Document:

EX-10.23

 

Exhibit 10.23

CHARTER JET POLICY & PROCEDURES

Personal Use Of Aircraft Chartered By The Company

Kennametal Inc. (the “Company”) may make available aircraft owned, leased or chartered by it for
personal use by executive officers of the Company if such corporate aircraft is not otherwise being
used for business purposes.

APPROVAL OF USE

A request by any executive (other than the Chief Executive Officer) for personal use of an aircraft
owned, leased or chartered by the Company must be approved by the Chief Executive Officer. A
request by the Chief Executive Officer for the personal use of such aircraft must be pre-approved
by either the Chief Financial Officer or the General Counsel, or by the Compensation Committee of
the Board of Directors if the request for personal use by the Chief Executive Officer came after
the use had already occurred. Any executive desiring to use such aircraft for personal use must
complete the request form attached to the Charter Jet Policy & Procedures and deliver such form to
the Chief Executive Officer (or the Chief Financial Officer or General Counsel in the case of the
Chief Executive Officer) for approval. The approved request form must then be promptly submitted
to the payroll department at the executive’s location.

COST OF USE

Imputation of Income. Taxable income will be imputed to the executive (considered compensation)
for each personal trip at a rate equivalent to the Standard Industry Fare Level formula calculation
(SIFL), or such other calculation as may be required under applicable IRS rules and regulations,
for that trip for the executive and each family member or guest over the age of two.

“Hitchhiker” Rules. The “hitchhiker” rules apply when a flight is for business purposes, but
certain passengers on the flight (referred to as “hitchhikers”) come along for non-business
purposes. If at least one-half (1/2) of the regular seating capacity on the aircraft is occupied
by employees whose flights are primarily for employer’s business purposes, no income will be
imputed to an executive and/or an immediate family member of an executive who is a hitchhiker. If
less than one-half (1/2) of the regular seating capacity on the aircraft is occupied by employees
whose flights are primarily for employer’s business purposes, then income using the SIFL formula
will be imputed to an executive and/or an immediate family member of an executive who is a
hitchhiker.

Other Charges. All other charges such as catering, ground transportation and other extra charges
incurred by the executive while using the corporate aircraft for personal use will be imputed to
the executive (considered compensation) at their actual cost to the Company.EX-10.01

 

Exhibit 10.01

CARDINAL HEALTH, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

Dollars at Work*: $22,360,210

Grant Date: September 2, 2005

Exercise Price: $58.88

Grant Expiration Date: September 2, 2012

Cardinal Health, Inc., an Ohio corporation (the “Company”), has granted to Robert D. Walter
(“Grantee”), an option (the “Option”) to purchase 379,759 common shares, without par value, of the
Company (the “Shares”) for a total purchase price of $22,360,210 (i.e., the equivalent of $58.88
for each full Share). The Option has been granted under the Cardinal Health, Inc. Amended and
Restated 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. In the event of a conflict between the provisions of this Agreement
and the provisions of the Plan, the provisions of the Plan shall control. 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 vest and become exercisable in four equal installments on each of
the first four anniversaries of the Grant Date (each, the “Vesting Date” with respect to the
portion of the Option scheduled to vest on such date), subject in each case to the provisions of
this agreement, including those relating to the Grantee’s
continued employment with the Company and its subsidiaries.

CARDINAL HEALTH, INC.

/s/ Anthony J. Rucci

By: Anthony J. Rucci

Its: Executive Vice President & President
of Strategic Corporate Resources

 

* 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 all or a portion of the Option is exercisable
under the Plan and this agreement, some or all of the exercisable portion of the Option may be
exercised from time to time by written notice to the Company, or such other method of exercise as
may be specified by the Company, including without limitation, exercise by electronic means on the
web site of the Company’s third-party option plan administrator (the “Plan Administrator”), 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, if not already provided,
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 portion of the Option being
exercised 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 Compensation
and Benefits department 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.

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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 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 13(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,
to the extent vested, 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 by reason of retirement or disability (each as defined in the Plan) prior
to the vesting in full of the Option, then, unless otherwise determined by the Committee within 60
days of such retirement or disability, a Ratable Portion of each installment of the Option that
would have vested on a Vesting Date shall vest upon and become exercisable in full from and after
the later of (x) the 60th day after such termination of employment and (y) such Vesting Date. Such
Ratable Portion shall, with respect to the applicable installment, be an amount equal to such
installment of the Option scheduled to vest on the applicable Vesting Date multiplied by a
fraction, the numerator of which shall be the number of days from the Grant Date through the date
of such termination, and the denominator of which shall be the number of days from the Grant Date
through such Vesting Date. The Option, to the extent vested, may be exercised after the date of
vesting 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”). 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 date of vesting 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 with respect to each installment of the
Option

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that has not yet vested shall vest upon the 60th day after such death, and the Option, to
the extent vested, 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.

(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 10 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,

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“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 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 if and 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

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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 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. Employment Agreement. Pursuant to Section 3(b)(iii) of the Amended and Restated
Employment Agreement between the Company and Grantee, dated February 1, 2004 (the “Employment
Agreement”), Grantee is entitled to a specified value of stock options during each year of the
Employment Period (as defined in the Employment Agreement). Grantee acknowledges that the Option
granted hereunder, in tandem with the grant as of the date hereof by the Company to the Grantee of
restricted share units in respect of 54,251 Common Shares,
satisfy in full the Company’s obligation under Section 3(b)(iii) of the Employment Agreement with
respect to the current year of the Employment Period. Section 5 of the Employment Agreement sets
forth certain rules in respect of treatment of stock options upon the Grantee’s termination of
employment, and Sections 9(e) and 9(i) of the Employment Agreement set forth certain rules
in respect of the application of restrictive covenants set forth in stock option agreements to the
Grantee. The parties acknowledge that such rules set forth in the Employment Agreement apply to
the Option granted hereunder, and further acknowledge that in the event of any conflict between
such rules and the terms of this Agreement, such rules shall govern.

9. 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

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

10. Action by the Committee. The parties agree that the interpretation of this agreement
shall rest exclusively and completely within the sole 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.

11. 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

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Grantee and
returned to the Company within 90 days of the Grant Date set forth on the first page of this
agreement.

12. Electronic Delivery and Consent to Electronic Participation. The Company may, in its
sole discretion, decide to deliver any documents related to the Option grant under and
participation in the Plan or future options that may be granted under the Plan by electronic means.
Grantee 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 option grants and the execution
of option agreements through electronic signature.

13. Notices. All notices, requests, consents and other communications required
or provided under this agreement to be delivered by Grantee 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) 757-6948

All notices, requests, consents and other communications required or provided under this agreement
to be delivered by the Company to Grantee 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 Grantee.

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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, including the provisions in the agreement regarding
“Triggering Conduct/Competitor Triggering Conduct” and “Special Forfeiture/Repayment Rules” set
forth in paragraphs 5 and 6 above. 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 September 2, 2005 pertaining to the
Plan.

	 
	/s/ Robert D. Walter

	 

	Signature

	 

	Robert D. Walter

	 

	Print Name

	 

	9/2/05

	 

	Date

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