Document:

EX-10.02

 

Exhibit 10.02

CARDINAL HEALTH, INC.

RESTRICTED SHARE UNITS AGREEMENT

     On [grant date] (the “Grant Date”), Cardinal Health, Inc, an Ohio corporation (the “Company”),
has awarded to [employee name] (“Awardee”) [# of shares] Restricted Share Units (the “Restricted
Share Units” or “Award”), representing an unfunded unsecured promise of the Company to deliver
common shares, without par value, of the Company (the “Shares”) to Awardee as set forth herein.
The Restricted Share Units have been granted pursuant to the Cardinal Health, Inc. 2005 Long-Term
Incentive Plan (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 Share
Units 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 Share Units shall vest [CLIFF VESTING ALTERNATIVE: on [vesting date] (the “Vesting
Date”)] [INSTALLMENT VESTING ALTERNATIVE: in accordance with the following schedule: [vesting
schedule] (each such vesting date, the “Vesting Date” with respect to the Restricted Share Units
scheduled to vest on such date)]. Notwithstanding the foregoing, in the event of a Change of
Control prior to Awardee’s Termination of Employment, the Restricted Share Units shall vest in
full.

     2. Transferability. The Restricted Share Units shall not be transferable.

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

     4. Triggering Conduct/Competitor Triggering Conduct. As used in this Agreement,
“Triggering Conduct” shall include the following: disclosing or using in any capacity other than as
necessary in the performance of duties assigned by the Company and its Affiliates (collectively,
the “Cardinal Group”) any confidential information, trade secrets or other business sensitive
information or material concerning the Cardinal Group; violation of Company policies, including
conduct which would constitute a breach of any of the Certificates of Compliance with Company
Policies and/or the Certificates of Compliance with Company Business Ethics Policies signed by
Awardee; directly or indirectly employing, contacting concerning employment, or participating in
any way in the recruitment for employment of (whether as an employee, officer, director, agent,
consultant or independent contractor), any person who was or is an employee, representative,
officer or director of the Cardinal Group at any time within the 12 months prior to Awardee’s
Termination of Employment; any action by Awardee and/or his or her representatives that either does
or could reasonably be expected to undermine, diminish or otherwise damage the relationship between
the Cardinal Group and any of its customers, potential customers, vendors and/or suppliers that
were known to Awardee; and breaching any provision of any employment or severance agreement with a
member of the Cardinal Group. As used in this Agreement, “Competitor Triggering Conduct” shall
include, either during Awardee’s employment or within one year following Termination of Employment,
accepting employment with or serving as a consultant or advisor or in any other capacity to an
entity that is in competition with the business conducted by any member of the Cardinal Group (a
“Competitor”), including, but not limited to, employment or another business relationship with any
Competitor if Awardee has been introduced to trade secrets, confidential information or business
sensitive information during Awardee’s employment

 

 

with the Cardinal Group and such information would aid the Competitor because the threat of
disclosure of such information is so great that, for purposes of this Agreement, it must be assumed
that such disclosure would occur.

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

     (a) any Restricted Share Units that have not yet vested or that vested within the Look-Back
Period (as defined below) with respect to such Triggering Conduct or Competitor Triggering Conduct
and have not yet been settled by a payment pursuant to Paragraph 6 hereof shall immediately and
automatically terminate, be forfeited, and 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 settlement of all Restricted Share Units pursuant to Paragraph 6 hereof (measured as of
the settlement date (i.e., the market value of the Restricted Share Units on such settlement date))
that have already been settled and that had vested at any time within three years prior to the
Triggering Conduct (the “Look-Back Period”), minus (y) $1.00. If Awardee engages only in
Competitor Triggering Conduct, then the Look-Back Period shall be shortened to exclude any period
more than one year prior to Awardee’s Termination of Employment, but including any period between
the time of Termination of Employment and the time of Awardee’s engaging in Competitor Triggering
Conduct.

     Awardee may be released from his or her obligations under this Paragraph 5 if and only if the
Administrator (or its duly appointed designee) determines, in writing and in its sole discretion,
that such action is in the best interests of the Company. Nothing in this Paragraph 5 constitutes
a so-called “noncompete” covenant. This Paragraph 5 does, however, prohibit certain conduct while
Awardee is associated with the Cardinal Group and thereafter and does provide for the forfeiture or
repayment of the benefits granted by this Agreement under certain circumstances, including, but not
limited to, Awardee’s acceptance of employment with a Competitor. Awardee agrees to provide the
Company with at least 10 days written notice prior to directly or indirectly accepting employment
with, or serving as a consultant or advisor or in any other capacity to, a Competitor, and further
agrees to inform any such new employer, before accepting employment, of the terms of this Paragraph
5 and Awardee’s continuing obligations contained herein. No provision of this Agreement shall
diminish, negate or otherwise impact any separate noncompete or other agreement to which Awardee
may be a party, including, but not limited to, any of the Certificates of Compliance with Company
Policies and/or the Certificates of Compliance with Company Business Ethics Policies; provided,
however, that to the extent that any provisions contained in any other agreement are inconsistent
in any manner with the restrictions and covenants of Awardee contained in this Agreement, the
provisions of this Agreement shall take precedence and such other inconsistent provisions shall be
null and void. Awardee acknowledges and agrees that the provisions contained in this Agreement are
being made for the benefit of the Company in consideration of Awardee’s receipt of the Restricted
Share Units, 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 Share Units and execution of this Agreement are voluntary
actions on the part of Awardee and that the Company is unwilling to provide the Restricted Share
Units to Awardee without including the restrictions and covenants of Awardee contained in this

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Agreement. Further, the parties agree and acknowledge that the provisions contained in
Paragraphs 4 and 5 are ancillary to, or part of, an otherwise enforceable agreement at the time the
agreement is made.

     6. Payment. Subject to the provisions of Paragraphs 4 and 5 of this Agreement, and
unless Awardee makes an effective election to defer receipt of the Shares represented by the
Restricted Share Units, on the date of vesting of any Restricted Share Unit, Awardee shall be
entitled to receive from the Company (without any payment on behalf of Awardee other than as
described in Paragraph 10) the Shares represented by such Restricted Share Unit; provided, however,
that, subject to the next sentence, in the event that such Restricted Share Units vest prior to the
applicable Vesting Date as a result of the death of Awardee or as a result of a Change of Control,
Awardee shall be entitled to receive the corresponding Shares from the Company on the date of such
vesting. Notwithstanding the proviso of the preceding sentence, if Restricted Share Units vest as
a result of the occurrence of a Change of Control under circumstances where such occurrence would
not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the
regulations thereunder, and where Code Section 409A applies to such distribution, such proviso
shall not apply and Awardee shall be entitled to receive the corresponding Shares from the Company
on the date that would have applied absent such proviso. Elections to defer receipt of the Shares
beyond the date of settlement provided herein may be permitted in the discretion of the
Administrator pursuant to procedures established by the Administrator in compliance with the
requirements of Section 409A of the Code.

     7. Dividends. Awardee shall not receive cash dividends on the Restricted Share Units
but instead shall, with respect to each Restricted Share Unit, receive a cash payment from the
Company on each cash dividend payment date with respect to the Shares with a record date between
the Grant Date and the earlier of the forfeiture of such unit in accordance with the terms hereof
or the settlement of such unit pursuant to Paragraph 6 hereof, such cash payment to be in an amount
equal to the dividend that would have been paid on the Common Share represented by such unit.

     8. Right of Set-Off. By accepting these Restricted Share Units, 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.

     9. No Shareholder Rights. Awardee shall have no rights of a shareholder with respect
to the Restricted Share Units, including, without limitation, Awardee shall not have the right to
vote the Shares represented by the Restricted Share Units.

     10. Withholding Tax.

     (a) Generally. Awardee is liable and responsible for all taxes owed in connection
with the Restricted Share Units (including taxes owed with respect to the cash payments described
in Paragraph 7 hereof), regardless of any action the Company takes with respect to any tax
withholding obligations that arise in connection with the Restricted Share Units. 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 Share Units or the subsequent
sale of Shares issuable pursuant to the Restricted Share Units. The Company does not commit and is
under no obligation to structure the Restricted Share Units to reduce or eliminate Awardee’s tax
liability.

     (b) Payment of Withholding Taxes. Prior to any event in connection with the
Restricted Share Units (e.g., vesting or settlement) that the Company determines may result in any
domestic or

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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 Share Units become
vested and payable 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. The Company shall have the right to deduct from all cash payments paid pursuant to
Paragraph 7 hereof the amount of any taxes which the Company is required to withhold with respect
to such payments.

     11. Beneficiary Designation. Awardee may designate a beneficiary to receive any
Shares to which Awardee is entitled with respect to the Restricted Share Units which vest as a
result of Awardee’s death. Notwithstanding the foregoing, if Awardee engages in Triggering Conduct
or Competitor Triggering Conduct as herein defined, the Restricted Share Units 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.

     12. Governing Law/Venue. This Agreement shall be governed by the laws of the State of
Ohio, without regard to principles of conflicts of law, except to the extent superceded by the laws
of the United States of America. The parties agree and acknowledge that the laws of the State of
Ohio bear a substantial relationship to the parties and/or this Agreement and that the Restricted
Share Units 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.
Awardee acknowledges that the covenants contained in Paragraphs 4 and 5 of this Agreement are
reasonable in nature, are fundamental for the protection of the Company’s legitimate business and
proprietary interests, and do not adversely affect Awardee’s ability to earn a living in any
capacity that does not violate such covenants. The parties further agree that in the event of any
violation by Awardee of any such covenants, the Company will suffer immediate and irreparable
injury for which there is no adequate remedy at law. In the event of any violation or attempted
violations of the restrictions and covenants of Awardee contained in this Agreement, the Cardinal
Group shall be entitled to specific performance and injunctive relief or other equitable relief,
including the issuance ex parte of a temporary restraining order, without any showing of
irreparable harm or damage, such irreparable harm being acknowledged and admitted by Awardee, and
Awardee hereby waives any requirement for the securing or posting of any bond in connection with
such remedy, without prejudice to 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. 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.

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     13. Action by the Administrator. The parties agree that the interpretation of this
Agreement shall rest exclusively and completely within the sole discretion of the Administrator.
The parties agree to be bound by the decisions of the Administrator with regard to the
interpretation of this Agreement and with regard to any and all matters set forth in this
Agreement. The Administrator may delegate its functions under this Agreement to an officer of the
Cardinal Group designated by the Administrator (hereinafter the “Designee”). In fulfilling its
responsibilities hereunder, the Administrator or its Designee may rely upon documents, written
statements of the parties or such other material as the Administrator or its Designee deems
appropriate. The parties agree that there is no right to be heard or to appear before the
Administrator or its Designee and that any decision of the Administrator or its Designee relating
to this Agreement, including, without limitation, whether particular conduct constitutes Triggering
Conduct or Competitor Triggering Conduct, shall be final and binding unless such decision is
arbitrary and capricious.

     14. Prompt Acceptance of Agreement. The Restricted Share Unit 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.

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

     16. 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

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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:                                                             

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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) accepts this Agreement and the Restricted Share Units granted to him or
her under this Agreement subject to all provisions of the Plan and this Agreement, including the
provisions in the agreement regarding “Triggering Conduct/Competitor Triggering Conduct” and
“Special Forfeiture/Repayment Rules” set forth in paragraphs 4 and 5 above; (c) represents that he or she understands
that the acceptance of this Agreement through an on-line or electronic system, if applicable,
carries the same legal significance as if he or she manually signed the Agreement; (d) represents
and warrants to the Company that he or she is purchasing the Restricted Share Units for his or her
own account, for investment, and not with a view to or any present intention of selling or
distributing the Restricted Share Units 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 Shares delivered in respect of the Restricted Share
Units shall be made unless the 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]	 	 

7EX-10.03

 

Exhibit 10.03

CARDINAL HEALTH, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

     On [date of grant] (the “Grant Date”), Cardinal Health, Inc., an Ohio corporation (the
“Company”), has awarded to [employee name] (“Awardee”), an option (the “Option”) to purchase [# of
shares] common shares, without par value, of the Company (the “Shares”) for a price of [$X.XX] per
share. The Option has been granted under the Cardinal Health, Inc. 2005 Long-Term Incentive Plan
(the “Plan”) and will include and be subject to all provisions of the Plan, which are incorporated
herein by reference, and will be subject to the provisions of this agreement. Capitalized terms
used in this agreement which are not specifically defined will have the meanings ascribed to such
terms in the Plan. This Option shall vest and become exercisable [CLIFF ALTERNATIVE: on [vesting
date]] [INSTALLMENT ALTERNATIVE: in accordance with the following schedule: [vesting schedule],
subject [INSTALLMENT ALTERNATIVE: in each case] to the provisions of this agreement, including
those relating to the Awardee’s continued employment with the Company and its Affiliates.
Notwithstanding the foregoing, in the event of a Change of Control prior to Awardee’s Termination
of Employment, the Option shall vest in full. This Option shall expire on [date of expiration]
(the “Grant Expiration Date”).

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 equity 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 Awardee, 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 below:

     (i) in cash;

     (ii) by check or wire transfer (denominated in U.S. Dollars);

     (iii) subject to any conditions or limitations established by the Administrator, other Shares
which (A) in the case of Shares acquired from the Company (whether upon the exercise of an Option
or otherwise), have been owned by the Participant for more than six months on the date of surrender
(unless this condition is waived by the Administrator), and (B) have a Fair Market Value on the
date of surrender equal to or greater than the aggregate exercise price of the Shares as to which
said Option shall be exercised (it being agreed that the excess of the Fair Market Value over the
aggregate exercise price shall be refunded to the Awardee in cash);

 

 

     (iv) consideration received by the Company under a broker-assisted sale and remittance program
acceptable to the Administrator; or

     (v) any combination of the foregoing methods of payment.

2. Transferability. The Option shall be transferable (I) at Awardee’s death, by Awardee by
will or pursuant to the laws of descent and distribution, and (II) by Awardee during Awardee’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 Awardee, or any other persons sharing Awardee’s household
(other than tenants or employees) (collectively, “Family Members”), (b) a trust or trusts for the
primary benefit of Awardee or such Family Members, (c) a foundation in which Awardee or such Family
Members control the management of assets, or (d) a partnership in which Awardee 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 Awardee. The Administrator 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 Awardee 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, Awardee 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 Awardee
shall be deemed to refer to the transferee. The events of Termination of Employment of Awardee
provided in paragraph 3 hereof shall continue to be applied with respect to the original Awardee,
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 Awardee’s Termination of Employment with the Company for any reason. The conduct prohibited of
Awardee in paragraphs 5 through 7 and, if applicable, paragraph 11 of this agreement shall continue
to be prohibited of Awardee 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 Awardee to the same extent as would have been the case of Awardee
had the Option not been transferred. Awardee shall remain subject to the recoupment provisions of
paragraph 13 of this agreement and tax withholding provisions of Section 29 of the Plan following
transfer of the Option.

3. Termination of Employment.

(a) Termination of Employment by Reason of Death. If a Termination of Employment occurs by
reason of death prior to the vesting in full of the Option, then any unvested portion of the Option
shall vest upon and become exercisable in full from and after such death. The Option may
thereafter be exercised by any transferee of Awardee, if applicable, or by the legal representative
of the estate or by the legatee of Awardee under the will of Awardee for a period of one year from
the date of death or until the Grant Expiration Date, whichever period is shorter.

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(b) Termination of Employment by Reason of Retirement or Disability. If a Termination of
Employment occurs by reason of Retirement or Disability prior to the vesting in full of the Option,
then any unexercised portion of the Option which has not vested on such date of Termination of
Employment will automatically be forfeited. The Option, to the extent vested, may be exercised by
Awardee (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, provided that if Awardee has at
least 15 years of service with the Company and its Affiliates (collectively, the “Cardinal Group”)
at the time of Retirement, the Option, to the extent vested, may be exercised by Awardee (or any
transferee, if applicable) until the Grant Expiration Date. Notwithstanding the foregoing, if
Awardee dies after Retirement or Disability, but before the expiration of the exercise period
provided for by the preceding sentence, 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 Awardee under the will of Awardee from and after such death only until the earlier of
(x) the first anniversary of the date of death or (y) the date upon which such exercise period
would have otherwise expired.

(c) Other Termination of Employment. If a Termination of Employment occurs by any reason
other than death, Retirement or Disability, any unexercised portion of the Option which has not
vested on such date of Termination of Employment will automatically be forfeited. Subject to
Section 16(b)(ii) of the Plan, Awardee (or any transferee, if applicable) will have 90 days from
the date of Termination of Employment or until the Grant Expiration Date, whichever period is
shorter, to exercise any portion of the Option that is vested and exercisable on the date of
Termination of Employment; provided, however, that if the Termination of Employment was a
Termination for Cause, as determined by the Administrator, the Option may be immediately canceled
by the Administrator (whether then held by Awardee 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 Awardee
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 Awardee’s compliance with
the terms of paragraphs 5 through 7 and, if applicable, paragraph 11 of this agreement or any
employment or severance agreement between the Cardinal Group and Awardee) reasonably requested by
the Company.

5. Agreement Not to Disclose or Use Confidential Information, Trade Secrets or Other Business
Sensitive Information. The parties acknowledge and agree that the Cardinal Group is the sole
and exclusive owner of Confidential Information, Trade Secrets or Other Business Sensitive
Information 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

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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.

6. 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.

7. Other Covenants. Except as modified by paragraph 11 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

4

 

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 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.

8. 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.

9. Covenants Are Independent Elements. The parties acknowledge that the obligations and
covenants set forth in paragraphs 5 through 8 above and, if applicable, paragraph 11 below are
essential independent elements of this Option grant and that, but for Awardee agreeing to comply
with them, the Cardinal Group would not have granted such Option to Awardee. The parties agree and
acknowledge that the provisions contained in paragraphs 5 through 8 above and, if applicable,
paragraph 11 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 5 through 8 above and, if applicable,
paragraph 11 below. The covenants contained in paragraphs 5 through 8 above and, if applicable,
paragraph 11 below will remain in full force and effect whether Awardee is terminated by the
Cardinal Group or voluntarily resigns.

10. 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.

11. California Specific Modifications. This paragraph 11 shall supercede and modify
certain of the covenants, obligations and restrictions of Awardee set forth in paragraph 7 above in
the

5

 

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
7(d) through (f) above are inconsistent with the provisions of this paragraph 11 with regard to the
State of California, then the provisions contained in subparagraphs 7(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 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
7 above shall apply in full force and effect and the provisions of this paragraph 11 shall not
apply.

12. 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.

13. 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) 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) Awardee 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 Awardee 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

6

 

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 conduct by
Awardee that is in violation of the covenants and restrictions of this agreement (the “Look-Back
Period”), less $1.00.

Awardee may be released from Awardee’s obligations under this paragraph 13 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 provisions of this agreement shall diminish,
negate or otherwise impact any separate noncompete or other agreement to which Awardee may be a
party, including, but not limited to, any of the Certificates of Compliance with Company Policies
and/or the Certificates of Compliance with Company Business Ethics Policies; provided, however,
that to the extent that any provisions contained in any other agreement are inconsistent in any
manner with the restrictions and covenants of Awardee contained in this agreement, the provisions
of this agreement shall take precedence and such other inconsistent provisions shall be null and
void. Awardee acknowledges and agrees that the 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 Option, 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 Option and execution of this agreement are voluntary actions
on the part of Awardee and that the Company is unwilling to provide the Option 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 7 and, if applicable,
paragraph 11 above are ancillary to or part of an otherwise enforceable agreement at the time the
agreement is made.

14. Right of Set-Off. By accepting this Option, 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.

15. Withholding Tax.

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

(b) Payment of Withholding Taxes. Concurrently with the payment of the exercise price
pursuant to paragraph 1 hereof, Awardee is required to arrange for the satisfaction of the minimum
amount of any domestic or foreign tax withholding obligation, whether national, federal, state or
local, including any employment tax obligation (the “Tax Withholding Obligation”) in

7

 

a manner acceptable to the Company. Any manner provided for in subparagraph 1(b) hereof shall be
deemed an acceptable manner to satisfy the Tax Withholding Obligation unless otherwise determined
by the Company.

16. Governing Law/Venue. This agreement shall be governed by the laws of the State of
Ohio, without regard to principles of conflicts of law, except to the extent superceded by the laws
of the United States of America. The parties agree and acknowledge that the laws of the State of
Ohio bear a substantial relationship to the parties and/or this agreement and that the Option and
benefits granted herein would not be granted without the governance of this agreement by the laws
of the State of Ohio. In addition, all legal actions or proceedings relating to this agreement
shall be brought in state or federal courts located in Franklin County, Ohio and the parties
executing this agreement hereby consent to the personal jurisdiction of such courts. 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.

17. 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.

18. 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 5
through 7 and, if applicable, paragraph 11 above, shall be final and binding unless such decision
is arbitrary and capricious.

19. Prompt Acceptance of Agreement. The Option grant evidenced by this agreement shall, at
the discretion of the Administrator, be forfeited be forfeited if this agreement is not manually

8

 

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.

20. 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.
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 option grants and the execution
of option agreements through electronic signature.

21. 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:	 	 	 	 
	 

	 	 	 	 	 	 

9

 

ACCEPTANCE OF AGREEMENT

Awardee 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; (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 obligations and covenants set forth in paragraphs 5
through 8 above and, if applicable, paragraph 11 above; and (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.
Awardee further acknowledges receiving 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.

	 	 	 	 	 
	 

	 	[
	 	 
	 

	 	 	 	 
	 

	 	Awardee’s Signature	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Awardee’s Social Security Number	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Date]	 	 

10

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