Document:

EX-10.3 FORM OF NONQUALIFIED STOCK OPTION AGMNT

 

Exhibit 10.3

Symbion Non-Employee Directors Stock Option Plan

Nonqualified Stock Option Agreement

Grant Number _________

     This Agreement is made and entered into on this ___day of ___, ___, by and
between Symbion, Inc. (the “Company”) and ___ (the “Participant”), in connection with the
grant of an Option under the Symbion Non-Employee Directors Stock Option Plan (the “Plan”) that was
made on ___, ___.

     The Company established the Plan by action of its board of directors and thereafter approved
by the stockholders of the Company effective on March 28, 2002. The Participant is a non-employee
director of the Company and is eligible to receive this Option under the terms of the Plan. The
Company desires to encourage the Participant to own Stock for the purposes stated in Article II of
the Plan. In consideration of the foregoing, the parties have entered into this Agreement to
govern the terms of the Option granted by the Company pursuant to the authority specified under the
Plan:

     1. Grant of Option. Subject to the terms and conditions set forth herein, the Company
has granted to the Participant an Option to purchase from the Company
___ shares of Stock at a
price of $  per share. This price and the number of shares are subject to adjustment as
provided in Article VIII of the Plan. This Option expires at the close of business on ___,
___, unless it expires sooner pursuant to Paragraph 6. Except as otherwise provided in
Paragraph 6 or in the Plan, this Option is exercisable at any time prior to the date it expires
with respect to the number of shares of Stock shown in the schedule below.

	 	 	 
	On and After	 	Shares Subject to Exercise
	[Date]
	 	___Shares

	[Date]
	 	An additional ___Shares

	[Date]
	 	An additional ___Shares

     2. Method of Exercise. The exercise of this Option is subject to the Participant’s
execution of a written stockholders agreement that generally applies to some or all of the
stockholders of the Company, payment of the exercise price stated in Paragraph 1, and making
arrangement for any required tax withholdings in a method that is acceptable to the Company or the
Committee. The Participant may exercise this Option in whole or in part, from time to time, with
respect to the number of whole shares of Stock that can be purchased at such time in accordance
with Paragraph 1, by actual delivery of written notice to the Company at the address provided in
Paragraph 10. Such notice of exercise shall:

          (a) specify the number of whole shares of Stock to be purchased, the exercise price and, if
applicable, the portion of the Option that is being exercised;

          (b) contain evidence satisfactory to the Committee that the person exercising this Option is
the Participant or has the right to exercise this Option; and

 

 

          (c) be accompanied by payment of the exercise price in accordance with the Plan and, in a
manner that is acceptable to the Company or the Committee, payment of or arrangement for the
payment of any required federal, state, and local withholding taxes that are due in connection with
the exercise.

     3. Transfer and Exercise of Option. In general, this Option is not transferable and
the Participant may not make any disposition of this Option or any interest herein during his or
her lifetime, except for transfers pursuant to a will or the laws of descent and distribution;
provided, however, that the Option may be transferred to the extent consented to by the Committee.
As used herein, “disposition” means any sale, transfer, encumbrance, gift, donation, assignment,
pledge, hypothecation, or other disposition, whether similar or dissimilar to those previously
enumerated, whether voluntary or involuntary, and whether during the Participant’s lifetime or upon
or after the Participant’s death, including, but not limited to, any disposition by operation of
law, by court order, by judicial process, or by foreclosure, levy or attachment, except a transfer
by will or by the laws of descent or distribution. Any attempted disposition in violation of this
Paragraph is void.

     4. Status of Participant. The Participant shall not be deemed a stockholder of the
Company with respect to any of the shares of Stock subject to this Option, except to the extent
that such shares shall have been purchased and transferred to him or her. The Company is not
required to issue shares of Stock purchased upon exercise of this Option until all applicable
requirements of law have been complied with and such shares shall have been duly listed on any
securities exchange or market system on which the Stock may then be traded.

     5. No Effect On Capital Structure. This Option shall not affect the right of the
Company or any Affiliate to reclassify, recapitalize or otherwise change its capital or debt
structure or to merge, consolidate, convey any or all of its assets, dissolve, liquidate, windup,
or otherwise reorganize.

     6. Expiration of Option. In general, the right to purchase Stock under this Option
shall expire on the date specified in Paragraph 1, which is seven years from the date this Option
was granted. However, this Option shall expire on the soonest of any of the following circumstances
to occur.

          (a) Fraud or Dishonesty. If the directorship of the Participant is terminated on account of
fraud, dishonesty or other acts detrimental to the interests of the Company or any direct or
indirect majority-owned subsidiary of the Company, the Option shall automatically terminate as of
the date of such termination.

          (b) Disability. If the directorship of the Participant is terminated due to the Participant’s
disability (as defined in section 22(e)(3) of the Code), the Participant may exercise this Option
for 12 months after such termination, but only to the extent the Participant was able to do so
under Paragraph 1 on the date of termination of the directorship. Thereafter, this Option shall
terminate and cease to be exercisable.

          (c) Death. If the Participant dies, this Option shall be fully exercisable by the
Participant’s legal representatives, heirs, legatees, or distributees for 12 months after death if
the

 

 

Participant was entitled to exercise it on the date of death, without regard to the schedule
in Paragraph 1. Thereafter, this Option shall terminate and cease to be exercisable.

          (d) Other Termination of Directorship. If the directorship of the Participant terminates for
any reason other than the circumstances described in subparagraphs (a), (b), or (c) above, the
Participant may exercise this Option for three months after such termination, but only to the
extent the Participant was able to do so under Paragraph 1 on the date of termination of the
directorship. Thereafter, this Option shall terminate and cease to be exercisable. Notwithstanding
the foregoing, if the Participant becomes an employee of the Company or an Affiliate upon the
termination of his directorship, the Participant may exercise this Option for 12 months after such
termination to the extent provided under Paragraph 1 on the date of exercise. Thereafter, this
Option shall terminate and cease to be exercisable.

     7. Committee Authority. Any question concerning the interpretation of this Agreement,
any adjustments required to be made under the Plan and any controversy that may arise under the
Plan or this Agreement shall be determined by the Committee in its sole discretion. Such decision
by the Committee shall be final and binding.

     8. Change in Control. Upon the occurrence of a Change in Control, as defined in the
Plan, this Option shall be subject to the following:

          (a) If this Option is outstanding immediately prior to the Change in Control and, as a result
of the Change in Control, the Company is not the surviving entity after the transaction, or
survives only as a subsidiary or is otherwise controlled by another entity, this Option shall be
assumed by the entity which is the survivor of the transaction, or converted into options to
purchase the common stock of the surviving entity, in a transaction to which section 424(a) of the
Code applies.

          (b) Notwithstanding the provisions of Section 8.3 of the Plan regarding the acceleration of
the right to exercise this Option upon a Change in Control, a portion of the acceleration of
vesting described in this Section shall not occur with respect to this Option to the extent such
acceleration of vesting would cause the Participant or holder of such Option to realize less
income, net of taxes, after deducting the amount of excise taxes that would be imposed pursuant to
section 4999 of the Code, than if accelerated vesting of that portion of the Option did not occur.
This limitation shall not apply to the extent that the stockholders of the Company or the acquirer
approve the acceleration of vesting hereunder in a manner that satisfies section 280G(b)(5)(B) of
the Code, or to the extent that the Participant is a party to an agreement in which the Participant
is fully indemnified or otherwise held harmless for the taxes that result from section 4999 of the
Code.

          (c) Except as modified by this Paragraph 8, the provisions of Section 8.3 shall otherwise
apply to this Option upon the occurrence of a Change in Control.

     9. Plan Controls. The terms of this Agreement are governed by the terms of the Plan,
as it exists on the date of this Agreement and as the Plan is amended from time to time. A copy of
the Plan, and any amendments thereto, has been delivered or made available to the Participant and
shall be deemed to be a part of this Agreement as if fully set forth herein. In the event of any

 

 

conflict between the provisions of the Agreement and the provisions of the Plan, the terms of
the Plan shall control, except as expressly stated otherwise. For purposes of this Agreement, the
defined terms in the Plan shall have the same meaning in this Agreement, except where the context
otherwise requires. The terms “Article” or “Section” generally refer to provisions within the Plan;
provided, however, the term “Paragraph” shall refer to a provision of this Agreement.

     10. Notice. Whenever any notice is required or permitted hereunder, such notice must
be in writing and personally delivered or sent by mail. Any notice required or permitted to be
delivered hereunder shall be deemed to be delivered on the date that it is personally delivered,
or, whether actually received or not, on the third business day after it is deposited in the United
States mail, certified or registered, postage prepaid, addressed to the person who is to receive it
at the address that such person has theretofore specified by written notice delivered in accordance
herewith. The Company or Participant may change, by written notice to the other, the address
previously specified for receiving notices. Notices delivered to the Company shall be addressed as
follows:

Symbion, Inc.

Attn: __________________

40 Burton Hills Blvd., Suite 500

Nashville, TN 37215

Phone: (615) 234-5900

Fax: (615) 234-5998

Notices to the Participant shall be hand delivered to the Participant on the premises of the
Company or its Affiliates, or mailed to the last address shown on the records of the Company.

     11. Information Confidential. As partial consideration for granting of this Option,
the Participant agrees that he or she will keep confidential all information and knowledge that the
Participant has relating to the manner and amount of his or her participation in the Plan;
provided, however, that such information may be disclosed as required by law and may be given in
confidence to the Participant’s spouse, tax and financial advisors, or to a financial institution
to the extent that such information is necessary to secure a loan.

     12. Governing Law. Except as is otherwise provided in the Plan, where applicable, the
provisions of this Agreement shall be governed by the internal laws of the State of Tennessee,
without regard to the principles of conflicts of laws thereof.

 

 

Execution Page

     In Witness Whereof, the Company has caused this Agreement to be executed and the
Participant has set his hand hereto, to be effective as of _______________.

	 	 	 	 	 
	 	

Symbion, Inc.

 	 
	 	
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

	 	 	 	 	 
	 	ParticipantEX-10.01

 

Exhibit 10.01

Cardinal Health, Inc.

Long-Term Incentive Cash Program for Fiscal Years 2006-2008

Article 1. Establishment and Purpose

     1.1. Establishment of Program. The Cardinal Health, Inc. Long-Term Incentive Cash
Program for Fiscal Years 2006-2008 (the “Program”) is hereby established effective as of July 1,
2005, under Section 13 of the Cardinal Health, Inc. 2005 Long-Term Incentive Plan (the “2005
LTIP”). The Program is subject to the terms and provisions of the 2005 LTIP and shall remain in
effect until October 31, 2008, or earlier termination by the Administrator of either this Program
or the 2005 LTIP.

     1.2. Purpose. The primary purposes of the Program are to:

     (a) Achieve the Company’s long term growth objectives relative to earnings per share;

     (b) Focus management on key measures that drive superior financial and management
performance and that result in enhanced value of the Company;

     (c) Provide compensation opportunities that are externally competitive and internally
consistent with the Company’s growth objectives and total compensation strategies; and

     (d) Provide award opportunities that reward executives with financial and operating
responsibilities that can impact achievement of the Company’s growth goals.

Article 2. Definitions

     Whenever used in the Program, capitalized terms that are defined in the 2005 LTIP shall have
the meanings attributed to them in the 2005 LTIP. In addition, the following terms shall have the
meanings set forth below and, when the defined meaning is intended, the term is capitalized:

     2.1. “Covered Employee” means any Participant who is, or who is determined by the Committee to
be likely to become, a “covered employee” within the meaning of Code Section 162(m).

     2.2. “Effective Date” means July 1, 2005.

     2.3. “Final Award” means the actual incentive compensation earned during a Performance Period
by a Participant, as determined by the Administrator following the end of the Performance Period.

     2.4. “Performance Period” means the three fiscal year period beginning on the Effective Date
and ending on June 30, 2008.

Article 3. Eligibility and Participation

     3.1. Eligibility. The Administrator shall designate the key executive Employees who
are eligible to receive a Cash Award under the Program. In general, an Employee may be designated
as a key Employee if such Employee is a strategic executive who is responsible for or contributes
to the management, growth, and/or profitability of the business of the Company in a material way.
Only the Committee may determine the eligibility of Employees who are Covered Employees.

 

 

     3.2. Participation. Employees who were chosen to participate in the Program shall be
apprised of the performance criteria and related Cash Awards determined for them for the
Performance Period, as soon as is practicable after such Cash Awards are established.

     3.3. Partial Performance Period Participation. An Employee who becomes eligible after
the beginning of the Performance Period may participate in the Program for that Performance Period
on a ratable basis. Such situations may include, but are not limited to (a) new hires; or (b) when
an Employee is promoted from a position which did not previously meet the eligibility criteria.
The Administrator, in its sole discretion, retains the right to prohibit or allow participation for
any of the aforementioned Employees. The performance criteria previously established under the
Program shall apply to any Employees who become eligible after the beginning of the Performance
Period. If an Employee participates for only a portion of the Performance Period for any reason,
his or her Cash Award will be pro-rated based on the number of days he or she performed services
during the Performance Period over the total days in the Performance Period, or some similar method
adopted by the Committee that results in a ratable reduction of the Cash Award based on the partial
Performance Period applicable to the Employee. In addition, in the event a Participant changes job
levels during a Performance Period, the Participant’s Cash Award may be adjusted to reflect the
amount of time at each job level during the Performance Period. Notwithstanding anything in this
Section 3.3 or in the Program to the contrary, the participation in the Program for a Covered
Employee who becomes eligible after the beginning of the Performance Period shall comply with the
provisions of Code Section 162(m), as set forth in Section 4.1.

     3.4. No Right to Participate. No Participant or other Employee shall at any time have
a right to be selected for participation in the Program for any Performance Period, whether or not
he or she previously participated in this or any similar Program.

Article 4. Award Determination

     4.1. Qualifying Performance Criteria. The Committee selected and established in
writing performance criteria for the Performance Period, which, if met, may entitle Participants to
the payment of the Cash Awards. To ensure compliance with the exception from Code Section 162(m)
for qualified performance-based compensation for Participants who are Covered Employees, the
performance criteria established were (and will be for any new Participants who are Covered
Employees) based on one or more Qualifying Performance Criteria selected by the Committee in
writing within 90 days following the first day of the period of service of such Employee as a
Participant under the Program (or, if earlier, before 25% of that period has elapsed), and at a
time when the outcome relative to the attainment of the performance criteria is not substantially
certain. Subject to the requirements of Code Section 162(m) with respect to Covered Employees, if
a Participant commences participation after the beginning of a Performance Period, the performance
criteria established for the Performance Period shall apply to that Participant, with the Cash
Award amount adjusted or pro-rated over the remaining balance of the Performance Period to reflect
the partial period of participation in the Program. Once established, the performance criteria
shall not be changed during the Performance Period. Subject to the requirements of Code Section
162(m) with respect to Covered Employees, at the time the Cash Awards are made and performance
criteria are established, the Committee is authorized to determine the manner in which the
performance criteria will be calculated or measured to take into account certain factors over which
Participants have no or limited control, including, but not limited to, market related changes in
inventory value, changes in industry margins, changes in accounting principles, and extraordinary
charges to income.

     4.2. Cash Award Targets. The Committee has established in writing a Cash Award target
for each Covered Employee and for all other Participants for the Performance Period. Participants
who are Covered Employees may receive a Cash Award solely if the Qualifying Performance Criteria
are met.

2

 

     4.3. Final Award Determinations. At the end of the Performance Period, the Committee
shall certify in writing the extent to which the Qualifying Performance Criteria were met during
the Performance Period for any Cash Awards for Covered Employees. If the Qualifying Performance
Criteria for the Performance Period are met, Covered Employees shall be entitled to the payment of
the Cash Awards, subject to the Committee’s exercise of negative discretion to reduce any Final
Award payable to a Covered Employee based on business objectives established for that Covered
Employee or other factors as determined by the Committee in its sole discretion. As set forth in
the 2005 LTIP, the maximum amount payable to any single Participant pursuant to the portion of a
Cash Award earned with respect to any single fiscal year shall not exceed $7,500,000. With respect
to Participants who are not Covered Employees, the Committee will determine the Final Award based
on the performance criteria and other business objectives. The Committee may adjust (either up or
down) any Final Award for Participants who are not Covered Employees on the basis of such further
considerations as the Committee shall determine in its sole discretion.

Article 5. Payment of Final Awards

     Each Participant’s Final Award shall be paid in cash, in one lump sum, subject to applicable
tax withholding, on or before the 15th day of the third month after the end of each
Performance Period. If payment is delayed due to an unforeseeable event or other administrative
delays, payment shall in no event be made later than the 15th day of the third month
after the end of the taxable year of the Participant in which the Final Award was earned. The
Administrator may permit or provide for deferred payment of any Final Award to a specified date or
to a date not less than six (6) months after termination of employment, in accordance with such
conditions and procedures as the Administrator may specify in compliance with the requirements of
Code Section 409A.

Article 6. Termination of Employment; Other Forfeiture Events

     6.1. Termination of Employment Due to Death or Disability. In the event a
Participant’s employment is terminated by reason of death or Disability, the Final Award determined
in accordance with Section 4.3 herein shall be reduced to reflect participation prior to
termination of employment only. The Final Award, if any, shall be calculated based on a
determination of the achievement of the performance criteria and business objectives as of the end
of the fiscal year quarter in which the Participant’s termination of employment occurred. The Cash
Award so determined shall be further reduced by multiplying the Final Award by a fraction, the
numerator of which is the number of days of employment in the Performance Period through the date
of employment termination, and the denominator of which is the number of days in the Performance
Period. In the case of a Participant’s Disability, the employment termination shall be deemed to
have occurred as of the date that the Committee determines was the date on which the definition of
Disability was satisfied. The Final Award thus determined shall be paid as soon as practicable and
reasonable following the end of the Performance Period in which employment termination occurs, but
in no event shall such amount be paid later than the 15th day of the third month after
the end of the taxable year of the Participant in which the Performance Period ended.

     6.2. Beneficiary Designations.

     (a) General. Each Participant under the Program may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Program is to be paid in case of his or her death before such Participant
receives any or all of such benefit. Each designation will revoke all prior designations by
the same Participant, shall be in a form prescribed by the Administrator, and will be
effective only when filed by the Participant in writing with the Administrator during his or
her lifetime.

3

 

     (b) Invalidity of Powers of Attorney. The Program shall not recognize beneficiary
designations made on a Participant’s behalf by the Participant’s attorney in fact, or by any
person acting under a power of attorney or any instrument by which the Participant has
appointed another person as his or her agent, thereby conferring upon him or her the
authority to perform certain specified acts on the Participant’s behalf.

     (c) Failure of Beneficiary Designation. In the absence of a beneficiary designation
made by the Participant in accordance with Section 6.2(a), or if the beneficiary named by a
Participant predeceases him or her, then the Administrator shall pay any benefits remaining
unpaid at the Participant’s death to the Participant’s estate.

     6.3. Termination of Employment Following a Change in Control. In the event of a
Change in Control, all Participants shall become vested in and entitled to their Cash Awards
calculated based on their individual target awards times a fraction, the numerator of which is the
number of days from the beginning of the Performance Period to the date of the Change in Control
and the denominator of which is the total number of days in the Performance Period. The amount so
calculated shall be the minimum amount payable as a Final Award for the Performance Period in which
the Change in Control occurs. If the Participant’s employment is terminated before the last date
of a Performance Period and within two (2) years of a Change in Control for any reason other than a
Termination for Cause, the Final Award thus determined shall be paid as soon as practicable and
reasonable following the Participant’s Termination of Employment, but in no event shall such amount
be paid later than the 15th day of the third month after the end of the taxable year of
the Participant in which the Termination of Employment occurred.

     6.4. Termination of Employment for Other Reasons. In the event of a Participant’s
Termination of Employment before the last date of a Performance Period for any reason other than
death or Disability, all of the Participant’s rights to any Final Award for that Performance Period
shall be forfeited. In addition, the Administrator may also, in its sole discretion, determine and
provide that all or any portion of a Final Award is subject to an obligation of repayment to the
Company in the event of a Termination for Cause of the Participant within a specified period after
a Final Award is earned.

     6.5. Other Forfeiture Events. The Administrator may, in its discretion, require that
all or any portion of a Final Award is subject to an obligation of repayment to the Company upon
the violation of a non-competition and confidentiality covenant applicable to the Participant. The
Administrator may, in its discretion, also require repayment to the Company of all or any portion
of a Final Award if the amount of the Final Award was calculated based upon the achievement of
certain financial results that were subsequently the subject of a financial statement restatement,
the Participant engaged in misconduct that caused or contributed to the need for the financial
statement restatement, and the amount of the Final Award would have been lower than the amount
actually awarded to the Participant had the financial results been properly reported. This Section
6.4 shall not be the Company’s exclusive remedy with respect to such matters. This Section 6.4
shall not apply after a Change of Control.

Article 7. Nontransferability

     No right or interest of any Participant in the Program shall be assignable or transferable,
other than by will or pursuant to the laws of descent and distribution, or subject to any lien,
directly, by operation of law or otherwise, including, but not limited to, by execution, levy,
garnishment, attachment, pledge, or bankruptcy.

4

 

Article 8. Administration

     8.1. General. The Program shall be administered in accordance with Section 4 of the
2005 LTIP.

     8.2. Facility of Payment. If the Administrator deems any person entitled to receive
any amount under the provisions of the Program to be incapable of receiving or disbursing the same
by reason of minority, illness or infirmity, mental incompetence, or incapacity of any kind, the
Administrator may, in its sole discretion, (i) apply such amount directly for the comfort, support
and maintenance of such person; (ii) reimburse any person for any such support theretofore
supplied to the person entitled to receive any such payment; (iii) pay such amount to any person
selected by the Administrator to disburse it for such comfort, support and maintenance, including
without limitation, any relative who has undertaken, wholly or partially, the expense of such
person’s comfort, care and maintenance, or any institution in whose care or custody the person
entitled to the amount may be; or (iv) with respect to any amount due to a minor, deposit such
amount to his or her credit in any savings or commercial bank of the Administrator’s choice, direct
that such distribution be paid to the legal guardian, or if none, to a parent of such person or a
responsible adult with whom the minor maintains his or her residence, or to the custodian for such
person under the Uniform Gift to Minors Act or Gift to Minors Act, if such payment is permitted by
the laws of the state in which the minor resides. Payment pursuant to this Section 8.2 shall fully
discharge the Company, the Board, the Committee, and the Program from further liability on account
thereof.

Article 9. Amendment or Termination

     The Administrator, without notice, at any time and from time to time, may modify or amend, in
whole or in part, any or all of the provisions of the Program, or suspend or terminate it entirely,
in accordance with the provisions of the 2005 LTIP. No Cash Award may be granted during any period
of suspension of the Program or after termination of the Program, and in no event may any new Cash
Award be granted after the termination or expiration of the 2005 LTIP under which this Program is
established.

Article 10. Miscellaneous

     Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Program. Any reference to a section (other than to a section
of the Program) shall also include a successor to such section. The Program is governed by the
2005 LTIP and shall be construed in accordance therewith. In the event any term or provision of
the Program conflicts with any term or provision of the 2005 LTIP, the terms and provisions of the
2005 LTIP shall control.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Cardinal Health, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Carole S. Watkins	 	 
	 

	 	 	 	 	 	 
	 	 	Title: Chief Human Resources Officer	 	 

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