) If the Executive is
terminated by the Company without Cause during the Employment Period, the Executive shall not be
entitled to any further compensation or benefits provided for under this Agreement except (x) as
provided in the Option Agreement and (y) as provided in the following sentence. Under such
circumstance, the Company shall:

     (i) pay to the Executive an amount equal to one times the sum of (x) the Executive’s
Base Salary, at the rate in effect on the day immediately prior to the Date of Termination
and (y) the Executive’s Annual Bonus target for the fiscal year of the Company in which the
Date of Termination occurs, such amount to be paid monthly in equal installments over the
twelve (12) month period immediately following the Date of Termination; and

     (ii) provide the vested benefits. if any, required to be paid or provided by law.

Notwithstanding the foregoing, the Company’s obligations to the Executive under this Section 4(c)
shall immediately terminate, and the Executive shall not be entitled to any further compensation or
benefits provided for under this Agreement or the Option Agreement in the event that the Executive
violates any of the provisions of Section 5 of this Agreement.

     (d) Other Employment Terminations. If, during the Employment Period, the Executive’s
employment is terminated for any reason other than by the Company without cause, including, without
limitation, termination by the Executive, incapacity, death, or termination by the Company for
Cause (subject only to Section 4(e) of this Agreement), the Executive shall not be entitled to any
compensation provided for under this Agreement, other than (i) the Base Salary through the Date of
Termination; (ii) benefits under any long-term disability insurance coverage in the case of
termination because of incapacity; (iii) vested benefits, if any, required to be paid or provided
by law; and (iv) the benefits provided for under the Option Agreement, if any.

     (e) Termination after a Change of Control. In the event that during the Employment
Period (i) the Executive’s employment is terminated by the Company within one year after a “Change
of Control” (as defined in the Cardinal Health, Inc. Amended and Restated Equity Incentive Plan, as
amended from time to time, or any successor plan thereto ) for any reason other than because of the
Executive’s death, incapacity or by the Company for Cause, or (ii) the Executive has experienced a
material diminution of his duties under Section 2(a) of this Agreement, other than actions that are
not taken in bad faith and are remedied by the Company within ten business days after receipt of
written notice thereof from the Executive, and as a result the Executive terminates his employment
within one year after a Change of Control (as so defined), then the Company shall pay to the
Executive the severance payments and benefits as set forth in Section 4 (c) of this Agreement.

     5. Covenants. (a) Introduction. The Parties acknowledge that the provisions
and covenants contained in this Section 5 are ancillary and material to this Agreement and the
Option 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 5 do

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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 11(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 5 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 5(b) (“Confidential Information”). For the purposes of this
Section 5(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 the prior
written consent of the Cardinal Group, as applicable, 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 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 Employer’s Employees, etc. Executive shall not, at any time
during the Restricted Period (as defined in this Section 5(c)) without the prior written consent of
Cardinal Health, Inc., 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 (12) months an employee, representative, officer or director
of the Cardinal Group. Further, during the Restricted Period, Executive shall not take any action
that could reasonably be expected to have the effect of encouraging or inducing any employee,
representative, officer or director of the Cardinal Group to cease their relationship with the
Cardinal Group for any reason. This provision does not apply to recruitment of employees within or
for the Cardinal Group. The “Restricted Period” means the period of Executive’s employment with
the Cardinal Group and the additional period that ends 24 months after the Executive’s Date of
Termination.

     (d) No Competition — Solicitation of Business. During the Non-Competition Period (as
defined in this Section 5(e)), 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) potential customer of the Cardinal Group which the Executive knew to be an identified,
prospective purchaser of services or products of the Cardinal Group. The “Non-Competition Period”
means the period of Executive’s employment with the Cardinal Group and the additional period that
ends twelve (12) months after the Executive’s Date of Termination.

     (e) No Competition – Employment by Competitor. During the Non-Competition Period, the
Executive shall not invest in (other than in a publicly traded company with a maximum investment of
no

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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.

     (f) No Disparagement. (i) The Executive shall at all times refrain from taking
actions or making statements, written or oral, that (A) denigrate, disparage or defame the goodwill
or reputation of the Cardinal Group 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 statements to third parties relating to the Executive’s
employment or any aspect of the businesses of the 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, officers, security holders, partners, agents or former or
current employees and directors, except as may be required by a court or governmental 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 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 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 the
Employment Period and any subsequent period when 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 Chief Executive Officer and are
hereby transferred to and shall redound to the benefit of the Company, and shall become and remain
its sole and exclusive property. The Executive agrees to execute any assignments 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 secret, processes, discoveries or
improvements covered by this Agreement, but all necessary expenses thereof shall be paid by the
Company.

     (h) Acknowledgement and Enforcement. (i) The Executive acknowledges and agrees that:
(A) the purpose of the foregoing covenants, including without limitation the non-competition
covenants of Sections 5(e) and (f), 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 5; and (C) remedies at law (such as
monetary damages) for any breach of the Executive’s obligations under this Section 5 would be
inadequate. The Executive therefore agrees and consents that if the

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Executive commits any breach of a covenant under this Section 5 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 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.

     (ii) In addition, in the event of a violation of this Section 5, the Company shall have
the right to require the Executive to pay to the Company all or any portion of the Clawback
Amount (as defined below) within 30 days following written notice by the Company to the
Executive (the “Company Notice”) that it is imposing such requirement. The “Clawback
Amount” means an amount equal to the gross option gain realized or obtained by the Executive
or any transferee resulting from the exercise of any stock options granted to the Executive
by the Cardinal Group within three years before a violation of Section 5(b), 5(c), 5(h) or
5(i) or within one year before a violation of Section 5( d) or 5( e ), measured at the date
of exercise (i.e., the difference between the fair market value of the purchased stock on
the date of exercise and the exercise price paid by the Executive therefore).

In addition to the foregoing, in the event of a violation of this Section 5, all outstanding stock
options granted to the Executive by the Cardinal Group (or any part thereof) that have not been
exercised shall immediately and automatically terminate, be forfeited, and cease to be exercisable
at any time.

     (iii) With respect to any provision of this Section 5 finally determined by a court of
competent jurisdiction to be unenforceable, the Executive and the Company hereby agree that
such court shall have jurisdiction to reform this Agreement or any provision hereof so that
it is enforceable to the maximum extent permitted by law, and the parties agree to abide by
such court’s determination. If any of the covenants of this Section 5 are determined to be
wholly or partially unenforceable in any jurisdiction, such determination shall not be a bar
to or in any way diminish the Company’s right to enforce any such covenant in any other
jurisdiction.

     6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or practice provided by
the Cardinal Group for which the Executive may qualify, nor, subject to Section 9 below, shall
anything in this Agreement limit or otherwise affect such rights as the Executive may have under
any contract or agreement with the Cardinal Group. Vested benefits and other amounts that the
Executive is otherwise entitled to receive under any plan, policy, practice or program of, or any
contract or agreement with, the Cardinal Group on or after the Date of Termination shall be payable
in accordance with such plan, policy, practice, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement. Notwithstanding the foregoing, the Executive
waives all of the Executive’s rights to receive severance payments and benefits under any severance
plan, policy or practice of the Cardinal Group or any entity merged with or into the Cardinal Group
(or any part thereof) except to the extent provided for in this Agreement.

     7. No Mitigation. 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, regardless of
whether the Executive obtains other employment.

     8. Notices. (a) Methods. Each notice, demand, request, consent, report,
approval or communication (hereinafter, “Notice”) which is or may be required to be given by any
party to any other party in connection with this Agreement, shall be in writing, and given by
facsimile, personal delivery, receipted delivery services, or by certified mail, return receipt
requested, prepaid and properly addressed to the party to be served as shown in Section 8(b) below.

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     (b) Addresses. Notices shall be effective on the date sent via facsimile, the date
delivered personally or by receipted delivery service, or three days after the date mailed:

	 	 	 	 	 
	 

	 	If to the Company:
	 	Cardinal Health, Inc.
	 

	 	 	 	7000 Cardinal Place
	 

	 	 	 	Dublin, OH 43017
	 
	 	 	 	 
	 

	 	 	 	Attn : Chief Legal Officer
	 

	 	 	 	Facsimile: (614) 757-6948
	 
	 	 	 	 
	 

	 	If to the Executive:
	 	At the Executive’s residence address
most recently on the books and records
of the Company.

     (c) Changes. Each party may designate by Notice to the other in writing, given in the
foregoing manner, a new address to which any Notice may thereafter be so given, served or sent.

     9. Entire Agreement. This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior agreements with respect thereto.

     10. Successors. (a) Executive. This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s legal representatives.

     (b) The Company. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

     (c) The Company may assign this Agreement to 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 that expressly agrees to assume and perform this Agreement in the same manner
and to the same extent that the Company would have been required to perform it if no such
assignment had taken place. As used in this Agreement, the “Company” shall mean both the Company
as defined above and any such successor that assumes and agrees to perform this Agreement, by
operation of law or otherwise.

     11. Miscellaneous. (a) Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of Ohio, without reference to principles of conflict of
laws. 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. This Agreement may not be amended or
modified except by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

     (b) Severability. 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 law.

- 7 -

 

     (c) Tax Withholding. Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal, state, local and
foreign taxes that are required to be withheld by applicable laws or regulations.

     (d) No Waiver. The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement shall not be deemed
to be a waiver of such provision or right or of any other provision of or right under this
Agreement.

     (e) Warranty. The Executive hereby warrants that the Executive is free to enter into
this Agreement and to perform the services described herein.

     (f) Headings. The Section headings contained in this Agreement are for convenience
only and in no manner shall be construed as part of this Agreement.

     (g) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

     (h) Survival. The obligations under this Agreement of the Executive and the Company
that by their nature and terms require (or may require) satisfaction after the end of the
Employment Period shall survive such event and shall remain binding upon such parties.

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     IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization
of the Executive Committee of 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.

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/ Dwight Winstead
 	 
	 	Dwight Winstead 	 
	 	 	 
	 
	 	CARDINAL HEALTH, INC.

 	 
	 	By:  	     /s/ George L. Fotiades
 	 
	 	 	     George L. Fotiades 	 
	 	 	     President and Chief Operating Officer 	 
	 

- 9 -

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