Document:

EX-10.22

EXHIBIT 10.22

ECONOMIC PARTICIPATION AGREEMENT

          THIS ECONOMIC PARTICIPATION AGREEMENT (this “Agreement”), dated as of October 23,
2008, but effective as of February 20, 2008 (the “Effective Date”), is entered into by and
among W2007 Finance Sub, LLC, a Delaware limited liability company (“Whitehall Finance”),
Whitehall Parallel Global Real Estate Limited Partnership 2007, a Delaware limited partnership
(“Whitehall Parallel”, and together with Whitehall Finance, “Whitehall”), and
Phyllis A. Gilland, a natural person residing at 380 Terrabianca Circle, Henderson, Nevada 89012
(“Participant”).

WITNESSETH:

          WHEREAS, Whitehall Finance, Whitehall Parallel and Strat Hotel Investor, L.P., a Delaware
limited partnership, are party to that certain Amended and Restated Limited Liability Company
Agreement of W2007/ACEP Holdings, LLC (the “Company”), dated as of February 20, 2008 (the
“Company LLC Agreement”);

          WHEREAS, pursuant to the Company LLC Agreement, Whitehall is entitled to receive certain
Proceeds (as defined below) in respect of its membership interests in the Company; and

          WHEREAS, Whitehall wishes to grant to Participant and Participant wishes to accept from
Whitehall, a participation in the membership interests in the Company held by Whitehall, subject
to, and in accordance with, the terms and conditions of this Agreement.

          NOW, THEREFORE, the undersigned in consideration of the promises, covenants and
agreement contained herein, do hereby agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:

          “1/4 Vesting Milestone” means the first anniversary of the Effective Date.

          “3/4 Vesting Milestone” means the third anniversary of the Effective Date

          “1/2 Vesting Milestone” means the second anniversary of the Effective Date.

          “Additional Cash Investment” has the meaning set forth in Section 3(a).

          “Additional Investment” has the meaning set forth in Section 3(a).

          “Additional Participating Investment” has the meaning set forth in Section
3(a).

          “Agreement” has the meaning set forth in the introductory paragraph hereof.

          “Capital Event Proceeds” means (i) any proceeds received by the Company from the sale
or other disposition of any property or asset held, directly or indirectly, by the

 

 

Company or (ii) financing proceeds received by the Company from a loan or similar financing
transaction under which the repayment obligations are secured by a pledge, directly or indirectly,
of Whitehall’s interest in the Company or any of its subsidiaries, the Company’s direct or
indirect interest in any of its subsidiaries, or any of the properties or other assets of the
Company or its subsidiaries, in the case of each of (i) and (ii) net of all out-of-pocket
transaction costs (as determined by Whitehall), which, for certainty, shall include any such costs
payable to affiliates of Whitehall. Notwithstanding the forgoing, in no event shall the definition
of “Capital Event Proceeds” hereunder include any proceeds that are borrowed pursuant to the
Initial Financing or pursuant to a loan that is (x) fully recourse to any of Whitehall Finance,
Whitehall Parallel or Whitehall Street Global Real Estate Limited Partnership 2007 (“Whitehall
Street”) or (y) is secured by a significant portion of the assets of Whitehall Finance,
Whitehall Parallel or Whitehall Street (which significant portion, for certainty, shall not be
comprised only of Whitehall’s interest in the Company).

          “Cash Interest Entitlement” is equal to the Cash Percentage Interest multiplied by the applicable Proceeds.

          “Cash Percentage Interest” has the meaning set forth in Section 3(b).

          “Cause” means Employee’s: i) failure to perform the duties assigned to him; (ii)
chronic impairment due to alcohol or substance abuse; (iii) conviction of a Serious Crime or being
charged with a felony (for purposes of this Agreement a “Serious Crime” is a crime that the Company
believes could prohibit the Employee from obtaining or maintaining any work card, license, or
finding of compliance suitability necessary for Employee to maintain employment with Company); (iv)
violation of a federal or state securities law or regulation; (v) negligent conduct, error or
omission in the carrying out of his duties under this Agreement; (vi) conduct that causes damage to
the reputation of the Company(vii) breach of the Exclusivity Obligation or any of the obligations
set forth in Section 6 or Section 7 below; (viii) any revocation or suspension by any state or
local authority of Employee’s required license(s) to serve in his position(s) with the Company; or
(ix) any act or failure to act by Employee which causes any gaming or other regulatory authority
having jurisdiction over the Company, the Designated Affiliates or any of their affiliates to seek
any redress or remedy against Employee, the Company, any Designated Affiliate or any of their
affiliates.

          “Cause Termination” mean the circumstance wherein Participant is no longer an employee
of the Company or any subsidiary thereof for reason of removal or termination from such employment
for Cause.

          “Company” has the meaning set forth in the recitals hereof.

          “Company LLC Agreement” has the meaning set forth in the recitals hereof.

          “Current Portion” is equal to the vesting percentage as of such date (as determined in
accordance with the vesting provisions set forth in Section 4 hereof) multiplied by the
Participating Investment Entitlement.

 

 

          “Effective Date” has the meaning set forth in the introductory paragraph hereof.

          “Employment Agreement” means that certain Employee Agreement between Participant
and American Casino & Entertainment Properties, LLC, dated as of October 23, 2008.

          “Full Vesting Milestone” mean the earlier of (i) the fourth (4th)
anniversary of the Effective Date and (ii) the date on which Whitehall no longer owns any direct
or indirect interest in the Company.

          “Funding Portion” has the meaning set forth in Section 5(a) or 5(b), as
applicable.

          “Incentive Distributions” has the meaning set forth in Section 6.

          “Initial Financing” means the first, and only the first, financing entered into by
one or more of the Company’s subsidiaries and secured by a pledge of such subsidiaries’ assets.

          “Initial Investment” has the meaning set forth in Section 2(b).

          “Initial Participating Investment” has the meaning set forth in Section
2(b).

          “Internal Rate of Return” means, with respect to any investment, a return of all
capital invested in such investment plus a cumulative, quarterly compounded, return on such
invested capital at a rate per annum equal to the applicable percentage specified herein. An
investment shall be deemed to have produced a specified Internal Rate of Return when the total cash
in-flows invested from time to time in such investment produces cash out-flows in amount sufficient
to cover the cash in-flows together with an annual return equal to such specified percentage
calculated commencing on the date such cash in-flows are funded and compounded quarterly to the
extent not paid on a current basis, and all previous cash out-flows produced by such investment.
For purposes of computing such Internal Rate of Return, any cash in-flows invested in such
investment, any forfeiture of any capital invested and any cash out-flows from such investment at
any time during a month shall be deemed to be invested, forfeited or produced on the first day of
such month.

          “Investment” has the meaning set forth in Section 3(a).

          “Operating Proceeds” means proceeds received by the Company and from the operation of
property and assets held, directly or indirectly, by the Company, net of interest and other finance
charges paid by Whitehall under any financing(s).

          “Participant” has the meaning set forth in the introductory paragraph
hereof.

          “Participating Investment” means, as of any date, the Initial Participating
Investment plus the aggregate of all Additional Participating Investments.

 

 

          “Participating Investment Entitlement”:

     (X) with respect to Operating Proceeds is equal to (i) (A) Participant’s
Participating Percentage Interest multiplied by the applicable Proceeds minus (B)
the Unfunded Carry multiplied by (ii) if the Unfunded Participating Investment is
greater than zero, 75%; and

(Y) with respect to Capital Event Proceeds is equal to (i) (A) Participant’s Participating
Percentage Interest multiplied by the applicable Proceeds minus (B) the Unfunded
Carry.

          “Participating Percentage Interest” has the meaning set forth in Section
3(b).

          “Percentage Interest” has the meaning set forth in Section 3(b).

          “Proceeds” means, collectively, Capital Event Proceeds and Operating Proceeds.

          “Qualifying Circumstance” means the circumstance wherein Participant is no longer an
employee of the Company or any subsidiary thereof for any reason whatsoever except for a Cause
Termination, including, without limitation, any removal from such employment without Cause, any
resignation by Participant or Participant’s ceasing to be an employee due to Participant’s death or
disability.

          “Redemption Price” means a cash amount (determined as of the date of redemption)
equal to the Participant’s Initial Cash Investment less the amount of any Cash Distributions
received by the Participant.

          “Redemption Right” has the meaning set forth in Section 7.

          “Tax Shortfall Amount” has the meaning set forth in Section 8.

          “Total Whitehall Contribution” means, as of any date, the total amount Whitehall has
contributed to the Company’s common equity, net of the financing proceeds, if any, received by
Whitehall prior to such date pursuant to the Initial Financing.

          “Unfunded Carry” as of any date means an amount, when added to all other amounts
attributed to Unfunded Carry, is sufficient to cover a return of 7% p.a. on the Unfunded
Participating Investment calculated commencing on the date such Unfunded Participating Investment
is funded and compounded quarterly to the extent not paid on a current basis.

          “Unfunded Participating Investment” as of any date means an amount (which shall not be
less than zero) equal to the Initial Participating Investment plus all Additional Participating
Investment minus the cumulative amounts of all Funding Portions previously credited pursuant to
Section 5(a) and 5(b).

 

 

          “Vesting Milestone” means each of the 1/4 Vesting Milestone, the 1/2 Vesting
Milestone, the 3/4 Vesting Milestone and the Full Vesting Milestone.

          “Whitehall” has the meaning set forth in the introductory paragraph
hereof.

          “Whitehall Finance” has the meaning set forth in the introductory paragraph hereof.

          “Whitehall Parallel” has the meaning set forth in the introductory paragraph hereof.

     2. Initial Investment.

          (a) Within five business days of the date of this Agreement, Participant shall make a payment
in cash to Whitehall in the amount of $0.00 (no Cash Investment to be made) (the “Cash
Investment”). For all purpose herein, Participant will be treated as having made the Cash
Investment as of the Effective Date.

          (b) Upon receipt of the Cash Investment, subject to the vesting provisions set forth in
Section 4, Participant shall be credited with an additional investment in the amount of 200% of the
Cash Investment (such additional investment, the “Initial Participating Investment”, and
the Cash Investment together with the Initial Participating Investment, the “Initial
Investment”). For example, if Participant’s Cash Investment is $50,000, his or her Initial
Participating Investment would be $100,000 and his or her Initial Investment would be $150,000.

     3. Additional Investments; Percentage Interests.

          (a) If and when Whitehall contributes additional common equity capital to the Company,
so long as no Qualifying Circumstance or Cause Termination has occurred, Participant will have the
right to elect to make an additional investment (such additional investment, together with the
Additional Participating Investment (defined below) in respect of such additional investment, an
“Additional Investment”) in the amount required to maintain Participant’s then-current
Percentage Interest (as defined below), it being understood that Participant may only exercise this
option with respect to the full amount contemplated herein and Participant will not be entitled to
make a partial election. Whitehall shall give Participant written notice of an upcoming
contribution to the Company’s common equity and Participant shall have five business days from the
date of that notice to advise Whitehall in writing whether or not Participant will make the
Additional Investment (and failure to respond within that time period will be deemed to be an
election to not make the Additional Investment). If Participant timely elects to make an Additional
Investment, Participant shall, within five business days of the date on which he or she notified
Whitehall of his or her election, make a payment in cash to Whitehall in an amount equal to
one-third of the Additional Investment (an “Additional Cash Investment”). Upon receipt of
the Additional Cash Investment, subject to the vesting provisions set forth in Section 4,
Participant shall be credited with an additional investment in the amount of 200% of the Additional
Cash Investment (such additional investment, the

 

 

“Additional Participating Investment”). If Participant does not timely elect to make an
Additional Investment or does not have the right to make such Additional Investment due to the
occurrence of a Qualifying Circumstance or Cause Termination, Participant recognizes that his or
her Percentage Interest will be diluted as a result of the additional investment made by Whitehall
to fund the capital call. The “Investment” means the Initial Investment together with any
Additional Investment(s).

          (b) Participant’s “Percentage Interest” means, as of any date of determination,
the percentage obtained by dividing Participant’s aggregate Investment as of such date by the
Total Whitehall Contribution. Participant’s “Cash Percentage Interest” means, as of any
date of determination, the percentage obtained by dividing Participant’s aggregate Cash Investment
as of such date by the Total Whitehall Contribution. Participant’s “Participating Percentage
Interest” means, as of any date of determination, the percentage obtained by dividing
Participant’s Participating Investment as of such date by the Total Whitehall Contribution. As of
the date hereof, the Total Whitehall Contribution is $                     and Participant’s initial Percentage Interest, Cash Percentage Interest and
Participating Percentage Interest are, respectively, 0._%, 0.___% and 0.___%.

     4. Vesting.

          (a) Participant’s rights hereunder with respect to the Cash Investment are fully vested
as of the Effective Date. Provided that no Qualifying Circumstance or Cause Termination has
occurred on or prior to the applicable Vesting Date, Participant’s rights hereunder with respect to
the Participating Investment and the Incentive Distributions shall vest in accordance with the
following schedule:

          (i) between the Effective Date and the 1/4 Vesting Milestone, Participant’s
vesting percentage shall be 0%;

          (ii) from and after the 1/4 Vesting Milestone up to the 1/2 Vesting Milestone,
Participant’s vesting percentage shall be 25%;

          (iii) from and after the 1/2 Vesting Milestone up to the 3/4 Vesting Milestone,
Participant’s vesting percentage shall be 50%;

          (iv) from after the 3/4 Vesting Milestone up to the Full Vesting Milestone,
Participant’s vesting percentage shall 75% and

          (v) from and after the Full Vesting Milestone, Participant’s vesting
percentage shall be 100%.

          (b) Notwithstanding Section 4(a) above, if a Qualifying Circumstance occurs, Participant
shall be entitled to retain the vesting percentage with respect to the Participating Investment and
the Incentive Distributions that vested prior to the occurrence of such Qualifying Circumstance,
but such vesting percentage shall not thereafter increase. For example, if a Qualifying
Circumstance should occur after the 1/2 Vesting Milestone but prior to

 

 

the 3/4 Vesting Milestone, Participant’s vesting percentage with respect to the Participating
Investment and the Incentive Distributions shall be 50% (but shall in no event increase to 75% or
100% thereafter). Notwithstanding Section 4(a) above, if a Cause Termination occurs, effective as
of the date of such Cause Termination, Participant’s Vesting Percentage with respect to the
Participating Investment and the Incentive Distributions shall be reduced to 0%.

          (c) Provided that no Cause Termination has occurred on or prior to the applicable
Vesting Date: (i) on the 1/4 Vesting Milestone, 25% of any amounts which Participant is entitled
to receive under Sections 5 or 6 and which are then held in escrow shall be payable to the
Participant in cash (as a Cash Distribution); (ii) on the 1/2 Vesting Milestone, 50% of any
amounts which Participant is entitled to receive under Sections 5 or 6 and which are then held in
escrow shall be payable to the Participant in cash (as a Cash Distribution); (iii) on the 3/4
Vesting Milestone, 75% of any amounts which Participant is entitled to receive under Sections 5 or
6 and which are then held in escrow shall be payable to the Participant in cash (as a Cash
Distribution) and (iv) on the Full Vesting Milestone, 100% of any amounts which Participant is
entitled to receive under Sections 5 or 6 and which are then held in escrow shall be payable to
the Participant in cash (as a Cash Distribution). If a Cause Termination occurs, Participant shall
immediately forfeit all rights to all amounts which Participant would otherwise have been entitled
to receive under Sections 5 or 6 and which are then held in escrow, and all such escrowed amounts
shall promptly be returned to Whitehall.

     5. Participation in Proceeds.

          (a) Operating Proceeds. As and when Whitehall receives Operating Proceeds,
Participant shall be entitled to receive an amount equal to (i) the Cash Interest Entitlement plus
(ii) the Participating Investment Entitlement. The Cash Interest Entitlement and the Current
Portion of the Participating Investment Entitlement will be payable to the Participant in cash
within five business days of Whitehall’s receipt of such Operating Proceeds (as a Cash
Distribution) and the remainder of the Participating Investment Entitlement will be escrowed and
distributed to Participant in accordance with the vesting provisions set forth in Section 4 hereof.
In addition, as of such date, to the extent there is then an Unfunded Participating Investment,
Participant will be credited with a reduction of the Unfunded Participating Investment in an amount
of the Funding Portion with respect to such Operating Proceeds. If the Unfunded Participating
Investment is greater than zero, the “Funding Portion” under this Section 5(a) shall be equal to
25% multiplied by (A) Participant’s Participating Percentage Interest multiplied by such
Operating Proceeds minus (B) the Unfunded Carry and, if the Unfunded Participating Investment is
zero, the “Funding Portion” shall be zero.

          (b) Capital Event Proceeds. As and when Whitehall receives Capital Event
Proceeds, Participant shall be entitled to receive an amount equal to (i) the Cash Interest
Entitlement plus (ii) if the Unfunded Participating Investment is zero, the Participating
Investment Entitlement. The Cash Interest Entitlement and the Current Portion of any Participating
Investment Entitlement that Participant is entitled to receive pursuant to clause (ii) above will
be payable to the Participant in cash within five business days of Whitehall’s receipt of such
Capital Event Proceeds (as a Cash Distribution) and the remainder of such Participating

 

 

Investment Entitlement will be escrowed and distributed to Participant in accordance with the
vesting provisions set forth in Section 4 hereof. In addition, as of such date, to the extent
there is then an Unfunded Participating Investment, Participant will be credited with a reduction
of the Unfunded Participating Investment in an amount of the Funding Portion with respect to such
Capital Event Proceeds. If the Unfunded Participating Investment is greater than zero, the
“Funding Portion” under this Section 5(b) shall be equal to (A) Participant’s Participating
Percentage Interest multiplied by such Capital Event Proceeds minus (B) the Unfunded Carry
and, if the Unfunded Participating Investment is zero, the “Funding Portion” shall be zero.

          (c) The parties agree that the provisions of Sections 5(a) and 5(b) are intended to
achieve the same economics as if Participant had borrowed an amount equal to the Participating
Investment from Whitehall on the Effective Date (or such applicable later date with respect to an
Additional Participating Investment) and paid interest to Whitehall on such amount at a rate of 7%
p.a. until such amount was repaid in full.

     6. Incentive Distributions.

(a) When and if Whitehall has achieved a 15% Internal Rate of Return with respect to its
investments in the Company, then Participant shall be entitled to a cash payment in the
amount of $500,000 to be paid to Participant within five business days of notice from
Whitehall.

(b) In addition to the foregoing, when and if Whitehall has achieved a 20% Internal
Rate of Return with respect to its investments in the Company, then Participant shall
be
entitled to (b) a cash payment in the amount of $500,000 to be paid to Participant
within
five business days of notice from Whitehall (the cash payments in the foregoing
clauses
6(a) and 6(b) shall be known as “Incentive Distributions”).

     7. Redemption Rights. Each of Participant and Whitehall acknowledge and agree that if a Cause
Termination occurs, Whitehall shall have the right (but not the obligation), at Whitehall’s
election at any time after the occurrence of such Cause Termination, to redeem the Initial Cash
Investment at the Redemption Price (such right shall be known as the “Redemption Right”).
Whitehall shall pay Participant the Redemption Price within 90 days of the date on which Whitehall
notifies Participant in writing of its intention to exercise its Redemption Right.

     8. Tax Distributions. If the amount of Cash Distributions received by Participant pursuant to
Section 5 in any fiscal year is not sufficient to cover Participant’s tax liabilities in respect to
the amount Participant is entitled to receive under Section 5 in such fiscal year (such difference,
the “Tax Shortfall Amount”), then Whitehall shall, subject to Participant’s execution and
delivery of a promissory note in the form of Exhibit A in favor of Whitehall in the amount
of the Tax Shortfall Amount, within 60 days after the close of the fiscal year, lend an amount of
cash to Participant equal to the Tax Shortfall Amount.

     9. No Admission; No Fiduciary or other Relationship. It is agreed and understood by the
parties hereto that Whitehall shall continue to hold its membership interests in the Company, and
that it is not the intention of the parties to admit Participant as a substituted

 

 

member or to otherwise admit Participant as a member of the Company. Each of Whitehall and
Participant confirms and agrees that the relationship between Whitehall, on the one hand, and
Participant, on the other hand, is strictly limited to the contractual arrangement set out in this
Agreement, that the relationship is one of arm’s-length contracting parties and is not one of
employer and employee or of any other similar arrangement, and further that that neither of the
parties is, or should for any purpose be construed as being, a partner or affiliate of the other
or has, or should for any purpose be construed as having, any duty (fiduciary or otherwise) to the
other or has, or should be construed as having, any other responsibility to the other except to
the extent specifically set forth in the terms of this Agreement.

     10. Representations and Warranties. Participant represents, warrants and acknowledges,
as a material inducement to Whitehall entering into this Agreement, as follows:

          (a) Participant is acquiring his or her Investment for his or her own account for investment
purposes only and not with a view to the distribution or resale thereof, in whole or in part, and
agrees that he or she will not transfer, sell, pledge, hypothecate, encumber, assign or consent to
any transfer, sale, pledge, hypothecation, encumbrance, assignment, or solicit offers to buy from
or otherwise approach or negotiate in respect thereof with any person or persons whomsoever, all or
any portion of his or her Investment in any manner that would violate or cause the Company to
violate any applicable federal or state securities laws;

          (b) Participant is financially able to bear the economic risk of his or her investment in
the Investment, including the total loss thereof;

          (c) No Person has at any time expressly or impliedly represented, guaranteed, or warranted to
Participant that a percentage of profit and/or amount or type of consideration will be realized as
a result of his or her Investment, that past performance or experience of the Company or its
subsidiaries or assets in any way indicates the future results of the ownership of his or her
Investment or of the Company business, that any cash distributions from Company operations or
otherwise will be made by any specific date or will be made at all, or that any specific tax
benefits will accrue as a result of the Investment;

          (d) The Investment is an illiquid investment with an indeterminate length, and no Person has
at any time expressly or impliedly represented, guaranteed, or warranted that the Investment will
be realized, redeemed or redeemable within a specific period of time;

          (e) Participant’s execution and delivery of this Agreement and the performance of his or her
obligations hereunder will not conflict with, result in a breach of or constitute a default (or any
event that, with notice or lapse of time, or both, would constitute a default) or result in the
acceleration of any obligation under any of the terms, conditions or provisions of any other
agreement or instrument to which Participant is a party or by which Participant is bound or to
which any of Participant’s property or assets are subject, or violate any statute or any order,
rule or regulation of any court or governmental or regulatory agency, body or official, that would
materially and adversely affect the performance of his or her duties hereunder; and Participant has
obtained any consent, approval, authorization or order of any

 

 

court or governmental agency or body required for the execution, delivery and performance by
Participant of his or her obligations hereunder;

          (f) There is no action, suit or proceeding pending against Participant or, to Participant’s
knowledge, threatened in any court or by or before any other governmental agency or
instrumentality which would prohibit Participant from entering into or performing his or her
obligations under this Agreement;

          (g) Neither Participant nor any of Participant’s affiliates has employed any broker or
finder, or incurred any liability therefore, in connection with this Agreement or the transactions
contemplated hereby;

          (h) This Agreement is a binding agreement on the part of Participant enforceable
in accordance with its terms against Participant;

          (i) Participant acknowledges and agrees that Sullivan & Cromwell LLP serves as counsel
to Whitehall, and that Sullivan & Cromwell LLP does not serve as counsel to any other Party.
Participant acknowledges and agrees that he or she does not have an attorney-client relationship
with Sullivan & Cromwell LLP, and that no such relationship will arise in the course of the
Company’s existence or dissolution by any means. Participant represents and warrants that, in the
event of litigation or arbitration between Whitehall and Participant, Participant will not seek the
removal of Sullivan & Cromwell LLP as counsel to Whitehall for any purported conflict of interest
or attorney-client relationship allegedly existing between Sullivan & Cromwell LLP and Participant.
Participant has been advised to and has engaged his or her own counsel and any other advisers
Participant deems necessary and appropriate. By reason of Participant’s business or financial
experience, or by reason of the business or financial experience of Participant’s own attorneys,
accountants and financial advisors, Participant is capable of evaluating the risks and merits of
the Investment and of protecting his or her own interests in connection with Investment; and

          (j) Participant has consulted with his or her own accountants and financial advisors
regarding all tax and financial matters concerning the Investment and the tax consequences of the
Investment. Participant acknowledges that the tax consequences of the Investment will depend on
Participant’s particular circumstances, and neither the Company, Whitehall, nor the partners,
shareholders, members, managers, fiduciaries, agents, officers, directors, employees, affiliates,
or consultants of any of them will be responsible or liable for the legal, tax, or financial
consequences to Participant of the Investment. Participant will solely look to, and rely upon, his
or her own advisers with respect to the legal, tax, and financial consequences of the Investment.

     11. Tax Treatment. Whitehall and Participant agree that (a) Participant’s Investment
pursuant to this Agreement shall be treated for U.S. federal income tax purposes as (i) a sale of a
portion of the membership interests in the Company equal to Participant’s Cash Percentage Interest
to Participant and (ii) a grant of a profits interest in the Company equal to Participant’s
Participating Percentage and Incentive Distributions, with Whitehall holding such membership and
profits interests as a nominee on behalf of Participant, (b) Participant shall be treated for

 

 

U.S. federal income tax purposes in the same manner as if he or she (i) had purchased and is
holding a common equity membership interest in the Company equal to Participant’s Percentage
Interest, and (ii) is holding a profits interest in the Company equal to Participant’s
Participating Percentage and Incentive Distributions, (c) Whitehall shall timely deliver to the
Company the statement described in Treas. Regs. Section 1.6031(c)-lT(a)(l)(ii) with respect to the
portion of the membership interests in the Company that is treated as purchased by Participant
pursuant to this Agreement, (d) Participant shall provide Whitehall with a properly completed IRS
Form W-9 or W-8, as applicable, and any other information, forms or documents as may be reasonably
requested by Whitehall acting in its role as nominee and (e) Participant shall make a Section
83(b) election in respect of his or her Investment.

     12. Confidentiality. Participant agrees to hold the terms of this Agreement and any
information relating to the Company or Whitehall that Participant obtains during the term of this
Agreement strictly confidential and not to disclose the same to any third party, provided,
however, that Participant may disclose such information only (a) as required by applicable
law and then only to the extent required by such law, (b) at the express direction of any court or
other governmental authority with jurisdiction over Participant or (c) pursuant to subpoena or
other process of a court or other governmental authority having jurisdiction over Participant.

     13. Future Cooperation. Each of the parties hereto agrees to cooperate at all times from and
after the date hereof with respect to all of the matters described herein, and to execute such
further assignments, releases, assumptions, notifications and other documents as may be reasonably
requested for the purpose of giving effect to, or evidencing or giving notice of, the transaction
contemplated by this Agreement.

     14. Termination. Participant’s rights under this Agreement automatically shall terminate and
expire upon the sooner of (i) the closing of the exercise of Whitehall’s Redemption Rights as
provided in Section 7 above and (ii) the date that Whitehall no longer owns any direct or indirect
interest in the Company.

     15. Notice. Unless otherwise expressly agreed in writing, any notice, consent or other
document required to be sent pursuant to this Agreement shall be in writing and shall be deemed to
be validly given by the delivery thereof to its recipient, either personally with a receipt, by
registered mail, via reputable overnight courier, or via facsimile transmission if such facsimile
provides confirmation of sending followed by a reputable overnight courier that provides
confirmation of delivery to the sender. Notices shall be sent as follows:

If to the Company, then to:

W2007/ACEP Holdings, LLC

c/o Goldman, Sachs & Co.

85 Broad St.

New York, NY 10004

Attention: Whitehall Chief Financial Officer & Whitehall General Counsel

 

 

with a copy to:

Whitehall Street Global Real Estate Limited Partnership 2007

c/o Goldman, Sachs & Co.

85 Broad St.

New York, NY 10004

Attention: Whitehall Chief Financial Officer & Whitehall General Counsel

and a copy to:

Sullivan & Cromwell, LLP

125 Broad Street

New York, NY 100004

Attention: Anthony J. Colletta, Esq.

and a copy to:

American Casino & Entertainment Properties, LLC

2000 Las Vegas Blvd, South

Las Vegas, NV 89104

Attention: Frank V. Riolo, President

If to Participant, then to:

Phyllis A. Gilland
 380
Terrabianca Circle

Henderson, NV 89012

Any written notice is deemed to have been received: (a) if sent by personal delivery,
registered mail or prepaid overnight courier, at the time of its delivery; (b) if sent by
prepaid mail, on the fifth (5th) business day following its sending; or (c) if transmitted by
facsimile transmission or other electronic means as may be permitted by this Agreement or
otherwise mutually agreed, on the first business day following its sending.

     16. Rights Personal to Participant. The rights and privileges described in this Agreement
are personal to Participant and may not be sold, assigned, pledged or otherwise transferred or
encumbered (other than testamentary transfers to Participant’s spouse or heirs), directly or
indirectly, by Participant without Whitehall’s prior written consent, which consent Whitehall may
grant or withhold in Whitehall’s sole and absolute discretion. Any pledge or other transfer of all
or any portion of Participant’s rights under this Agreement without Whitehall’s prior written
consent shall be void ab initio, and if Participant attempts to effect any such transfer then at
any time following such attempt Whitehall shall have the right to redeem Participant’s interest at
a redemption price equivalent to the Redemption Price provided for in Section 7 above.

 

 

     17. Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit of,
the parties hereto and their respective successors and assigns.

     18. Execution in Counterparts. This Agreement may be (a) executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument
and (b) transmitted by telecopy or other facsimile signature (which shall be deemed an original for
all purposes).

     19. Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York, and all rights and remedies hereunder shall be governed by such laws
without regard to principles of conflict of law.

[signature page follows]

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	 	 
	 	
/s/ PHYLLIS A. GILLAND
 	 
	 	Phyllis A. Gilland
 	 
	 	Social Security No. 168402594 	 
	 
	 	WHITEHALL PARALLEL GLOBAL REAL ESTATE LIMITED
PARTNERSHIP 2007, a Delaware limited

partnership

 	 
	 	By:  	WH PARALLEL ADVISORS, L.L.C. 2007,
 	 
	 	 	its General Partner 	 
	 	 	 	 
	 	By:  	/s/ JONATHAN A. LANGER
 	 
	 	 	Name:  	Jonathan A. Langer 	 
	 	 	Title:  	Manager 	 
	 
	 	W2007 FINANCE SUB, LLC, a Delaware limited

liability company

 	 
	 	By:  	WHITEHALL STREET GLOBAL REAL ESTATE LIMITED PARTNERSHIP 2007, its Managing Member 
 	 
	 	 	 	 
	 	By:  	WH ADVISORS, L.L.C. 2007, its General Partner  	 
	 	 	 	 
	 	By:  	/s/ JONATHAN A. LANGER
 	 
	 	 	Name:  	Jonathan A. Langer 	 
	 	 	Title:  	ManagerEX-10.19

Exhibit 10.19

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) 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)
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 Paragraph
6 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, 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 receive
dividends with respect to such Restricted Shares and the right to vote such Restricted Shares, but
subject, however, to those restrictions in this Agreement or in the Plan.

     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 the treatment of any tax
withholding in connection with the grant or vesting of the Restricted Shares or the subsequent sale
of shares issuable pursuant to 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 shares
from those shares issuable to Awardee at the time 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) 757-6813

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

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